Market Research Reports - Ken Research UK Grocery Market Research Report - Ken Research

UK Grocery Market to Intensify With the Advent of Rising Competition: Ken Research
Hypermarkets, supermarkets, mixed retailers, convenience stores and discounters are the
distribution channels that have been long used by grocery retailers in United Kingdom. There
are many non-store retailing channels which include vending, direct selling, internet retailing,
home shopping etc. The distribution channel contributing the most to the grocery retailers
market in 2016 has been the ‘discounters’ who have been expanding with an impressive value
growth.
The consumers are also becoming increasingly price-conscious that has helped the discounters
channel to grow. The discounters have well provided the cheapest products to consumers like
lobsters being sold by Lidl at just GBP2.99. Another reason for the growth is that there is a focus
on luxury discounting and also the store network of many of the leading companies is
expanding.
J Sainsbury Plc, Aldi, Lidl Ltd, Tesco Plc and Marks & Spencer Plc are some of the leading grocery
retailers in United Kingdom with the leader being Tesco Plc. The company uses a variety of
distribution channels for selling its products including hypermarkets, supermarkets and
convenience stores along with some forecourt retailers. The store also has came across a lot of
price cuts recently which resulted in a loss in value share. The company also closed many of its
underperforming stores and shifted its call centre operations in one place. This led to a further
reduction in sales volume of the company. Despite all this, the company has been viewed
recently to increase the workers’ pay by 10.5% which means they will now be more dedicated
towards work and the company has also improved its maternity benefits. It feels this will help
the company to acquire better talent as well as take better care of the needs of the employees.
Even after the pay hike, Aldi has prolonged to be the highest paying grocery retailer in UK.
According to the report, “Grocery Retailers in the United Kingdom”, the recent developments
have changed the market dynamics. There is increasing competition in the market with the
coming in of German discounters which are gaining popularity rapidly. Currently, internet
retailing of groceries is also capturing a larger market share.
United Kingdom is considered the most mature market for online groceries in the West but the
share of internet selling is still very small. Ocado is the biggest online-only grocery retailer in the
United Kingdom but is very far behind when compared to the online sales of major
supermarkets. This scenario is expected to change with the acquisition of Whole Foods by
Amazon. Amazon is an e-commerce giant which is expected to start selling groceries through
physical stores. This will further augment the online sale of groceries as well as give tough
competition to other companies with a physical presence.