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UK Grocery Retail Market Size 2025-2029

The UK grocery retail market size is valued to increase USD 56.2 billion, at a CAGR of 3.8% from 2024 to 2029. Rapid urbanization and rising consumer spending will drive the UK grocery retail market.

Major Market Trends & Insights

By Product - Food and beverages segment was valued at USD 176.60 billion in 2022
By Distribution Channel - Hypermarkets and supermarkets segment accounted for the largest market revenue share in 2022
CAGR : 3.8%

Market Summary

The Grocery Retail Market in the UK is a dynamic and evolving sector, characterized by the adoption of core technologies and innovative applications. With rapid urbanization and rising consumer spending, grocery retailers are investing in advanced technologies such as automation, AI, and robotics to streamline operations and enhance the customer experience. For instance, the use of self-checkout kiosks and mobile apps for contactless shopping has surged in popularity, particularly in response to the COVID-19 pandemic. However, the market also faces challenges, including the threat from counterfeit grocery products. According to a report by the Food Standards Agency, around 10% of all food and drink products sold in the UK are believed to be counterfeit.
To mitigate this issue, regulatory bodies are implementing stricter regulations and collaborating with retailers to ensure product authenticity. Despite these challenges, opportunities abound for grocery retailers in the UK. The market is expected to witness significant growth in the coming years, with online grocery sales projected to reach 15% of the total market share by 2025. Innovative store layouts and offerings, such as click-and-collect services and subscription-based models, are also gaining popularity among consumers. Overall, the Grocery Retail Market in the UK is a continuously unfolding landscape, shaped by a complex interplay of technological advancements, regulatory requirements, and consumer preferences.

What will be the Size of the UK Grocery Retail Market during the forecast period?

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How is the Grocery Retail in UK Market Segmented and what are the key trends of market segmentation?

The grocery retail in UK industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Product

  Food and beverages
  Non food


Distribution Channel

  Hypermarkets and supermarkets
  Convenience stores
  Discount stores
  Online
  Others


Sales Channel

  In-Store
  Online Delivery
  Click-and-Collect


Consumer Segment

  Urban Consumers
  Rural Consumers
  Premium Shoppers


Product Types

  Fresh Produce
  Packaged Foods
  Household Goods
  Health and Beauty


Geography

  Europe

    UK

By Product Insights

The food and beverages segment is estimated to witness significant growth during the forecast period.

In the dynamic and evolving grocery retail market in the UK, loss prevention strategies continue to be a priority for retailers, with online grocery shopping seeing a significant increase in adoption, reaching 7.1% of total sales in 2020. Sales promotion techniques, such as promotional pricing models and loyalty programs, are essential tools to attract and retain customers. Food safety regulations play a crucial role in ensuring product quality and consumer trust. Stock rotation and inventory optimization are essential for maintaining freshness and reducing waste. Automated checkout systems and self-checkout kiosks streamline the shopping experience, while e-commerce platforms enable seamless online ordering and last mile delivery.

Product traceability and quality control measures are vital for ensuring the authenticity and safety of goods. Retail technology integration, including demand forecasting and data analytics dashboards, enables retailers to optimize store operations efficiency and adapt to changing consumer behavior. Customer service metrics, such as response times and resolution rates, are key performance indicators for maintaining customer satisfaction. The grocery market is expected to grow further, with online sales projected to reach 11.7% of total sales by 2025. The adoption of advanced technologies, such as RFID tagging, AI-driven demand forecasting, and warehouse automation, will continue to transform the industry.

Category management techniques and waste reduction initiatives will help retailers optimize their offerings and reduce costs. The foods and beverages segment, which includes fresh and frozen meat, dairy products, fruits and vegetables, and snack foods, is a significant contributor to the market's growth. The most preferred grocery products in this segment include fresh bread, salty snacks, and ce

Number of Businesses statistics on the Supermarkets industry in the UK

The market share of the leading supermarkets in Great Britain (GB) has begun to shift from the traditional market leaders to discounters in recent years. However, Tesco and Sainsbury's have continually had the largest share over the period under consideration, holding **** percent of the market together as of July 2025. Prior to the popularity of the discounters, the grocery retail market was dominated by the 'big four' supermarkets: Tesco, Sainsbury's, Asda, and Morrisons. On the back of the post-Brexit uncertainty and growing inflation, consumer behavior has shifted in favor of cheaper alternatives such as Aldi and Lidl. In September 2022, Aldi took over fourth place in the grocery store ranking from Morrisons for the first time. In April 2023, Aldi's market share reached double digits for the first time. In July 2025, this figure stood at **** percent.

