Fresh and chilled food categories are expected to drive growth in wholesale over the next few years, according to the IGD.
Thanks to increased spending in the foodservice market and a greater focus on these categories from forward-thinking retailers, IGD is forecasting the total wholesale sector to grow 1.6% over the next four years from £29.8bn at the end of 2014 to £32.3bn in 2019.
Wholesale growth in 2014 stood at +1%, according to IGD’s figures, but fresh and chilled were star performers, with growth far outstripping overall levels:
- 4.1% growth in fresh across both grocery and foodservice wholesaling
- 3.5% growth through sales to foodservice
- 5.9% growth through sales to retail
Wholesalers focusing on fresh and chilled foods, as well as foodservice, will benefit over the next few years from increased spending in the out-of-home market, added an IGD spokesperson. Meanwhile, independent and affiliated/symbol retailers are also increasing their fresh and chilled ranges, offering strong growth opportunities for suppliers to the wholesale channel.
James Walton, IGD chief economist, said: “Over the last few years, we have seen all types of wholesaler increasing their investment in fresh and chilled food, developing their ranges and the way they serve their customers. There is a clear growth opportunity for those wholesalers and their suppliers that get fresh and chilled right and we expect this to help drive some of the overall growth in wholesale over the next few years.”
However, Walton added that competition was expected to intensify across the board.
“The sector is seeing plenty of consolidation, most notably the recently agreed purchase of Musgrave Retail Partners GB by Booker. Customer numbers are falling and those that remain look set to be bigger, more capable businesses with an even wider variety of needs,” he said.
“As wholesalers focus on meeting evolving customer requirements, suppliers to the channel will have to work still harder to stand out. One opportunity will lie in the growth of symbol groups and retail clubs which will become even more important for wholesalers as they look to build and maintain customer loyalty. Suppliers who listen to what their wholesale customers need and adapt to this changing channel will be well placed to make the most of the growth potential we envisage.”