Table of Contents
Executive Summary
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- The market
- High inflation throughout 2017 boosted growth in the market
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- 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
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- Figure 2: Average weekly earnings, by Consumer Prices Index, January 2015-January 2019
- Off-licences take greatest share of the market
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- Figure 3: Estimated share of total sales through specialist food and drink retailers, 2018
- Meat accounts for largest share of consumer spending on food
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- 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
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- Figure 5: Specialist food and drink retailers used in the last three months, December 2018
- Strong demand for on-the-go food services
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- Figure 6: Behaviours towards specialist food and drink retailers, December 2018
- High quality and price are most important to specialist users
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- Figure 7: Important factors when shopping for specialist food and drink, December 2018
- Good value for money is key to encourage usage
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- Figure 8: Factors to encourage shopping at specialist food and drink retailers, December 2018
- Adding value to the high street
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- Figure 9: Attitudes towards specialist food and drink retailers, December 2018
- Supporting local business is high on the agenda
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- Figure 10: Attitudes towards specialist food and drink retailers, December 2018
- What we think
Issues and Insights
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- 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
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- 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
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- High inflation throughout 2017 boosted growth in the market
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- Figure 11: Market size and forecast: retail sales of specialist food and drink retailers (excl. VAT), 2013-23
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- 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
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- Off-licences take the biggest share of turnover
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- Figure 13: Specialists as a % of total specialists' revenue, 2018
- High inflation fuelled market growth in 2017
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- Figure 14: Turnover in the leading categories, 2014-18
- Number of specialists is steadily in decline
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- Figure 15: Number of UK enterprises, by type of specialist food and drink retailer, 2013-17
Market Drivers
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- Inflation eases off in 2018
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- Figure 16: CPI annual rate of change, April 2017-January 2019
- Real wages return to growth in 2018
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- Figure 17: Average weekly earnings, by Consumer Prices Index, January 2015-January 2019
- Consumer spending on food and drink
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- Figure 18: Annual % growth in consumer spending on food and drink, 2012-18
- Food spending broken down
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- Figure 19: Composition of consumer spending as a % of total spending on food, 2013-18
- Brexit woes start to impact consumer confidence
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- Figure 20: Consumer confidence: current financial situation vs sentiment for the coming year, January 2017-January 2019
- The rise in veganism…
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- 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
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- Figure 22: Benefits of eating less meat, by gender, July 2018
The Consumer – What You Need to Know
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- 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
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- Bakeries are the most used type of specialist retailer
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- Figure 23: Specialist food and drink retailers used in the last three months, December 2018
- Significantly fewer people are shopping at a butcher
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- Figure 24: Specialist food and drink retailers used in the last three months, December 2018
- Most visit more than one type of specialist
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- 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
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- Men are more likely to visit specialists
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- Figure 26: Specialist food and drink shoppers, by age and gender, December 2018
- Usage prevalent amongst higher socio-economic groups
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- Figure 27: Specialist food and drink shoppers, by socio-economic status, December 2018
- Butchers attract a significantly older consumer base
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- 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
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- Figure 29: Specialist food and drink shoppers, by geographical location, December 2018
- Bakeries are widely accessible
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- Figure 30: Specialist food and drink shoppers, by geographical location, December 2018
Frequency and Change in Usage of Specialist Food and Drink Retailers
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- Specialists not used on a frequent basis
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- Figure 31: Frequency of visits to specialist food and drink retailers, December 2018
- Younger consumers are the more frequent visitors
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- Figure 32: Frequency of visits to specialist food and drink retailers, December 2018
- Delicatessens are visited the most frequently
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- Figure 33: Frequency of visits to specialist food and drink retailers, December 2018
- Country-specific retailers are used fairly frequently
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- Figure 34: Frequency of visit to specialist food and drink retailers, December 2018
- Younger consumers visiting more in last three months
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- 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
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- Figure 36: Shopping behaviours of consumers who shop at specialists, December 2018
Behaviours Associated with Specialist Food and Drink Retailer Users
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- Ability to cater for the meat-free market
- But what does this mean for butchers?
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- Figure 37: Behaviours towards specialist food and drink retailers, December 2018
- Strong demand for on-the-go food services
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- Figure 38: Behaviours towards specialist food and drink retailers, by age, December 2018
Important Factors When Shopping at Specialist Food and Drink Retailers
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- High quality and price are most important to specialist users
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- Figure 39: Important factors when shopping for specialist food and drink, December 2018
- Women are more concerned with animal welfare
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- Figure 40: Important factors when shopping for specialist food and drink, by gender, December 2018
- Locally sourced also of high importance
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- Figure 41: Important factors when shopping for specialist food and drink, December 2018
- Followed by animal welfare concerns
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- Figure 42: Important factors when shopping for specialist food and drink, December 2018
Factors to Encourage Usage
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- Good value for money is key to encourage usage
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- Figure 43: Factors to encourage shopping at specialist food and drink retailers, December 2018
- Women are the savvier shoppers
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- 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
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- Figure 45: Factors to encourage shopping at specialist food and drink retailers, December 2018
- The appeal of a sweet treat
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- 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
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- Specialists make the high street appealing…
- …and seen to help reduce plastic waste
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- Figure 47: Attitudes towards specialist food and drink retailers, December 2018
- …but what could boost their appeal even more?
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- Figure 48: Attitudes towards specialist food and drink retailers, December 2018
- Supporting local business is high on the agenda
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- Figure 49: Attitudes towards specialist food and drink retailers, December 2018
Key Players – What You Need to Know
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- 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
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- 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
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- Figure 50: Key financials of the leading food and drink specialist retailers, 2016-18
- Hotel Chocolat plans further expansion
- Holland & Barrett’s digital roadmap
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- Figure 51: Outlet numbers for the leading store-based specialists, 2016-18
- Diversification success story
Launch Activity and Innovation
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- Greggs vegan sausage roll rises to the occasion
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- Figure 52: The Greggs vegan sausage roll, January 2019
- Making veganism mainstream
- ‘Vegetable Butcher’
- The birth of the butcher-bistro
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- 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
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- 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
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- 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
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- 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
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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