In 2025, the value of the leading sales channels in grocery retailing came to approximately ***** billion British pounds (GBP) in the United Kingdom. Of the major sales channels, supermarkets had the largest share of the market value with over *** billion pounds. Supermarkets had more than twice as big a market value as the convenience channel, the second largest channel. By 2030, the value of grocery retailing is expected to increase to over *** billion British pounds. Where UK shoppers buy groceries Some ** percent of surveyed grocery shoppers stated that they regularly shopped at supermarkets in the UK. Online retailers ranked in second place, with*** percent. Market leader Tesco held just over *********** of the market share of all grocery stores in Great Britain in July 2025. Together with Sainsbury's, the two retailers had a combined market share of **** percent. Tesco operated roughly ***** stores in the United Kingdom and the Republic of Ireland in 2025. With this presence, the company regularly reached ** percent of shoppers according to a recent survey.

European supermarkets’ revenue is forecast to inch upwards at a compound annual rate of 0.6% over the five years through 2025 to reach €1.7 trillion. European supermarkets face intense price competition amid lingering cost pressures. Though EU food inflation stabilised at 2.7% in April 2025 according to Eurostat, consumer focus on value remains high. Discounters like Aldi and Lidl continue to gain share as shoppers seek lower prices. Supermarkets are investing heavily in price-matching schemes, though sustaining these is financially challenging. Tesco and Sainsbury’s have begun scaling back such initiatives, while Asda has abandoned its price match strategy. Private label growth is reshaping the sector, with sales reaching €352 billion in 2024, the Private Label Manufacturers Association (PLMA) notes. Retailers are diversifying these ranges to balance value, quality and margins. Smarter product mixes are emerging as retailers prioritise local sourcing and premium niches to build loyalty. Strategies like Sainsbury’s ‘Supporting British’ and Mercadona’s local sourcing model resonate with values-driven shoppers. Loyalty programmes have become a strategic pillar, offering personalisation and margin-friendly growth. Programmes like Tesco Clubcard and Carrefour+ drive retention and profitability beyond price wars. Finally, rising labour costs add further pressure. Recent minimum wage increases across Europe have prompted supermarkets to pursue automation, cost savings, and operational efficiencies to protect profitability in an evolving retail landscape. In 2025, revenue is expected to grow at 0.9%, while profit is expected to reach 5.2%, a minor drop from 5.6% in 2020, thanks to intense price competition. Over the five years through 2030, supermarkets’ revenue is slated to climb at a compound annual rate of 2.9% to €2 trillion. Private label growth remains a structural trend while health, convenience and on-the-go meals are driving new demand, particularly among younger shoppers. Supermarkets must diversify their ranges to capture this growth, blending value, quality and functionality. Convenience is also fuelling an ongoing channel shift. Online grocery sales remain, with consumers willing to pay premiums for faster delivery. Retailers are scaling up e-commerce, partnering with delivery apps and innovating store formats to meet demand for flexibility. Smaller urban stores, hybrid models and grocerants are gaining traction. Supermarkets are accelerating investment in automation and AI to boost efficiency and margins. Personalised loyalty schemes are driving customer retention, while automation in warehouses and stores enhances productivity. Trials in drone delivery and robotic shelf scanning signal further innovation. Consolidation and integration are key to navigating sustained margin pressure. Larger grocers are pursuing M&A and pan-European alliances to drive scale, while moving upstream into food production for resilience. Supermarkets that adapt rapidly – blending private labels, convenience, technology and scale – will outperform in Europe’s increasingly competitive grocery landscape.

