Monday, August 24, 2015



China set to remain at head of line for grocery sales

A woman and her son select fruits at a supermarket in Hefei, Anhui province
Chinese grocery sales are set to grow by a third between now and 2020, according to forecasts from the Institute of Grocery Distribution.
While stock markets have been unnerved by the world’s second-largest economy struggling for momentum, the IGD forecasts that Chinese grocery sales will increase from $1,119bn in 2015 to $1,491bn in 2020.

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“China will maintain its position as the world’s biggest grocery market for the foreseeable future. Although the Chinese growth rate is slowing, it’s still very impressive, particularly in tier three and four cities,” said Joanne Denney-Finch, chief executive of the IGD.
The Chinese grocery market has proved challenging for western supermarket chains, with Tesco failing to make it alone on the mainland despite an ambitious programme of building so-called “lifestyle malls”, anchored by Tesco stores. Walmart has struggled with food-safety issues in China — a market where foreign brands trade on their reputation for quality, so any safety flaws are particularly bad for brand image.
But Ms Denney-Finch said there were “many more opportunities for retailers and western brands”, including the growth of online grocery shopping in China, where it is already the biggest global market and is forecast to expand further.
However, the IGD also expects significant growth in grocery sales in India and the so-called MINT countries — Mexico, Indonesia, Nigeria and Turkey.
The food and grocery research charity estimates that Indian sales will increase almost 80 per cent to $901bn in 2020.
Nigeria is forecast to generate the fastest growth of the largest markets, with sales expected to increase 85 per cent to more than $300bn in 2020.
Meanwhile, Indonesia’s grocery market is expected to be worth nearly as much as the UK’s in 2020.
“Although growth prospects appear limited in Europe at the moment, this is a time of tremendous opportunity for grocery companies further afield,” Ms Denney-Finch said. “The vast majority of global grocery growth will come from Asia, Africa and the Middle East supported by increasing affluence, urbanisation, and rising population. With many European products and brands highly regarded in these regions, this will be a boom time for companies with export skills.”
The US grocery market is expected to increase 21 per cent to $1.3tn in 2020, second only to China. UK grocery sales are set for a 14 per cent increase, with the value of the market rising from $310bn in 2015, to $352bn in 2020. The UK growth forecast comes despite the British industry being in the grip of a price war.

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