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UK Specialist Food and Drink Retailers market report

Everything you need to make the right decisions

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

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Products covered in this Report

The retail locations used in this Report are based on the different types of shopping mission.

Local centres – small high streets and neighbourhood stores. These are small centres, primarily for top-up shopping and satisfying immediate needs. So they include everything from corner shops through to small high streets which we think need to be developed as local centres. Such high streets have very few multiples.

Major centres – city centres and major shopping centres such as Bluewater or Westfield. These centres are for big shopping trips when a large selection of major multiples is wanted. They are the place for comparison shopping and have department stores and major multiples including Marks & Spencer (M&S).

Retail parks – collections of out-of-town non-food superstores. Typically, these contain furniture, electricals and DIY retailers. But they can also have retailers such as M&S, Next and Boots in them. We specifically exclude the grocery superstores from these. Grocery superstores – the superstores of the big four food retailers – Tesco, Sainsbury’s, Asda and Morrisons.

Online – any online sales, whether through a pureplay or storebased retailer.

Expert analysis from a specialist in the field

Written by Thomas Slide, 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. Thomas Slide
Retail Analyst

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Table of contents

  1. Overview

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

          • The market
            • High inflation throughout 2017 boosted growth in the market
              • Figure 1: Market size and forecast: retail sales of specialist food and drink retailers (excl. VAT), 2013-23
            • Inflation eases and real incomes grow in 2018
              • Figure 2: Average weekly earnings, by Consumer Prices Index, January 2015-January 2019
            • Off-licences take greatest share of the market
              • Figure 3: Estimated share of total sales through specialist food and drink retailers, 2018
            • Meat accounts for largest share of consumer spending on food
              • Figure 4: Share of total household expenditure on food, by product category, 2013-18
            • Companies, brands and innovation
              • A sector of independents
                • Greggs dominates the market
                  • Hotel Chocolat eyes expansion
                    • The consumer
                      • Bakeries are the most used
                        • Figure 5: Specialist food and drink retailers used in the last three months, December 2018
                      • Strong demand for on-the-go food services
                        • Figure 6: Behaviours towards specialist food and drink retailers, December 2018
                      • High quality and price are most important to specialist users
                        • Figure 7: Important factors when shopping for specialist food and drink, December 2018
                      • Good value for money is key to encourage usage
                        • Figure 8: Factors to encourage shopping at specialist food and drink retailers, December 2018
                      • Adding value to the high street
                        • Figure 9: Attitudes towards specialist food and drink retailers, December 2018
                      • Supporting local business is high on the agenda
                        • Figure 10: Attitudes towards specialist food and drink retailers, December 2018
                      • What we think
                      • Issues and Insights

                        • Catering for the meat-free market
                          • The facts
                            • The implications
                              • Demand for on-the-go food options
                                • The facts
                                  • The implications
                                    • In-store events/courses could boost appeal
                                      • The facts
                                        • The implications
                                        • The Market – What You Need to Know

                                          • Two years of growth but forecasted to slow in years ahead
                                            • Number of enterprises is in decline
                                              • Off-licences outperform the wider market
                                                • Inflation eases and real wages grow
                                                  • However Brexit uncertainty knocks consumer confidence
                                                  • Market Size and Forecast

                                                    • High inflation throughout 2017 boosted growth in the market
                                                      • Figure 11: Market size and forecast: retail sales of specialist food and drink retailers (excl. VAT), 2013-23
                                                      • Figure 12: Market size and forecast: Retail sales of specialist food and drink retailers (excl VAT), at current and constant prices, 2013-2023
                                                    • Forecast methodology
                                                    • Market Segmentation

                                                        • Off-licences take the biggest share of turnover
                                                          • Figure 13: Specialists as a % of total specialists' revenue, 2018
                                                        • High inflation fuelled market growth in 2017
                                                          • Figure 14: Turnover in the leading categories, 2014-18
                                                        • Number of specialists is steadily in decline
                                                          • Figure 15: Number of UK enterprises, by type of specialist food and drink retailer, 2013-17
                                                      • Market Drivers

