2021
9
UK Specialist Food and Drink Retailers Market Report 2021
2021-04-02T04:06:59+01:00
OX1045445
2195
136216
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Report
en_GB
“Specialist food and drink retailers have suffered in a year like no other in recent times. With the economy struggling as the pandemic took hold, wages dropped and footfall on…

UK Specialist Food and Drink Retailers Market Report 2021

£ 2,195 (Excl.Tax)

Report Summary

Providing the most comprehensive and up-to-date information and analysis of the UK Specialist Food and Drink market, including the behaviours, preferences and habits of the consumer.

With the COVID-19 pandemic seeing the closure of most non-essential stores and a huge decline in high street footfall, the specialist food and drink sector saw a 5% fall in sales. While there was a huge rise in online shopping across all sectors, many specialist shops struggled due to their previous lack of online presence. 48% of consumers reported to having cut back on time spent in-store because of the pandemic and fear of contamination.

Despite furlough being extended to September 2021, the economic uncertainty and potential layoffs once lockdowns are lifted could also cause a further decline in the market. However, the rise in online shopping could create market opportunities going forwards, especially for smaller stores who are unable to partner with third party delivery services like Just Eat.

This report outlines the current state of the market as the pandemic lifts, as well as future market opportunities that specialists could use to improve market growth and customer perception. With 28% of shoppers reporting feeling intimidated by their shopping experience, brands could work to improving customer shopping experiences.

Read on to discover more details or take a look at all of our UK Food and UK Drink market research.

Alternatively, take a look at this similar report: UK Supermarkets.

Quickly understand

  • The impact of COVID-19 on shopping behaviour and its impact on the specialist sector.
  • How consumers shop at specialist food and drink retailers.
  • The types of specialists most used in the UK.
  • Consumer attitudes towards specialists.
  • How satisfied consumers are with the specialists they shop at.

Covered in this report

Specialist Retailer Types: Butchers, bakery, health food, greengrocer, farmer’s market, confectionary shops, alcoholic drinks retailers, fishmongers, delicatessens, online food and drink specialists, country or region specific food shops, off-licenses.

Brands and Chains: Greggs, Hotel Chocolat, HelloFresh, Naked, Majestic Wines Retail, Just Eat, BestWay Retail, Holland & Barrett, Direct Wines, Thorntons, The Wine Society, Cook Trading, Graze – Nature Delivered, Krispy Kreme, Abel & Cole, Riverford Organic Vegetables, Sayers the Bakers, G101 Off Sales, Coopland & Son (Scarborough), Gail’s, Virgin Wine Online, Whittard of Chelsea, Greenhalgh’s Craft Bakery, Birds (Derby), Millie’s Cookies (Retail).

Expert analysis from a specialist in the field

Written by Piers Butel, a leading analyst in the Retail sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

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.

Piers Butel
Retail Analyst

Table of Contents

  1. Overview

      • Key issues covered in this Report
        • COVID-19: market context
          • Economic and other assumptions
            • Products covered in this Report
            • Executive Summary

                • Impact of COVID-19 on the specialist food and drink retail sector
                  • Figure 1: Short, medium and long-term impact of COVID-19 on specialist food and drink retailers, March 2021
                • The market
                  • Specialists suffer as footfall plummets and ecommerce surges
                    • Figure 2: Market size and forecast: retail sales of specialist food and drink retailers, 2015-25
                  • Wages plummet as economic downturn hits
                    • Figure 3: Average weekly earnings, by consumer price index, January 2016-December 2020
                  • Companies and brands
                    • A broad sector consisting of independents
                      • Greggs still dominates, but takes a hit in 2020
                        • Hotel Chocolat’s experience in ecommerce pays off
                          • The consumer
                            • Butchers and bakers the most popular specialists
                              • Figure 4: Specialist food and drink retailers typically used, December 2020
                            • Bakers particularly appeal to younger consumers
                              • Figure 5: Specialist food and drink retailers typically used by average age and affluence, December 2020
                            • Over a quarter of shoppers find specialists intimidating
                              • Figure 6: Attitudes towards specialist food and drink retailers, December 2020
                            • Specialists could consider supporting local communities to build loyalty
                              • Figure 7: Key drivers of overall satisfaction with specialist food and drink retailers, December 2020
                            • Value and convenience are key to encourage customer visits
                              • Figure 8: Factors to encourage shopping at specialist food and drink stores
                          • Issues and Insights

                            • COVID-19 pandemic underlines the importance of ecommerce
                              • Opportunity for specialists to capitalise on rise in localism
                              • The Market – Key Takeaways

                                • COVID-19 hit consumer confidence and spending plummets
                                  • Post-pandemic growth on the horizon
                                    • Specialist numbers continue to drop
                                      • Online grocery sales surge
                                      • Market Size and Forecast

