Asia-Pacific is now the largest global market for food retailing – and the fastest growing.
And the supermarket and hypermarket sectors will grow the fastest between now and 2020 according to a new market report published by Persistence Market Research, Global Market Study on Food Retail.
The global food retail market was valued at US$ 5.644 trillion in 2013 and is expected to grow at a compounding average growth rate of 6.1 per cent from 2014 to 2020, to reach an estimated value of US$8.542 trillion in 2020.
The growth is being driven by the fast-growing middle classes in the world’s developing markets, especially in Asia.
China and India are among the countries witnessing a fast growth in their middle-class population. In 2012, there were 227 million and 149 million middle-class households in China and India, respectively. Due to the increasingly 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 pick up and pure-play online grocers is expected to drive the food retail market in the years to come, the report says.
About 1.5 billion households globally would be categorised as ‘middle-class’ by 2020, up from 1.2 billion households in 2012.
The number of organised players is increasing in developing countries due to increasing urbanisation and growing per capita income. In India, easing of restrictions on foreign direct investment in retail is aiding the food retail industry.
But the report cautions that growth is being restrained by a lack of supply chain effectiveness in less developed countries, a problem likely to remain in the short and medium terms.
Government investment in infrastructure and the entry of global food processing companies in developing countries are expected to minimise the impact of those supply chain restraints.
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 due to the presence of the large number of branded stores and discounters such as Aldi, Carrefour, Auchan and Tesco which offer fresh and branded products. It is followed by North America.
Browse the full Global Market Study on Food Retail and report here