                                                        • Inflation eases off in 2018
                                                          • Figure 16: CPI annual rate of change, April 2017-January 2019
                                                        • Real wages return to growth in 2018
                                                          • Figure 17: Average weekly earnings, by Consumer Prices Index, January 2015-January 2019
                                                        • Consumer spending on food and drink
                                                          • Figure 18: Annual % growth in consumer spending on food and drink, 2012-18
                                                        • Food spending broken down
                                                          • Figure 19: Composition of consumer spending as a % of total spending on food, 2013-18
                                                        • Brexit woes start to impact consumer confidence
                                                          • Figure 20: Consumer confidence: current financial situation vs sentiment for the coming year, January 2017-January 2019
                                                        • The rise in veganism…
                                                          • Figure 21: Share of new product launches in the UK meat-free foods market, by top 10 claims (sorted by 2018), 2014-18
                                                        • … and flexitarianism/reducetarians
                                                          • Figure 22: Benefits of eating less meat, by gender, July 2018
                                                      • The Consumer – What You Need to Know

                                                        • Over half shop at specialists
                                                          • Usage is high amongst the young and affluent
                                                            • The young are also visiting more frequently
                                                              • Specialist shoppers prioritise high quality
                                                                • Good value for money is key in encouraging usage
                                                                  • High demand for on-the-go food options
                                                                    • Specialists boost the appeal of the high street
                                                                    • Specialist Food and Drink Retailers Used

                                                                      • Bakeries are the most used type of specialist retailer
                                                                        • Figure 23: Specialist food and drink retailers used in the last three months, December 2018
                                                                      • Significantly fewer people are shopping at a butcher
                                                                        • Figure 24: Specialist food and drink retailers used in the last three months, December 2018
                                                                      • Most visit more than one type of specialist
                                                                        • Figure 25: Repertoire analysis of specialist food and drink retailers used in the last three months, December 2018
                                                                    • Demographics of Specialist Food and Drink Retailer Users

                                                                      • Men are more likely to visit specialists
                                                                        • Figure 26: Specialist food and drink shoppers, by age and gender, December 2018
                                                                      • Usage prevalent amongst higher socio-economic groups
                                                                        • Figure 27: Specialist food and drink shoppers, by socio-economic status, December 2018
                                                                      • Butchers attract a significantly older consumer base
                                                                        • Figure 28: Specialist food and drink retailers used in the last three months, by average age and affluence, December 2018
                                                                      • Cities and small towns show highest usage
                                                                        • Figure 29: Specialist food and drink shoppers, by geographical location, December 2018
                                                                      • Bakeries are widely accessible
                                                                        • Figure 30: Specialist food and drink shoppers, by geographical location, December 2018
                                                                    • Frequency and Change in Usage of Specialist Food and Drink Retailers

                                                                      • Specialists not used on a frequent basis
                                                                        • Figure 31: Frequency of visits to specialist food and drink retailers, December 2018
                                                                      • Younger consumers are the more frequent visitors
                                                                        • Figure 32: Frequency of visits to specialist food and drink retailers, December 2018
                                                                      • Delicatessens are visited the most frequently
                                                                        • Figure 33: Frequency of visits to specialist food and drink retailers, December 2018
                                                                      • Country-specific retailers are used fairly frequently
                                                                        • Figure 34: Frequency of visit to specialist food and drink retailers, December 2018
                                                                      • Younger consumers visiting more in last three months
                                                                        • Figure 35: Usage of specialist food and drink retailers in the last three months, by age, December 2018
                                                                      • Special occasions present an opportunity for specialists
                                                                        • Figure 36: Shopping behaviours of consumers who shop at specialists, December 2018
                                                                    • Behaviours Associated with Specialist Food and Drink Retailer Users

                                                                      • Ability to cater for the meat-free market
                                                                        • But what does this mean for butchers?
                                                                          • Figure 37: Behaviours towards specialist food and drink retailers, December 2018
                                                                        • Strong demand for on-the-go food services
                                                                          • Figure 38: Behaviours towards specialist food and drink retailers, by age, December 2018
                                                                      • Important Factors When Shopping at Specialist Food and Drink Retailers

