Global grocery retail to generate an additional $440B in sales by 2022
The global grocery retail market is on track to generate an additional $440bn in sales between 2020 and 2022, yielding a 3.1% compound annual growth rate, according to the latest forecast from global insight provider IGD.
This follows an exceptional growth for grocery in 2020, which saw the top 20 markets grow by $280 billion – an 8.8% YoY growth. Accelerated growth in most of the global retail market in 2020 was driven by a shift in consumer spend from out-of-home to at-home as a result of pandemic lockdown restrictions.
The global forecasts also found the U.S. will remain the leading market until 2022, in the medium-term Central and Eastern Europe is expected to grow faster than Western Europe, and growth in China will remain robust and the accelerated shift towards online will continue.
On North America, Stewart Samuel, Programme Director at IGD Canada, said: "There’s a high degree of uncertainty relating to the economic outlook in the US, which is dependent on the level of financial support from the new administration and the vaccine roll-out."
"We expect relatively flat growth over the next two years but any growth we do see is likely to be driven by ecommerce and discount and value formats."
“The pandemic has slowed the gradual loss of share by supermarkets and hypermarkets as shoppers have consolidated their trips in larger stores and we expect this trend to continue. Suppliers have had an unprecedented opportunity to capture new households during the pandemic. Focusing on retention and repeat purchase will help to consolidate the share gains from 2020.”
Regarding growth in China, IGD’s Head of APAC Nick Miles said: “The data suggests that most of China has been virus-free since April 2020; growth for the grocery retail market will remain robust.
“The ongoing trend of consumers shifting towards online channels has accelerated and social platforms will continue to drive online traffic and sales. Consumers are increasingly demanding an ultra-convenience experience and omnichannel services such as speedy home delivery, QR code scanning and self-checkout will be widely adopted.
“The rise in popularity of community stores and omnichannel retailing is changing the dynamic of the grocery market. Suppliers will need to broaden their customer base and reach potential shoppers in lower tier cities and appeal to them with relevant products, because that is where the retailers are heading.”
On Western Europe, Head of EMEA Jon Wright said: “Economic challenges are expected across most of Western Europe in 2021, so retailers will need to focus on price to remain competitive.
"Pre-COVID trends have been accelerated by the pandemic, which has hastened the switch to online across most markets, resulting in further investment in this channel.
“In the UK, following a dramatic shift of consumer spend from foodservice into grocery retail in 2020, sales growth will moderate as the national vaccination programme allows the hospitality sector to reopen. Online is set to retain its elevated market share and big weekly shops will remain popular. Winding down of financial support and rising unemployment will result in some households economising on grocery shopping while others may spend less as eating out begins to recover.”