Updated: Sep 14, 2020
The global food and grocery retail market size is valued at USD 13.98 trillion in 2020 and is expected to grow at a growth rate (CAGR) of 5.0% from 2020 to 2027 to USD 17.30 trillion.
The increasing number of middle-class consumers and rising brand consciousness among them have been driving the market for food and grocery retail in developing countries, including India and China.
As a result of the COVID 19 outbreak, the food and grocery retail market is witnessing a significant rise in demand globally.
Gen Z and millennials are leading the shift to e-commerce.
Rising enthusiasm and comfort for digital shopping among the millennials and Generation Z consumers have been boosting the growth of the segment in the food and grocery retail industry.
The corona virus pandemic is hitting at a time when millennials and Generation Z are reaching critical milestones in their lives.
Across the globe, consumers have hunkered down and figured out how to fulfill their needs—from socializing to eating to having fun—through a mix of traditional approaches and new, technology-enabled methods.
Young people are expected to pursue fitness goals, cook more fresh food at home, and seek products and services that support their mental health such as meditation apps.
"Millennials see their local retailer as a full partner in their journey toward a healthier lifestyle, as well as in discovering new and exciting foods, and expect a personalized shopping experience to their individual life goals" said Yuval Canfi, Co-Founder & CEO @ AlgoCart
According to BCG In terms of how they spend their dollars, Gen Z and millennials are leading the shift to e-commerce. Since the pandemic began, 33% of these consumers have increased their online spending, for a net increase of 6%, versus 23% of consumers in older generations.
This acceleration of e-commerce is occurring on two fronts: a shift of existing products, services, and retailers to online, and a surge in digital-only or digital-first products, services, and retailers.
Gen Z households spend an average of $760 for food each month, with $550 (or 72%) of the total going for groceries
Consistent with the food product trends, Gen Z and millennial consumers are expected to increase their overall spending and their online spending at food retailers that are geared toward at-home consumption and are value-oriented.
Along the same lines, young consumers expect to decrease their spending at dine-in restaurants and shift toward off-premises eating, with fast-food restaurants faring better than casual ones across both channels. Takeout, drive-through, online ordering, and delivery apps—all of which have accelerated during the outbreak and are here to stay.
Marketers will need to stretch their creative capabilities, relying on understanding what resonates best with these generations and how to get the most out of new formats.
Those demand transparency and freshness from their foods, and they want them to come from companies that share their ethical values.
Also important are loyalty programs, food samples, grocery store apps, an improved online shopping experience, and quality of personnel. These attributes apply both in-store and online.