UK Wholesaler Growth Driven By Foodservice Market: IGD
An increase in the number of foodservice outlets and out-of-home options in traditional channels is helping to lift the UK’s foodservice market, according to new figures from grocery research organisation IGD.
IGD said that UK wholesalers saw 2016 sales grow 0.3% on the previous year to just short of £30 billion, which was mainly driven by more clients in the foodservice market, with this segment seeing sales grow by 2.1%.
Speaking at the IGD Wholesaling Conference, IGD’s chief economist James Walton, said, “For another year, foodservice has lifted the wholesaling sector, representing the vibrancy of the expanding out-of-home customer. We’re also seeing growth in the chilled and fresh and beer, wines and spirits categories, demonstrating clear investment opportunities for wholesalers.”
Sector Growth
IGD is predicting that the UK wholesaling sector will reach £31.3 billion by 2021, which is a compound annual growth rate of 0.9%. This forecast projects a 2.5% CAGR for delivered foodservice, 0.5% for delivered grocery and 0.1% for retail-led cash and carry.
Commenting on the wholesale sector’s 2016 figures, Walton added that one area of decline for the channel was tobacco (which saw sales drop by 1.8%), “but this is to be expected as new legislation brings in plain packaging and minimum pack sizes. Sales to the independent and convenience retail customer base also fell (by -0.6%).
“However, IGD’s recent survey indicates that four out of five (80%) wholesale suppliers remain optimistic about the future of the wholesale channel, including independent operators. Therefore, there is still plenty of opportunity for wholesalers wanting to drive growth in the independent market.”
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