The British food and grocery market is predicted to grow 14.8 per cent by 2023, up to a record £218.5billion, according to research.
Industry analysts IGD forecast the biggest growth in online sales of food, such as Ocado or Amazon Fresh, as well as the discount supermarkets Aldi and Lidl.
The big four retailers can also look forward to growth of supermarkets and hypermarkets, despite a value dip predicted next year due to falling inflation. Over half of large store shoppers agree that bigger stores are more enjoyable as there is more time to browse, according to IGD.
Simon Wainwright, director of insight at IGD said: “Supermarkets are now better at defending their position against discounters as they become easier to shop with a focus on product quality and innovation, offering services and products that discounters don’t with fast payments and by promoting omnichannel strengths.
“Maintaining appeal to shoppers will be a continuing challenge as shoppers migrate to more smaller and easier-to-shop formats and online sales evolve at pace.”
The German discounters continue to steam ahead, expanding in value by 36.7 per cent to a combined worth of £31.5bn. Online sales will continue to top overall growth rates however, with a massive 54.4 per cent growth in the next five years. Online grocery shopping is expected to hit £17.3bn in value by 2023.
Wainwright attributed the success of discounters to bolstering core food categories. “Food discounters are benefiting from targeted investment in key categories such as fresh produce, meat and bakery, along with improvements to the in-store environment and facilities, making stores much more comparable to supermarkets.
“Variety discounters will see strong growth from investment in more store openings, but we will see this balance out with closures elsewhere. Opportunities for these retailers lie in developing the food-for-now and impulse grocery offers, taking a more flexible approach to formats, offering more unique and exciting products, and delivering compelling seasonal events.”