IGD forecasts continued change to retail landscape

IGD chief executive predicts a £31bn growth in Convenience, discount and online retailing
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Convenience, discount and online retailing are predicted to grow by more than £31bn in the next five years and claim 43% of the grocery market.

The bold prediction was made by IGD chief executive Joanne Denney-Finch at the organisation’s annual convention in Westminster, London, today. She also predicted that if current trends continue, superstores and supermarkets will account for just over half of grocery sales in five years’ time – down from 63% today.

The discounters continue to win customers, with eight out of 10 discount store shoppers believing the quality on offer is improving. The poll revealed that the average shopper now makes 24 grocery trips a months through four different channels, and 54% of shoppers visit a discounter in any month.

Denney-Finch said: “So discounters have become a benchmark for value that everyone needs to test themselves against. It shows the discounters have listened and responded to shoppers.”

She added that supermarkets have become victims of their own success as the market has changed around them. People prefer to do several smaller shops a week, maybe on their way home, rather than the one big weekly shop under one roof.

Pricing and promotions

“This encourages a blinkered style of shopping where people zoom in on the familiar, missing what is new. So we spend over £1bn each year on product development and yet much of it doesn’t even get noticed,” said Denney-Finch.

“Clearing the fog over pricing is another priority. Promotions will always be part of the mix, but I’d use them decisively, guided again by the shoppers.”

The IGD found that the idea that every promotion should offer at least a 25% discount was supported by 37% of people – up six points over the past two years – while 55% said they wanted price cuts rather than multibuys, which is a vast increase from 17% seven years ago.

Predictions

“The discounters will open many more outlets, they’ll stock some more brands and they might experiment with new formats, as Lidl is doing in France.

“We expect to see convenience, discount and online retailing grow together by more than £31bn over the next five years and claim 43% of the market.”

Denney-Finch also predicted a “blurring of the lines” with discount formats offered by convenience retailers and vice versa, as well as restaurant chains in superstores.

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