Convenience Retailing in the UK 2017
Convenience is the second fastest growing channel in food & grocery retail after online. Convenience will take over 22% share of the market in 2022, up from just over 20% in 2016, boosted by sales growth of 22.0% for the period 2017-22, versus total food& grocery sector growth of 19%. The convenience channel is being driven by food, but muted by the poor performance in the tobacco segment. The performance of food will continue to surpass all other categories, with growth averaging about 5.5% p.a. between2017-22, versus around 0.4% and 3.2% for tobacco and alcohol, respectively. Fresh food and food-on-the-go is supporting this, both through consumer demand and retailer supply as both are higher margin.
Market share is moving towards the multiples, with sales rising around 30% over the next five years to give the multiples a share of nearly 40% in 2022. The symbols are also performing well with sales forecasted to rise by around 23.6%, aided by consolidation and rapid recruitment of independents.
Millennials’ changing shopping habits are driving the growth of convenience. Over 25% of 24-35 year olds use convenience stores for their weekly shop and more than 48% of 16-24s use convenience stores to pick up food-on-the-go. These are the two highest growth areas in convenience, benefiting the performance of the multiples and co-operatives.
London and the South East still dominate the convenience market, in part due to population density and greater disposable income, but also as eating habits have shifted more towards convenience items and speciality produce (particularly from independents), but this is largely driven by millennials in large cities.
Tesco and Sainsbury’s will improve their market share by about 1.1ppt each over the five years from 2017, the largest share gains in the market. For the prior five years, both experienced a 2.3ppt share gain. This strong growth has been boosted by the change in millennial shopping habits, improved fresh food ranges, innovative products prompting impulse purchases and enhanced FOTG options, leading to a combined market share of around 28% in 2017.
The report Convenience Retailing in the UK 2017, provides comprehensive insight into and analysis of the UK convenience retail market, the prevailing trends, hot issues, consumer motivations, strategies for success, and opportunities for future growth. Consumer data is based on our convenience survey using a panel of nationally representative shoppers.
In particular, this report provides the following -
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