The UK grocery market is set to grow by more than £45bn by 2031, but IGD has warned that headline gains will mask a prolonged period of weak underlying demand.

The food and grocery insight body forecasts that the market will reach £303.7bn in value by 2031, with growth driven largely by inflation and population increases rather than a meaningful recovery in how much shoppers buy.

IGD said ongoing pressure on household budgets, lasting changes in shopper behaviour and emerging health trends such as GLP-1 weight-loss drugs would all limit volume growth over the next five years.

Senior insight analyst Alex Rowberry said: “There will not be a meaningful recovery in underlying demand over the next five years.

“Ongoing economic pressure, lasting changes in shopper behaviour, and emerging factors, such as GLP-1s, are all acting to limit how much people buy. We expect that GLP-1 adoption alone will offset £11.2bn of market growth.”

IGD expects future growth to become increasingly uneven, with online and discount retailers capturing a disproportionate share of gains.

Online is forecast to be the fastest-growing channel, with a compound annual growth rate of 5.6 per cent, while discount is expected to grow at 3.6 per cent.

The forecasts reflect longer-term changes in how shoppers are buying groceries, including smaller baskets, more frequent trips and continued value-led decision making.

IGD said those behaviours were reinforcing demand for convenience and low prices, while placing pressure on more traditional formats.

Rowberry said: “What’s changing is that retailers can no longer rely on a growing market to drive performance.

“With demand remaining structurally weak, growth increasingly depends on being positioned in the channels and missions where spend is shifting.”

Supermarkets will remain the largest grocery channel and are expected to contribute the most absolute growth, adding £17.9bn over the forecast period.

However, IGD said supermarkets would lose share to faster-growing competitors, with large store formats particularly exposed and hypermarkets continuing to underperform.

Discount is forecast to narrow the gap with convenience, which remains the UK’s second-largest grocery channel.

IGD expects discount to reach £52.9bn in value by 2031, compared with £54.7bn for convenience, as value-led formats continue to gain traction among financially constrained shoppers.

Convenience will continue to grow in value terms but is expected to cede share over time, with declining tobacco and vape sales, regulation and changing shopper habits weighing on the channel.

IGD also expects policy and health to play a greater role in shaping grocery demand, with HFSS regulation and changing health behaviours influencing category mix, purchasing patterns and long-term consumption.

The organisation said the market was moving out of an inflation-led recovery and into a more stable but lower-growth phase, where retailers will need to fight harder for share rather than relying on rising demand.

A free summary of IGD’s 2031 UK grocery forecasts is available on its website, with further channel forecasts set to be published in the coming weeks.

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