UK Retail Futures 2012: Food & Grocery

SUMMARY

Overview

Introduction

UK Retail Futures 2012: Food & Grocery combines comprehensive insight into sector related issues such as food price inflation, space expansion and the changing patterns of consumer demand. It combines this with a host of economic, social and political factors to derive thorough sector forecasts over the next five years

Scope

• Market expenditure, inflation and volume growth forecast to 2012 as well as data from the last 10 years
• Comprehensive analysis covering inflation, volume, and sales growth for 15 food & grocery sub categories
• Channels of distribution analysis 2006, 2007 and 2012 covering grocers, the different food specialists and off licences & tobacconists
• Comprehensive analysis of the key issues set to impact the food & grocery market over the next five years

Report Highlights

Despite the harsher economic conditions we forecast for the next five years, we anticipate food & grocery expenditure will hold up well. In part this is because of higher prices but it also reflects initiatives by food retailers to make their stores and ranges more appealing and accessible.

We expect average annual retail price inflation over the next five years of 2.7%. This is a 1.2 percentage point rise on the average rate between 2002 and 2007. Higher levels of wholesale food price inflation will be at the core of this growth.

Grocers will account for all of the sector's growth. We forecast grocers' sales to grow by over 26% between 2007 and 2012. This will increase grocers' share of total retail spending to 41.6% in 2012.

Reasons to Purchase

• Plan for the future using this report to develop strategies that will enable you to compete effectively against rivals in tougher market conditions
• Enhance your understanding of key issues, trends, and dynamics in the market
• See which core food & grocery categories are expected to outperfom over the next five years

