5 drivers to the grocery sector in 2020

The UK retail market will continue to undergo a monumental change in 2020.  To survive this shift and thrive in a new climate of change, the UK grocery sector is driven to evolve. So, what exactly are these changes that we, as producers and retailers, face today?

1. Convenience and choice will drive consumer behaviour

Let’s face it: Our customers’ shopping habits are changing. Apparently, the pattern is said to have shifted markedly about five years ago.  One must note that this generation spends money differently from the way their parents used to. In the future, for instance, it would be incomprehensible for them to spend two hours of their time food shopping on a Sunday.

2. Online will take a larger share of grocery sales

In a digital world, the grocery run has also changed course and found a faster, easier route. Thanks to online shopping, e-commerce giants like Amazon now have bragging rights to a convenient platform on which to shop from home. Inevitably, we must contend with innovations and advancements in which we should neither be outpaced nor left behind. 

3. Discounters will continue to eat market share

A renewed focus on low prices has come from consumer demand for value after the economic downturn. Although the economy has recovered, consumer habits have remained consistent. Decades have seen the Big Four namely Tesco, Asda, Morrisons, and Sainsbury’s dominate the UK scene. What these retailers seem to have underestimated, however, is the meteoric rise of present-day discount chains. Clashing with the titans of the supermarket industry, they promote the value of no-frills shopping where one can buy comparable goods at low prices. Powerful as price is, it drives trade in a different direction. 

4. Further consolidation and diversification.

Dealt this hand, the Big Four were forced to broker deals to acquire greater volume and growth. Mergers like Sainsbury’s/Asda and Tesco/Booker rendered them more influential and competitive. Because of the redundancy and overlap that comes with consolidating companies, however, store closures and job losses could result from it. 

Demographically, we are also dealing with a much more diversified consumer base. As we face this diversification in population, the grocer of today no longer caters to the tastes and preferences of the same market as it had before.

5. Brexit is still a wild card.

Last but not least, blame it on Brexit. Britain’s exit from the European Union will certainly have a long and lasting impact beyond the grocery front. Aside from disrupting many supply chains and affecting the trade and import of goods, it also drives the UK manufacturing sector to drastically expand both farming and production locally in order to meet the country’s demand.As with any retail market, we in the UK know only too well that the customer always comes first! Thus, part of being consumer-driven would be to respond to these changes in the context of these five factors. Game-changing, they will shape how well we operate in the present and influence how much we succeed in the future.