David Shukri, senior business analyst at the IGD, explored what the future may hold for convenience stores at the IGD Convenience Retailing 2011 event on 11 November 2011.
Reporting IGD research, Shukri said the convenience market is forecast to grow 4.6% this year to £33.6bn versus total grocery market growth of 3.3.%.
Shoppers are visiting 3.3 channels per week, up from 3.1, he said; and more shoppers are visiting c-stores. Further, if petrol prices continue to rise, 50% of shoppers said they would use local stores more frequently, said Shukri.
Shukri said convenience retailers around the world are catering to a wider range of missions including impulse, 24-hour, food-for-now, restaurant, and convenience meets coffee house.
“New entrants are stretching the boundaries of convenience,” he said.
Shukri highlighted the first Little Waitrose store on a Shell forecourt and said it provided a “serious breakfast offer” that was well delivered and rarely seen elsewhere.
Shukri told delegates there was plenty more growth opportunity in convenience with the IGD forecasting sales will reach £42.2bn by 2016 and account for nearly 23% of all spend in the grocery sector.
Growth will be fueled by a ‘little and often’ shopping approach, said Shukri; but retailers need to focus on health, formats and digital developments to differentiate their offer.
On health, Shukri said government could not afford not to act and, as convenience grows, so too will the role it plays in shaping people’s diets.
Shukri urged retailers to act sooner rather than later.
Shukri highlighted stores which are doing a good job in healthy foods such as Kochhaus in Berlin, which has fresh as the hero; FreshStop in South Africa, described as “best fresh offer in the world”; and Eurospar in Dublin, promoting fresh, healthy living.
Multi-format is another emerging feature in convenience, said Shukri. It provides the capacity to flex the format to best meet local needs. Examples include Fresh & Easy Express, Wal-Mart Express, a Wal-Mart pop-up shop, Carrefour’s segmented convenience offer and My Costcutter.
“Expect to see more of this coming into convenience,” he said.
Convenience retailers also need to adopt a digital strategy, said Shukri.
“Shoppers are ready for it,” he said, and reported two thirds of people who are already doing online grocery shopping are using their smart phones.
Shukri told delegates one in five searches on Google is grocery related but there was a mismatch between delivery and demand. Convenience, however, is a logical partner to online, he said,