The landscape of global grocery retail is set for a significant transformation over the next five years, with online and discount channels leading the charge in growth.
According to the Institute of Grocery Distribution (IGD), these channels are expected to outpace traditional ones significantly, driven by economic factors, changing consumer behaviours, and strategic retailer adjustments. The forecast highlights that online grocery channels alone could represent 6.3% of global sales by 2029, while discount stores are poised to contribute 9.3%.
While inflation is anticipated to gradually subside by 2025, developed markets might achieve inflation targets sooner than developing regions. Nevertheless, IGD’s projections suggest that traditional trade will still hold a dominant position globally, accounting for 43% of new sales in the given timeframe. Yet, its market share is predicted to decrease in most areas.
Supermarkets remain essential, significantly impacting net new sales despite their declining share. IGD’s head of global insights, Nick Miles, emphasised the importance for businesses to identify future growth areas. “Understanding where growth will come from over the next five years is crucial for prioritising capital expenditure and resource deployment,” he stated. Although online and discount channels are gaining momentum, the biggest monetary gains may still come from more established markets like traditional trade and supermarkets. However, the performance of these channels will vary notably across different regions and markets.
The grocery retail sector is on the cusp of a shift, with online and discount channels positioned for rapid growth. Businesses will need to adjust their strategies accordingly to capitalise on these opportunities.
