Convenience stores are outgrowing the rest of the grocery market, says industry think-tank the Institute of Grocery Distribution. It expects strong growth to continue.
Go deeper with GlobalData
“Convenience is now a significant part of our retail marketplace and consumers are demanding local convenience shopping,” said IGD Chief Executive, Joanne Denney-Finch. “The development of new types of convenience stores across the UK will drive market growth and we believe will actually generate extra demand for convenience rather than merely fulfilling demand which is already present. This would mean that it is possible for growth to occur across all retailers.”
Of spending on food and grocery, 20% is spent in convenience stores, IGD said in a new report into the convenience market. The market is now worth £23.9bn (£43.8bn), up 5% on 2004, and is outperforming the total grocery market which grew by 4.2% in the same period.
More than half (52%) of shoppers visit a convenience store between two and four times each week and IGD believes that shoppers will continue to spend more money in convenience stores as the need for convenience shapes future shopping habits. Over the next five years IGD expects the market to continue to see strong growth and will be worth £32bn by 2010.
Most operators have performed strongly, benefiting from a combination of rising consumer demand and improved operational practices, with the performance of each segment improved year-on-year. Co-operatives and Convenience Multiples have grown strongly, by 15% and 18% respectively, fuelled in part by store acquisitions.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataMore small retail businesses have also chosen to enter a Symbol operation in the past year, almost a quarter of all convenience stores are now affiliated to a symbol group. Affiliating to a group such as SPAR or Costcutter allows operators to gain scale advantages and to benefit from additional support and expertise. Symbol groups now account for 23% of stores and 31% of sales in convenience. Independent affiliation to symbol groups has increased 4%.
A continuation of the trend in the decline of independents continued with a 5% decline in value and 7% decline in store numbers. This includes those independent stores leaving to join symbol groups and those exiting the sector altogether. In addition, fewer traditional CTNs (confectioner, tobacconist and newsagent), off-licences, forecourts and grocers are choosing to enter the sector by offering a total convenience offer and are opting to stick to what they are best at. This migration has previously helped to boost independent convenience store numbers in the past. The number of food specialists and off licences has risen in the past year.
The independents that remain represent a hard core of the most able and dedicated that performed above the rate of inflation with sales per store increasing by 2.5% in 2004. IGD expects them to continue to remain the most common providers of convenience retailing for some time to come, making up 46% of stores and 27% of sales in five years time.
