World: food retail industry to grow 6.1% y-o-y by 2020 - report

The predicted figure is based on various factors, such as rise in the global population, changing consumer preferences and emerging economies, according to a report issued by the market research company Persistence Market Research.

Moreover, rising middle-class population is creating growth opportunities for food retail market and is expected to drive the market further: no less than 1.5 billion households globally would be in the middle-class category by 2020, up from 1.2 billion households in 2012, the source cites. China and India are among the countries witnessing a fast growth in their middle-class population, with 227 million and 149 million middle-class households, respectively, in 2012.

In addition, due to busy life schedules, many working people have less time to shop for food items. Therefore, increasing online retail shopping through online retail formats such as in-store pickup and pure-play online grocers is expected to drive the food retail market in the same time frame. The restraining impact of 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 number of organized players is increasing in developing countries due to increasing urbanization and per capita income.

Asia-Pacific is the largest market for food retail. Increasing per capita income, growing level of education, smaller families and increasing urbanisation and westernisation are the key factors driving the growth of food retail industry in this region. Europe is the second largest market for food retail, followed by North America, due to the presence of the large number of branded stores and discounters such as Aldi, Carrefour, Auchan and Tesco, which offer branded products.

Food Retail is categorised under distribution channel into four different segments: supermarkets or hypermarkets, independent and specialist retailers, convenience stores and others. Supermarket or hypermarket segment holds the largest share of the overall market in 2013, at USD 2,925.8 billion, and is expected to reach USD 4,448.5 billion by 2020 at a CAGR of 6.2% during 2014 to 2020. Under regional segment, the Asia Pacific food retail market (the largest market in 2013) increased by 7.2 % CAGR during 2010-2013 to reach USD 1,909.2 million in 2013.