The analyst’s latest five-year forecast to 2029 shows that discount will be the fastest growing physical grocery channel globally, with a sales CAGR of 5.2 per cent
Discount is set to grow by US$217bn globally from 2024 to 2029, making it the fastest growing physical channel in grocery retail.
That is according to a new forecast by IGD, the Global Discount Trends Report.
The analyst said that, for both retailers and suppliers, it is ”vitally important” to know what the key drivers of growth will be in the discount channel for the short to medium term, helping them plan and prepare their strategies for the period.
In the UK, the significance of the discount channel, which ranks third globally by value, is on the rise, it explained.
Forecasts indicate that discount sales will increase by over 19 per cent between 2024 and 2029, ultimately capturing a market share of 16.6 per cent.
Europe remains the heartland for the channel, IGD outlined, with the top 14 countries by discount market share in the region.
Despite this, there is encouraging growth across the globe with new regional players emerging, discounters expanding to new markets and retailers focusing on their discount banners.
“The continued growth of discounters in grocery retail cannot be ignored, with suppliers needing to identify opportunities to work with them and competitors wanting to know how to fight back,” said Dan Butler, senior insights analyst at IGD.
”Our report shows the key trends that are driving discounters forward, which takes inspiration from our global research despite Europe’s dominance in the channel.
”We identify which markets have the best prospects for discount growth and who the main players will be through our data and five-year forecasts,” he noted.
The Global Discount Trends Report highlighted the trends that will be most important to discounters in 2025.
These included value leadership; a renewed focus on networks; rethinking non-grocery; affordable health; and strengthening sustainability.
Going forward, Europe will remain the discount channel’s global hotspot, IGD confirmed, with its share advancing to over 23 per cent of sales by 2029.
Central and Eastern European markets and Portugal offer “strong prospects” for the discount channel, with high penetration and sales growth rates to 2029.
All regions, except Asia, are expected to see discounter market share growth, driven by shoppers switching into the channel and networks’ continued expansion.
However, only one market outside of Europe, Canada, will have a discount market share of over 15 per cent in 2029, it predicted.
In terms of retailers, Aldi and Lidl will ”continue to dominate the channel”.
The discounters’ combined total sales are set to pass US$320bn by 2029. Together Aldi and Lidl will account for 34 per cent of the channel’s global sales in 2029, IGD expects.
Lidl, Aldi and 18 other operators will account for 83 per cent of the channel’s additional sales between 2024 and 2029 and ”should be top of mind in building any strategic plans for the channel”.
”By understanding the key drivers of growth and adapting strategies accordingly, businesses can not only thrive but also lead the charge in transforming the grocery retail landscape,” IGD pointed out.
”Embrace the insights, innovate, and position your brand at the forefront of this dynamic market.
”The future of the discount channel is bright and full of potential,” it continued.
”As the channel continues to evolve, those who are proactive and strategic in their approach will reap the rewards.
“Now is the time to act, innovate, and lead the way in the discount retail revolution,” the analyst added.
