Alarice Rajagopal writing in Supermarket News on July 7th provided a forecast of retail grocery sales for 2023 and 2024. Projections developed by Coresight indicate a 5.6 percent growth in retail grocery sales in 2023 to $1.5 trillion. For the subsequent year, grocery retail sales are anticipated to grow at a 4.2 percent year-over-year rate to $1.56 trillion. The food-away-from-home share attained 53 percent in 2022 but will show only moderate growth through 2027.
A proportion of the projected increase in sale is represented by inflation although stabilizing at a lower rate. The report noted that “consumers will remain judicious with their spending”, a sentiment echoed by the CEOs of major grocery chains.
Other take-home messages from Coresight included:-
- The post-COVID surge in QSR and restaurant sales will abate as consumer spending shifts resulting in benefits to the food service sector.
- Coresight observed that traditional supermarkets should develop in-store options that offer convenience, affordability and taste.
- Club stores and major discounters will grow at the expense of traditional supermarkets. Almost half of the top ten retailers, including Costco, Dollar stores, Target and Walmart will use grocery to drive traffic since their margins on non-food items more than compensate for lower grocery revenue.
- Deep discounters, including Aldi and Lidl and their homegrown counterparts, will continue to attract price-sensitive consumers and will increase sales through expansion by opening brick-and-mortar stores in strategically placed locations.