Fresh food driving grocery sector growth

Fresh food led the expansion in the grocery market last year – accounting for €1.6bn, or 38%, of total growth in the sector.

New research carried out by Nielsen on retail performance in western Europe shows consumers spent €4.3bn more on fast-moving consumer goods in 2016 than in the previous year.

Behind fresh foods in driving the growth was confectionery, which grew 23% and alcohol, which recorded a 20% rise.

These three categories accounted for 80% of increased grocery spend in 2016.

Promotions a major factor

Olivier Deschamps of Retailer Services Europe commented that the findings show: “Fresh is clearly a strong focus for retailers, in order to attract shoppers and have a positive impact on their image.

“Fresh food and confectionery’s growth were primarily driven by consumers buying more items, whilst alcohol’s was mainly driven by paying higher prices,” he said.

The overall grocery market recorded a €2.2bn growth. Half of this was due to promotional items, which retailers increasingly used in 2016 to encourage shoppers to add more items to their shopping baskets which was a major factor in the growth.

Own brand labels

In terms of sub-categories, fresh meals, beer, fresh fruit and vegetables and mineral water contributed the most to expansion in the sector.

Own brand labels also proved more popular in 2016, accounting for 30% of all growth in the grocery market, however, the top 10 manufacturers in western Europe saw a €430m decline in consumer spend. They now have a 17% market share, while manufacturers outside the top 10 account for a 46% share, followed by own label at 36%.

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