In 2023, is was forecast that the grocery market in the United Kingdom would grow by around 6.1 percent. Growth hit an all-time high in 2020 at over eight percent and is forecast to decrease to 2.3 percent by 2026.

Market shares of grocery stores

As of August 2023, the four most important players on the grocery market were Tesco, Sainsbury’s, Asda, and Aldi. The market leader Tesco had a share of over a quarter of the market. Fifth-placed Morrisons was around 1.5 percent away from retaking fourth place from Aldi.

Sales channels

The most relevant grocery sales channels measured by generated monetary value are supermarkets and convenience stores. Discounters, a smaller channel in comparison, still surpassed online sales.

Description

Explore the dynamics of supermarket sales with the Supermarket Sales Dataset. This dataset contains transactional records capturing details of products sold, quantities purchased, prices, and customer information across various countries. Dive into the world of retail analytics and uncover insights into transaction patterns and customer behaviour.

Features

Invoice: This feature represents a unique identifier for each transaction or invoice in the dataset.

StockCode: This feature represents a unique identifier for each product or item sold in the transaction.

Description: This feature provides a textual description of the product or item sold in the transaction.

Quantity: This feature indicates the quantity of the product or item sold in the transaction.

InvoiceDate: This feature represents the date and time when the transaction or invoice was issued.

Price: This feature represents the price of each unit of the product or item sold in the transaction.

Customer ID: This feature represents a unique identifier for each customer involved in the transaction.

Country: This feature represents the country where the transaction took place or where the customer is located.

Usage:

• Analyze sales trends: Explore the sales volume and revenue generated over time, identify popular products, and uncover seasonal variations in purchasing behavior.
• Customer segmentation: Segment customers based on their purchasing patterns, demographics, and geographic locations to target marketing campaigns more effectively.
• Market basket analysis: Understand product associations and recommend complementary products to enhance cross-selling opportunities.
• Predictive modeling: Develop predictive models to forecast future sales, identify potential high-value customers, and optimize inventory management.

UK retail market is leading the way in industry innovation, whether it's high-end retail, sustainable fashion, mobile retailing, or tech capabilities.

UK Supermarket Market is projected to grow around USD 165.4 billion in 2025 to USD 287.8 billion by 2031, registering a CAGR of 9.7%.

Over the five years through 2025, industry revenue is expected to drop at a compound annual rate of 5.8%. Specialist food retailers in the UK have endured a turbulent period marked by soaring costs, fragile consumer confidence, and intensifying competition. Supermarkets and discounters intensified pressure, expanding private label ranges into premium and organic lines. In response, specialists leaned on differentiation through provenance, artisanal quality, sustainability, and closer community ties, with many embracing digital tools, home delivery, and loyalty initiatives. Evolving consumer habits also spurred adoption of grocery-plus models, blending retail and food service to deliver ready-to-eat, health-focused, and locally sourced meals—an increasingly important lever of resilience and growth.Operating expenses rose sharply due to surging ingredient, feed, energy, and labour costs, squeezing margins even as food inflation eased from an EU peak of 19.3% in 2023 to 3.1% by mid-2025. Stubborn input costs and stagnant household budgets kept value top of mind for consumers, with over a third of UK shoppers still cutting back on groceries. Labour costs climbed with minimum wage hikes and tight labour markets, challenging a sector reliant on personal service and skilled staff. Independents often turned to flexible or family labour, while larger chains absorbed premium wage pressures. Energy shocks in 2022 pushed many small shops to the brink, with government relief proving vital. In 2025, revenue is expected to dip by 4.7% to €99.5 billion, while profit is anticipated to absorb 8.7% of revenue. Over the five years through 2030, revenue is expected to dip at a compound annual growth rate of 1.5% reaching €92.2 billion, while profit is anticipated to remain under pressure from intense competition reaching 7.2% of revenue. Specialist food retailers face a complex future shaped by labour pressures, intensifying competition, and shifting consumer values. Persistent labour shortages and rising wages will remain a defining challenge, with larger chains turning to automation to offset costs, while smaller shops balance authenticity with cautious digital adoption, wary of undermining their artisanal identity. Competitive pressure will sharpen as supermarkets expand premium private labels and capture more foot traffic through scale and strategic locations. To stand out, specialist retailers must lean into differentiation, offering experiences such as tastings, workshops and masterclasses, alongside stronger storytelling and digital engagement. Consumer behaviour will reinforce opportunities for specialists. Health, sustainability and premiumisation are driving demand for fresh, ethically sourced and high-quality food. Younger shoppers, in particular, expect traceability and are willing to pay premiums for welfare-friendly, clean-label products.

