During the pandemic, the number of traditional grocery retailers decreased slightly, and retail value sales growth was negative. Conversely, during 2021 traditional grocery retailers registered a rise in retail value sales growth, as consumers shifted from supermarkets and hypermarkets to smaller format stores.
Specialised stores such as drinks specialists performed well in 2021. This was not only because of the increased consumption of alcoholic drinks at home, in compensation for horeca not fully recovering, but also as the format became attractive to many consumers who tried to avoid crowds in supermarkets and hypermarkets.
The pandemic strengthened many people’s concerns for their health and wellbeing. Consequently, more consumers are considering the composition of the products they buy and try to choose more natural products which are often associated with local provenance.
Once the pandemic subsides and people’s habits return to pre-pandemic routines, traditional grocery retailers are expected to continue its negative trajectory. Across the forecast period, traditional grocery retailers will continue to find it a challenge to compete against the rise of modern grocery retailers, especially major retailers, and will, therefore, continue to lose value share and register negative constant retail value sales.
Though facing harsh competition from modern grocery retailers, some traditional grocery retailers are performing strongly by focusing on their points of difference, offering specialist items to consumers. These retailers benefit from offering more insight and better quality in comparison with modern grocery retailers.
As rent prices are high in larger cities, and it is hard to generate profitable value, many traditional grocery retailers are shifting to e-commerce, strengthening this channel at the cost of selling space. Moreover, responding to increasingly hectic consumer lifestyles, more and more traditional grocery retailers are shifting to e-commerce, while also keeping their brick-and-mortar stores.
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Traditional grocery retailing is the aggregation of those channels that are invariably non-chained and are, therefore, owned by families and/or run on an individual basis. For Euromonitor traditional grocery retailing is the aggregation of three channels: Independent Small Grocers, Food/Drink/Tobacco Specialists and Other Grocery Retailers. While there can be modern (i.e. chained) food/drink/tobacco specialists or other grocery retailers, due to the store's presence in the channel, these stores are still considered as traditional for Euromonitor International.See All of Our Definitions
This report originates from Passport, our Traditional Grocery Retailers research and analysis database.
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