The last year has seen the convenience sector surge into growth as national lockdowns have led to a rise in food-for-home sales. Mintel estimates that the convenience sector grew by 5.4% in 2020 to reach £46.5bn.

The COVID-19 pandemic has had a huge impact on almost all aspects of life in the country and the convenience sector is no different. The last year saw many convenience stores benefit from bigger baskets but some suffered as the food-to-go mission disappeared almost overnight. Going forward, as the country gradually relaxes lockdown restrictions, we expect the sector to experience a continued halo effect from the rise in local shopping driven by the pandemic.

There is a risk, however, that the sector loses its convenience edge as online purchasing becomes ever more widespread, efficient and easy to use. If convenience stores do not innovate, they risk becoming just smaller, more expensive stores with limited ranges.

Mintel expects that the rise in local shopping driven by the pandemic will continue, albeit at lower levels, for some time. Convenience stores can adapt to the needs of their local communities and become invaluable community centres offering not just food but also vital services. Click-and-collect points are already commonly found in convenience stores and have the effect of linking the fortunes of convenience stores with that of the red-hot online retail channel.

Key issues covered in this Report

  • The impact of COVID-19 on shopping behaviour and its impact on the convenience sector.

  • How consumers shop at convenience stores.

  • The services used at convenience stores.

  • The most popular convenience stores in the UK.

  • Consumer attitudes towards convenience stores.

  • The factors most likely to encourage convenience store shopping.

COVID-19: market context

The first COVID-19 cases were confirmed in the UK at the end of January 2020, with a small number of cases in February. Rapidly rising case numbers led to the first national lockdown, starting on 23 March. It wasn’t until 15 June that non-essential stores were allowed to reopen, followed by pubs, restaurants, hotels and hairdressers on 4 July and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave, and social-distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a month-long lockdown from 5 November and Scotland introducing a new five-level system of coronavirus restrictions.

Despite these restrictions, however, case numbers continued to increase. All four UK nations tightened restrictions further in January 2021, effectively leading to a full UK-wide lockdown.

On 22 February, Boris Johnson announced the roadmap to an easing of restrictions in England, starting with the reopening of schools on 8 March, followed by easing of restrictions on outdoor gatherings on 29 March, and with a hoped end to all restrictions by 21 June, although the growth of the Delta variant means this final lifting of restrictions was delayed. The Welsh and Scottish governments also gave more details on their plans to ease restrictions, with both nations taking a slightly more cautious approach to the one planned for England.

Even before the full reopening of the economy, retail sales and Mintel’s own household finances tracker provided encouraging signs of a rapid return to consumer confidence, and a willingness to spend at least some of the savings that many households were able to build up over the lockdown period.

The UK’s vaccination programme started on 8 December, 2020. As of 15 June, nearly 80% of the UK population had received their first dose of the vaccine and more than 57% had received their second dose.

Economic and other assumptions

Mintel’s economic assumptions are based on the Office for Budget Responsibility (OBR)’s central scenario included in its March 2021 Economic and Fiscal Outlook Report, but also take into account predictions made by other economic forecasts, including the Bank of England.

After the fall of 9.9% over the course of 2020, the OBR’s scenario suggests that UK gross domestic product (GDP) will grow by 4% in 2021 and 7.3% in 2022. GDP isn’t expected to return to pre-COVID-19 levels until the second quarter of 2022, although this is six months earlier than the OBR forecast in November 2020, mainly because of the faster-than-expected roll-out of vaccines.

Unemployment is expected to peak at 6.5% in the fourth quarter of 2021. As with GDP, this is more positive than the OBR’s November forecast, but the OBR does raise the prospect of long-term scarring on employment, especially in the more exposed retail and hospitality sectors.

The rapid vaccine rollout and the continued efficacy of the vaccine, however, means that more recent economic forecasts have been significantly more optimistic than the OBR’s March forecast, even given the rise of the Delta variant. We have factored this rise in optimism into our market analysis and scenario forecasts.

Products covered in this Report

This Report combines both market and consumer data along with key retailer metrics to give an overview of the UK convenience market.

A convenience store (c-store) is a small-store grocery-focused retail format that is complementary to larger grocery formats more geared towards full weekly shops, such as supermarkets and online channels.

Convenience stores offer a convenient option for people to undertake top-up shopping or make unexpected or impulse purchases. Over the last decade, many of the major grocers have established their own convenience formats, which have driven higher standards of fresh and chilled produce as well as trusted own-label items. The sector has since become an increasingly important player in consumers’ weekly shopping habits.

In practice, convenience stores should:

  • Be open seven days a week and have extended hours of opening

  • Sell a range of groceries beyond simply confectioner, tobacconist and newsagent (CTN) categories

  • Usually trade from a unit of less than 3,000 square feet (280 square metres). Stores above this size cannot trade all day on a Sunday. Due to their larger size, Tesco Metro stores and the new Sainsbury’s Neighbourhood Hub stores fall outside this report. Tesco Express and Sainsbury’s Local are included, however. Some M&S Simply Food stores are larger than 3,000 square feet, but the retailer is predominantly used as a top-up shopping destination and is therefore included in this report.

The scale and offer of a convenience store are dependent on its location and the volume of footfall it can drive. At one end of the spectrum, convenience stores can come close to fulfilling the primary shopping needs for consumers in certain locations. This is particularly true of the convenience stores of the major grocers such as Tesco and Sainsbury’s, but also of Co-op Food and some symbol groups such as SPAR and Nisa.

Some convenience store formats are designed to almost exclusively target the food-to-go shopper. These stores tend to be smaller and located in city centres or along travel infrastructure. Shoppers are less likely to be able to pick up a full shop at these stores. Tesco and Sainsbury’s have store estates that include these food-to-go locations.

At the other end of the scale, smaller stores serving more limited catchments can be more akin to a larger-scale CTN. Mace and Best-one fall into this category.

The following stores are excluded from this report:

  • All food specialists, from bakers and greengrocers to off-licences and tobacconists.

  • Hard discounters such as Aldi, Lidl and Iceland.

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