Convenience market to be worth nearly £50bn by 2019


The UK convenience market is due to be worth £49 billion by 2019, growing by over 30% over the next five years from a current value of £37 billion.

Symbol group operators (such as Costcutter or Nisa) have the biggest overall share of convenience sales, accounting for just over £4 in every £10 spent in UK convenience stores. Sales at symbols groups represent more than the next two largest groups (convenience multiples and unaffiliated independents) combined.

The convenience multiples have experienced the fastest growing increase in sales in the 12 months to April 2014 and are now the second largest part of the market.

Unaffiliated independents and symbol groups account for over 70% of the total number of convenience stores and while growing at the fastest rate, convenience multiples still represent less than 10% of total stores.

Joanne Denney-Finch, chief executive, IGD, said: “The convenience sector continues to build on its success and we’re forecasting almost £12bn in extra sales between now and 2019.

“Convenience stores are benefiting from changing social demographics, such as smaller households, and shoppers spreading more of their spending across a variety of grocery formats. Our latest ShopperVista research shows that seven out of ten (71%) of them are using both a supermarket and convenience shop in any given month.

“Our 24-hour, seven day a week society means people can buy anything, anywhere and at any time. Convenience stores are well placed to make the most of this trend as shoppers use them more than any other type of grocery format.

“Building on the success of click and collect, convenience shops continue to offer a link between digital and physical shopping – acting both as a drop-off and collection point. This also provides another reason for shoppers to visit, helping them combine two tasks in one journey.

“With all types of retailers focusing so much on convenience, it’s an incredibly exciting time to be involved in this sector. However, it’s vital convenience shops stay close to shoppers changing needs and keep innovating to maintain this momentum. One convenience operator, for example, tweets alerts about seasonal products while another has an interactive digital ‘smart pad’ allowing customers to view local suppliers and leave feedback.”

Adam Leyland, Editor of the Grocer Magazine, said: "Tesco is once again providing a formidable presence in the convenience sector and there are no signs of a let-up in terms of its ambition for convenience. However, symbol groups continue to dominate the market. And the number of convenience stores now operated by symbol groups exceeds the number of convenience stores added by the major multiples.

“How has this happened? With independently operated convenience stores continuing their historic decline, clearly some unaffiliated independents have looked to the various symbol retailers for help. But the growth of symbol-operated convenience stores actually exceeds the decline in the number of unaffiliated independents, which suggests that the improved offers delivered by symbols like Bestway and Booker are emboldening a new breed of entrepreneur to chance their arm against the mighty multiples.”

Source: The Institute of Grocery Distribution