The growth in the UK food sector will not match that of 2015, according to data analysis company Horizons’ managing director Peter Backman.
Backman made the comment at Horizons’ annual briefing this week. The theme of the event was achieving ongoing growth in a decelerating market.
Peter Andrews, agent for the Bank of England, also addressed the event, which was attended by more than 120 food industry representatives.
The audience heard that the forecast for the UK’s foodservice market is less confident than it was, with growth likely to end the year at 1.8% compared with last year’s 2%.
Backman said: “There is now some uncertainty in the economy, particularly with the question mark over the UK’s relationship with the EU… At best, sales are likely to grow slightly across the sector.”
Backman added that intense competition on the high street meant like-for-like growth was difficult to achieve, putting pressure on chains to grow sales by expanding their outlet numbers. A scarcity of new sites of sufficient quality pushes already expensive rents even higher, he said.
Opportunities for smaller chains
He added that while the UK’s top foodservice brands were able to adapt to changing demand, it was the smaller chains that were likely to find innovation and growth easier.
“Smaller companies can be more nimble, more adaptable and more able to maintain control – it is with the fledgling businesses that we are currently seeing the most growth in the UK in terms of new store openings, and many are bringing something new and innovative to the market, which means the larger players must too.”