Table of Contents
Executive Summary
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- The market
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- Figure 1: Convenience store market size, (inc VAT), 2015-25
- Impact of COVID-19 on convenience stores
- Shift to in-home food and drink brings opportunities to boost basket sizes for c-stores
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- Figure 2: Expected impact of COVID-19 on convenience stores, short, medium and long term, 2020
- Real incomes growth continues
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- Figure 3: Average weekly earnings (excluding bonus pay) growth versus CPIH, January 2016- May 2020
- Consumer confidence rose before the lockdown
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- Figure 4: Mintel’s Financial Confidence Tracker, January 2018-June 2020
- Retail sales growth holding up
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- Figure 5: Retail sales: growth in all retail sales and all food retail sales, by value and volume, January 2018-May 2020
- Move towards renting homes
- Companies and brands
- A year of consolidation
- Consolidation in wholesaling
- Other deals
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- Figure 6: Leading c-store retailers, shares of all retail sales, 2019
- Huge tail
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- Figure 7: Leading c-store retailers, shares of all c-store outlets, 2019
- COVID-19 – c-stores should prove to be a beneficiary
- Technology – short-term boost for being hygienic
- Brand analysis
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- Figure 8: Attitudes towards and usage of selected brands, April 2020
- The consumer
- 85% of all internet users have shopped in a c-store in the last year
- Food the most bought item
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- Figure 9: UK: Items bought from convenience stores, March 2020
- Key to the appeal is the broad offering
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- Figure 10: Number of different types of items bought from c-stores, March 2020
- Chilled goods most bought for the home
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- Figure 11: Usage of c-stores for food for the home, March 2020
- Snacks the most bought food-to-go item
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- Figure 12: Usage of c-stores for food for the home, March 2020
- Services very important
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- Figure 13: Usage of services in c-stores, March 2020
- C-stores not enough
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- Figure 14: Grocery stores used by c-store shoppers, March 2020
- 75% of c-store shoppers use a c-store at least once a week
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- Figure 15: Frequency of c-store usage, March 2020
- Tesco the most used store, followed by the Co-op
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- Figure 16: Stores used by regular c-store shoppers, March 2020
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- Figure 17: C-store most often used by regular c-store shoppers, March 2020
- Convenience the main driver to purchase
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- Figure 18: Key factors behind choosing a c-store, March 2020
- What people want from a c-store
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- Figure 19: Attitudes towards c-stores, March 2020
- Time for lunch
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- Figure 20: Factors influencing lunch solutions, March 2020
- What we think
Implications of COVID-19 for Convenience Stores
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- Figure 21: Expected impact of COVID-19 on convenience stores, short, medium and long term, 2020
- Short term
- Medium term
- Long term
- Opportunities and threats
- Shift to in-home food and drink brings opportunities to boost basket sizes…
- …but it also presents threats to traditional footfall drivers
- …but placed pressure on supply chains…
- …and presents threats to traditional footfall drivers
- Location has never been more crucial
- COVID-19 to accelerate mobile scanning
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- Figure 22: Sainsbury’s SmartShop, mobile scanning technology, July 2020
- Convenience sector plays its part in ensuring access to groceries
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- Figure 23: Co-op notice board, April 2020
- Figure 24: Tesco Nightingale London Excel, April 2020
- Impact on the market
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- Figure 25: Convenience store market size, (inc VAT), 2015-25
- Shift in consumer behaviour
- A focus on localism can highlight the importance of c-stores to communities
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- Figure 26: Co-op local cause funding, June 2020
- Heightened online demand heralds more influence in the online channel for c-stores
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- Figure 27: Deliveroo Grocery, June 2020
- Impact on key consumer segments
- Shift to online from older shoppers presents a threat
- Younger shoppers more financially impacted
- How COVID-19 recession will reshape the market
- On the face of it convenience demand held up well in the past financial crisis
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- Figure 28: Convenience store market size, including VAT, 2007-17
- Impact on the marketing mix
- COVID-19: Market context
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Issues and Insights
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- Sunday trading – Not to everyone’s taste
- The facts
- The implications
- Time for a shakeout in the symbol groups
- The facts
- The implications
The Market – What You Need to Know
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- Real incomes growth continues
