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Fruit & Vegetables Market Report Plus 2009
Key Note Publications Ltd, March 2009, Pages: 138
The UK retail market for fresh fruit and vegetables was worth £8.34bn in 2008, which was 8.3% higher than in 2007 and 24.3% up on 2004. High food price inflation, especially for fresh fruit and vegetables, contributed to the growth in the value of the market in 2008.
Fresh fruit and fresh vegetables are the two main sectors of the market. Fresh fruit includes products such as apples and pears, bananas, berries, grapes, tropical fruits, stone fruits and citrus fruits. The vegetables sector includes products such as salads, potatoes, root vegetables, brassicas and legumes. Fresh fruit was the fastest-growing sector between 2004 and 2008, due to the continuing popularity of a wide range of fruits.
Fresh fruit and vegetables are likely to become a battleground for the supermarkets in 2009, as they cut their prices to remain competitive during the recession. This, in turn, will put pressure on the suppliers who will be asked to reduce their own prices further and in the process trim their already slim profit margins. The leading supermarket chains are also concerned that retail discounters such as Aldi and Lidl will increase their share of the retail fruit and vegetables market during the recession, a situation they would want to avoid.
The approval of a new pesticides directive by Members of the European Parliament (MEPs) has sent shockwaves through the fruit and vegetable growing sector. The new directive will ban the use of those chemicals in pesticides that are believed to cause serious illnesses. Growers already have a limited range of products to protect horticultural crops, and in some instances there will be no viable alternatives for treating common pests, which reduce yields and damage fresh produce. The sector is worried that these further restrictions could lead to reductions in crop yields and quality and a rise in food prices for household staples like potatoes and broccoli.
The UK retail market for fresh fruit and vegetables is forecast to show further growth in 2009, although the impact of the recession on demand, together with lower levels of price increases for fruit and vegetables, is expected to lead to a lower rate of retail sales growth in 2009 than in 2008. Some segments of the fruit and vegetables market, such as premium lines and organic produce, may also be more affected by the recession than others, as shoppers look for more economically advantageous alternatives.
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