Base Year 2023 Forecast Period 2024-2028 Market Growth X.XX%*

The UK AI in retail market size reached USD 466.99 Million in 2024. Looking forward, IMARC Group expects the market to reach USD 2,201.19 Million by 2033, exhibiting a growth rate (CAGR) of 18.80% during 2025-2033. The market is driven by increasing innovations in technology that enhance retail operations and customer experiences, along with the expanding e-commerce industry, which is catalyzing the need for seamless shopping interactions in the UK.

Data Set Information:

https://github.com/amanbitian/Market-Basket-Analysis/blob/e058d7c086eed9a6e5dab561597328de1c4fa35f/Dataset/online%20retailer.PNG" alt="Data Info">

This is a transnational data set that contains all the transactions occurring `between 01/12/2010 and 09/12/2011 for a UK-based and registered non-store online retail. The company mainly sells unique all-occasion gifts. *Most customers of the company are wholesalers*.

Attribute Information:

• InvoiceNo: Invoice number. Nominal, a 6-digit integral number uniquely assigned to each transaction.** If this code starts with the letter 'c', it indicates a cancellation.**
• StockCode: Product (item) code. Nominal, a 5-digit integral number uniquely assigned to each distinct product.
• Description: Product (item) name. Nominal.
• Quantity: The quantities of each product (item) per transaction. Numeric.
• InvoiceDate: Invice Date and time. Numeric, the day and time when each transaction was generated.
• UnitPrice: Unit price. Numeric, Product price per unit in sterling.
• CustomerID: Customer number. Nominal, a 5-digit integral number uniquely assigned to each customer.
• Country: Country name. Nominal, the name of the country where each customer resides.

Source

http://archive.ics.uci.edu/ml/datasets/online+retail#

The United Kingdom Hardware Stores Retail Market Report is Segmented by Type (Door Hardware, Building Materials, Kitchen and Toilet Products, and Other Product Types). by Distribution Channels (Offline and Online). The Report Offers the Market Size and Forecasts for the United Kingdom Hardware Stores Retail Market in Value (USD) for all the Above Segments.

Supermarkets, department stores and general merchandise stores are non-specialised retail stores that stock and sell a wide range of items covering many different product categories, such as food, clothing, novelty items, furniture and more.

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Applied AI In Retail And E-Commerce Market Size 2025-2029

The applied AI in retail and e-commerce market size is valued to increase by USD 77.56 billion, at a CAGR of 28.6% from 2024 to 2029. Surging demand for hyper-personalization and enhanced customer experience will drive the applied ai in retail and e-commerce market.

Major Market Trends & Insights

North America dominated the market and accounted for a 41% growth during the forecast period.
By Component - Solutions segment was valued at USD 7.62 billion in 2023
By Deployment - Cloud segment accounted for the largest market revenue share in 2023

Market Size & Forecast

Market Opportunities: USD 853.61 million
Market Future Opportunities: USD 77564.50 million
CAGR from 2024 to 2029 : 28.6%

Market Summary

In the dynamic realm of retail and e-commerce, Applied Artificial Intelligence (AI) has emerged as a game-changer, driving innovation and transformation. The market's growth is underscored by the increasing demand for hyper-personalized experiences and enhanced customer engagement. In-store analytics AI, supply chain AI, and smart shelf technology optimize operations, while conversational AI and augmented reality shopping create immersive customer experiences. According to recent studies, the global retail AI market is expected to reach a value of USD7.35 billion by 2025, reflecting a significant surge in adoption. AI's role extends beyond automation and optimization. It now powers generative technologies, enabling the creation of personalized content and recommendations. This evolution is crucial in an era where consumers expect tailored experiences, driving businesses to adapt or risk losing market share.
However, the integration of AI in retail and e-commerce isn't without challenges. Data privacy and security concerns loom large, with ethical considerations adding complexity. Balancing the benefits of AI with the need for transparency and user control is essential. Despite these challenges, the future of retail and e-commerce remains bright, with AI poised to redefine the industry landscape.

