What you need to know
Specialist food and drink retailers enjoyed a strong year in 2017 with growth accelerating by 8.4% which was boosted by the particularly high levels of inflation. Mintel estimates that growth in 2018 slowed down to 2.4% as inflation eased off. Real wages returned to growth last year with consumer financial confidence being particularly high during summer. However, in recent months financial confidence has been consistently below the highs experienced in summer 2018 although the majority of consumers still think they should be fine looking forward. Whilst we don’t know what the outcome of Brexit will be yet, we do know that if consumer confidence takes a hit and spending is squeezed, consumers will be tightening their purses. Due to the price premium attached to specialists, this is likely to impact growth. Because of this, we have forecast that growth will slow over the next few years with the market forecast to be worth £13.8 billion by 2023.
Over half of people used specialists in the three months to December 2018 (60%) with bakeries being the most used. We are seeing both a decline in the number of people using a butcher (22%) as well as the number of butchers in the market. Butchers have struggled with fierce competition from the supermarkets as well as the growing interest in veganism and flexitarianism. Our research also highlights the importance of young people to the sector with 16-34s significantly more likely to be visiting specialists once a week (55%). There is widespread agreement that specialists make the high street appealing and are an important part of supporting local business. However, given the price attached to shopping at them, it’s important that specialists make shoppers feel they are getting good value for money.
Products covered in this Report
The main focus of this Report is the specialist food and drink retailers. For the purposes of this Report we define a specialist as a retailer that makes more than 50% of its revenue from a particular product category.
Example categories are butchers, bakers, fishmongers, greengrocers, off-licences, delicatessens, health food shops and confectionery shops. We also include home shopping specialists such as Abel & Cole, Gousto and HelloFresh. This year we have also included country specific food shops, eg Polish or Chinese.
