Coronavirus: Grocery retail sector to grow by 10 % in 2020: significant implications for the packaging industry

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Grocery retail sector to grow by 10 % in 2020:

Significant implications for the packaging industry

Thomas Reiner | 24.04.2020

The SARS CoV 2 pandemic is changing consumer behaviour. The consumption of food outside the home is collapsing, while sales in the food retail sector are rising sharply.

Our calculations forecast a growth rate of 10 percent for Germany in 2020 compared to the previous year. This corresponds to around 8 – 10 billion euros. Europe-wide we expect an increase of up to 60 billion euros.

Our calculation for Germany in detail:

  • Total consumption outside the home is around 80 billion euros per year. Assuming that 50 percent of this value translates to goods, the value of food is around 40 billion euros.
  • For the first quarter of 2020, we expect a 40 percent decline in food consumption outside the home. For the year as a whole, this will result in a decline of 20 – 25 percent in 2020.
  • Based on an out-of-home food value of 40 billion euros, the decline in 2020 will amount to 8 – 10 billion euros.
  • This value of goods changes to the account of grocery retail, which fills the gap outside the home. Accordingly, growth of 8 – 10 billion euros can be expected for the grocery retail sector.
  • In 2019 the turnover of the grocery retail sector was around €105 billion. In relation to the sales increase of €8- 10 billion, this represents a growth rate of around 8 – 10 percent.

In Eastern and Western Europe, the combined turnover in food consumption outside the home is around €470 billion. Based on the same parameters as for Germany, sales growth of up to €60 billion can be forecast for 2020.
The strong increase in turnover in grocery retailing has a direct impact on the system-relevant packaging industry. Since almost every food product sold in the grocery retail sector is dependent on at least one packaging unit, the turnover of packaging will increase parallel to the turnover of food products sold. The consequence: significant growth for the packaging industry.

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