                                                                        • High quality and price are most important to specialist users
                                                                          • Figure 39: Important factors when shopping for specialist food and drink, December 2018
                                                                        • Women are more concerned with animal welfare
                                                                          • Figure 40: Important factors when shopping for specialist food and drink, by gender, December 2018
                                                                        • Locally sourced also of high importance
                                                                          • Figure 41: Important factors when shopping for specialist food and drink, December 2018
                                                                        • Followed by animal welfare concerns
                                                                          • Figure 42: Important factors when shopping for specialist food and drink, December 2018
                                                                      • Factors to Encourage Usage

                                                                        • Good value for money is key to encourage usage
                                                                          • Figure 43: Factors to encourage shopping at specialist food and drink retailers, December 2018
                                                                        • Women are the savvier shoppers
                                                                          • Figure 44: Factors to encourage shopping at specialist food and drink retailers, by gender, December 2018
                                                                        • Value for money most important for bakeries and butchers
                                                                          • Figure 45: Factors to encourage shopping at specialist food and drink retailers, December 2018
                                                                        • The appeal of a sweet treat
                                                                          • Figure 46: Factors to encourage shopping at specialist food and drink retailers, December 2018
                                                                      • Specialist Food and Drink Retailers and Their Place on The High Street

                                                                        • Specialists make the high street appealing…
                                                                          • …and seen to help reduce plastic waste
                                                                            • Figure 47: Attitudes towards specialist food and drink retailers, December 2018
                                                                          • …but what could boost their appeal even more?
                                                                            • Figure 48: Attitudes towards specialist food and drink retailers, December 2018
                                                                          • Supporting local business is high on the agenda
                                                                            • Figure 49: Attitudes towards specialist food and drink retailers, December 2018
                                                                        • Key Players – What You Need to Know

                                                                          • Greggs finishes 2018 on a high note
                                                                            • Hotel Chocolat eyes expansion
                                                                              • HelloFresh biggest advertisers of 2018
                                                                                • Crawshaws rescued from administration
                                                                                  • Administrators sell Conviviality’s retail business
                                                                                  • Competitive Strategies

                                                                                      • A sector of independents
                                                                                        • Greggs dominates the market
                                                                                          • Thorntons is struggling with competition from upmarket rivals
                                                                                            • Acquisitions and administrations
                                                                                              • Tesco closes fish, meat and deli counters at 90 stores
                                                                                                • Figure 50: Key financials of the leading food and drink specialist retailers, 2016-18
                                                                                              • Hotel Chocolat plans further expansion
                                                                                                • Holland & Barrett’s digital roadmap
                                                                                                  • Figure 51: Outlet numbers for the leading store-based specialists, 2016-18
                                                                                                • Diversification success story
                                                                                                • Launch Activity and Innovation

                                                                                                  • Greggs vegan sausage roll rises to the occasion
                                                                                                    • Figure 52: The Greggs vegan sausage roll, January 2019
                                                                                                  • Making veganism mainstream
                                                                                                    • ‘Vegetable Butcher’
                                                                                                      • The birth of the butcher-bistro
                                                                                                        • Figure 53: Meat the sausage class at Meat N16, 2018
                                                                                                      • A push for convenience
                                                                                                        • Chocolatiers innovate to entice health-conscious consumers
                                                                                                          • Livestreaming for foodies
                                                                                                            • Rise of online subscription beer
                                                                                                              • A sweet subscription
                                                                                                                • The hoppiest place on earth
                                                                                                                • Advertising and Marketing Activity

                                                                                                                    • Top 20 spenders increase expenditure by 57% in 2018
                                                                                                                      • Krispy Kreme x Thorntons Christmas collaboration
                                                                                                                        • Power of influencer marketing
                                                                                                                          • Greggs makes the most of a free marketing opportunity
                                                                                                                            • Figure 54: Recorded above-the-line, online, display and direct mail total advertising expenditure, by leading top 20 specialist food and drink spenders in 2018, 2014-18
                                                                                                                          • TV attracts the greatest percentage of advertising spend
                                                                                                                            • Figure 55: Selected leading UK specialist food and drink retailers: % of recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2018
                                                                                                                          • Nielsen Ad Intel coverage
                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                              • Abbreviations
                                                                                                                                • Consumer research methodology
                                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                                  • Forecast methodology