TABLE OF CONTENTS

• CHAPTER 1 EXECUTIVE SUMMARY
  • Key Findings
  • Main Conclusions
• CHAPTER 2 FORECAST SUMMARY
  • Expenditure Summary
  • Inflation
  • Share of Retail Spending
  • Grocers: Sales
  • Grocers: The Rise of Non-food
• CHAPTER 3 KEY MARKET ISSUES
  • Summary
  • Impact of Tough Economic Conditions - History Repeating?
  • The Changing Consumer
    • Premiumisation of Food
    • Convenience
    • Environmentally Responsible Retailing
  • Retail Price Inflation
  • Space Expansion
    • Tesco
    • Asda
    • Sainsbury
    • Morrison
  • Growth of Non-food via Grocers
• CHAPTER 4 ALL GROCERS & FOOD SPECIALISTS
  • Retail Sales
  • Sources of Sales Growth
  • Share of Total UK Retail Sales
  • Store Numbers
  • Space Growth
  • Sales Densities
• CHAPTER 5 GROCERS
  • Retail Sales
  • Sources of Sales Growth
  • Share of Sector Specialists Sales
  • Store Numbers
  • Space Growth
  • Sales Densities
• CHAPTER 6 FOOD SPECIALISTS
  • Retail Sales
  • Sources of Sales Growth
  • Share of Sector Specialists Sales
  • Store Numbers
  • Space Growth
  • Sales Densities
• CHAPTER 7 OFF-LICENCES AND TOBACCONISTS
  • Retail Sales
  • Sources of Sales Growth
  • Share of Sector Specialists Sales
  • Store Numbers
  • Space Growth
  • Sales Densities
• CHAPTER 8 CHANNELS OF DISTRIBUTION
  • Sales & Spending
  • Food & Grocery Market Shares
• CHAPTER 9 CATEGORY FORECASTS
  • Expenditure Summary
  • Expenditure Analysis
  • Food & Grocery Market
  • Food
  • Bakery & Cereals
  • Dairy Products
  • Fruit & Vegetables
  • Hot Drinks
  • Meat & Fish
  • Oils & Fats
  • Pets, Petcare & Petfood
  • Sugar & Sweet Products
  • Other Food
  • Alcoholic Drinks
  • Beer
  • Spirits
  • Wine
  • Soft Drinks
  • Tobacco
  • Non-durable Household Goods
• CHAPTER 10 UK ECONOMIC FORECASTS
  • Key Messages
  • Gross Domestic Product - GDP
    • How does it affect retail?
    • What's happened?
    • What will happen?
  • Earnings Growth
    • How does it affect retail?
    • What's happened?
    • What will happen?
  • Real Household Disposable Income
    • How does it affect retail?
    • What's happened?
    • What will happen?
  • Employment
    • How does it affect retail?
    • What's happened?
    • What will happen?
  • Inflation
    • How does it affect retail?
    • What's happened?
    • What will happen?
  • Exchange Rates
    • How do they affect retail?
    • What's happened?
    • What will happen?
  • Interest Rates
    • How do they affect retail?
    • What's happened?
    • What will happen?
  • Savings Ratio
    • How does it affect retail?
    • What's happened?
    • What will happen?
  • Consumer Debt
    • How does it affect retail?
    • What's happened?
    • What will happen?
  • Equities
    • How does it affect retail?
    • What's happened?
    • What will happen?
  • House Price Inflation
    • How does it affect retail?
    • What's happened?
    • What will happen?
  • Housing Equity Withdrawal
    • How does it affect retail?
    • What's happened?
    • What will happen?
  • Housing Transactions
    • How does it affect retail?
    • What's happened?
    • What will happen?
• CHAPTER 11 UK RETAILING FORECASTS
  • Key Indicators
  • Retail Expenditure 1997-2012
  • Sales by Location 2007-2012
  • Sources of Growth 1997-2012
  • Store Numbers by Location 1997-2012
  • Space by Location 1997-2012
  • Sales Density by Location 1997-2012
  • Average Store Size 1997-2012
  • Average Store Sales 1997-2012
  • Online Retail Spending
• CHAPTER 12 GLOSSARY
  • Terminology
  • Market Definition
  • Location Definitions
    • Town Centre
    • Out-of-town
    • Neighbourhood
    • Non-store Retail
  • Forecasting Methodology
  • Abbreviations
• List of Tables
  • Table 1: Food & grocery key numbers 1997, 2002, 2007& 2012
  • Table 2: Grocers non-food sales 2006, 2007 and 2012
  • Table 3: Grocers non-food market shares 2006, 2007 and2012
  • Table 4: All food & grocery specialists sales1997-2012
  • Table 5: Sources of growth for UK food & groceryretailers 1997-2012
  • Table 6: Food & grocery retailers total sellingspace 1997-2012
  • Table 7: Grocers sales 1997-2012
  • Table 8: Sources of growth for grocers 1997-2012
  • Table 9: Total selling space for grocers 1997-2012
  • Table 10: Food specialists sales 1997-2012
  • Table 11: Sources of growth for food specialists1997-2012
  • Table 12: Total selling space for food specialists1997-2012
  • Table 13: Off-licence and tobacconists sales 1997-2012
  • Table 14: Sources of growth for off-licences andtobacconists 1997-2012
  • Table 15: Total selling space for off-licences andtobacconists 1997-2012
  • Table 16: Food & grocery channels of distribution byretailer type 2006, 2007 and 2012
