Highlights
UK wholesale sector poised for steady growth to £42 billion by 2030, despite ongoing pressure from tobacco decline and retail channel weakness, says IGD, states an industry report released on Monday (Aug 4).
IGD has unveiled its latest findings on the UK grocery and foodservice wholesaling industry, revealing a stabilisation in sector growth following several years of volatility, driven by the pandemic and inflation.
The sector achieved growth of 1.2 per cent in 2024, signaling a welcome return to normalcy, even if the pace remains modest.
Looking ahead, IGD forecasts a more robust trajectory for the industry, anticipating expansion to £42bn by 2030. This represents a compound annual growth rate of 2.5 per cent. However, beneath the surface of this ‘new normal’ lie intensifying challenges for both retail and foodservice channels.
Retail channel supply remains a key concern, with sales declining by 1.2 per cent in 2024, primarily due to a sharp 6.8 per cent drop in the Tobacco and vape category, which continues to account for more than 30 per cent of retail segment sales.
Tobacco and vape is projected to remain a drag on overall performance, with segment growth forecast to average just 1.1 per cent to 2030.
Excluding this category, retail segment sales showed a modest positive increase of 1.6 per cent in 2024. Yet, weak performance in other categories, such as Chilled & fresh food (-1.7%), emphasises the ongoing challenge for operators to diversify sales streams.
In contrast, impulse categories like soft drinks saw notable growth, rising 3.8 per cent in 2024, a testament to the resilience of certain core product areas.
Foodservice wholesaling delivered solid results, with sales increasing by 3.2% in 2024, buoyed by growth across major product categories.
The outlook remains favourable, though operators face mounting pressures to secure profitability, particularly given the sector’s reliance on customer delivery (representing 85% of sales) and the resulting higher operating costs. As businesses strive for profitability, many are pursuing acquisitions to broaden customer bases and product capabilities.
Patrick Mitchell-Fox, Insight Partner at IGD, comments, “As the UK wholesale sector emerges from a period of unprecedented disruption, our latest research points to a renewed sense of stability and opportunity. While challenges persist, particularly in the retail channel and with categories like Tobacco & vape, we are seeing promising signs of growth, innovation, and resilience. The sector’s willingness to adapt, invest, and pursue new opportunities will be key to unlocking sustainable long-term success.”
The UK Grocery & Foodservice Wholesaling 2025 report comes as IGD launched a new Away From Home proposition earlier this month. The new service has been developed in recognition of the need for a whole-market viewpoint of the AFH sector and marks a significant milestone for IGD as its first new insight product for 15 years.