MarketLine Blog

Posts about Food Retail

Rapid growth in Asia-Pacific organic food market set to change global market shares

The global market in organic food expanded between 2012 and 2016 at a compound annual growth rate (CAGR) of 10.9%, and is forecast to accelerate to a value of $187.6 billion by 2021, representing a CAGR of 13.8%, according to research firm MarketLine. The company’s latest report states that the US will remain the largest single market, rising from $44.9 billion in 2016 to $63.4 billion by 2021 at a CAGR of 7.1%, underlining the country’s pivotal role in driving global growth. Christopher Leyman-Nicholls, Analyst for MarketLine, says: “Although the… Read more

Tesco’s deal with Booker: Attempt to control the UK food supply chain?

MarketLine

The deal, announced in January 2017, grants several benefits to Tesco. It means that the incumbent retailer can expand even faster in the UK food convenience sector, the fastest growing part of the grocery market for a number of years. The merger with Booker will also give the retail giant the access to a new territory – the “out-of-home” eating market, as it will be taking over the supplier to a string of restaurants and cinemas. This is a new area for Tesco, but one that accounts for around a… Read more

Gig Employment: Not a smooth ride

MarketLine

The number of individuals defined as self-employed is growing aided by the latest trend of gig-employment. These self-employed individuals serve to increase competition between those seeking full time employment and those who prefer to work contract to contract. A recent change in the mindset of the gig-employment workers has caused a shift in working patterns with these workers now beginning to seek out full time employee status and the benefits which accompany this. Businesses which previously exploited these gig workers (e.g. Deliveroo and Uber) are now under scrutiny and face… Read more

Tesco-Booker: The Squeeze on Small Businesses

MarketLine

Tesco, one of the largest retailers in the world, is the most dominant supermarket in the UK market. Its recent announcement to merge with Booker was a surprise to all. Booker occupies a very different area of the market, primarily offering bulk-purchase supply to small retailers, both independent and franchised stores under brands it owns, such as Londis and Budgens. At first glance then, this seems an odd target for Tesco; to merge operations with a company whose target market is so different to its own. Indeed, no one considers… Read more

Supermarkets facing up to the discounters; Asda left behind?

MarketLine

Supermarkets in the UK have faced a tough marketplace in recent years. The recession, and the accompanying squeeze on incomes, has led to many consumers becoming shrewd in their purchases and increasingly looking to find the cheapest option. This has led to a climate in which discounters, and in particular Aldi and Lidl, have been able to thrive. The impact on the big four supermarkets has been evident. Tesco, Sainsbury’s, Asda, and Morrison’s have all seen sales fall and profits eroded. Asda, Tesco, Sainsbury’s, and Morrison’s all responded to the… Read more

Big retail takes control of Russian food market

MarketLine

The Russian food market is amongst the largest and most populated globally. As the population of 146 million people continues to grow, they are also buying more food. There are a lot of opportunities for further development, especially in the convenience segment, as the grocery retail market is significantly less saturated than in Western Europe. Changes in tastes and technology have opened up the sector to new suppliers and new ideas. However, after almost a decade of double digit growth, this over $300bn market has seen a significant deceleration recently… Read more

Morrison’s: Can’t match up to the discounters?

MarketLine

From November 2, 2015, Morrison’s will be making changes to its Match & More scheme. The program will no longer include Match points on comparable shopping. The scheme, which was introduced in October 2014, gained widespread coverage in the UK for its promise to match the discounters, Aldi and Lidl, on price or refund the difference in the form of points, with vouchers being issued once enough points have been accumulated. While the other major supermarkets in the UK have their own price promise schemes, none have been brave enough… Read more

Pack your bags: England joins other UK nations in ending free plastic bags with caveats

MarketLine

England has become the final part of the UK to introduce a charge for plastic carrier bags in a bid to slash the 7.6 billion handed out annually. However, several caveats and exemptions may stifle the scheme’s success compared to other parts of the UK. Although some retailers (such as M&S and the German discounters Aldi and Lidl) have already introduced plastic bag charges, the government has moved to employ a strategy used in Scotland, Wales, and Northern Ireland which has reduced consumption of plastic bags dramatically. The 7.6 billion… Read more

