The spectacular success of the chilled convenience food market is contributing to a levelling off of sales of frozen ready meals, according to the latest issue of Retail Intelligence’s product market monitor Consumer Goods UK. Other factors the report cites include lack of product innovation and low key promotion. Tackling these two issues has already brought modest returns – while the market has yet to recover to its 1996 peak, 1999 at least saw a return to growth (5% by volume) after two years of decline.

Figure 1: Market Size for Chilled and Frozen Ready Meals, 1995-1999


Source: Retail Intelligence.

Frozen Food Market Not So Healthy

Frozen ready meals were first introduced into the UK in the mid-1970s; by the middle of the 1980s the sector was valued at £200mn, Consumer Goods UK reports. Over the next decade the market tripled in size to peak at £600mn in 1995 – a growth rate that made it one of the most dynamic sectors in the whole food market. The factors driving this growth rate centre on the decline in traditional family mealtimes – caused by smaller families, more women working and the cult of the individual – a higher priority put on healthy eating and more adventurous palates, and technological advances, such as a wider ownership of freezers and microwaves.

However, all these factors have equal – and possibly greater – relevance to the chilled food market: products in this sector are seen as more convenient, more innovative and – crucially – more healthy. It is indicative of this last factor that, while healthy eating gains ever more prominence generally, healthy frozen ready meals have seen a 12% decline in market value over the 1995 to 1999 period.

Table 2: Frozen Ready Meals as a Proportion of the Ready Meals Market, 1995-1999
(% of value)

% change in sales













Source: Retail Intelligence.

A Reversal of Fortunes

Between 1997 and 1999 the market shares of frozen and chilled ready meals markets were, effectively, reversed. Retailer promotional and pricing strategy became focused on wresting market share away from the hugely lucrative fast food sector (which had done much to establish the market for ethnic cuisine, almost half the volume of the UK frozen ready meal market). However, the bulk of this effort favoured the chilled convenience food sector – where a greater drive to recreate authentic ethnic eating, better packaging and the healthy eating perception all contribute. The result: the frozen ready meal market was in decline in 1997 and 1998. This trend was reflected in other sectors of the frozen convenience food market (the exception – as reported by Consumer Goods UK in January – is the frozen pizza market, which remains buoyant).

Consumer Goods UK notes, however, that 1999 has seen something of a recovery in the frozen ready meals market. The factors driving this have been greater innovation in meal types: firstly a wider variety of ethnic cuisine, which continues to strengthen market share (Chinese meals have seen five year growth of 153%); and more recently organic meals have been making headway. Advertising spend has fallen, to be replaced largely by below the line promotional effort. While these efforts have had the effect of halting the decline, Nicholas Wall, senior analyst at Consumer Goods UK, notes that “the prospect of a return to the double digit growth of the 1980s and early 1990s looks remote.”

Details of reports from Retail Intelligence click here