Online and discount grocery channels are set to experience the fastest growth worldwide over the next five year, according to the latest forecast from the Institute of Grocery Distribution (IGD).

Economic factors, shifting consumer behaviours, and retailer strategies are expected to drive this surge, with online channels projected to account for 6.3% of global sales by 2029.

Meanwhile, discount stores, which it noted as the fastest-growing physical channel, are set to contribute 9.3% to global grocery sales by the same year.

While inflation is expected to decline steadily through 2025, IGD said developed markets will see a return to inflation targets “sooner than their developing counterparts”.

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While IGD forecasts that traditional trade will continue to dominate globally, accounting for 43% of net new sales between 2024 and 2029, it’s share is expected to decline in most markets.

It also notes that supermarkets will remain “a crucial channel”, contributing significantly to net new sales, despite a gradual decline in market share.

IGD head of global insights Nick Miles said: “It is critical for businesses to understand where growth will come from over the next five years to ensure they are prioritising capital expenditure, resource deployment, and building the right capabilities to drive growth.

“While online and discount will be the fastest-growing channels globally, traditional trade and supermarkets will provide the biggest cash growth opportunities. However, channel mix and performance will vary considerably by region and market.”