Global Food Retail Market Size (2023 – 2030)

The Food retail market is expected to be valued at USD 12 trillion in 2022 and is estimated to register a revenue of USD 16.42 trillion by 2030. The market is anticipated to witness a compound annual growth rate (CAGR)of 4% over the forecast period of 2023-2030. Food consumption has grown as a result of growingdisposable income and a fast-paced lifestyle among a significant portion of the global population.

Industry Overview

People eat a wide range of food and grocery goods regularly. Fresh food, frozen foods, personal care and home care goods, drinks, and other commodities fall under this category. Food and grocery merchants may increase their income by using an appropriate price-product combination. Nowadays, organisations in the food and grocery retailing industries concentrate on inventory management to produce the necessary income from such items. In addition, they use a variety of analytical tools to track customer behaviour when it comes to purchasing such things from their stores.

Retailers are now holding a variety of workshops, discount pop-ups, and events relating to grocery goods in their stores. This assists businesses in increasing client confidence in purchasing grocery products from their retail stores, resulting in market expansion. Walmart Inc., for example, introduced three 'Black Friday' events at its U.S. shops in October 2020 to sell reduced grocery products to U.S. shoppers. Growing global trends in the consumption of nutritional and frozen food items are expected to boost sales for these goods.

Furthermore, the growing popularity of e-commerce among the worldwide population is predicted to open up new avenues for the retail industry's expansion. In addition, customers began restocking their households with a range of food and grocery goods to minimise supply shortages during the COVID-19 lockdown period. As a result, revenue from such things increased dramatically. However, the demand is anticipated to be constrained by fierce rivalry from unorganised and local industry players. Furthermore, disruptions in the food and grocery supply chain owing to a variety of unforeseeable reasons such as military conflict, tornadoes, and other natural disasters are projected to stymie sector growth.

MARKET DRIVERS:

The surge in people cooking food in their homes is propelling the market growth

There is a growing trend among those who want to relive the feeling of travelling and vacationing by preparing ethnic foods at home. The need for food cupboards has risen as a result of this. Curry pastes and spice blends, for example, provide a shortcut to flavorful dishes for inexperienced home cooks. As a result, food pantry goods have become a key and profitable market for speciality stores to explore, as the home cooking trend rises, as does the need for ingredients that add something special to a standard dish.

The industry expansion has been fueled by new delivery methods introduced by the HORECA industry

Consumers are driving the development and acceptance of innovative grocery delivery models that align with their retail and service consumption habits. New delivery options such as Buy Online Pickup In-Store (BOPIS), curbside pickup, and direct-to-door are gaining popularity, indicating a change in customer behaviour. One- to two-day shipping is becoming increasingly common, and it tends to raise delivery expectations. Customer loyalty and retention are negatively affected by inaccurate delivery estimations. As subscription services and direct-to-consumer models gain popularity, grocers are restructuring their brick-and-mortar locations to maximise their real estate investments to fit these new consumption models.

Market restraints

Several unanticipated circumstances may have a restraining effect on the growth of the food retail market

The industry's expansion is projected to be hampered by disruptions in the food and grocery supply chain caused by a variety of unforeseeable reasons such as military conflict, tornadoes, and other natural disasters.

The growth is projected to be constrained by fierce rivalry from local industry players

The market is experiencing issues such as inadequate supply chains and the danger of unorganised companies. In the short and medium-term, the influence of the growing private label brands market is predicted to be high, and n the long term, it is likely to be moderate. Private label brands are those produced by small-scale food processing enterprises and sold to food merchants at cheaper prices than those produced by larger food processing corporations. Due to the predicted rebound in the European economy, private label brands are supposed to lose market share by the end of the decade. Customers will eventually be retained by the brands of organised food processing enterprises as a result of this.

FOOD RETAIL MARKET REPORT COVERAGE:

This research report on the food retail market has been segmented and sub-segmented based on By Product, By Category, By Distribution Channel and By Region.

FOOD RETAIL MARKET – BY PRODUCT:

• Fresh Food

• Frozen Food

• Food Cupboard

• Beverages

• Cleaning & Household

• Others

In 2021, the food cupboard sector accounted for more than 37.5 per cent of the market share. As per the COVID-19 Consumer Tracker commissioned by the UK Food Standards Agency, due to pandemic-induced lockdowns, which resulted in the temporary closure of pubs, restaurants, and cafés, about 39% of UK consumers made meals from scratch. In recent times, growth in demand for the food cupboard category has been driven by a rise in cooking and baking activities, particularly among Generation Z customers. In recent years, the focus on nutrition and authenticity has grown more important in the fine food sector, but demand for high-quality, long-lasting food cabinet items is projected to grow in the future years as more customers shop locally and less frequently. The beverages category, on the other hand, is estimated to rise at the quickest rate throughout the projection period. Due to the closure of restaurants, bars, pubs, and cafés during the pandemic, off-trade purchases of beer, wine, and non-alcoholic beverages increased dramatically. During the projection period, the category is likely to rise due to changes in consumer behaviour about beverage consumption at home. In recent years, the beverage industry has seen major changes as new trends compel producers to find new methods to boost sales. The beverage industry, like many others, has seen a surge in health and wellness goods recently. Alternative commodities, such as natural and organic drinks, are growing in popularity while traditional beverage sales decline.