- Consumer confidence rose before the lockdown
- Retail sales growth holding up
- Move towards renting homes
Market Drivers
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- Strong underlying growth in real incomes
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- Figure 29: Average weekly earnings (excluding bonus pay) growth versus CPIH, January 2016- May 2020
- Consumer confidence on an upward trend, pre-COVID-19
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- Figure 30: Mintel’s Financial Confidence Tracker, January 2018-June 2020
- Retail sales since lockdown buoyed by greater in-home food demand
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- Figure 31: Retail sales: growth in all retail sales and all food retail sales, by value and volume, January 2018-May 2020
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- Figure 32: Supermarkets, performance of large and small businesses, January 2018-May 2020
- Inflation trending downwards in 2020
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- Figure 33: Inflation in core food and drink categories, 2015-May 2020
- Housing tenure – recovery in numbers of homeowners
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- Figure 34: UK households, by tenure status, 2009-18
- Ageing population
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- Figure 35: UK population, by age, 2014-24
- Household size decreasing
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- Figure 36: UK household size as a percentage of all households, 2014-19
Market Size and Forecast
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- A record year forecast for 2020
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- Figure 37: Convenience store market size (inc. VAT) and forecast, 2015-25
- Following a rebalance in 2021, steady growth is forecast for the sector through to 2025
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- Figure 38: Convenience store market size (including VAT), 2015-25
The Consumer – What You Need to Know
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- 85% of consumers have shopped in a c-store in the last year
- Food the most bought item
- Services very important
- C-stores are primarily a secondary location
- 75% of c-store shoppers use a c-store at least once a week
- Tesco the most used store, followed by the Co-op
- Convenience the main driver to purchase
- What people want from a c-store
- Time for lunch
Convenience Store Shoppers
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- A note on the timing of this research
- The vast majority shop in convenience stores
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- Figure 39: UK: Items typically bought from convenience stores, March 2019 and 2020
- Convenience use peaks in urban areas
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- Figure 40: Usage of c-stores, by type of location, March 2020
- Products purchased by age and income
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- Figure 41: Profile of c-store shoppers, by age and income, March 2020
- Most use c-stores for a variety of missions
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- Figure 42: Number of different types of items bought from c-stores, March 2020
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- Figure 43: Profile of c-store shoppers, by number of items bought, March 2020
In-home Food Purchasing
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- Over half (55%) of consumers buy food for home from c-stores
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- Figure 44: Usage of c-stores for food for the home, March 2019 and 2020
- Younger shoppers key in-home food shoppers
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- Figure 45: Profile of shoppers of food items, by age and income, March 2020
- Number of food-for-the-home items bought
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- Figure 46: Number of different types of food for home items bought from c-stores, March 2020
On-the-go Food
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- 44% of consumers buy on-the-go food from c-stores
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- Figure 47: Usage of c-stores for food to go, March 2020
- Younger shoppers over-index in terms of food to go
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- Figure 48: Profile of shoppers of food to go, by age and income, March 2020
- Number of food-on-the-go items bought
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- Figure 49: Number of different types of food-to-go items bought from c-stores, March 2020
Lunch Solutions
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- Pricing crucial for lunch
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- Figure 50: Factors looked for in lunch solutions, March 2020
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- Figure 51: Factors influencing lunch solutions, by type of location, March 2020
- Meal deals crucial for current users, but more healthy options could bring in more consumers
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- Figure 52: Factors looked for in lunch solutions, by current level of c-store lunch buying, March 2020
Services Used in Convenience Stores
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- Services a crucial footfall driver
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- Figure 53: Usage of services in c-stores, March 2020
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- Figure 54: Users of c-store services, by age and income, March 2020
- Number of services used
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- Figure 55: Number of c-store services used, March 2020
Convenience Stores in Context
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- Where else do c-store shoppers shop?
