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Still waiting for the recovery
Confident predictions that GDP would increase in Q3 may have helped buoy consumer confidence. The predictions were wrong, though, and the bad news could play a role in damping down shoppers' optimism over the coming months.
Toby Clark - Senior Finance Analyst

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The UK online grocery market is estimated at £4.4 billion (including sales tax and delivery charges) in 2009, having more than doubled (134% growth) in value over 2005-09. Rapidly rising food inflation, particularly in 2008, has contributed to high value growth in the sector, while dampening demand in volume terms. However, even the underlying growth has been explosive. On the consumer side, rising broadband penetration and higher connection speeds, together with the steady expansion of the online grocers’ geographical coverage, has made the service accessible to more people. Meanwhile, the improvements to the online grocers’ services and rising web fluency have encouraged usage.

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Two-thirds of adults cook their evening meal from scratch. However, most draw upon a repertoire of meal options that includes take-aways and ready meals. Manufacturers and retailers of convenience foods are failing to attract their share of older shoppers, with this group preferring to cook their evening meals from scratch. Consumers who typically eat ready meals and takeaways in the evening are more likely to eat a larger meal at lunchtime and to work irregular hours. But this group spends more time cooking at the weekend: manufacturers and retailers could target this group by offering meal kits and promotions based around popular takeaway dishes to encourage them to cook more.