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Specialist Food & Drink Retailers - UK - March 2017

“Specialist food and drink retailers have enjoyed two years of growth, but rising inflation and successful turnaround strategies implemented by the supermarkets make for a challenging time ahead. Specialists can ensure their appeal extends beyond price by delivering a shopping experience that helps articulate their expertise while highlighting the transparency of their supply chain.”

–    Thomas Slide, Retail Analyst

This report will cover the following areas:

  • AmazonFresh is offering a new way into e-commerce for specialists
  • The risk from inflation

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Two strong years of growth but tough times ahead
              • Figure 1: Market size and forecast: retail sales of specialist food and drink retailers (Excl. VAT), 2011-21
            • Bakers/Confectioners grow while butchers decline
              • Figure 2: Estimated share of total sales through specialist food and drink retailers, 2015
            • Food deflation continues in 2016
              • Figure 3: CPI annual rate of change, 2011-16
            • Meat accounts for the largest share of consumer spending on food
              • Figure 4: Share of total household expenditure on food, by product category, 2012-16
            • Companies, brands and innovation
              • Greggs sidesteps a declining category by shifting focus
                • Few chains of butchers
                  • AmazonFresh gives specialists a new route to market
                    • The consumer
                      • Nearly two thirds shop at specialists
                        • Figure 5: Specialist retailers used in the last three months, December 2016
                      • Quality and discovery the key drivers
                        • Figure 6: Reasons for shopping at specialists, December 2016
                      • Butchers should leverage their position at the heart of the community
                        • Figure 7: How they view selected specialist food and drink retailers, December 2016
                      • Britishness an important factor
                        • Figure 8: Factors important when buying food and drink, December 2016
                      • Quality is important for health
                        • Figure 9: Attitudes towards food and drink, December 2016
                      • What we think
                      • Issues and Insights

                        • AmazonFresh is offering a new way into e-commerce for specialists
                          • The facts
                            • Implications
                              • The risk from inflation
                                • The facts
                                  • The implications
                                  • The Market – What You Need to Know

                                    • Two years of growth but challenging times ahead
                                      • Bakeries, confectionery shops and off-licences see strongest growth
                                        • Number of enterprises falls for fifth year in a row
                                          • Deflation continues through 2016
                                            • Consumer confidence stays strong
                                            • Market Size and Forecast

                                              • Consecutive years of growth for the specialists…
                                                • …but tougher times could be ahead
                                                  • Figure 10: Market size and forecast: retail sales of specialist food and drink retailers (Excl. VAT), 2011-21
                                                  • Figure 11: Market size and forecast: Retail sales of specialist food and drink retailers (excl VAT), at current and constant prices, 2011-21
                                                • Forecast methodology
                                                • Market Segmentation

                                                    • Bakers/confectioners see strong growth
                                                      • Off-licences outperform the wider drinks industry
                                                        • Butchers’ sales fall between 2011 and 2015
                                                          • Figure 12: Turnover in the leading categories, 2011-15
                                                        • Enterprise numbers continue to fall
                                                          • Figure 13: Number of UK enterprises, by type of specialist food and drink retailer, 2011-15
                                                      • Market Drivers

                                                        • Food deflation throughout 2016
                                                            • Figure 14: CPI annual rate of change, January 2016-January 2017
                                                            • Figure 15: CPI, annual percentage change, by detailed product category (food), August 2016-January 2017
                                                          • Consumer spending on food and drink
                                                            • Figure 16: Annual % growth in consumer spending on food and drink, 2011-16
                                                            • Figure 17: Composition of consumer spending as a % of total spending on food, 2012-16
                                                          • Consumer confidence
                                                            • Figure 18: Consumers’ perceived financial health, January 2015-January 2017
                                                            • Figure 19: Trends in consumer sentiment for the coming year, January 2015-January 2017
                                                          • Supermarket price wars
                                                          • Key Players – What You Need to Know

                                                            • Greggs repositions to avoid a declining category
                                                              • Few chains of butchers
                                                                • AmazonFresh gives specialists a new route to market
                                                                  • Chocolatiers the biggest advertisers of 2016
                                                                    • Holland & Barrett partners with Tesco
                                                                    • Competitive Strategies

                                                                        • Greggs repositions to avoid a declining category
                                                                          • Few large chains of butchers
                                                                            • A long tail of independents
                                                                              • Figure 20: Key financials of the leading food and drink specialist retailers, 2014-16
                                                                            • Greggs continues to expand
                                                                              • Holland & Barrett rolls out More stores
                                                                                • Thorntons’ store numbers continue to decline
                                                                                  • Figure 21: Outlet numbers for the leading store-based specialists, 2014-16
                                                                              • Advertising and Marketing Activity