Consumer Law: Shifting power from businesses to consumers

MarketLine

As of October 1, 2015 new consumer protection measures came into force in the UK. Under the Consumer Rights Act, customers are now entitled to a full refund on faulty goods for up to 30 days after the purchase. This area was previously rather sketchy, with consumers only being entitled to refunds for a ‘reasonable time’. A further measure has been the introduction of new protection for those purchasing digital content, allowing for a replacement on downloads that do not work. What’s more, if a digital download infects a user’s… Read more

Sorry for any inconvenience caused? Morrisons expected to sell off its M local convenience stores

MarketLine

Morrisons, Britain’s fourth-largest grocer, is in advanced talks to sell its convenience stores to investment firm Greybull Capital as new chief executive David Potts seeks to focus the business on its traditional supermarket estate. Greybull was working with a team of industry executives to take over about 150 stores that trade as M local and generate annual sales of about GBP 300m (approximately $494m). The convenience sector has become a primary focus for many UK retailers reeling from the discounter industry disruption, which has seen Aldi and Lidl wrestle market… Read more

Keep calm and take advantage. Deflation, good for the consumer, not so good for business

MarketLine

On Tuesday, May 19, 2015, it was announced by the Office for National Statistics (ONS) that the UK had fallen into deflation for the first time since 1960. The Consumer Price Index (CPI) fell by 0.1% in the year to April 2015, compared to no change (0.0%) in the year to March 2015. According to the ONS, this is the first time the CPI has recorded a decline over a year since official records began in 1996, and is the first instance of deflation when using comparative data since 1960…. Read more

Superfood powders are the latest alleged panacea of the health-conscious world

MarketLine

Superfood powders are marketed for their myriad of supposed benefits, from improved skin and increased energy, to preventing conditions and diseases such as diabetes, cancer, and dementia. Superfood powders contain ground down superfoods, freeze dried and fine milled. Products which use the powders include the Super Elixir, boasts strong content and an equally eye watering price. Superfood powders have seen strong growth, although remain only a modicum of the wider market. Vitamix, a smoothie maker has also received celebrity endorsements and a loyal customer base despite its expensive price. Increasing… Read more

Supermarket price wars: A race to the bottom?

MarketLine

Grocery retailers in the UK have been experiencing the effects of a noticeable shift in consumer behavior in recent years. The recession, and the accompanying squeeze on incomes, has led to many consumers becoming shrewd in their purchases and increasingly looking to find the cheapest option. This has led to a climate in which discounters, and in particular Aldi and Lidl, have been able to thrive. Loyalty to supermarkets has been affected, with consumers more willing to shop around for their goods. This has had a detrimental impact on the… Read more

The driving force behind Aldi’s success: Phantom Brands

MarketLine

Discount supermarket Aldi reported a 65% jump in pre-tax profits in September 2014. More than 95% of Aldi’s products are own label, but many of its products lack direct reference to the retailer. As discussed in the MarketLine case study, Supermarket private labels: growth following economic downturn; market share for retailer brands has increased rapidly over the years, most notably in the UK, Spain, Germany, Italy and the Netherlands.  After years of consistent market share increases, private label now has its strongest competitive position ever. Of particular interest is the… Read more

Halal: The new organic

MarketLine

The global halal market, which includes products and services complying with Islamic laws and regulations, was valued at $1.7tn in 2012, growing faster than other consumer markets despite the recent global recession. At a time when many Western markets are reaching their saturation point, Muslim consumers are becoming a target audience, and the halal market is emerging as one of the fastest growing consumer segments in the world. Despite the common belief that the term “halal” is limited to meat and poultry, opportunities in the halal market go way beyond… Read more

