Specialist Food and Drink Retailers - UK - March 2015
“Attributes such as quality standard marking, food traceability and low food miles/freshly produced on-site can all be compelling reasons for shoppers to favour specialists and eschew the mainstream retailers.”
– Chris Wisson, Senior Drinks Analyst
This report looks at the following areas:
- The importance of the online channel to specialists
- Specialists and the supermarket price wars
- Is the horsemeat scandal still benefiting the specialists?
- How can specialists compete with c-stores more effectively?
The specialist food and drink grocery market continues to see modest growth. The number of specialist stores has been broadly declining for a number of years. This is a likely result of the rising business rates in many city centres and increased competition within the food and drink retail sector, leading to the growth of many online operators and a rejuvenation in food box deliveries such as HelloFresh and Graze.
The category saw an upturn in fortunes in the wake of the horsemeat scandal in early 2013 as food transparency became more important to many consumers. It has also benefited from the increasing trend for consumers to do less of their main shopping at supermarkets, instead looking towards top-up shopping trips. However, specialists are being overshadowed by the performance of convenience stores which are often doing a better job of securing the business of top-up shoppers, with the online channel and continued growth of the ‘discounters’ adding further competition.
While specialists are widely seen to offer higher quality goods, they also continue to be somewhat hampered by perceptions of high prices. This issue may become increasingly pertinent in the immediate future as the supermarket price wars escalate. The onus is therefore on specialists to try to convince shoppers that their produce and service is worth making the visit for and can justify higher costs where applicable.
This report looks at food and drink sales through specialist retailers, including the following as per the Standard Industry Classifications from the Annual Business Survey:
- Greengrocers (fruit and vegetables)
- Butchers (meat)
- Fishmongers (fish/seafood)
- Bakers and confectioners (bread, cakes, chocolate and sugar confectionery)
- Off-licences (alcoholic beverages)
- Farmers’ markets
- Other food specialists including delis and health food shops
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