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- Figure 56: Grocery stores used by c-store shoppers, March 2020
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- Figure 57: Store format where the most is spent in a typical month, November 2019
- Frequency of c-store usage
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- Figure 58: Frequency of c-store usage, March 2020
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- Figure 59: Frequency of c-store shopping, by age and income, March 2020
- Frequency of c-store shopping by products bought
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- Figure 60: Purchase of items from c-stores, by frequency of purchase, March 2020
Retailers Used
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- All stores used
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- Figure 61: Stores used by regular c-store shoppers, March 2020
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- Figure 62: Number of c-stores used, March 2020
- C-store most often used
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- Figure 63: C-store most often used by regular c-store shoppers, March 2020
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- Figure 64: Profile of shoppers at leading c-stores, by age and income, March 2020
- Most often used stores by location
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- Figure 65: Distribution of customers for most often used stores, by location, March 2020
- Most often used stores and what is bought
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- Figure 66: Buyers of food-to-go goods relative to the proportion of all shoppers, March 2020
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- Figure 67: Buyers of newspapers and lottery relative to the proportion of all shoppers, March 2020
Key Attributes for a Convenience Store
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- Convenience naturally crucial for patronage
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- Figure 68: Key factors behind choosing a c-store, March 2020
- Key factors and favourite retailers
- Co-operative Food
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- Figure 69: Co-operative Group key factors relative to the average, March 2020
- M&S Simply Food
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- Figure 70: M&S Simply Food key factors relative to the average, March 2020
- Sainsbury’s Local
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- Figure 71: Sainsbury’s Local key factors relative to the average, March 2020
- Tesco
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- Figure 72: Tesco Express key factors relative to the average, March 2020
- Symbol groups
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- Figure 73: Symbol groups key factors relative to the average, March 2020
Attitudes Towards Convenience Stores
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- C-stores seen as essential to the community
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- Figure 74: Attitudes towards c-stores, March 2020
- Younger shoppers value the multi-mission experience
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- Figure 75: Agreement to attitudes towards c-stores, March 2020
- Development of range is crucial to continue to engage young shoppers
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- Figure 76: Agreement to attitudes towards c-stores, March 2020
Leading Retailers – What You Need to Know
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- A year of consolidation
- Consolidation in wholesaling
- Other deals
- Huge tail
- Technology the way forward
Competitive Strategies
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- Sector structure
- Convenience stores not as homogeneous as one might expect
- COVID-19 early results
- High-footfall stores
- Major multiples
- Co-operative societies
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- Figure 77: Leading Co-operatives’ sales, 2017/18-2019/20
- Figure 78: Leading Co-operatives’ outlets, 2017/18-2019/20
- Figure 79: Leading Co-operatives’ sales per outlet, 2017/18-2019/20
- Low-footfall stores
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- Figure 80: Leading symbol groups, 2019/20
- Other – predominantly wholly owned groups
- Petrol forecourts
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- Figure 81: Total number of, and breakdown in ownership of, UK forecourts, 2016-19
Leading Retailers – Key Metrics
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- Turnover
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- Figure 82: Leading c-stores’ sales, 2015/16-2019/20
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- Figure 83: Leading c-stores’ outlet numbers, 2015/16-2019/20
- Figure 84: Leading c-stores’ sales per outlet, 2015/16-2019/20
Market Shares
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- Figure 85: Leading convenience stores’ market shares, 2015-19
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- Figure 86: Leading convenience retailers’ share of all c-store outlets, 2019
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Launch Activity and Innovation
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- Supermarkets’ smaller neighbourhood retail formats
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- Figure 87: Aldi Local, Balham, 2019
- ‘Cashierless’ convenience stores
- Student campus convenience store opportunity
- Emphasis on expanding foodservice and food-to-go proposition
- Convenient vending
- On-demand delivery
- Vegan convenience store concept
- Convenience store’s pop-up food market
- Reducing food waste and tackling plastic pollution
- Convenience stores adapting operations to cope with COVID-19 restrictions
Advertising and Marketing Activity
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- Supermarket and c-store advertising spend up 1.2% year-on-year in 2019
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- Figure 88: Recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarket and convenience store operators, 2015-19
- Convenience store campaigns
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- Figure 89: Leading UK supermarket and convenience store operators’ recorded above-the-line, online display and direct mail total advertising expenditure, 2015-19
- Majority of advertising spend channelled through TV
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- Figure 90: Recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarket and convenience store operators, by media type, 2019
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 91: Attitudes towards and usage of selected brands, April 2020
- Key brand metrics
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- Figure 92: Key metrics for selected brands, April 2020
- Brand attitudes: Spar and the Co-op well trusted
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- Figure 93: Attitudes, by brand, April 2020
- Brand personality: Accessibility the key
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- Figure 94: Brand personality – macro image, April 2020
- Spar basic, but Tesco reliable and responsive
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- Figure 95: Brand personality – micro image, April 2020
- Brand analysis
- M&S Simply Food still sets the standards in the sector
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- Figure 96: User profile of M&S Simply Food, April 2020
- Sainsbury’s Local most improved c-store in 2019/20
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- Figure 97: User profile of Sainsbury’s Local, April 2020
- Tesco Express – The market leader
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- Figure 98: User profile of Tesco Express, April 2020
- Co-op Food – the ethical one
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- Figure 99: User profile of Co-op Food, April 2020
- Spar the nearest competitor to Tesco and the Co-op among the voluntary groups
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- Figure 100: User profile of Spar, April 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data Sources
- Financial definitions
- Trade definitions
- Sales per store, sales per square metre
- Abbreviations
- Consumer research methodology
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