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The UK grocery industry is set to grow by £24.1bn by 2024 driven by surging online and discounter sales according to a report from IGD.

That increase would represent market growth of 12.5% and take the total grocery market to £217.7bn by that date.

IGD said online would be the fastest growing industry segment, rising by 43.8% to £16.7bn over the next five years to take its total market share to 7.7%.

Simon Wainwright director of insight at IGD said: “Firstly, newer players are entering the space such as Amazon and meal box operators such as Hello Fresh, Gousto and Mindful Chef.

“Faster and more convenient options to shop for groceries online are being introduced, such as Sainsbury’s, Ocado and Amazon all offering orders within an hour and widening the availability of delivery. More sophisticated analytics are also helping to strengthen customer loyalty.”

Discounters will grow by a further 40.2% by 2024 to take their total market share to 15.8%.

IGD noted that Aldi is likely to have 1,200 UK stores by 2025, while Lidl continues to grow its store estate by 50-60 per year.

“With many food discount shoppers now perceiving Aldi and Lidl as supermarkets rather than discounters, and more targeted investments in categories such as fresh produce, meat, bakery and beauty, the channel will continue to experience notable growth,” Wainwright said.

Large stores, such as supermarkets and hypermarkets, will account for only half of the market in five years’ time, while the convenience segment will account 22.2%.

However, Wainwright said the large store format will not be in terminal decline, with major supermarkets instead “investing more in how they can improve the shopper experience at existing stores over introducing new sites, with key trends including easier in-store navigation for shoppers conducting smaller shops and introducing more foodservice and concessions.”

Morning update

The FTSE 100 has opened the day up 0.2% to 7,417.5pts after the US Fed said last night to was open to a future rate cut.

Early risers include Just Eat (JE), up 3.1% to 633.8p, Bakkavor, up 2.8% to 124p and FeverTree (FEVR), up 2.2% to 2,379p.

Fallers so far include Tate & Lyle (TATE), down 2.5% to 731.4p, McBride (MCB), down 2.3% to 78p, Reckitt Benckiser (RB), down 1.4% to 6,414p and Compass Group (CPG), down 1.1% to 1,878p.

Yesterday in the City

The FTSE 100 fell back 0.5% to 7,403.5pts yesterday on a subdued day of trading on weaker industrial data.

Notably in the grocery sector, Marks & Spencer (MKS) and Ocado (OCDO) fell by 4.6% to 212.1p and 5.6% to 1,087p respectively. The latter announced the sale of its Fabled fashion business to Next yesterday, but the damage to its share price had already been done by investors reacting to the news that Tesco is mulling launching an upmarket range of Finest stores to compete with M&S’ Simply Food concept.

Just Eat (JE) was down 3.7% to 614.6p after it was downgraded by UBS to neutral, with the broker concerned “JE is not investing enough at a time when capital is flowing into the industry and customer acquisition costs are rising”.

Other fallers yesterday included McColl’s (MCLS), down 6.5% to 69.2p, Bakkavor (BAKK), down 5.8% to 120.6p, PZ Cussons (PZC), down 5.5% to 206p and FeverTree Drinks (FEVR), down 3.6% to 2,328p.

Also falling were McBride (MCB), down 2.4% to 79.8p, PureCircle (PURE), down 2.3% to 251p, British American Tobacco (BATS), down 2.1% to 2,800p, WH Smith (SMWH), down 2.1% to 1,913p and Cranswick (CWK), down 1.6% to 2,554p.

The day’s few risers included DS Smith (SMDS), up 2.6% to 354.1p, Devro (DVO), up 2.4% to 215p, Glanbia (GLB), up 1.9% to €14.88 and C&C Group (CCR), up 0.9% to €3.79.