The UK grocery wholesaling market will reach £18.3bn (US$34.3bn) by 2009, almost a 10% increase on the current value of £16.7bn, according to food and grocery think tank IGD.
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In its new research report Grocery Wholesaling 2005, IGD anticipates that delivered will continue to fare better than cash & carry. It will reach £8.5bn in 2009, an average annual growth rate of 3.5%. This growth will be boosted by the predicted ongoing growth of symbol groups, as well as growth through forecourt retailing and foodservice. Cash & carry is expected to reach £9.8bn, an average annual growth rate of 0.5%.
Key considerations for the future include consolidation in both the wholesale sector, as shown by the recent Bestway acquisition of Batley’s, and in the convenience market. IGD believes that franchising is also likely to drive growth as it presents opportunities for non-affiliated independents who seek to benefit from the advantages of belonging to a larger business.
IGD’s supplier survey revealed that 88% of suppliers say they are committed to investing in the wholesale sector, while 66% are devoting more resources to it than last year. And 86% believe that communication between wholesalers and suppliers is continually improving; encouragingly IGD found that three-quarters of suppliers state that they work with wholesalers to provide category plans and support for independent retailers.
“The wholesale sector continues to grow, albeit at a slower rate (1.9%) than the grocery sector, which grew by 3.3% last year. However, our research shows that both suppliers and wholesalers are positive about the future of the sector, with suppliers devoting more resources and wholesalers expecting to see growth across convenience stores, forecourts and foodservice in 2005,” said IGD chief executive Joanne Denney-Finch.
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By GlobalData“However, we also found that a key opportunity is to improve communication and ensure that continual improvements in information flow and collaborative planning take place. Initiatives of this type already underway are definitely proving successful,” she added.
