Foodservice growth boosts wholesale sector

Growth in the foodservice sector resulted in a 0.3 per cent rise in sales to almost £30 billion for grocery wholesalers in 2016, according to the IGD.

The research found that the foodservice sector increased sales by 2.1 per cent in 2016.

It is forecasting that the wholesale sector will reach £31.3 billion by 2021, representing a compound annual growth rate (CAGR) of 0.9 per cent. This forecast projects a 2.5 per cent CAGR for delivered foodservice, 0.5 per cent for delivered grocery and 0.1 per cent for retail-led cash and carry.

The IGD’s chief economist James Walton said: “For another year, foodservice has lifted the wholesaling sector, representing the vibrancy of the expanding out-of-home customer. We’re also seeing growth in the chilled and fresh and beer, wines and spirits categories, demonstrating clear investment opportunities for wholesalers.”

However, sales to the independent and convenience retail customer base fell by 0.6 per cent, while tobacco sales were down by 1.8 per cent.