Manufacturers urged to grasp convenience opportunity
According to the latest research by IGD, UK convenience stores’ sales are forecast to reach £44bn by 2017, which represents a 29% increase from the current value of £34bn.
The average annual growth rate for the convenience sector is set to be 5.1% between now and 2017.
Joanne Denney-Finch, chief executive, IGD, said: “Despite the tough trading conditions, the UK convenience sector is performing well and growing faster than the total grocery market.
“The convenience market is benefiting as people favour a ‘little and often’ approach to their food shopping that helps them budget and spread the cost.”
Figures in the report show that that 49% of shoppers are now doing their grocery shopping three or more times a week, compared to 39% in 2009.
Growth opportunity
This changing shopper behaviour will need to be reflected by food manufacturers if they are to make the most of the growth opportunity, according to Benjamin Punchard, packaging specialist at market research company Mintel.
He said: “With consumers moving to 'little and often' there may be a drive to stocking more SKUs [stock keeping units] in convenience stores to better compete with larger grocery stores, putting pressure on space in these smaller outlets.
“Reducing the number of items per case may offer one solution for more efficient shelf stocking but this could lead to stock outages which negatively impact sales.
“With the UK officially in the grip of a double-dip recession, smaller pack sizes providing lower price points for the consumer is likely to be the preferred solution.”
More competitive than ever
Denney-Finch said retailers were also looking to improve their range. She explained: “The sector is more competitive than ever, with operators raising their game to attract more customers. This includes offering stronger promotions, a greater choice of goods and better value for money.”
She said there were several factors behind the increasing popularity of convenience stores. “Nearly three-quarters – 72% – of convenience stores are still independently owned, either by an unaffiliated retailer or as part of a symbol group such as Nisa or Spar. So they stand to benefit from the considerable interest in supporting local communities and businesses.
“People are leading increasingly busy lives and might not be home when online deliveries or bulky post arrives. Convenience stores can help by offering the facility to pick up parcels, giving shoppers the opportunity to do grocery shopping at the same time, and providing another reason to use them.”