                                        • Specialists struggle as footfall drops and online surges
                                          • Figure 9: Short, medium and long-term impact of COVID-19 on specialist food and drink retailers, March 2020
                                        • Sales drop as pandemic and economic downturn bite
                                          • Figure 10: Market size and forecast – Retail sales of specialist food and drink retailers, 2015-25 (prepared on 15/03/21)
                                          • Figure 11: Market size and forecast – Retail sales of specialist food and drink retailers (excluding VAT), at current and constant prices, 2015-25
                                        • Market drivers and assumptions
                                          • Figure 12: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 09/09/21)
                                        • Learnings from the last recession
                                          • Figure 13: Annual % change in all grocery retail sales (excluding VAT), and by broad category, 2007-12
                                        • Forecast methodology
                                        • Market Segmentation

                                            • Butchers account largest share of sector
                                              • Figure 14: Specialists by type as a percentage of total number 2020
                                            • Specialist numbers continue to decline
                                              • Figure 15: Number of UK enterprises, by type of specialist food and drink retailer 2017-20
                                          • Market Drivers

                                            • Food and drink prices rise again in third national lockdown
                                              • Figure 16: Food and drink inflation, January 2020-January 2021
                                            • Wages take a pounding after COVID-19 triggers economic downturn
                                              • Figure 17: Average weekly earnings, by consumer price index, January 2016-December 2020
                                            • Consumer confidence remains volatile amidst COVID-19 and Brexit worries
                                              • Figure 18: Financial confidence index, January 2015-Febuary 2021
                                            • Retail sales drop sharply during COVID-19 lockdown
                                              • Figure 19: Monthly UK retail sales (excluding fuel), by value, January 2017-January 2021
                                            • Consumers are increasingly invested in their local communities
                                              • Figure 20: Attitudes towards local and British sourced products, 2020
                                          • Companies and Brands – Key Takeaways

                                            • Greggs suffers from collapse in footfall
                                              • Hotel Chocolat benefits from ecommerce nous
                                                • HelloFresh was 2020’s big spender
                                                  • Naked splits from Majestic
                                                  • Competitive Strategies

                                                      • A sector of independent retailers
                                                        • Greggs remains the dominant player
                                                          • Hotel Chocolat’s experience in ecommerce pays off
                                                            • A bumper year for HelloFresh
                                                              • Acquisitions and restructuring
                                                                • Leading retailers cut in-store produce counters
                                                                  • Figure 21: Key financials of the leading food and drink specialist retailers 2017-20
                                                                • Holland & Barrett cuts store estate
                                                                  • Figure 22: Outlet numbers for leading store-based specialists, 2017-20
                                                              • Launch Activity and Innovation

                                                                • Specialist retailers meeting demand for new diets
                                                                  • Figure 23: Asda’s vegan-only counter concept, January 2021
                                                                • Recipe box kits take off amidst pandemic
                                                                  • Figure 24: Dishoom’s bacon naan kit, June 2020
                                                                • Plastics are still a problem
                                                                  • The return of the milkman
                                                                    • Figure 25: Milk & More delivery service, January 2021
                                                                  • Specialists finding new ways to engage consumers
                                                                  • Advertising and Marketing Activity

                                                                      • Top spenders in 2020 double their ad-spend
                                                                        • 2020’s big spenders were all ecommerce focused retailers
                                                                          • HelloFresh leveraged influencers to reach customers
                                                                            • Riverford Organic stresses sustainability
                                                                              • Figure 26: Total above-the-line, online display and direct mail advertising expenditure by leading specialist food and drink retailers in 2016-20
                                                                            • Digital attracted the greatest percentage of advertising spend in 2020
                                                                              • Figure 27: Selected leading UK specialist food and drink retailers: % of recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2020
                                                                            • Nielsen Ad Intel coverage
                                                                            • The Consumer – Key Takeaways

                                                                              • COVID-19 fears lead to shift in specialist shopping behaviour
                                                                                • Specialists lag behind when it comes to online retail
                                                                                  • Since the pandemic consumers are shopping more locally
                                                                                    • Specialists appeal most strongly to higher-income consumers
                                                                                      • Consumers visit specialists infrequently
                                                                                        • Over a quarter of consumers find specialist retailers intimidating
                                                                                        • Impact of COVID-19 on Consumer Behaviour

