The food and grocery market is expected to expand by 20% to £184bn in the next five years, driven largely by the rise of discounters, a new study has revealed today.

The UK food and grocery market, valued this year at £156.8bn by IGD Retail Analysis, will expand as discount retailers, such as Lidl and Aldi, grow at an annual rate of 10.1% to a total value of £11.4bn by 2016, compared to £7bn this year.

The convenience sector – which includes Tesco Express and Sainsbury’s Local – will grow by 4.7% and is set to be worth £42.2bn by 2016, while online will be the fastest-growing channel with an annual average growth rate of 13.7% to reach £11.2bn over five years.

Joanne Denney-Finch, chief executive at IGD, said growth in the sector will be driven by one-off events including the Queen’s Jubilee celebrations, the Euro 2012 football championship and the London Olympics.

She said: “We still buy most of our groceries at supermarkets and hypermarkets, but we are also using different types of stores more often, such as online and convenience. And leading retailers are building their presence in these areas.”

During this year’s Royal wedding, IGD’s ShopperTrack research found there was a spike in shoppers’ interest in food with a local or British theme.

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