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China is poised to surpass the United States for the first time as the largest grocery market in the world by 2014, according to IGD, a global food and grocery expert providing information, insight and best practice to the food and grocery industry. In its recent “10 for 2010” report, the U.K.-based company predicts that the Chinese grocery market will be worth 761 billion euros (US $1.05 trillion), outpacing that of the United States, which is on track to be worth 745 billion euros (US $1.03 trillion) in four years’ time.
Among the reasons for this, the report found, are:
—The United States was hit harder by the recession than China. The International Monetary Fund forecasts that the Chinese market could grow almost three times faster than that of the United States over the next four years
—Investment and consumer spend has gone up in China, and the government’s stimulus package has spurred private-sector demand
—Between 2010 and 2014, China’s population growth rate is expected to be double that of the United States
Other markets pegged to grow in size include India, which IGD says will become the third-largest food and grocery market by 2014, while Russia and Brazil will rank fifth and sixth, respectively. The company further predicts that Indonesia will enter the top-10 list for the first time.
IGD’s full list of top 10 grocery markets by value in 2014 is China, the United States, India, Japan, Russia, Brazil, France, the United Kingdom, Germany and Indonesia.
“Chinese population growth and economic prosperity are contributing to the rise of China as an important grocery market on the world stage,” noted Joanne Denney-Finch, chief executive of Watford, Hertfordshire-based IGD. “The U.S. and key European markets still offer an important source of growth for food and grocery businesses, but it is becoming harder to ignore the BRIC [Brazil, Russia, India and China] countries.
“Many retailers and manufacturers are already leading the way, building a strong presence in China and other emerging markets,” added Denney-Finch. “[T]he pace of growth for emerging markets will continue to outstrip that of the developed world.”