  • Table 17: Food & grocery market shares 2003-2008e
  • Table 18: Food & grocery expenditure summary 1997,2002, 2007 & 2012
  • Table 19: Food expenditure analysis 2007-2012
  • Table 20: Alcoholic drinks & soft drinks expenditureanalysis 2007-2012
  • Table 21: Tobacco & non-durable household goodsexpenditure analysis 2007-2012
  • Table 22: Total food & grocery consumer expenditure1997-2012
  • Table 23: Total food consumer expenditure 1997-2012
  • able 24: Bakery & cereals expenditure 1997-2012
  • Table 25: Dairy products expenditure 1997-2012
  • able 26: Fruit & vegetables expenditure 1997-2012
  • Table 27: Hot drinks expenditure 1997-2012
  • Table 28: Meat & fish expenditure 1997-2012
  • Table 29: Oils & fats expenditure 1997-2012
  • Table 30: Pets, petcare & petfood expenditure1997-2012
  • Table 31: Sugar & sweet products expenditure1997-2012
  • Table 32: Other food expenditure 1997-2012
  • Table 33: Alcoholic drinks expenditure 1997-2012
  • Table 34: Beer expenditure 1997-2012
  • Table 35: Spirits expenditure 1997-2012
  • Table 36: Wine expenditure 1997-2012
  • Table 37: Soft drinks expenditure 1997-2012
  • Table 38: Tobacco expenditure 1997-2012
  • Table 39: Non-durable household goods expenditure1997-2012
  • Table 40: Economic drivers for retail 2008
  • Table 41: Measures of inflation 2008
  • Table 42: UK retailing forecasts summary 2007-2012
  • Table 43: Forecast chronology 2008-2012
  • Table 44: Total consumer retail expenditure 1997-2012
  • Table 45: Sales by location 1997-2012
  • Table 46: Total UK physical store sales & sellingspace 1997-2012
  • Table 47: Sources of sales growth for physical stores1997-2012
  • Table 48: Store numbers 1997-2012
  • Table 49: Space by location 1997-2012
  • Table 50: Sales densities by location at current prices1997-2012
  • Table 51: Average store size by location 1997-2012
  • Table 52: Average sales per store by location at currentprices 1997-2012
  • Table 53: Food & Grocery market definition
• List of Figures
  • Figure 1: Food & grocery expenditure - sources ofsales growth 1997-2007 and forecast to 2012
  • Figure 2: Food & grocery expenditure - annualinflation (%) 1997-2012
  • Figure 3: Food & grocery expenditure share of totalretail spend 1997-2012
  • Figure 4: Grocers sources of sales growth 1997-2007 andforecast to 2012
  • Figure 5: Grocers share of retail spending 1997-2012
  • Figure 6: Grocers food and non-food growth 2007-2012
  • Figure 7: Grocers food/non-food sales mix 2007-2012
  • Figure 8: Grocers non-food category growth 2007-2012
  • Figure 9: Grocers non-food category growth - value terms(bn) 2012 on 2007
  • Figure 10: Food & grocery key issues 2007-2012
  • Figure 11: Similarities and differences between 1992 andthe forecast period 2008-2012
  • Figure 12: Causes of food price inflation and grocer'sinitiatives to reduce it
  • Figure 13: Space expansion plans for Big Four grocers2008-2012
  • Figure 14: Sales of food & grocery specialists as a% of total UK retail spending 1997-2012
  • Figure 15: Total food & grocery specialists storenumbers 1997-2012
  • Figure 16: Food & grocery space growth 1997-2012
  • Figure 17: Food & grocery retailers sales densitiesat current prices 1997-2012
  • Figure 18: Food & grocery retailers sales densitiesat constant (2003) prices 1997-2012
  • Figure 19: Grocers sales as a % of total specialistsfood & grocery specialists sales 1997-2012
  • Figure 20: Grocers store numbers 1997-2012
  • Figure 21: Grocers space growth 1997-2012
  • Figure 22: Grocers sales densities (current prices)1997-2012
  • Figure 23: Grocers sales densities (constant 2003prices) 1997-2012
  • Figure 24: Food specialists sales as a % of totalspecialists food & grocery sales 1997-2012
  • Figure 25: Food specialists store numbers 1997-2012
  • Figure 26: Food specialists space growth 1997-2012
  • Figure 27: Food specialists sales densities (currentprices) 1997-2012
  • Figure 28: Food specialists sales densities (constant2003 prices) 1997-2012
  • Figure 29: Off-licence and tobacconists sales as a % oftotal food & grocery specialists sales 1997-2012
  • Figure 30: Off-licence and tobacconists store numbers1997-2012
  • Figure 31: Space growth for off-licences andtobacconists 1997-2012
  • Figure 32: Off-licence and tobacconists sales densities(current prices) 1997-2012
  • Figure 33: Off-licences and tobacconists sales densities(constant 2003 prices) 1997-2012
  • Figure 34: Food & grocery category growth prospects2006, 2007 & 2012
  • Figure 35: Food & grocery channels of distribution2006, 2007 & 2012
  • Figure 36: Grocers percentage point change in marketshare 2003-2008e
  • Figure 37: Food & grocery expenditure growth rates1997-2002, 2002-07 and 2007-12
