The grocery sector is on the brink of significant transformation, with online and discount channels set to lead growth.
- Economic factors and evolving consumer behaviors are at the core of this shift in global grocery sales.
- By 2029, online grocery is expected to capture 6.3% of global sales, highlighting a major shift in shopping habits.
- Discount stores, as the fastest-growing physical channels, are forecasted to contribute 9.3% to global sales.
- Traditional trade will continue its dominance, yet its share is anticipated to decline in multiple markets.
The grocery landscape is evolving rapidly, driven by notable economic factors and changing consumer preferences, according to the latest insights from the Institute of Grocery Distribution (IGD). This transformation is poised to be led by the online and discount grocery channels over the next five years.
Online grocery channels are expected to revolutionize the market, projected to account for 6.3% of global sales by 2029. This growth signifies a significant alteration in shopping behaviors, as consumers increasingly turn to the convenience of online shopping. Meanwhile, discount stores are not far behind, predicted to gain 9.3% of the global grocery sales, marking them as the fastest-growing physical retail channels.
Despite the anticipated growth in online and discount sectors, traditional trade is expected to maintain a significant role, contributing to 43% of net new sales between 2024 and 2029. However, the market share of traditional trade is anticipated to decline in several regions, as modern retail formats gain popularity.
Supermarkets are forecasted to remain an important segment in the grocery sector, contributing significantly to new sales, even as they experience a gradual decrease in market share. Nick Miles, IGD’s head of global insights, emphasized the importance for businesses to identify growth sources, stating, “It is critical for businesses to understand where growth will come from over the next five years, to ensure they are prioritizing capital expenditure, resource deployment, and building the right capabilities to drive growth.”
Inflationary trends also play a notable role in this shifting landscape. While inflation is expected to decline gradually through 2025, developed markets are likely to achieve inflation targets more quickly than developing ones. This economic backdrop is contributing to the strategic maneuvers undertaken by retailers in preparation for future growth.
The dynamic shifts in the grocery industry highlight an era of opportunity and adaptation, driven by online and discount channels.
