The UK Food Retail Sector
The UK food, drink and tobacco market
Market value and trends
The term 'food retailers' is becoming ever more inappropriate as the operators of the largest stores increase their non-food offer. But food remains the core of the offer and the main reason that people visit the stores.
Figure 12: UK: Consumer spending on food, drink and tobacco, 1999-2003
(£m incl. sales tax)
1999
2000
2001
2002
2003
% change 1999-2003
Food & non-alcoholic beverages
57,025
58,563
59,974
61,170
63,082
10.6
Food
50,670
51,840
52,882
53,792
55,261
9.1
Non-alcoholic beverages
6,355
6,723
7,092
7,378
7,821
23.1
Alcoholic beverages & tobacco
24,458
24,617
25,158
25,960
27,342
11.8
Alcoholic beverages
10,166
10,395
10,700
11,338
12,051
18.5
Tobacco
14,292
14,222
14,458
14,622
15,291
7.0
Source: National Statistics/Mintel
Demand for food is mature. There is a little growth, particularly from the development of higher margin goods - more fresh foods, organic and ready prepared foods. But on the whole people have enough to eat and do not increase their consumption in good times.
Figure 13: UK: Consumer spending on food, drink and tobacco as % all retail sales, 1999-2003
Source: Mintel
Therefore the upswing in consumer spending on food, drink and tobacco in 2003 is a little unexpected. The year certainly saw much weaker retail sales growth than any other in the last five, but there was certainly no recession and consumer confidence remained high. We believe that the main reason for the slight relative improvement was that inflation in foods was above the average for retail sales in 2003. Spending on food would not have responded to that small relative difference and the proportion of food in the spending mix therefore increased.
For the food retailers, food is the core of the business and the principal traffic driver. Tesco and ASDA have both managed to become destination outlets for some non-foods, but that is very unusual in the context of UK food retailing.
Figure 14: UK: Spending on food and drink, 1999-2003
£m, excl VAT
1999
2000
2001
2002
2003
% change 1999-2003
Bread and cereals
8,065
8,346
8,702
9,054
9,137
+13.3
Meat
11,883
12,265
12,384
12,628
13,369
+12.5
Fish
2,063
2,152
2,298
2,400
2,344
+13.6
Milk, cheese and eggs
7,263
7,412
7,480
7,435
7,721
+6.3
Oils and fats
1,223
1,219
1,221
1,184
1,188
-2.9
Fruit
3,961
4,068
4,242
4,522
4,695
+18.5
Vegetables
8,228
8,332
8,418
8,301
8,440
+2.6
Sugar, confectionery and ice-cream
6,549
6,644
6,732
6,858
6,955
+6.2
Other food
1,435
1,402
1,405
1,410
1,412
-1.6
Total food
50,670
51,840
52,882
53,792
55,261
+9.1
Coffee, tea and cocoa
1,670
1,759
1,841
1,811
1,684
+0.8
Fruit and vegetable juices and other soft drinks
4,685
4,964
5,251
5,567
6,137
+31.0
Total Non-alcoholic beverages
6,355
6,723
7,092
7,378
7,821
+23.1
Spirits
2,802
2,777
2,855
2,969
3,183
+13.6
Wines, cider and perry
4,389
4,621
5,039
5,431
5,733
+30.6
Beer
2,975
2,997
2,806
2,938
3,135
+5.4
Tobacco
14,292
14,222
14,458
14,622
15,291
+7.0
Total alcoholic drink and tobacco
24,458
24,617
25,158
25,960
27,342
+11.8
All food, drink and tobacco
81,483
83,180
85,132
87,130
90,424
+11.0
Source: National Statistics/Mintel
Demand in individual sectors can be erratic and in fresh fruit, price fluctuations can be dramatic.
Figure 15: UK: Growth in consumer spending on food, drink and tobacco, 1999-2003
(%)
1999
2000
2001
2002
2003
Bread and cereals
2.5
3.5
4.3
4.0
0.9
Meat
1.6
3.2
1.0
2.0
5.9
Fish
2.7
4.3
6.8
4.4
-2.3
Milk, cheese and eggs
3.3
2.1
0.9
-0.6
3.8
Oils and fats
3.6
-0.3
0.2
-3.0
0.3
Fruit
4.1
2.7
4.3
6.6
3.8
Vegetables
4.4
1.3
1.0
-1.4
1.7
Sugar, confectionery and ice-cream
2.7
1.5
1.3
1.9
1.4
Other food
12.0
-2.3
0.2
0.4
0.1
Total food
3.1
2.3
2.0
1.7
2.7
Coffee, tea and cocoa
2.9
5.3
4.7
-1.6
-7.0
Fruit and vegetable juices and other soft drinks
5.6
6.0
5.8
6.0
10.2
Total Non-alcoholic beverages
4.9
5.8
5.5
4.0
6.0
Spirits
10.7
-0.9
2.8
4.0
7.2
Wines, cider and perry
19.0
5.3
9.0
7.8
5.6
Beer
3.4
0.7
-6.4
4.7
6.7
Tobacco
7.0
-0.5
1.7
1.1
4.6
Total Alcoholic drink and tobacco
8.9
0.7
2.2
3.2
5.3
All food, drink and tobacco
4.9
2.1
2.3
2.3
3.8
Source: Mintel
Supermarkets are destination outlets for day to day household requirements - both food and non-food.
To create a sound piece of writing it is imperative to develop skills that make the piece both enjoyable and understandable to the reader. By doing so we become academic writers who acknowledge the importance of careful and concise writing. The piece of writing that I found best exemplifies an academic piece in its use of Craft tips is “The Supermarket: Prime Real Estate”, by Nestle. I believe this because of its meta-commentary, outstanding framework while quoting, and use of transitional phrases. This particular essay pulls together ideas about a modest subject, the grocery store and its’ setup, in a way that is intriguing to the reader by the expansion of simple ideas,
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... and Engel, J. (2007). Consumer Behaviour An Asia Pacific Approach. Australia: Nelson Australia Pty Limited. 172.
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2. Market demand for certain crops may vary significantly from one year to the next.
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