Will new United Kingdom Prime Minister Boris Johnson finally figure out Brexit and make Britain great again?
The U.S. Department of Agriculture’s Foreign Agricultural Service issued a report this week posing the question of whether Johnson’s new cabinet appointments can help him finally break the Brexit impasse.
The report looked at the cabinet Johnson has put together, which is being called one of the biggest changes in UK leadership in modern times. The hunch from the USDA report is that Johnson’s cabinet appointments will him deliver on his promise to have the UK leave the European Union by Oct. 31 of this year.
From the report:
With regards to Brexit, the UK Parliament has thus far demonstrated its lack of appetite for permitting a ‘no deal’ Brexit. On the other hand, the European Union has thus far shown no willingness to renegotiate Johnson’s predecessor’s (Theresa May) Withdrawal Agreement which includes the backstop element which Boris himself has described as dead.
The prospect of the UK withdrawing Article 50 and remaining in the EU seems as unlikely as ever, and there is no guarantee that the EU will grant the UK a further extension beyond October 31, even if the UK were to request it. Elected by members of the Conservative Party, there is also the question of whether Johnson will take the country to an early General Election in an attempt to shore up his mandate, but unless he does so very soon any vote would take place after October 31. Of course, this approach was attempted by his predecessor, achieving the opposite effect, and with the country divisively split on the issue of Brexit, this strategy presents its own challenges. As has been the case for many months, the UK’s future remains in a state of uncertainty, albeit with a new, energized and pro-Brexit leadership team.
Also relating to the United Kingdom, the USDA has issued its annual review of the country’s retail scene.
There are similarities to the U.S. market, of course.
The report said convenience stores, discounters and online grocery retailing are the formats seeing the strongest expansion in the United Kingdom. The report said major chains are opening up smaller stores in city and town centers, while they limit the expansion of large format outlets in small town and out-of-town locations.
Another interesting tidbit is that online grocery shopping is expected to increase 52% over the next five years.
According to the report, the discounters will continue to be the fastest growing channel as both quality and value are recognized by consumers. By 2023, discounters are projected to claim about 30% of every food dollar.
Food prices have been decreasing in recent years, according to the report, due to the success of the discounters and competition. However, when the UK voted to leave Europe in June 2016, the British pound weakened significantly, which has created upward pressure on food prices. The discounters continuing to gain market share the report says that they have pledged that prices will again decrease.
The report said the aging population and increased health consciousness of consumers is fueling the demand for health and wellness products, as well as functional food products. The “high-paced” society and the rising number of single households are driving the demand for convenient, ready-to-eat meals, according to the report.
There is an increasing share of consumers who view their purchasing decisions as a political or lifestyle statement. along the lines of “no GMO”, only range-free eggs, vegetarian or vegan diet.
Consumers increasingly require traceability and information about production methods, and Fair Trade and organic products are becoming increasingly popular.
Key excerpts from the report:
The UK grocery market was valued at $237.9 billion in June 2018. This is an increase of 3.1% over 2017. Groceries account for 9% of total household spending in the UK, making it the third largest area of expenditure, following housing and transport.
Four supermarket chains dominate UK food retailing, accounting for 70% of the market. Tesco is the market leader, with 27.3% market share, followed by Sainsbury’s and Asda with 15.2% each and Morrison’s with 10.4%. Other UK supermarket chains include Aldi, The Coop, Waitrose, Lidl, and Iceland.
The discounters Aldi and Lidl continue to gain market share. In the 12 weeks ending May 19, 2019, the discounters combined market share reached 13.8% of the British grocery market for the first time. The discounters show no signs of stopping with plans to open hundreds of more stores between them.
The value of the UK online grocery market has seen tremendous growth in recent years and in 2018 was valued at $15.4 billion. Online grocery sales are predicted to reach $24.7 billion by 2023 as the internet becomes more widely used and relied upon by UK shoppers.
Online grocery shopping is now offered by all of the major UK supermarket chains. Outside of these suppliers, the market is mainly populated by a wide range of niche, specialized retailers, many of which offer products that are not always available in major supermarkets.
The UK online market is regarded as one of the most advanced in the world and online shopping for food is one of the main areas of growth. 28% of online shoppers now do all or most of their grocery shopping online – confirming the UK’s leadership in online grocery retailing in Europe, yet still less than 5% of the total food retailers’ sector sales are online.
With the increasing popularity of online retailing, supermarkets and other retailers introduced Click and Collect which has become hugely popular and is rapidly growing. About 28% of consumers regularly use Click and Collect for grocery shopping.
TK: While I was traveling yesterday to Monterey for the Produce Marketing Association’s Foodservice Conference and Expo , I see The Packer’s news editor that Chris Koger was on top of the news related to the cyclospora outbreak. The Food and Drug Administration has named Mexican basil served at restaurants in four states as the likely source of a multi-state outbreak of 132 cyclospora illnesses.
Notable industry related web links today: