Bringing the volumes back: the challenge for today and tomorrow

Date : 23 May 2023

For well over a year now we have watched the different tactics shoppers have used to help them control their spending.

We have seen shoppers:

  • Experiment with cooking techniques that require less energy consumption (eg: air frying, stir frying)
  • Invest more time in higher levels of planning and pre-shop activity to ensure they make the most of each trip
  • Switch to private label or cheaper alternatives (eg: cheaper cuts of meat)
  • Simply buying less; which is leading to declining volumes

Volume growth to return, slowly

Our Economics Team predicts that volume will return, very slowly, as the economy recovers. Driving volume growth as much as possible will be a key objective for both suppliers and retailers. Businesses will wish to capture and hold on to any volume that returns to the market. However, this process will be rather slow, so the main gain will continue to be by taking existing volume from elsewhere.

Four areas of heightened, short-term competition

This will take place across four aspects:

Source: IGD Research

Our research and insight can help you navigate the months and years ahead, as you search for opportunities to encourage or benefit from volume growth.

1. Fight for share of stomach

IGD’s annual Eating In vs eating out research provides a view on the value of the total consumption market in the UK. It explores the split between food and drink bought in retail channels and that bought across the various eating out channels, from workplaces to pubs and bars.

Our latest report will be coming out in June and will provide our future forecasts for the total market and the factors we think will be most influential in shaping the outlook.

2. Fight for channel share

The growth and evolution of different retail channels across the UK and globally is something our analysts spend a lot of time keeping up with. For the UK market one important way we extrapolate what changes in shopping patterns mean for channel growth is through our UK channel forecasts. In our upcoming report (released in June) we will provide five-year forecasts for each channel to help you prioritise your customer plans.

3. Fight for loyalty

The developments in loyalty, reward and subscription services we have seen in recent years has been incredible. In the UK this has seen some retailers have enter this space for the first time, while others have been evolving their offer. At the same time, we have seen food service businesses invest in new digital capabilities to enable them to get closer to consumers and their behaviour.

Ultimately all these businesses are seeking to encourage more shoppers and consumers to return more regularly through deeper understanding and stronger connections.

This focus on loyalty has been central to our recent work on the new value equation as well as our recent shopper and consumer research series. This work helps to distil what really matters to end consumers to help create more compelling propositions.

4. Fight for retail share

Our regular shopper updates into the channels they are using, the missions they are completing alongside the drivers of these choices can help you to get underneath regular performance or market data to uncover the why behind the data.

Next steps…

If you would like any more information about how our Economics and Insight services can help you and your business navigate the coming months contact our customer service team.

Visit our Economics research page to access free analysis of the latest economic and socio-economic trends, while you can sign up to our bulletin newsletter, which will help you keep up-to-date with the developments shaping the industry.

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