What will be the Size of the Applied AI In Retail And E-Commerce Market during the forecast period?

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How is the Applied AI In Retail And E-Commerce Market Segmented ?

The applied AI in retail and e-commerce industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Component

  Solutions
  Services


Deployment

  Cloud
  On premises


End-user

  Fashion and apparel
  Electronics and appliances
  Grocery and FMCG
  Beauty and personal care
  Others


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    UK


  APAC

    Australia
    China
    India
    Japan


  South America

    Brazil


  Rest of World (ROW)

By Component Insights

The solutions segment is estimated to witness significant growth during the forecast period.

The market continues to evolve, with businesses increasingly adopting advanced technologies to automate processes, generate insights, and enhance customer experiences. A key area of innovation is the integration of generative AI into enterprise platforms, as demonstrated by Google Cloud's January 2024 launch of conversational commerce tools, customer service modernization solutions, and automated catalog enrichment. These technologies enable retailers to build nuanced chatbots, modernize operations, and transform in-store technology deployments. For instance, dynamic pricing models utilize predictive analytics retail and machine learning personalization to offer personalized offers AI and optimize inventory in real-time. Image recognition retail and visual search technology provide a personalized shopping experience, while chatbot customer service and sentiment analysis e-commerce improve customer engagement.

Moreover, AI-driven marketing automation, demand prediction algorithms, and fraud detection AI help retailers anticipate trends and mitigate risks. These advancements represent a significant shift in the retail landscape, with AI-powered solutions becoming essential tools for businesses to stay competitive. According to a recent report, the global retail AI market is projected to reach USD25.2 billion by 2027, underscoring the market's growing importance.

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The Solutions segment was valued at USD 7.62 billion in 2019 and showed a gradual increase during the forecast period.

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Regional Analysis

North America is estimated to contribute 41% to the growth of the global market during the forecast period.Technavio's analysts have elaborately explained the regional trends and drivers that shape the

Over ** percent of surveyed consumers in the UK stated that they would like to see UK supermarkets implement food waste management practices. Other environmentally friendly practices that topped the list included reducing plastic usage and energy efficiency. Plastic waste in the UK Approximately *** million metric tons of plastic packaging waste are generated in the UK annually. The generation of plastic packaging waste in the UK has slightly decreased recently, following an increasing trend from 2017 to 2021. About **** percent of this plastic packaging is recycled. The recycling rate of plastic packaging waste in the UK has increased considerably over the last decade. Almost **** billion items of plastic packaging waste are discarded each year by households in the UK. The most common items of plastic packaging waste thrown away by UK households are snack bags, packets, and wrappers. About **** million such items are discarded annually. Additionally, approximately ************ items of plastic waste come from other soft drink and beverage packaging. Purchasing of sustainable products among consumers in the UK Efforts to tackle plastic packaging waste are accompanied by a rising interest in sustainable products among UK households. In the food and beverage sector, the primary reason for purchasing sustainable products in the UK is that they are better for nature and the environment, as reported by more than half of British survey participants. While many consumers aim to purchase sustainable products, there are numerous barriers that prevent them from doing so more often. Two of the leading requirements for consumers in the UK to adopt a more sustainable lifestyle are *******************************************************************************************************************. However, the main requirement is to *********************************************. Although higher prices for sustainable products deter some consumers, nearly a ******* of consumers in the UK state they are willing to pay more for brands that produce sustainable packaging and products.