                                                                                  • Chocolate retail brands battle it out online with Easter campaigns
                                                                                    • Home food and drink delivery services
                                                                                      • Figure 25: Selected leading UK specialist food and drink retailers: Recorded above-the-line, online display and direct mail total advertising expenditure, 2012-16
                                                                                    • Press attracts the greatest percentage of advertising spend
                                                                                      • Figure 26: Selected leading UK specialist food and drink retailers: % of recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2016
                                                                                    • Nielsen Ad Intel coverage
                                                                                    • Innovation and Launch Activity

                                                                                      • Bakeries and confectioners
                                                                                        • Butchers, greengrocers and farmers’ markets
                                                                                          • Health food stores
                                                                                            • Drinks retailers
                                                                                            • The Consumer – What You Need to Know

                                                                                              • Nearly two thirds shop at specialists
                                                                                                • Specialists attract the young and affluent
                                                                                                  • Visits to specialists driven by quality and discovery
                                                                                                    • Young more persuaded by practical concerns
                                                                                                      • Butchers and bakeries seen as part of the community
                                                                                                        • British-made is a key driver when shopping for food and drink
                                                                                                          • Localism presents an opportunity for specialists
                                                                                                          • Specialist Food and Drink Retailers Used

                                                                                                            • Nearly two thirds shop at specialists
                                                                                                              • Figure 27: Specialist retailers used in the last three months, December 2016
                                                                                                            • Butchers have the oldest customer base
                                                                                                              • Figure 28: Specialist food and drink retailers used in the last three months, by average age and affluence, December 2016
                                                                                                            • Morrisons shoppers most likely to use specialists
                                                                                                              • Figure 29: Proportion of those doing the majority of their grocery shopping at the leading supermarkets who have visited any specialist food or drink retailer in the past three months, December 2016
                                                                                                            • Frequency of visits
                                                                                                              • Figure 30: How frequently they visit specialists, December 2016
                                                                                                            • Young visit more specialists
                                                                                                              • Figure 31: Repertoire of specialist food and drink retailers visited in the past three months, December 2016
                                                                                                          • Reasons for Shopping at Food and Drink Specialists

                                                                                                            • Trading on quality and excitement
                                                                                                                • Figure 32: Reasons for shopping at specialists, December 2016
                                                                                                              • Young more persuaded by practical concerns
                                                                                                                • Figure 33: Reasons for shopping at specialist food and drink retailers, by average age and socio economic group, December 2016
                                                                                                              • Reasons for shopping by specialist retailer used
                                                                                                                  • Figure 34: Attitudes towards shopping at specialists, by where they shop, December 2016
                                                                                                              • How They View Specialist Retailers

                                                                                                                • Butchers need to leverage their community credentials
                                                                                                                  • Figure 35: How they view selected specialist food and drink retailers, December 2016
                                                                                                                  • Figure 36: How they view selected specialist food and drink retailers, December 2016
                                                                                                              • Important Factors When Shopping for Food and Drink

                                                                                                                • British-made
                                                                                                                  • Figure 37: Factors important when buying food and drink, December 2016
                                                                                                                • Women are more concerned with welfare factors
                                                                                                                  • Figure 38: Factors important when buying food and drink, by gender, December 2016
                                                                                                                • Sugar concerns cross all social segments
                                                                                                                  • Figure 39: 1st rank factor important when shopping for food and drink, by profile, December 2016
                                                                                                                • Specialist shoppers prioritise local sourcing
                                                                                                                  • Figure 40: Factors important when buying food and drink to those who have shopped at specialist food and drink retailers in the last 3 months, December 2016
                                                                                                                  • Figure 41: Factors important when buying food and drink, percentage point difference from the average of all specialist shoppers, December 2016
                                                                                                              • Attitudes towards Shopping for Food and Drink

                                                                                                                • The importance of localism
                                                                                                                  • Figure 42: Attitudes towards food and drink, December 2016
                                                                                                                • Millennials are more concerned about sourcing information
                                                                                                                  • Figure 43: Any agreement with selected attitudes, percentage point difference from the average, by generation, December 2016
                                                                                                                • Attitudes of those who don’t shop at specialists
                                                                                                                  • Figure 44: Attitudes towards shopping for food and drink by those who haven’t shopped at a specialist food or drink retailer in the past three months, December 2016
                                                                                                                • Delicatessens and fishmongers appeal to those looking for cooking advice
                                                                                                                  • Figure 45: Attitudes towards shopping for food and drink, by the specialist they used in the last 3 months, December 2016
                                                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                  • Abbreviations
                                                                                                                    • Consumer research methodology
                                                                                                                    • Appendix – Correspondence Analysis

                                                                                                                      • Methodology
                                                                                                                        • Figure 46: How they view selected specialist food and drink retailers, December 2016
                                                                                                                        • Figure 47: How they view selected specialist food and drink retailers, December 2016
                                                                                                                    • Appendix – Market Size and Forecast

                                                                                                                      • Forecast methodology

                                                                                                                      Companies Covered

                                                                                                                      To learn more about the companies covered in this report please contact us.

                                                                                                                      Specialist Food & Drink Retailers - UK - March 2017

                                                                                                                      US $2,570.96 (Excl.Tax)