The European grocery sector is set to experience 5% growth between now and 2026, however much of that will be driven by inflation rather than volume growth, IGD has said.
IGD recently held its European Future Talk, at which the research and insights body shared its outlook for the region over the next five years.
Return To Normality
As Jon Wright, IGD's head of European data and insight, explained, “After the rollercoaster period of 2015-2019, which saw a modest compound annual growth rate of 1.1% and an abnormal increase of 4.7% in 2020 as a result of the pandemic, we expect to see some normality return this year, with steady growth in the next five years.”
For the current year, the market is forecast to grow by 2%, despite concerns over post-COVID reopening, building on the strong growth experienced last year.
Looking ahead, growth is likely to vary country-by-country, depending on the local environment in each, Wright said.
Consumer Confidence Remains 'Fragile'
“Whilst the outlook is generally positive, it should be highlighted that consumer confidence is fragile," he explained. "Over the last year, it has ebbed and flowed and has the potential to revert quite sharply in response to changing conditions.”
All channels across the region are likely to see additional sales between now and 2026, but the market share for hypermarkets and supermarkets is set to decrease by 2.5% and 2.8% respectively, IGD said.
The convenience, discount and online channels are all likely to gain share, boosted by their important standing during the COVID-19 pandemic. IGD had previously noted that increased top-up shopping was helping to boost the convenience store market across Europe.
“Hypermarkets will be focusing on maintaining share by repurposing space, working with third parties and supporting online," said Wright. "Supermarkets will also face some interesting challenges to 2026; investment will be made in supporting a range of missions and occasions.”
IGD plans to release in-depth forecasts on a country-by-country basis in November 2021.
© 2021 European Supermarket Magazine. Article by Stephen Wynne-Jones. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.