Over the five years through 2025, industry revenue is expected to drop at a compound annual rate of 5.8%. Specialist food retailers in the UK have endured a turbulent period marked by soaring costs, fragile consumer confidence, and intensifying competition. Supermarkets and discounters intensified pressure, expanding private label ranges into premium and organic lines. In response, specialists leaned on differentiation through provenance, artisanal quality, sustainability, and closer community ties, with many embracing digital tools, home delivery, and loyalty initiatives. Evolving consumer habits also spurred adoption of grocery-plus models, blending retail and food service to deliver ready-to-eat, health-focused, and locally sourced meals—an increasingly important lever of resilience and growth.Operating expenses rose sharply due to surging ingredient, feed, energy, and labour costs, squeezing margins even as food inflation eased from an EU peak of 19.3% in 2023 to 3.1% by mid-2025. Stubborn input costs and stagnant household budgets kept value top of mind for consumers, with over a third of UK shoppers still cutting back on groceries. Labour costs climbed with minimum wage hikes and tight labour markets, challenging a sector reliant on personal service and skilled staff. Independents often turned to flexible or family labour, while larger chains absorbed premium wage pressures. Energy shocks in 2022 pushed many small shops to the brink, with government relief proving vital. In 2025, revenue is expected to dip by 4.7% to €99.5 billion, while profit is anticipated to absorb 8.7% of revenue. Over the five years through 2030, revenue is expected to dip at a compound annual growth rate of 1.5% reaching €92.2 billion, while profit is anticipated to remain under pressure from intense competition reaching 7.2% of revenue. Specialist food retailers face a complex future shaped by labour pressures, intensifying competition, and shifting consumer values. Persistent labour shortages and rising wages will remain a defining challenge, with larger chains turning to automation to offset costs, while smaller shops balance authenticity with cautious digital adoption, wary of undermining their artisanal identity. Competitive pressure will sharpen as supermarkets expand premium private labels and capture more foot traffic through scale and strategic locations. To stand out, specialist retailers must lean into differentiation, offering experiences such as tastings, workshops and masterclasses, alongside stronger storytelling and digital engagement. Consumer behaviour will reinforce opportunities for specialists. Health, sustainability and premiumisation are driving demand for fresh, ethically sourced and high-quality food. Younger shoppers, in particular, expect traceability and are willing to pay premiums for welfare-friendly, clean-label products.

The performance of the hospitality sector, consumer spending habits and supermarket demand are the key factors affecting the Grocery Wholesaling industry. Over the five years through 2024-25, revenue is forecast to grow at a compound annual rate of 2% to £44.2 billion, including an anticipated hike of 0.7% in 2024-25. Inflation has played a big role in the industry’s recent performance. Food prices reached record highs in March 2023, with the Office for National Statistics reporting they climbed by 19.3% over the year, primarily due to the Russia-Ukraine conflict. Consumers responded to sky-high prices by trading down and eating out less, denting sales to supermarkets and hospitality venues; still, rising prices kept revenue growing. Food inflation has since fallen considerably, paving the way for growth in consumer confidence. However, food prices rose by 3.3% in the year to January 2025. While this is much lower than the peak in March 2023, food inflation had been trending downward in previous months (October to December 2024). High prices have limited sales volumes and increased the rate of wholesale bypass. Revenue is slated to swell at a compound annual rate of 2% over the five years through 2029-30 to £48.7 billion. As inflation stabilises, pressure on household finances will ease and boost consumer confidence. According to the Bank of England's projections in February 2025, inflation will rise to 3.7% at the end of Q3 2025, before easing slowly back to its target 2% in Q4 2027. This recovery will raise grocery sales, particularly in the hospitality sector. At the same time, consumers will trade up to higher-priced, healthier and sustainably sourced products, boosting revenue and profit. However, threats remain; wholesale bypass, the rise of farmers markets and rising demand for fresh, healthy products will continue to present challenges to grocery wholesalers, eating into sales. Upcoming hikes in the National Living Wage and employers’ National Insurance contributions are set to drive up wholesalers’ costs, hindering profitability.

In UK Retail Market is projected to grow from USD 2.3 trillion in 2025 to USD 3.7 trillion by 2031, at a CAGR of 8.2%