China to establish itself as largest grocery market, IGD

The leading 20 global grocery markets are set to generate an additional $1.9 trillion in sales, growing by 28% between 2018 and 2023, according to IGD.

Asia will see the strongest real growth – from population growth or consumers spending more on grocery – and is set to account for 47% of the additional spend between 2018 and 2023, with China leading the way as the largest market globally. Europe will be the second most important region. It is forecast to generate $322 billion in new sales in the timeframe.

Five key European countries will stand out in the next five years – France, Germany, Russia, Turkey and the UK, notes IGD's Head of Retail Insight EMEA Jon Wright. Online and discount are set to gain the most share to 2023, with discount set to be the strongest gainer between them both. Several factors are set to help maintain the channel’s growth, including expansion from regional leaders such as Aldi and local operators like Biedronka, and improvements in retailer offers as we’ve seen with Salling Group-owned Netto.

“We’re also seeing growth through more targeting of missions, as with Dia’s to Go format, and an expansion of ranges to include more organic and niche products,” he says.

“Despite growing slower than the market, the expansion and embedding of omnichannel strategies from hypermarket and supermarket operators is set to help them compete against discounters and pureplay e-commerce retailers. These initiatives are set to be enabled by alliances at a regional level, as between Carrefour and Tesco, and globally, as with US-based Target and Germany-based Metro collaborating.”

The North American market, meanwhile, is seeing significant investment in online, particularly in terms of supply chain and fulfilment. There is a big focus on making the channel more efficient which involves lots of testing of different solutions. Albertsons and Ahold Delhaize, for instance, have partnered with Takeoff Technologies for hyperlocal fulfilment, and Kroger has partnered with Ocado.