                                                                                            • Consumers spending more on food since the COVID-19 outbreak
                                                                                              • Figure 28: Consumer purchasing on food and alcoholic drinks, 4-12 February 2021
                                                                                            • COVID-19 accelerating online retail
                                                                                                • Figure 29: Changes in consumer behaviours due to the COVID-19 pandemic, 4-12 February 2021
                                                                                              • Younger shoppers visiting more since the pandemic
                                                                                                • Figure 30: Change in shopping behaviour since COVID-19, December 2020
                                                                                              • Consumers shopping more locally since the outbreak
                                                                                                  • Figure 31: Attitudes towards shopping in specialist food and drink retailers since COVID-19, December 2020
                                                                                                • Older shoppers lagging behind with online retail
                                                                                                    • Figure 32: Attitudes towards shopping in specialist food and drink retailers since COVID-19, by age, December 2020
                                                                                                • Specialist Food and Drink Retailers Used

                                                                                                  • Butchers and bakers most popular shops
                                                                                                    • Figure 33: Specialist food and drink retailers typically used, December 2020
                                                                                                  • Men and women have similar shopping habits
                                                                                                    • Figure 34: Specialist food and drink retailers typically used, split by gender, December 2020
                                                                                                  • Most consumers visit more than one specialist
                                                                                                    • Figure 35: Repertoire analysis of specialist food and drink retailers typically used, December 2020
                                                                                                • Demographics of Specialist Food and Drink Retailer Users

                                                                                                  • Men are more likely to use specialist stores
                                                                                                    • Figure 36: Specialist food and drink shoppers, by age and gender, December 2020
                                                                                                  • Specialists attract higher-income shoppers
                                                                                                    • Figure 37: Specialist food and drink shoppers, by age and gender, December 2020
                                                                                                  • Bakeries attract younger consumers in particular
                                                                                                    • Figure 38: Specialist food and drink retailers typically used by average age December 2020
                                                                                                  • Butchers appeal most to those living in rural areas
                                                                                                    • Figure 39: Selected specialist food and drink retailers by geographical location, December 2020
                                                                                                • Frequency of Specialist Food and Drink Retailer Usage

                                                                                                  • Specialists are not used frequently
                                                                                                    • Figure 40: Frequency of visits to specialist food and drink retailers, December 2020
                                                                                                  • Younger consumers visit more frequently
                                                                                                    • Figure 41: Frequency of visits to specialist food and drink retailers, by age, December 2020
                                                                                                  • Nearly a third of bakery shoppers visit once a week
                                                                                                    • Figure 42: Frequency of visits to selected specialist food and drink retailers, by type of specialist, December 2020
                                                                                                • Attitudes towards Specialist Food and Drink Retailers

                                                                                                  • Specialists may be appealing, but supermarkets are convenient
                                                                                                    • Room to improve for specialists on popular causes
                                                                                                      • Figure 43: Attitudes towards specialist food and drink retailers, December 2020
                                                                                                    • Nearly 30% of consumers find specialist retailers intimidating
                                                                                                      • Figure 44: Agreement with statement “shopping at specialist food and drink retailers is intimidating”, by selected specialists, December 2020
                                                                                                  • Satisfaction with Specialist Food and Drink Retailers

                                                                                                      • Just 13% of consumers were not satisfied with the products purchased at specialist retailer used last
                                                                                                        • Figure 45: Satisfaction with specialist food and drink retailer shopped at last, December 2020
                                                                                                      • Quality produce and service are vital for specialists
                                                                                                        • Specialists should consider supporting local communities and producers
                                                                                                          • Figure 46: Key drivers of overall satisfaction with specialist food and drink retailers, December 2020
                                                                                                          • Figure 47: Overall satisfaction with specialist food and drink retailers – Key driver output, December 2020
                                                                                                        • Methodology
                                                                                                        • Factors to Encourage Shopping at Specialists

                                                                                                          • Value for money and convenience are key for consumers
                                                                                                            • Figure 48: Factors to encourage shopping at specialist food and drink stores, December 2020
                                                                                                          • Older consumers more interested in value and location
                                                                                                            • Figure 49: Factors to encourage shopping at specialist food and drink stores, by age, December 2020
                                                                                                          • Value particularly important for those who visit butchers
                                                                                                            • Figure 50: Factors to encourage shopping at specialists, by type of specialist, December 2020
                                                                                                          • Location and helpful staff important for those who visit farmers’ markets
                                                                                                            • Figure 51: Factors to encourage shopping at specialists, by type of specialist, December 2020
                                                                                                        • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                          • Data sources
                                                                                                            • Financial definitions
                                                                                                              • Abbreviations
                                                                                                                • Consumer research methodology
                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                  • Forecast methodology
                                                                                                                  • Appendix – Key Driver Analysis

                                                                                                                      • Interpretation of results
                                                                                                                        • Figure 52: Overall satisfaction with specialist food and drink retailers – Key driver output, December 2020
                                                                                                                        • Figure 53: Satisfaction with specialist food and drink retailers, December 2020

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