The UK grocery market returned to real growth in 2024, with inflation as the main driver, according to a detailed forecast from IGD.
The UK Retail Grocery Channel Forecasts include predictions for in-store, online and convenience grocery shopping until 2029.
It reveals the various factors currently affecting UK grocery and offers a low-, medium- and high-growth view of the future.
Despite real terms market growth of 2.4%, inflation remained the main driver, according to the report.
Real-term growth is expected to continue at a lower level during 2025-26 and is not expected to rise above 1.0% for the rest of the forecast.
Shoppers are still relying on measures to save money that they adopted during the cost-of-living crisis, IGD noted.
Other Findings
Real wage growth is expected to return to its 2008 rate in 2026, although the report anticipates a higher tax burden on households later in the forecasted period.
The convenience and online channels are expected to witness significant growth over the next five years, with stores focusing on expanding their fresh-food offer with ranges catering to local shoppers’ needs.
Alex Rowberry, senior analyst at IGD stated, "IGD believes businesses should prepare for a mid-growth scenario: UK economic growth remains low, and inflation remains the driver of grocery market performance, as real market growth remains contracted."
Online retail is expected to get a boost from technological advancements that will lead to improved customer experience and product availability.
Supermarkets are forecast to see the highest growth in value, according to the report.
Rhian Thomas, head of UK Insight at IGD said, "Our channel forecasts are uniquely comprehensive, and IGD’s insight at large is expanding to include in-depth analysis of non-food items in stores and the growing demand for in-store services."