Improved quality and packaging narrows gap between private and branded products

MarketLine

Consumers are becoming increasingly inquisitive about where their products are being manufactured. Private labels now have a similar quality to other renowned brands; and more consumers are now aware that many private label ‘generic brands’ foods are actually made by the same companies that produce higher priced name brands. Such Knowledge has aided growth in this sector. As discussed in the MarketLine case study, Supermarket private labels: growth following economic downturn, supermarkets are changing consumer perception. Consumers are not having to compromise on the quality of products if they purchase… Read more

Independent retailers and restaurants are small but growing organic food sellers

MarketLine

Sales of organic food through independent outlets rose by 6.9% in 2013 to a value of £513m (approximately $801m). Independent outlets include box schemes; farm, health and wholefood shops; farmers’ markets; and online purchases. Most independent retailers have seen strong growth: a Soil Association survey found that 75% grew, with three quarters of these retailers reporting sales growth of more than 10%. Only 6% experienced a decline in sales. Home delivery schemes have been doing particularly well: sales grew by 11% in 2013 to reach £193.6m (approximately $302.6m). Abel &… Read more

Economic downturn provides opportunities for private label sector

MarketLine

During a time of financial crisis and low disposable income, consumers are less likely to buy expensive, branded food products.  According to the Office for National Statistics, disposable income available to households fell 1.7% between the end of 2012 and the first three months of 2013; the biggest decline since early 1987. As discussed in the MarketLine case study, Supermarket private labels: growth following economic downturn, this has in turn led to consumers seeking out cheaper private label products that they can afford when carrying out their weekly food shopping…. Read more

Whole Foods: A victim of its own success?

MarketLine

Whole Foods, the US-based organic food retailer, is not now nor will it ever be a cheap shopping experience. Despite its high prices, the company has seen its revenues rise in recent years, as demand for healthy, natural foods has constantly increased. However, despite a whole paycheck being needed to shop at this organic food giant, recently only a fraction of one has been needed to buy the company’s stock. The company has seen its shares fall almost 35% in 2014. The main reason for the stock’s poor performance is… Read more

Arla’s Lactofree increases its consumer base

MarketLine

With an increase in self diagnosed cases of lactose intolerance; sales of lactose free products are expected to grow at a strong rate between 2012 and 2016, according to findings from Food and Health Innovation Services. Arla’s brand Lactofree specializes in offering complete lactose free products which are not readily available in the market.  The Lactofree brand offering includes milk, butter, cheese, cream, yogurt, ice-cream and many more. According to the UK’s National Health Service (NHS), lactose is a sugar found in milk. It cannot become absorbed by the body… Read more

Industry Analysis – Food Retail

MarketLine

Introduction Despite the financial differentiation of wealth in the continents the food retail industry is almost equally spread between Americas, Europe and Asia-Pacific. This is due to food production surpluses in North America, Australia and Western Europe that the global food market is close to equilibrium. The global food retail industry grew by with compound annual growth rate (CAGR) of 4.8% over last five years, to reach a value in excess of $5.5tn. The greater amount of food is being sold by Supermarkets and Hypermarkets, with the distribution share of… Read more

Loyalty programs utilizing big data analytics to improve CRM for retailers

MarketLine

Loyal customers are indispensable if retailers are to succeed. According to the Chartered Institute of Marketing, it can cost between 4 and 10 times as much to acquire a new customer (primarily through marketing costs) than it does to retain an existing one. Recognizing the benefit of loyal customers, responsible for around 55%-70% of revenues according to the Center for Retail Management at Northwestern University in the US, retailers developed loyalty programs very early on. From early beginnings in Germany to get around a government ban on price competition, to… Read more

Emphasis on food is shifting from nutrition to function

MarketLine

Scientific research has typically focused on the primary role of food as a source of energy and nutrients to build up the body. However, in recent years there has been a shift towards the impact that certain food components can have on human health. There has been a wealth of research to support the idea that diet and lifestyle contribute to health and may play a role in some human diseases. The concept of food being linked to human health is not new and has been reported throughout history. During… Read more

