ACS

New figures released by international food and grocery expert, IGD and William Reed Business Media reveal that the UK convenience store market has increased in value by 6.1% over the last 12 months, making it worth £29.1bn.

IGD’s Evolution of Convenience Retailing report reveals that the growth of the sector continues to outpace the growth of the UK grocery market overall and forecasts that the convenience market could be worth as much as £39.7bn by 2014.

The report also shows that new format innovation by retailers, new product development by manufacturers, and broadened food-to-go propositions all offer growth opportunities for the convenience sector.

William Reed Business Media, which provided the research on independents and forecourt store numbers for the report, revealed a decline in the number of Non-Affiliated Independents, driven partly by migration to Symbol Groups for their strong promotional packages, private label ranges and shopper mission based store formats.

The report also reveals:
• A slight increase in the number of Forecourt stores to 8,641, the first increase since 2002, driven by new openings and re-commissioning of sites
• The participation of fresh food categories continues to increase, now representing 30% of sales
• The importance of stronger value propositions in the convenience market in a tough economic climate
• Stronger margins and the benefit of additional footfall, continues to make food-to-go an attractive investment for convenience retailers
• Almost half (49%) of consumers who buy food or drink-to-go, choose a convenience store to make that purchase, significantly ahead of other outlets
 

ACS Chief Executive James Lowman said: “These figures, which are the benchmark for the sector, show convenience stores to once again be benefiting from the trend towards local shopping and community retailers. In part this trend is driven by changing lifestyle, for example the ageing population and the growing proportion of single person households, but they are also a reflection of the improving standards in local shops which are attracting more and more people to do their shopping in smaller stores. A 6.1% sales increase in the current environment shows the growing value of local shops to consumers.

“The continued decline in overall convenience store numbers is expected but still raises important questions that Government should consider: why are fewer stores now viable, is regulation a contributing factor to their closure, and what is the true impact of these closures on communities? Nearly 800 stores closed last year, meaning that more consumers will not have a local shop within five minutes walk of their home – a facility that we know people need. This should concern policy-makers.

Commenting on the performance of different parts of the convenience sector, James Lowman said:

“Once again symbol group stores are growing in number and sales, but the very significant increase in symbol store numbers from recent years is not evident this year, suggesting that these groups are focused on quality as much as quantity, and that sales in existing stores are strong. The double-digit sales growth for convenience multiples means that now, while these stores represent just over 5% of the market, their sales represent nearly 15% of sector turnover.

“The growth in multiple stores has been driven by a focus on availability and standards that the whole sector needs to learn from. The most striking figure is the growth in forecourt numbers after years of decline. The sales increase delivered by this segment suggests that those who combine a compelling fuel and convenience offer have a bright future.”