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Food Retail Market Segmented By Food and Grocery Retail, Pet Food Retail in Supermarkets, hypermarkets, Independent and specialist retails, Convenience stores
Increasing customer preference towards private label brands, rising consumer spending on food items and increasing supermarket shopping culture are some of the major drivers of the food retail market. Market share of independent and specialist retailers is expected to decline on account of rapid growth of other segments such as supermarkets/hypermarkets.
The industry is facing challenges in the form of supply chain ineffectiveness and threat from unorganized players. However, the burgeoning middle-class population and increasing online retail shopping are offsetting these challenges and presenting growth opportunities for the industry.
Lack of supply chain effectiveness and threat from unorganized food retailers are the major restraint of the market. The impact of a lack of supply chain effectiveness in less developed countries is expected to be medium in the short and medium terms, and low in the long term.
Government investment in infrastructure and the entry of global food processing companies in developing countries are expected to minimize the impact of supply chain-related restraints. The threat from unorganized players is expected to be high in the short term, medium in the medium term, and low in the long term.
The impact of the expanding private label brands market is expected to be high in the short and medium terms, and medium in the long term. Private label brands are those that are manufactured by small-scale food processing companies and supplied to food retailers at relatively lower prices compared to organized food processing companies.
Private label brands are expected to lose their share towards the end of the decade due to the expected recovery in European economy. This will eventually lead to retention of customers by the brands of organized food processing companies.
The impact of increasing customer spending on food items is expected to be medium in the short term, and high in the medium and long terms. Certain issues such as unemployment and inflation are some of the factors that have kept the impact of increasing customer spending medium in the short run. The influence of an increasing supermarket shopping culture is expected to be medium in the short term, and high in the medium and long terms.
Changing eating habits and food preferences among urban consumers are some of the factors that are likely to drive the growth of supermarkets in developed countries in the medium and long terms.
The number of organized players is increasing in developing countries due to increasing urbanization and per capita income. In India, discussions regarding foreign direct investment (FDI) in retail are currently under way, and if it is approved by the Indian government it may add benefits to the food retail industry.
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Major players of the industry include: