New Market Report Now Available: United Kingdom Food & Drink Report Q1 2011

Jan. 6, 2011 - PRLog -- A stronger than expected UK GDP print for the third quarter has caught the market off guard and suggests that the recovery is more robust than expected. While we do not discount the risk of a double-dip going forward, we believe it more likely that the economy will muddle through and emerge leaner by the end of this parliamentary term. On the back of data for the first half of the year, we expect growth of 1.50% for 2010 overall (revised up from a more bearish initial projection of 1.0%). Thereafter, we forecast growth of 2.0% in 2011 and 2.6% in 2012. The UK is supported by the competitive nature of its economy and in addition, the domestic consumer is one of the most enthusiastic in Western Europe, and so the food and drink industry stands to benefit more strongly than others from the eventual rebound in regional growth.

Headline Industry Data

* 2011 per capita food consumption =+t1.5%; forecast to 2015 = +12.6%
* 2011 alcoholic drink sales = +1.7%; forecast to 2015 = +12.7%
* 2011 soft drink sales = +4% ; forecast to 2015 = +27.9%
* 2011 mass grocery retail sales = +2.4%; forecast to 2015 = +20.4%

Key Industry Trends & Developments

UK Beer Sales Continue to Decline - Figures from the British Beer & Pub Association (BBPA) suggest that UK beer sales in the three months to the end of September 2010 registered their fastest fall since the group began collating figures in 1997. The BBPA suggests that volume sales in the period fell by around 10% year-on-year (y-o-y), with sales through retailers (the off-trade) falling by 12% and sales through pubs and bars (the on-trade) falling by 8%. The fall represents a continuation of the long-term trend, but is likely to have been magnified by consumers reducing consumption in the aftermath of the FIFA World Cup.

Discount Sector No Longer Set for Record Beating Growth - Recent developments in the UK retail market have signalled that a widespread shift towards the discount sector in this market now looks unlikely to materialise in the medium term. Germany-based discounter Aldi has scrapped plans to build a new 600,000 square foot distribution centre on the Isle of Sheppey and also revealed in a filing with Companies House that its sales in 2009 increased by only 1.6% to GBP2.04bn, despite increasing its number of stores by 45. This comes after international discounter Netto announced a deal to sell its 193 stores in the UK to Asda, stating that it intended to focus on its operations in Scandinavia and Northern Europe

Key Risk to Outlook

Return to recession - With the economic recovery still very weak, the government's plans for significant fiscal retrenchment combined with weak demand in the eurozone could be sufficient to tip the UK economy back into recession. Given that fiscal stimulus has been a key factor keeping the economy afloat during the global downturn, normalising the budget now could have a more detrimental impact on growth than we currently anticipate and as such, this remains a downside risk to our consumption forecasts.

Eurozone debt crisis - On the external front, the ongoing eurozone crisis poses a particular threat to investor confidence towards the UK. The risk of a major sovereign credit event on the continent would further damage confidence and put significant pressure on export demand and hence economic growth and consumption.

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Partial Table of Contents:

BMI Industry View
SWOT Analysis
- United Kingdom Food Industry SWOT
- United Kingdom Drink Industry SWOT
- United Kingdom Mass Grocery Retail Industry SWOT
Business Environment
- BMI's Core Global Industry Views
- BMI Food & Drink Core Views
- Western Europe Food & Drink Business Environment Ratings
- Table: Western Europe Food & Drink Risk/Reward Ratings Q1 2011
- United Kingdom Food & Drink Business Environment Rating
- Macroeconomic Outlook
- Table: United Kingdom - Economic Activity
Industry Forecast Scenario
- Consumer Outlook
- Food
- Table: UK Food Consumption Indicators - Historical Data & Forecasts
- Canned Food/Prepared Food
- Table: Canned Food Value/Volume Sales - Historical Data & Forecasts
- Confectionery
- Table: Confectionery Value/Volume Sales - Historical Data & Forecasts
- Drink
- Hot Drinks
- Table: Hot Drink Value Sales - Historical Data & Forecasts
- Soft Drinks and Bottled Water
- Table: Soft Drink Value Sales - Historical Data & Forecasts
- Alcoholic Drinks
- Table: Alcoholic Drink Value/Volume Sales - Historical Data & Forecasts
- Mass Grocery Retail
- Table: UK Mass Grocery Retail - Value Sales by Format - Historical Data & Forecasts
- Trade
- Table: Food & Drink Trade Balance - Historical Data & Forecasts
Food
- Industry Trends And Developments
- Decline In Organic
- Retailer-Supplier Relationships To Be Governed By Adjudicator
- Hovis Delisting Highlights Producer-Retailer Tensions, Strength Of Private Labels
- Premier Foods In Talks Over Quorn Unit, Asset Sales On The Way
- Market Overview
- Food Sector
- Prepared Food
- Confectionery
- Private Label
- Livestock
- Dairy
- Seafood
- Organic Food
Drink
- Industry Trends And Developments
- Plans To End Loss-leading Promotions Receive Industry Support
- UK Beer Sales Decline Will Impact Heineken And Molson Coors
- Carbonates Boosted By Downturn
- Market Overview
- Soft Drinks
- Alcoholic Drinks
- Alcohol on-Trade
Mass Grocery Retail
- Industry Trends And Developments
- Market Overview
- Online Retailing
- Table: Structure of the UK's Mass Grocery Retail Market by Estimated Number of Outlets
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Full Table of Contents is available at:
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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.