  • Figure 38: Food & grocery spend as a % of totalretail spend 1997-2012
  • Figure 39: Food & grocery expenditure growth(constant 2003 prices) 1997-2012
  • Figure 40: Food spend as a % of food & grocery spend1997-2012
  • Figure 41: Food expenditure growth (constant 2003prices) 1997-2012
  • Figure 42: Bakery & cereals spend as a % of food& grocery expenditure 1997-2012
  • Figure 43: Bakery & cereals expenditure growth(constant 2003 prices) 1997-2012
  • Figure 44: Dairy products spend as a % of food &grocery expenditure 1997-2012
  • Figure 45: Dairy products expenditure growth (constant2003 prices) 1997-2012
  • Figure 46: Fruit & vegetables spend as a % of food& grocery spend 1997-2012
  • Figure 47: Fruit & vegetables expenditure growth(constant 2003 prices) 1997-2012
  • Figure 48: Hot drinks expenditure as a % of food &grocery expenditure 1997-2012
  • Figure 49: Hot drinks expenditure growth (constant 2003prices) 1997-2012
  • Figure 50: Meat & fish expenditure as a % of food& grocery expenditure 1997-2012
  • Figure 51: Meat & Fish expenditure growth (constant2003 prices) 1997-2012
  • Figure 52: Oils & fats expenditure as a % of food& grocery expenditure 1997-2012
  • Figure 53: Oils & fats expenditure growth (constant2003 prices) 1997-2012
  • Figure 54: Pets, petcare & petfood expenditure as a% of food & grocery expenditure 1997-2012
  • Figure 55: Pets, petcare & petfood expendituregrowth (constant 2003 prices) 1997-2012
  • Figure 56: Sugar & sweet products spend as a % offood & grocery spend 1997-2012
  • Figure 57: Sugar & sweet products expenditure growth(constant 2003 prices) 1997-2012
  • Figure 58: Other food expenditure as a % of food &grocery expenditure 1997-2012
  • Figure 59: Other food expenditure growth (constant 2003prices) 1997-2012
  • Figure 60: Alcoholic drinks spend as a % of food &grocery expenditure 1997-2012
  • Figure 61: Alcoholic drinks expenditure growth (constant2003 prices) 1997-2012
  • Figure 62: Beer spend as a % of food & groceryexpenditure 1997-2012
  • Figure 63: Beer expenditure growth (constant 2003prices) 1997-2012
  • Figure 64: Spirits spend as a % of food & groceryexpenditure 1997-2012
  • Figure 65: Spirits expenditure growth (constant 2003prices) 1997-2012
  • Figure 66: Wine spend as a % of food & groceryexpenditure 1997-2012
  • Figure 67: Wine expenditure growth (constant 2003prices) 1997-2012
  • Figure 68: Soft drinks expenditure as a % of food &grocery expenditure 1997-2012
  • Figure 69: Soft drinks expenditure growth (constant 2003prices) 1997-2012
  • Figure 70: Tobacco expenditure as a % of food &grocery expenditure 1997-2012
  • Figure 71: Tobacco expenditure growth (constant 2003prices) 1997-2012
  • Figure 72: Non-durable household goods expenditure as a% of food & grocery expenditure 1997-2012
  • Figure 73: Non-durable household goods expendituregrowth (constant 2003 prices) 1997-2012
  • Figure 74: Real gross domestic product (GDP) at constant(2003) prices 1997-2007 and forecast to 2012
  • Figure 75: Inflation vs average earnings growth1997-2007 and forecast to 2012
  • Figure 76: Tax & Prices vs Average Earnings1997-2007 and forecast to 2012
  • Figure 77: Real household disposable income at constant(2003) prices 1997-2007 and forecast to 2012
  • Figure 78: UK employment 1997-2007 and forecast to 2012
  • Figure 79: UK unemployment 1997-2007 and forecast to2012
  • Figure 80: Inflation rates Y-o-Y 1997-2007 and forecastto 2012
  • Figure 81: Sterling, dollar and euro exchange rates1997-2007 and forecast to 2012
  • Figure 82: UK average base rates 1997-2007 and forecastby quarter for 2008
  • Figure 83: UK average base rates 1997-2007 and forecastto 2012
  • Figure 84: Savings ratio 1997-2007 and forecast to 2012
  • Figure 85: Growth in consumer debt 1997-2007 andforecast to 2012
  • Figure 86: FTSE 100 Index 1997-2007 and forecast to 2012
  • Figure 87: UK house price inflation 1997-2007 andforecast to 2012
  • Figure 88: Housing Equity Withdrawal (England &Wales) 1996-2007 and forecast to 2012
  • Figure 89: Housing transactions (England & Wales)1997-2007 and forecast to 2012
  • Figure 90: Retail spending value, volume andinflation/deflation trends 1997-2007 and forecast to 2012
  • Figure 91: Retail spending as percentage of totalconsumer spending 1997-2007 and forecast to 2012
  • Figure 92: Consumer, retail and non-retail spendingtrends % 1997-2007 and forecast to 2012
  • Figure 93: Retail sales by location 2007 and 2012
  • Figure 94: Share of turnover by location 1997, 2002,2007 & 2012
  • Figure 95: % share of store numbers by location 1997,2002, 2007 & 2012
  • Figure 96: % share of space by location 1997, 2002, 2007& 2012
  • Figure 97: Online retail spending 1997-2012
  • Figure 98: Verdict forecasting methodology 2008