The global grocery market is at high by the influence of Asian grocery market. Though there has been certain stagnation in growth in Western Europe and North America, the overall global grocery sales set to reach about US 10 trillion by the year 2023 that includes half of the additional sales which will mainly be from Asia. The grocery industry in the Western Europe and North America are struggling to sustain their positive growth in a saturated market, the worldwide grocery business is doubtful to weaken. Asia which is home to the world’s fastest growing economies can see a rapid rise in the grocery business globally and is expected to create additional USD 1.9 trillion retail grocery sales by 2023.
Since 2011, the global grocery industry of USD 8.77 trillion had grown by 6.9 percent annually according to the market researchers. According to the IGD which was released by the leading grocery training and research charity in December 2018 had focused on the positive trigger which the Asian markets are creating over the global trade. According to IGD report, nearly half or about 44% of the extra sales is actually expected from Asian market while, additional USD 1.9 trillion of the sales is projected by 20 global players from 2018 to 2023 which is around 28% extra sales. The sales in Asia keep growing in demand and is likely to add about 47% of additional spend over the groceries from 2018 to 2023. Many physical casinos have also come up with table games also.
Due to the high fixed costs, thin margins and the need to handle different products, the grocery retail is still under pressure. The grocery business had dropped in several mature economies due to the market saturation and the increased competition from a lower priced format like dollar stores and the discount chains. About 20-50 % of the market share in Germany had been captured by the discounters. It’s also rapidly increasing in Ireland, Netherland, US and Canada as well.
The changes in consumer behavior to opt for a specialty store or a convenient one had also reduced the sales in mandatory supermarket brands. Though most of the popular supermarket chains provide hundreds to thousands of items for the broad choice of their customers, customers are now looking for the selected product category throughout the board. Now customers trying to avoid the one stop shopping choices which they earlier used to have in various multiple retail outlets that also include the drug stores, online, warehouse clubs, dollar stores etc. They mainly focus on value-for-spent which has to be highest while making any kind of purchase.
The US has observed shirking in the market share of their traditional grocers. According to a study, the grocery store openings had dropped by about 28.8 percent year after year in 2017. Similarly, the biggest players in Britain have been left with 68.5 % against 76.3% combined market share which was about 5 years ago. According to the industry data, the grocery sales have just risen by 2% in saturated and mature economies over the last decade and more than half of the profits from 2012 to 2017 have taken a blow.
According to a recent study which was carried out in December 2018, it had claimed that the sales in Western Europe and the US may take a hit from US $200 billion to US $700 billion without taking any measure to get adopted to automation or consumers personalization, as consumers opt for alternative options like the discount stores, farmers markets and the online segments by the year 2026.
Though there is a slowdown in the Western Europe, the European grocery market has an existing euro 191 billion which is expected to reach about euro 228 billion by the year 2022 which will be 16% of the global grocery sales. This growth in the global grocery sales is mainly expected to come from the East and central European economies like Russia, Poland and Romania.
All of these countries are getting benefited by the liberalization of the economy and have better integration with various European countries. Countries like Japan, China and Korea have emerged to be the biggest growth triggers for the grocery sales in Asia. China which is actually the 2nd largest market in the US is expected to be a global leader by 2022 with a growth rate of 32.6%. According to the IGD report the top 10 global retailers by their revenues will be in Asia and will show higher growth in the next 5 years.
The GDP in Indonesia, Pakistan, India, Vietnam, Philippines continues to improve due to which their contribution to the global growth is significant. With the modernization in trade and the retail infrastructure, the overall business environment has become easy. The grocery retail is expected to reach about US 700 billion by the year 2022 in India which is currently ranging from US 440 billion to the US 600 billion. When we consider the grocery trade format in Asia it includes the specialty, small hypermarkets, convenience stores, stores close to the workplace or the residential hubs etc. The convenience stores are growing their sales at a faster rate in Asia with the changing shopping habits of the customers and increased store networks.
According to the IGD’s forecast these are expected to grow at a rate of 6.6% every year till 2022. In most of the Asian countries, the retail partnerships have also improved to a great extent. With the latest developments in technology and the self checkout technology it’s now very easy to manage the grocery retail operations in much efficient and cost-effective ways. According to the latest study, the global beverage sales and online food sales is expected to rise by 80% in the next 5 years that in turn results in keen decline by 2022 in the traditional form of brick and mortar sales. In Asia the online grocery shoppers are at a leading rate with 37% of buyers from Asia- Pacific when compared to the buyers from Europe which are just 13%.
