Food along with health and beauty are expected to be two of the best performing retail categories for 2024, a recent report has stated.
According to predictions from the KPMG/RetailNext Retail Think Tank (RTT), there will be a return to volume growth in food retailing in 2024, after 2 years of falling volumes. RTT member, Mike Watkins, who is Head of Retailer Insight at NIQ, predicts food retail will see headline value growth of +4-5 per cent in 2024, with volumes up around +0.5-1 per cent next year.
Off the back of record-breaking Christmas sales, which saw Lidl and Aldi post 12 per cent and 8 per cent sales rises respectively earlier this week and Lidl continuing its run as the fastest growing UK supermarket, discounter performance is set to continue into 2024 as consumers switch supermarket allegiance and opt for more own branded goods, according to the RTT.
“Most of the growth in 2024 will again come from the Discount and Value retail channels, with Aldi and Lidl having crossed the threshold of a combined 20 per cent market share after over 20 years in the UK,” according to Watkins.
Retail Consultant, Nick Bubb, added that “sales growth for the big supermarkets in 2024 is likely to be more subdued, with the boost from grocery price inflation dropping away”, as well as pointing to the ongoing pressure on consumer spending.
Retail consultant and former Globaldata Director, Maureen Hinton, suggests the “switch to own brands will continue in 2024 as consumers prioritise their needs and are more selective about where they shop and what they buy”. A recent poll showed that more than half of UK consumers (54 per cent) planning to buy cheaper or own-brand grocery items in 2024.
The report further adds that ‘lipstick effect’ – where consumers buy small ‘everyday’ treats rather than big-ticket items in economic downturns - will continue to boost the performance of Health & Beauty as well as Wellness retailers, James Sawley, Head of Retail & Leisure at HSBC, suggests.
Co-Chair of the RTT, RetailNext’s Gary Whittemore added that “while economic growth remains slow for 2024, the outlook for retail is muted for most sectors outside Grocery and Beauty.”
