LONDON (Reuters) - Britain’s food and grocery industry is forecast to grow by 12.5% to 217.7 billion pounds by 2024, driven by the online and discounter channels, researcher IGD said on Thursday.
It said online will be the fastest growing channel, with growth in value of 43.8% to 16.7 billion pounds in the next five years, just ahead of discounters, which are forecast to grow 40.2% to 34.3 billion pounds.
IGD said online’s market share will increase to 7.7%, while discounters’ will rise to 15.8%.
Growth in the online channel is coming from newer players entering the space such as Amazon and meal box operators such as Hello Fresh, Gousto and Mindful Chef.
Established players, such as Sainsbury’s and Ocado, are also introducing faster and more convenient options to shop for groceries, including orders delivered within an hour. More sophisticated analytics are also helping to strengthen customer loyalty to online, IGD said.
The discounters’ growth is being fuelled by their store opening programmes. IGD noted that Aldi is on track to trade from 1,200 UK stores by 2025, while Lidl is raising its store openings to 50-60 per year.
The researcher said large stores - supermarkets and hypermarkets - will still account for half of the market in 2024, while the convenience segment will account for 22.2%.
Reporting by James Davey; Editing by Alexandra Hudson