Big superstores lose grocery sales but who gains?

Published 8 July 15

Big superstores are expected to lose around 3% of their grocery sales value over the next five years despite continued growth in the UK grocery market. Sales are generally expected to shift toward online, discounters and convenience stores, according to a report by the IGD (Institute of Grocery Distribution). The broadening of alternative sales outlets could help improve the negotiating position of suppliers, especially in the liquid milk market where the big superstores have largely remained unchallenged.

Sales of liquid milk are currently following this pattern but cheese appears to be bucking the convenience trend. Convenience stores actually saw a 7% drop in their share of the cheese market in the year to April 2015, whilst the discounters gained a substantial 23%.

Pricing could be one reason for this as the discounters reduced cheese prices during this time, whilst average prices increased across the other types of outlets. Research also suggests that where shoppers want more choice, such as with cheese products, they are prepared to browse for longer. This means they may be less likely to purchase those products in smaller convenience stores.

Retailers graph 8Jul15