Investment Director Simon Martin on how the UK foodstore sector has evolved since the first Covid-19 lockdown – and why its role as critical infrastructure, investment asset and delivery driver is only becoming more important.
On this day six years ago – 26 March 2020 – the first Covid-19 lockdown legally came into force, with the Prime Minister instructing the nation to “stay at home”.
An unprecedented order, in unprecedented times. And while the full implications were unknown, the immediate impact on the retail sector was profound.
Foodstores were among the only retailers permitted to remain fully operational. In doing so, they faced an extraordinary set of challenges: unprecedented surges in demand, panic buying, empty shelves, staffing shortages, supply chain disruption, and the rapid implementation of safety protocols in line with evolving government guidance.
The sector responded at pace.
Six years on, foodstores remain one of the most resilient and strategically essential parts of the UK economy. And while much has changed, many of the pressures seen during the pandemic still echo today – albeit in a more structural and sustained form.
Inflation
Inflationary pressures remain a defining feature of the current landscape, mirroring the post-lockdown realities of 2020-21.
Today’s drivers are more structural. Regulatory change, long-term cost-of-living pressures and geopolitical instability all play a role. From ongoing conflicts in Ukraine and the Middle East, to increased National Insurance contributions in 2025, rising minimum wages and the forthcoming business rates revaluation, operators continue to face sustained cost pressures.
In response, foodstore operators are balancing a combination of price increases and operational efficiencies – or, more often, both.
Operational evolution
There are, however, clear differences in how the sector now operates.
The pandemic accelerated a wave of operational change that has since become embedded. Automation across supply chains and distribution networks has improved efficiency, while in-store technology – including scan-and-go and self-checkout – has become standard.
We have also seen the continued rise of hybrid convenience. Click and collect, rapid delivery through third-party operators, and on-demand grocery formats are now firmly established.
The introduction of On Demand Grocery hatches, such as those delivered at the refurbished Waitrose store in Barnet – supported by Newsteer’s foodstore advisory team – reflects how physical stores are evolving into multi-functional fulfilment hubs.
Changing consumer behaviour
Consumer behaviour has also shifted in ways that have persisted beyond the pandemic.
Online grocery shopping nearly doubled during Covid, rising from 7% in 2019 to around 15% at its peak. While this has since stabilised, it has settled at a new baseline of approximately 12% as of 2025.
More broadly, consumer behaviour is now defined by value sensitivity. Promotions account for around a third of grocery spend – the highest level since 2019 – reflecting continued pressure on household finances.
In response, operators have adapted their offer. This includes expanding own-label ranges, increasing loyalty-driven pricing, and growing accessible “treat” categories such as premium ready meals and “meals for tonight” ranges, as more consumers choose to eat at home.
More recently, the growing accessibility of weight loss drugs has also begun to influence product ranges, with increased focus on healthier and nutrient-led options.
Competition and demand
Competition across the sector remains intense.
Discounters such as Aldi and Lidl continue to gain market share, applying sustained pressure on established operators. In response, the traditional “Big 4” have diversified formats, with continued expansion into convenience and smaller store formats.
At the same time, opportunities for new foodstore development remain constrained. Limited land supply, high build costs and planning challenges continue to restrict delivery.
However, demand remains strong.
There has been a noticeable shift towards accessible, edge-of-centre retail park locations. The administration of Homebase, for example, created a rare opportunity for operators to secure space in strategic locations that would otherwise be difficult to access in a constrained market.
Six years on from the first lockdown, the essential role of foodstores within society is clearer than ever.
Covid reinforced the sector’s position as critical national infrastructure. Today, physical stores remain highly valuable – not just as retail destinations, but as omni-channel hubs supporting in-store, hybrid and online fulfilment.
Looking ahead, the UK food and grocery market is forecast to grow by 9.6% to £214 billion by 2028. The appetite for foodstores remains strong, but the shape of the sector will continue to evolve.
For operators, investors and developers alike, the challenge – and opportunity – will be in adapting to what comes next.
About the author
Simon Martin is Investment Director at Newsteer, specialising in foodstore occupational, investment and development advice.
He advises occupiers, investors and developers on asset strategy, transactions and repositioning, with a particular focus on unlocking value across foodstore portfolios in a rapidly evolving retail landscape.