China has surpassed the US to become the world’s largest food and grocery retail market, new research from IGD has revealed.
According to IGD’s findings, which were published today (4 April), the Chinese grocery sector was worth GBP607bn (US$963bn) at the end of 2011. The US, the world’s second-largest market, was valued at GBP572bn.
And China is expected to see stronger growth than the US in the coming years. By 2015, the Chinese market is forecast to be worth GBP918bn compared to a US value of GBP675bn, IGD predicted.
“China’s grocery growth story is phenomenal. Between 2006 and 2015, the Chinese grocery market is forecast to triple in value and to be worth nearly a trillion pounds. This rapid expansion has been fuelled by three main factors: rapid economic growth, population and rising food inflation,” Joanne Denney-Finch, IGD CEO, commented.
Between 2011 and 2015, the US grocery retail market should see growth accelerating to reach a compound annual growth rate of 4.2%, but China’s rate will be double this at 10.9% over the same period, IGD said.
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All the BRIC nations will be in the top five grocery markets by 2015, with India displacing Japan as the world’s third largest grocery market by value, IGD added.
The strong growth rate and extensive size of the BRIC markets – and China in particular – make them important markets for the international food industry, Denney-Finch observed.
“All the BRIC nations have been steadily increasing in value and by 2015 they are tipped to dominate the top five grocery slots, and many UK food and grocery companies are already pursuing this opportunity,” she commented.
The UK grocery market will be the eighth largest in the world by 2015, worth GBP162bn. Compound annual growth in the UK is expected to total 3.2% between 2011 and 2015, the research firm suggested.
In the UK, growth will be driven by growth in the convenience and online channels, Denny-Finch added.
“In the UK, we expect the online sector to perform well, with internet sales boosted by the increasing use of smartphones and tablet computers. Convenience stores, with their increased focus fresh food and tailoring the store depending on local demand, are also expected to be key performer.”