Another American dream over: the failure of Tesco PLC in the US

MarketLine

Tesco joined a growing list of failed British retailers in the US – including J Sainsbury and Marks & Spencer, as it finally disposed of its US venture Fresh & Easy in November 2013. The scale of losses the company incurred is astonishing- amounting to £1bn in just 6 years. Just how did Britain’s largest grocery retailer, with numerous international businesses, fail so badly? The difficulties faced by Tesco’s Fresh & Easy US venture may be best understood as an interaction between macro-economic problems in the US economy and conceptual… Read more

Savory snacks market comfort eats its way to growth despite difficult economic conditions

MarketLine

Despite the residual effects of the 2008 financial crisis still being felt in many nations around the world, particularly in Europe, consumer demand for savory snacks has continued to show growth, not only in developing countries but also developed nations. The global savory snacks market grew by 5.3% in 2012, to reach a value of $89.6 4illion, representing a compound annual growth rate of 5.0% for the period spanning 2008-2012. The Americas proved to have the largest share of the market, with 44.7% of the total value in 2012, Asia-Pacific… Read more

Coconut Water Consolidating Growth in a Burgeoning Segment

MarketLine

Coconut water has experienced a lot of initial success in the US due to its unique taste profile and sports nutrition benefits. Now is a pivotal time to further consolidate and grow the market, lest it be dismissed as just another ‘fad’ category. The myriad of health benefits associated with consumption means that a natural positioning for coconut water has been a healthier alternative to sports nutrition drinks. This has particular appeal to athletes who have become reticent in recent times to consume some of the more commercially popular sports… Read more

Frito-Lay SunChips: When Sustainable Packaging Conflicts With Consumers’ Sensory Needs

MarketLine

Savory snack giant Frito-Lay re-launched its popular SunChips healthier snacking range in the US and Canada in plant-based, 100%-compostable packaging, but the noise created when the product was used led to a significant consumer backlash. As a result, the company has reverted to conventional packaging for most of its SunChips lines in the US, although it has retained the compostable packaging in Canada. This article examines how a lack of attention paid to the packaging’s sensory qualities, to consumers’ key needs from snack packaging, and to managing potential problems in… Read more

Craft Beers in the US & UK: How Mainstream Brewers can Benefit From the Trend Towards Craft Beers

MarketLine

Amid data showing that the craft beer sub-sector has posted strong growth in an otherwise dismal US beer category, brewer MillerCoors has pooled all its craft-style domestic and international brands into a new craft-focused division called Tenth and Blake. The UK real ale sub-sector is also showing positive growth in a poor overall environment. The success of craft beer has arisen as it dovetails with various important consumer trends: it fits with the general trend towards trading up; it capitalizes on desires to purchase authentic products; it goes with the… Read more

Müllerlight: A Successful Attempt to Tackle the Clash of the Health and Indulgence Trends

MarketLine

Dairy manufacturer Müller’s Müllerlight Inspired By cheesecake brand extension has sold over 9 million units in the UK since its launch in mid-2010. The brand appears to have been effective in solving consumers’ conflicting desires for healthy foods and indulgent foods – which is still one of the most important unmet needs for the food industry to address. The success of Inspired By highlights several ways to overcome the problem, and the rewards available to companies that do. Datamonitor’s 2010 Consumer Survey found that across all parts of the world,… Read more

Rustlers Hot Subs: The Successful Transfer of a Foodservice Concept to Retail

MarketLine

In September 2009, UK-based company Kepak Convenience Foods extended its Rustlers line of hot snacks to include a range of Rustlers Hot Subs microwaveable sandwiches. Sales over the first 12 months of the line’s launch exceeded £10m, accounting for around 10% of the UK’s retail hot snacks market. Thanks in no small part to the expansion of the Subway chain from 300 outlets in 2005 to 1,400 outlets by 2011, the UK fast food market has been reshaped: sandwiches are no longer seen solely as a lunchtime item for office… Read more