New research from food and grocery analysts IGD has revealed that UK shoppers are spending some GBP13bn (US$24bn) a year on premium grocery products such as organic, Fairtrade, premium brands, retailers’ premium own label, local and regional foods, and specialist fine foods.

Moreover, IGD is forecasting that premium spending will rise to GBP19.2bn by 2011.
“Some retailers, like Marks & Spencer and Waitrose, focus almost exclusively on a premium offer,” said IGD’s senior business analyst Patrick Mitchell-Fox. “Others are looking to exploit the potential this market offers, and are adding more premium lines to their ranges.”
According to IGD’s data, the premium sector currently represents around 10% of the total food and grocery market in the UK, and its share will rise to 13.5% by 2011.

The expansion in the premium sector will be led by growth in organic, Fairtrade, retailers’ private label ranges and premium brands, IGD forecasted.

While the expansion of Waitrose and the addition of more food-only stores by Marks & Spencer have been  catalysts for the premium growth, IGD says other retailers, such as Tesco and Sainsbury’s, are continuing to develop their own premium offerings. The Tesco Finest range now has sales of GBP1bn a year, while the Sainsbury’s Taste the Difference range now extends over 1,000 lines.

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