New forecasts launched today by IGD, reveal that the UK convenience channel is set to add £7.1bn in the next five years to reach £47.2bn by 2023. The convenience channel will benefit from strong store growth over the period, helping to fuel the channel’s compound annual growth rate of 3.3% to 2023.
Patrick Mitchell-Fox, senior business analyst at IGD, said: “Growth in the convenience channel will come from a mix of activities. New store development will continue to be a key engine for the channel over the next five years, with the co-operatives, symbol and multiple retail segments* leading the way. However, with the multiples taking a more conservative approach to expansion, we expect there to be an increasing focus on driving sales from existing stores too. This makes for a very positive outlook for convenience retailing and it remains one of the fastest growing channels in the UK food and grocery market.”
Ahead of IGD’s Convenience Retailing Summit in September, Mitchell-Fox highlights three factors underpinning the success of the UK convenience channel:
“A new generation of shoppers – post-millennial shoppers, born between 1992-1999, have grown up in an era of ‘new’ convenience, shopping in convenience stores for a wider range of products than generations before them. This generation of shoppers is used to stores with longer opening hours, that offer great quality products. But while they are key to driving growth, they also have high expectations that need to be met.
“Speed of shopping – as shoppers shift away from the weekly shop to more frequent shopping, the need for speed in-store becomes an important advantage for convenience stores. Further enhancing how quickly shoppers can navigate stores and purchase products will be central for the convenience channel. As more retailers globally trial till-less technology, taking payment automatically via shoppers’ own smart devices, will be key to enhancing the speed of shopping trips in the next generation of convenience stores.
“Targeting more shopping missions, more effectively – while topping up the weekly shop remains the main reason for shoppers to visit convenience stores, retailers are also focusing on driving other ways to encourage shoppers into store with more enticing ranges of food-to-go and evening meal solutions. While some traditional categories, like tobacco and news, are in decline the rise of new footfall drivers such as fresh coffee and services like parcel collection are encouraging more shoppers into store more often. In addition, the growing provision of ‘dwell-space’ is also encouraging shoppers to spend more time in store.”