Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Two strong years of growth but tough times ahead
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- Figure 1: Market size and forecast: retail sales of specialist food and drink retailers (Excl. VAT), 2011-21
- Bakers/Confectioners grow while butchers decline
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- Figure 2: Estimated share of total sales through specialist food and drink retailers, 2015
- Food deflation continues in 2016
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- Figure 3: CPI annual rate of change, 2011-16
- Meat accounts for the largest share of consumer spending on food
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- 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
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- Figure 5: Specialist retailers used in the last three months, December 2016
- Quality and discovery the key drivers
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- Figure 6: Reasons for shopping at specialists, December 2016
- Butchers should leverage their position at the heart of the community
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- Figure 7: How they view selected specialist food and drink retailers, December 2016
- Britishness an important factor
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- Figure 8: Factors important when buying food and drink, December 2016
- Quality is important for health
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- Figure 9: Attitudes towards food and drink, December 2016
- What we think
Issues and Insights
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- 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
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- 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
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- Consecutive years of growth for the specialists…
- …but tougher times could be ahead
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- Figure 10: Market size and forecast: retail sales of specialist food and drink retailers (Excl. VAT), 2011-21
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- 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
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- Bakers/confectioners see strong growth
- Off-licences outperform the wider drinks industry
- Butchers’ sales fall between 2011 and 2015
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- Figure 12: Turnover in the leading categories, 2011-15
- Enterprise numbers continue to fall
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- Figure 13: Number of UK enterprises, by type of specialist food and drink retailer, 2011-15
Market Drivers
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- Food deflation throughout 2016
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- 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
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- Figure 16: Annual % growth in consumer spending on food and drink, 2011-16
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- Figure 17: Composition of consumer spending as a % of total spending on food, 2012-16
- Consumer confidence
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- Figure 18: Consumers’ perceived financial health, January 2015-January 2017
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- Figure 19: Trends in consumer sentiment for the coming year, January 2015-January 2017
- Supermarket price wars
Key Players – What You Need to Know
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- 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
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- Greggs repositions to avoid a declining category
- Few large chains of butchers
- A long tail of independents
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- 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
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- Figure 21: Outlet numbers for the leading store-based specialists, 2014-16
Advertising and Marketing Activity
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- Chocolate retail brands battle it out online with Easter campaigns
- Home food and drink delivery services
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- 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
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- 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
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- Bakeries and confectioners
- Butchers, greengrocers and farmers’ markets
- Health food stores
- Drinks retailers
The Consumer – What You Need to Know
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- 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
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- Nearly two thirds shop at specialists
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- Figure 27: Specialist retailers used in the last three months, December 2016
- Butchers have the oldest customer base
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- 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
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- 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
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- Figure 30: How frequently they visit specialists, December 2016
- Young visit more specialists
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- 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
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- Trading on quality and excitement
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- Figure 32: Reasons for shopping at specialists, December 2016
- Young more persuaded by practical concerns
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- 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
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- Figure 34: Attitudes towards shopping at specialists, by where they shop, December 2016
How They View Specialist Retailers
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- Butchers need to leverage their community credentials
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- Figure 35: How they view selected specialist food and drink retailers, December 2016
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- Figure 36: How they view selected specialist food and drink retailers, December 2016
Important Factors When Shopping for Food and Drink
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- British-made
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- Figure 37: Factors important when buying food and drink, December 2016
- Women are more concerned with welfare factors
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- Figure 38: Factors important when buying food and drink, by gender, December 2016
- Sugar concerns cross all social segments
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- Figure 39: 1st rank factor important when shopping for food and drink, by profile, December 2016
- Specialist shoppers prioritise local sourcing
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- 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
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- 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
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- The importance of localism
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- Figure 42: Attitudes towards food and drink, December 2016
- Millennials are more concerned about sourcing information
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- 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
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- 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
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- 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
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- Abbreviations
- Consumer research methodology
Appendix – Correspondence Analysis
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- Methodology
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- 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
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- Forecast methodology
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