Outlook for UK grocery & foodservice wholesaling

IGD has unveiled its latest findings on the UK grocery and foodservice wholesaling industry, revealing a stabilisation in sector growth following several years of volatility, driven by the pandemic and inflation. The sector achieved growth of 1.2% in 2024, signalling a welcome return to normalcy, even if the pace remains modest.

Looking ahead, IGD forecasts a more robust trajectory for the industry, anticipating expansion to £42bn by 2030. This represents a compound annual growth rate of 2.5%. However, beneath the surface of this ‘new normal’ lie intensifying challenges for both retail and foodservice channels.

Retail channel supply remains a key concern, with sales declining by 1.2% in 2024, primarily due to a sharp 6.8% drop in the Tobacco & vape category, which continues to account for more than 30% of retail segment sales. Tobacco & vape is projected to remain a drag on overall performance, with segment growth forecast to average just 1.1% to 2030.

Excluding this category, retail segment sales showed a modest positive increase of 1.6% in 2024. Yet, weak performance in other categories, such as Chilled & fresh food (-1.7%), emphasises the ongoing challenge for operators to diversify sales streams. In contrast, impulse categories like Soft drinks saw notable growth, rising 3.8% in 2024, a testament to the resilience of certain core product areas.

Foodservice wholesaling delivered solid results, with sales increasing by 3.2% in 2024, buoyed by growth across major product categories. The outlook remains favourable, though operators face mounting pressures to secure profitability, particularly given the sector’s reliance on customer delivery (representing 85% of sales) and the resulting higher operating costs. As businesses strive for profitability, many are pursuing acquisitions to broaden customer bases and product capabilities.

Patrick Mitchell-Fox, Insight Partner at IGD, comments: “As the UK wholesale sector emerges from a period of unprecedented disruption, our latest research points to a renewed sense of stability and opportunity. While challenges persist, particularly in the retail channel and with categories like Tobacco & vape, we are seeing promising signs of growth, innovation, and resilience. The sector’s willingness to adapt, invest, and pursue new opportunities will be key to unlocking sustainable long-term success.”

The UK Grocery & Foodservice Wholesaling 2025 report comes as IGD launched a new Away From Home proposition earlier this month. The new service has been developed in recognition of the need for a whole-market viewpoint of the AFH sector and marks a significant milestone for IGD as its first new insight product for 15 years.

View the UK Grocery & Foodservice Wholesaling 2025 report.

For media enquiries, please contact: [email protected]

Notes to editors:

_{1. All content is owned by IGD. If you use or refer to any content in this press release, please credit IGD.}

_{2. Follow us on LinkedIn: https://www.linkedin.com/company/igd/}

_{3. IGD brings together stakeholders from across the food system, fostering action across on critical challenges across a broad cross section of forums. Through evidence-based insights, credible research, and thought leadership, IGD guides businesses to make informed decisions that not only benefit their operations but also contribute to the collective good of society. As a charity with a long-standing commitment to the food and grocery industry, IGD does not advocate for any single commercial interest but works towards fostering alignment on shared goals that can have a positive, lasting impact on both the industry and the communities it serves. Its neutrality and impartiality are key to its role in facilitating collaboration, whether through policy development or addressing emerging risks and opportunities. By staying connected to the changing dynamics of the world, IGD ensures that the food system remains robust and sustainable, creating tangible benefits for businesses, consumers and society.}