UK grocery market outlook to 2031: growth without recovery

The UK grocery retail market is entering a defining period. On the surface, the numbers point to continued expansion, with the market forecast to reach £303.7 billion by 2031, up from £258.5 billion in 2026.

Yet, beneath the headline figures, a combination of retail industry trends, structural change and shifting consumer behaviour is reshaping how the market operates.

IGD’s UK grocery channel forecasts 2026–2031 report provides a detailed market analysis of this transition. Its central conclusion is clear: growth over the next five years will be harder won, with success dependent on sharper growth strategies, rather than a recovery in demand.

Growth driven by structure, not demand

At a headline level, the UK retail outlook remains positive. The market grows steadily, with year-on-year growth of around 2.0% in 2026, before accelerating and then stabilising later in the forecast period.

However, this growth masks a more complex reality. The grocery retail market is expanding, but underlying demand is constrained, and real growth remains weak. Inflation, population growth and pricing dynamics will continue to drive most of the increase in value, rather than a meaningful uplift in volume.

For businesses operating in the grocery retail market, this creates a more competitive environment, where business growth challenges are more pronounced and share capture becomes critical.

Consumer behaviour is reshaping grocery retail

A sustained cost-of-living backdrop has embedded a more cautious approach to grocery shopping, with shoppers prioritising value, controlling spend and relying heavily on promotions. This shift in buying behaviour has become structural.

At the same time, UK consumer trends point to increasing polarisation. Some shoppers continue to trade down, supporting the growth of value-led channels, while others selectively trade up into premium categories.

This divergence is reshaping the shopper lifecycle, creating both opportunity and complexity across the grocery retail landscape for retailers and suppliers.

Grocery retail trends: uneven channel growth

One of the most important grocery retail trends over the forecast period is the divergence in channel performance.

Supermarkets remain dominant, accounting for 42.3% of the grocery retail market in 2026, easing slightly to 41.9% by 2031. Their scale ensures they remain central to the retail sector, but structural pressures are becoming more visible.

In contrast, online grocery shopping continues to expand and will grow its share to 12.1% in 2031, from 10.9% in 2026. This will be supported by improvements in fulfilment, technology and changing shopper missions. As technology in retail advances, online becomes more deeply embedded in how shoppers engage with grocery.

The discount channel also strengthens, with share increasing to 17.4%, from 17.1%, reflecting continued demand for value and the expansion of leading discount retailers.

Meanwhile, convenience retail trends indicate a more challenging outlook, with the channel’s share declining from 18.7% to 18.0%. Structural pressures and regulatory changes will weigh on performance.

Structural drivers shaping the retail market

The impact of inflation remains central, influencing pricing and shopper behaviour. Combined with limited real income growth, these factors will continue to constrain consumer demand.

At the same time, emerging consumer goods trends are beginning to influence structural demand. Health-led behaviours, sustainability considerations and innovations such as GLP-1 treatments are reshaping how much consumers buy, and what they choose to purchase.

These factors contribute to growing complexity across the retail operating model, requiring businesses to adapt quickly to remain competitive.

What this means for retailers and suppliers

For both retailers and suppliers, the implications are significant.

Growth opportunities will exist, but capturing them will require strong market intelligence, sharper execution and a deep understanding of shopper behaviour insights.

As market share becomes more contested, success will depend on aligning propositions with evolving shopper needs, while adapting to structural shifts across channels.

In an environment marked by margin pressure, economic uncertainty and rapid change, businesses must focus on turning data-driven insights into actionable insights that shape strategy and drive performance.

Looking ahead: where growth will come from

The UK grocery market will continue to grow, reaching over £300 billion by 2031. The real challenge lies in identifying where growth will come from and how to capture it in an increasingly competitive and complex landscape.

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