Skip to content
Search
AI Powered
Latest Stories

New report highlights key trends shaping grocery retail

iStock 1458055720
iStock image
iStock image

As UK and European retailers gear up for 2025, the grocery sector is poised for transformation, driven by renewed focus on fundamental retail practices, new revenue opportunities, and the growing demand for health and sustainability initiatives., highlights a new report.

A new report from IGD outlines six key trends that are set to shape the future of the grocery sector across the UK and Europe.


1. Optimising Retail Fundamentals for Success

While new technologies capture attention, UK and European retailers are reinforcing core retail fundamentals like stock availability, pricing, and promotions. Innovations like shelf-edge cameras and AI-driven stock management are improving these essential areas, ensuring a seamless shopping experience.

2. Exploring New Revenue Streams

As operating costs rise, UK retailers are diversifying their revenue sources by leveraging e-commerce technology, data monetisation, and B2B services. Tesco’s launch of Transcend, enabling other grocers to use its fulfilment tools, exemplifies the growing interest in non-traditional retail income streams.

3. Evolving Store Formats for Greater Flexibility

Retailers are adopting adaptable store designs that cater to evolving consumer needs and seasonal trends. The rise of modular store formats that feature event spaces, like FairPrice Finest in Singapore, is gaining traction in Europe, offering dynamic, customer-focused shopping experiences.

4. Seamless Connected Commerce

UK and European retailers are enhancing the integration of physical and digital retail, focusing on omnichannel experiences, loyalty programmes, and smart checkout solutions. AI-powered tools, like Target’s Store Companion, are simplifying store operations while enhancing customer engagement.

5. Health and Wellness Products Lead the Charge

Driven by growing health-conscious consumer demand, retailers in the UK and Europe are introducing more functional foods and health-focused products. The rise of initiatives like Cycle.me demonstrates a shift towards combining wellness with convenience, offering consumers greater choice in healthy, sustainable products.

6. Accelerating Sustainability Commitments

Retailers are intensifying their sustainability efforts, with a focus on reducing food waste, plastic packaging, and energy usage. Germany’s EDEKA Dorfmann sustainability store sets a new benchmark for eco-conscious retail, inspiring UK and European retailers to meet ambitious sustainability goals through innovative practices.

Stewart Samuel, Director of Retail Futures at IGD, commented, “As we move towards 2025, retailers must build on the foundation of global trends while ensuring they stay agile to rapidly evolving consumer demands.

"Focusing on the basics – stock availability, pricing, and promotions – remains critical to success. But at the same time, leveraging new revenue streams, embracing technological innovation, and championing health and sustainability are no longer optional; they are essential to staying competitive.

“Retailers who can successfully integrate these areas will not only future-proof their businesses but also build stronger relationships with increasingly conscious and demanding consumers.”

More for you

'Snacking desire' under attack

Major consumer shift expected in snacking

iStock image

Brands urged to innovate as weight loss meds to impact 'snacking desire'

Customer habits of snacking and alcohol consumption are expected to see a major shift in the coming years with growing evidence that weight loss medication users show little interest in snacking, consuming alcohol, or even eating between meals, a recent report has stated.

This was one of the key messages from ‘The 2025 Show’, a virtual event hosted by MMR Research, where top industry voices unpacked what’s coming next for brands and product innovation.

Keep ReadingShow less
Alcohol free beer sales

Alcohol-free beer sales

REUTERS/Jose Luis Gonzalez

December overtakes Dry January in alcohol-free beer sales

Sales of low and no-alcohol beer were 20 per cent higher in December than January, shows recent data, suggesting that traditionally the month of abstinence has been overtaken by December in terms of alcohol consumption.

According to a recent report in The Times, supermarket Tesco experienced record demand for alcohol-free beverages in the four weeks running up to Christmas with sales up by more than 15 per cent on the previous year. The demand was largely driven by young Brits.

Keep ReadingShow less
Brits turn to scratch cooking

Brits turn to scratch cooking

iStock image

Growth in grocery retail steady as Brits turn to scratch cooking: NIQ

Cost of living is still consumers’ number one concern, shows recent data, highlighting how shoppers are turning to scratch cooking to both save money and have a healthier diet.

According to new data released today byNielsenIQ (NIQ), total till sales grew at UK supermarkets (+5.3 per cent) in the last four weeks ending 27th January 2025, up from +3.6 per cent recorded in December.

Keep ReadingShow less
Benefits of physical cash

Cash remains the most inclusive payment method.

New research highlights the benefits of physical cash

Using cash not only affects consumer spending habits but also supports a deep psychological sense of ownership - something rarely experienced with digital transactions, shows a new research exploring how different payment methods influence spending behaviour.

The study, published in Qualitative Market Research in late 2024, reinforce the well-documented advantages of cash, such as its accessibility, resilience, and data privacy.

Keep ReadingShow less
Consumer spending in January 2025

Consumer spending in January 2025

Photo: iStock

Healthier choices drive grocery spending as new year gets underway

Take-home sales at the grocers rose by 4.3 per cent over the four weeks to 26 January compared with one year ago, according to the latest data from Kantar, which also shows a consistent rise on spending on promotions and fresh produce. Share of symbols and independents however continued on a decline.

January spelled relief for shoppers as grocery price inflation slowed to 3.3 per cent over the four weeks.

With household budgets typically stretched at this time of year, retailers played their part in easing the pressure on purse strings.

Keep ReadingShow less