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Convenience Retailing in the UK 2017

Convenience Retailing in the UK 2017

Summary

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 -

  • Identifying the factors that are affecting the convenience channel.
  • Exploring what people buy and spend at convenience stores.
  • Understanding how consumers shop in convenience
Companies mentioned in this report: Aldi, Lidl, Tesco, Sainsbury's, Co-op, The Co-operative, Morrisons, Spar, Costcutter, Budgens, Londis, Premier, One Stop, Booker, Heron Foods, Waitrose, Nisa, McColl's, M&S

Scope
  • The convenience market is set to grow 22.0% for the period 2017-22, versus total food & grocery sector growth of 19.6%, driven by fresh food and food-on-the-go, but muted by poor performance in tobacco.
  • The multiples will see the greatest growth in market share, driven by acquisitions rather than organic store portfolio growth. Sales will rise 30.3% over the next five years for the multiples, increasing their market share to 39.9% in 2022. Meanwhile, the symbols will also perform well with sales forecast to rise 23.6%, aided by consolidation, store improvements, and rapid recruitment of independents.
  • Millennials' changing shopping habits are driving the growth of the convenience market with 25.3% of 24-35 year olds using convenience stores for their weekly shop and 48.6% of 16-24s using them to pick up food-on-the-go products - with convenience stealing some share from FOTG operators.
  • Retailers must focus stores on mission based shoppers, particularly those shopping for food-on-the-go and meal-for-tonight. Therefore ranges must be focused on and stores rearranged. Consumers now expect convenience stores to be equivalent to small supermarkets.
Reasons to buy
  • Utilise our five year forecasts to 2022 for the convenience retail channel and sector penetration to help form an effective growth strategy by understanding where the strongest growth is coming from, and what is driving it.
  • Understand why the convenience market has experienced such strong growth in relation to overall food & grocery retail, and how future growth can be tapped into from a logistical and consumer perspective.
  • Consider our analysis of market drivers and inhibitors, hot issues, strategies for success, and opportunities for growth to understand the future of the market and potential for convenience retail. Convenience will be a challenging market to survive in, and we have identified ways to strengthen convenience propositions, as well as who the disruptors will be.
  • Recognise what consumers want from the retail sector, both convenience-specifically, and in the general retail perspective. Convenience retailing is one of the most millennial-driven channels, and our analysis can be used to navigate the developing trends from this consumer group.


  • The hot issues
    • Market drivers and inhibitors in convenience
    • Main issues in convenience
    • Strategies for success in convenience
  • What people buy
    • Headlines
    • The sector at a glance
      • Table The sector at a glance
    • Overall channel size
    • Convenience proportions of retail
    • Convenience channel in context
    • Overall channel size
    • Category splits
    • Convenience penetration
    • Category splits
    • Category growth
    • Category trends: instore examples
  • Where people shop
    • Headlines
    • Channels of distribution
      • Table Channel split for convenience over time
    • Market shares
      • Table Five year convenience share changes
      • Table Convenience market share forecasts for the next five years
    • Space
      • Table Convenience total selling space 2012-2017e
      • Table Convenience total store numbers 2012-2017e
    • Market shares
    • Retailer profiles
  • How people shop
    • Highlights
    • Shopper penetration
    • Shopper profile
    • Retailers shopped at
    • Reasons for shopping
      • Table Channel usage for convenience by demographics
  • Methodology
    • What is included and methodology
    • What is included

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