Over the years, the UK grocery market has been exhibiting continuous growth. By 2020, its value is expected to more than 200 billion pounds. The United Kingdom has a relatively low inflation rate. This accompanied by real GDP growth, and a growing population, has caused retail sale to significantly increase owing to higher and wider purchase power. And this is expected to continue.
Top UK retailers
Four major retailers dominate the UK retail industry. They account for about 70% of the total market.
Tesco accounts for the highest market share at 29%. Over the years, Tesco has been the leading choice among consumers and shoppers. Sainsbury captures the second highest market share followed by Asda at 17% and Morrisons at 11%.
Consumer price sensitivity
With increasing economic confidence and the low inflation rate, the grocery sector exhibits growth spurred by consumer spending. However, despite the increase in spending confidence among consumers, many are still price-sensitive and prefer bargain deals. Apart from providing quality products, consumers still consider the price of the product as one of the major factors to consider when shopping either online or in the grocery store. This makes the UK grocery sector a highly competitive market.
The success behind the growth of the grocery sector
Industry trends are constantly evolving. For one, many suppliers are shifting to using more natural ingredients and are more transparent with product labeling which is essential to local consumer. There is also an increase among the development of organic products in the market.
Apart from the bigger suppliers, the small suppliers are also making huge sales as they dominate the trends and cater to the price sensitive market. As more and more people are now using social media, small enterprises now have equal opportunities to secure a higher market share.
Another factor that has a major contribution to the growth of the grocery sector is the E-Revolution. There is a huge number of applications, delivery services and online shopping sites that enable consumers easy accessibility to a host of products.
With the growth of the UK grocery store, there are several business opportunities for those who are already in the industry and for new entrepreneurs. Digital marketing and the electronic revolution have made huge impact on the market which now makes it easier even for new and small enterprises to gain competitive edge in the market. Whether you are a small retailer or a new product innovator, there are several opportunities that await you as the UK grocery store continuously expands.
For a new entrant it would be beneficial to a market research to get familiar with home tendencies. Utilizing the established distribution networks would also save a lot of setting up expenses.