0 12 min 1 yr

Get a comprehensive analysis of the emerging trends, forecasts and opportunities both qualitative and quantitative insights and analysis of the shifting food and grocery retail dynamics for drinks, household products, packaged food, tobacco and unpackaged food. As urbanization and rising disposable incomes along with a huge population, there are expanding consumer markets, the retail grocery markets are also evolving. While traditional markets are still present, consumers have diminished preference for them as these markets are increasingly facing competition from modern grocery retail formats, such as hypermarkets, supermarkets and convenience stores.

Supermarkets and hypermarkets are market terminators in some larger cities, and their continued expansion to even smaller cities is expected to further drive competition in the grocery retail sector. Of the various retail channels, hypermarkets are expected to have the most growth potential in market followed by the convenience stores due to rising disposable incomes and consumer’s preferences for convenience and modernized lifestyles. These factors are also expected to expand the opportunities for packaged food sales. Products that address other consumer concerns, such as health and food safety, may be particularly promising. Internet retailing also continues to expand its presence in the market. In-fact, online spend on food and grocery is projected to grow at a CAGR of 34.03% during 2015-20.

The consistent growth in the GDP per capita is a major factor contributing to the growth of the hypermarkets and convenience stores. Convenience stores offer speed of service to time-starved consumers who want to get in and out of the store quickly. These shoppers recognize this channel of trade for its convenient locations, extended hours of operation, one-stop shopping, variety of merchandise and fast transactions. Despite small operating areas, the product range is still quite broad.
Food and grocery retail market is dominated by local players of the country like CRE Ltd, Walmart, RT Mart etc.

Grocery sales are set to grow further as per forecasts from the Institute of Grocery Distribution. The grocery market has proved challenging for western supermarket chains, with Tesco failing to make it alone on the mainland despite an ambitious program of building so-called “lifestyle malls”, anchored by Tesco stores. Walmart has struggled with food safety issues – a market where foreign brands trade on their reputation for quality, so any safety flaws are particularly bad for brand image.

Key Macroeconomic Trends to Drive Growth of Food Retail?

The food and grocery retailing market is forecast to grow. Modernization of Lifestyles, Urbanization and rapid and consistent increase in the disposable incomes are some of the major factors expected to drive growth. Apart from these, we also have few other factors that can be associated to this growth:

The Ministry of Commerce is encouraging retailers to establish direct procurement bases to increase traceability and supply fresh produce to local residents. Regulatory responses to food safety concerns are many. For example, the “Further Supervision of Baby Milk Formula Quality” policy resulted in many local milk formula manufacturers exiting the market and later applied both antitrust legislation as well as price controls on the industry. The retail sale of unpackaged oils and fats as well as bulk dry fruits and nuts is also now banned in most locations, opening doors for big corporate to exploit.

The Ministry of Commerce’s scheme to introduce modern retailing to rural areas since 2006 is designed to provide those residents with high-quality products at competitive prices in clean and tidy shopping environments, in an attempt to move grocery shopping away from wet markets and small, independent outlets.

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