FOOD RETAIL MARKET – BY CATEGORY:

• Packed

• Unpacked

Retailers tend to stock pre-packaged grocery items to extend the shelf life of these commodities. As a result, the packed category accounts for a significant portion of the market. Furthermore, consumers can save time and effort by ingesting pre-packaged foods. The revenue from packaged food items is mostly driven by this.

FOOD RETAIL MARKET – BY DISTRIBUTION CHANNEL:

• Supermarkets & Hypermarkets

• Convenience Stores, Departmental Stores & Clubs

• Online

In 2021, the supermarkets & hypermarkets category dominated the market, accounting for more than 64.00 per cent of total sales. The key reason for its significant market share is the great number of supermarkets and hypermarkets throughout the world. One of the primary motivators for people to frequent their local supermarkets and hypermarkets is the convenience of having a wide variety of food and beverage goods in one location. Moreover, shop owners are coming up with creative marketing and promotional activities to guarantee that consumers' in-store purchase habits are maintained.

Due to the growth of purchasing patterns driven by the pandemic, the online delivery channel is predicted to grow at the quickest rate from 2023 - 2030. More safety restrictions boosted the market for both online and (especially in places with tougher lockdowns) local shopping, while the closure of cafés and restaurants, along with an increase in remote working, shifted customers' food consumption from restaurants to grocery stores. Customers are becoming more aware of the benefits of digitization in other retail contexts and are increasingly expecting it in grocery shops. Merchants who know how to use technology to enhance the shopping experience and meet changing customer needs are prospering. Digital natives, or customers especially the millennials and generation Z who grew up with digital technology, have aided in the growth of online food and grocery purchases. These clients are highly excited about and at ease with technology, and online shopping is a long-standing habit for them. Thus, the aforementioned reasons are the key factor propelling the market growth.

FOOD RETAIL MARKET - BY REGION:

• North America

• Europe

• The Asia Pacific

• Latin America

• The Middle East 

• Africa

In 2021, Asia Pacific had the highest proportion of worldwide sales, accounting for 36.3 per cent. The domination of this region is mostly due to the growth of supermarkets in emerging countries. Urbanization and increased disposable incomes on the demand side, FDI, format diversification, local investments, and modernization of procurement procedures to lower costs on the supply side have all contributed to the growth of supermarkets in the Asia Pacific.

Increased smartphone usage and broadband penetration, especially in developing nations, have supported the expansion of online food sales. In terms of internet commerce adoption, Asia Pacific consistently beats the world average. The most popular flexible retailing option in the area is online ordering for home delivery, with China leading the way in terms of online food and grocery shopping. This has boosted the market in this area, and it is projected to continue to do so in the future. Retailers in this region are leveraging technology to improve customer service and supply chain management.

Due to the increasing development of notable supermarket store companies such as LuLu Group International, AL Safeer International, Panda Retail Company, and others in nations such as the United Arab Emirates, Saudi Arabia, and South Africa, the Middle East and Africa region is anticipated to witness significant growth for the global market.

FOOD RETAIL MARKET - BY COMPANIES

With a large number of global and regional companies, the market is fragmented. To grow their client base and brand loyalty, these companies are investing heavily in the acquisition and promotional operations. Moreover, these companies are utilising emerging technologies such as blockchain and artificial intelligence (AI) to improve consumer experience and optimise supply chain operations. Some of the prominent players operating in the food retail market are:

1. Walmart

2. Costco Wholesale Corp.

3. 7-ELEVEN, Inc.

4. Amazon.com Inc

5. The Kroger Co.

6. Target Brands, Inc.

7. ALDI

8. AEON Co Ltd

9. Carrefour CA

10. Schwarz Gruppe

Covid-19 impact on the food retail market:

The advent of COVID -19 had significantly influenced the food retail market growth. In the aftermath of the COVID-19 epidemic, the food and beverage sector saw significant changes. Because some restaurants were closed and others were only available for takeaway or delivery, the bulk of meals was eaten at home, especially in areas where stringent lockdown laws were in effect. This caused unanticipated variations in grocery sales, as bare store shelves revealed shifting customer preferences in real-time. Confectionery, sweets, and salty snacks showed a rise in sales during the recessionary pantry-stocking period.

The advent of Covid resulted in greater grocery expenditure, increased online grocery sales volume, and consumer polarisation. As a result of the epidemic, consumer polarisation emerged, with some customers increasing their spending to buy more expensive items. Moreover, increasing home cooking as a result of the pandemic has been a key industry development factor.

NOTABLE HAPPENING IN THE FOOD RETAIL MARKET

• ACQUISITION- Alimentation Couche-Tard Inc., a Canadian convenience store firm, purchased Carrefour S.A., a French international retail corporation, in January 2021 in order to open its 26,000 food and grocery shops in the United States and Canada.

• PRODUCT LAUNCH - Walmart introduced Alphabot, a new technology for their supermarket business, in January 2020. As the firm strives to improve its position as America's largest supermarket, the technology will allow it to pick, pack, and deliver consumers' online grocery shopping quicker.

• PARTNERSHIP- In June 2020, Instacart, an American retail business, announced a partnership with C&S Wholesale Grocers to provide an e-commerce solution to the 3,000 independent C&S wholesale shops across the United States. The partner firm was able to develop its internet presence in the United States as a result of this.