Table of Contents
Executive Summary
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- Impact of COVID-19 on the convenience sector
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- Figure 1: Short-, medium- and long-term impact of COVID-19 on the convenience sector, 10 June 2021
- The market
- Market size and forecast
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- Figure 2: Convenience store market size (including VAT) and forecast (prepared on 10/06/21), 2016-26
- Weekly earnings bounce back following record decline
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- Figure 3: Average weekly earnings (excluding bonus pay) growth versus CPIH, January 2016-May 2021
- Consumer confidence in better shape this year
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- Figure 4: Financial confidence index, January 2018 to June 2021
- Leading retailers
- Tesco continues to dominate with Express and Booker
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- Figure 5: Leading convenience stores, market shares (ex-VAT), 2020
- More consolidation within the symbol group segment
- Brand Analysis
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- Figure 6: Key metrics for selected brands, April 2021
- Amazon Fresh represents a challenge to convenience sector
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- Figure 7: Amazon Fresh Ealing, London, March 2021
- The consumer
- Nine in 10 UK adults shop at convenience stores
- Food-for-home the most popular category
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- Figure 8: Items typically bought from convenience stores, March 2020 and 2021
- Shopping frequency drops off as consumers try to limit time spent in-store
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- Figure 9: Frequency of convenience store visits, March 2020 and 2021
- Little change in the popular food-for-home product categories
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- Figure 10: Usage of convenience stores for food for the home, March 2020 and 2021
- Snacks the most popular items in food-to-go
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- Figure 11: Usage of convenience stores for food-to-go, March 2021
- Services are key to driving footfall
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- Figure 12: Usage of services in convenience stores, March 2020 and 2021
- Co-op and Tesco Express are the joint most used convenience stores
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- Figure 13: Stores used by regular convenience store shoppers, March 2021
- Good locations and fresh produce are key for consumers
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- Figure 14: Key factors to encourage shopping at convenience stores, March 2021
- Consumers think convenience stores should support their neighbourhoods
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- Figure 15: Attitudes towards convenience stores, March 2021
Issues and Insights
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- Convenience stores can position themselves at the heart of their neighbourhoods
- Convenience stores have a chance to embed themselves into the online ecosystem
The Market – Key Takeaways
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- Rise in localism in 2020 benefited the convenience sector
- The growth in home-working hit some parts of the sector harder
- 2021 set to be a year of consolidation as the country resets
- Future looks positive for the convenience sector
Market Size and Forecast
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- Convenience sector benefits from rise in food-for-home and localism
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- Figure 16: Short-, medium- and long-term impact of COVID-19 on convenience sector, 10 June 2021
- Consolidation in 2021 following strong growth in 2020
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- Figure 17: Convenience store market size (including VAT) and forecast (prepared on 10/06/21), 2016-26
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- Figure 18: Convenience store market size (including VAT), 2016-26
- Market drivers and assumptions
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- Figure 19: Key drivers affecting Mintel’s market forecast, prepared on 10 June 2021, 2015-25
- Learnings from the last recession
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- Figure 20: Annual % change in all grocery retail sales (ex-VAT), and by broad category, 2007-12
- Forecast methodology
Market Drivers
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- Consumer confidence plummeted amid pandemic panic
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- Figure 21: Financial confidence index, January 2018 to June 2021
- Wages hit by COVID-19 have driven economic downturn
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- Figure 22: Average weekly earnings (excluding bonus pay) growth versus CPIH, January 2016-May 2021
- Retail sales since lockdown buoyed by greater in-home food demand
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- Figure 23: Retail sales: growth in all retail sales and all food retail sales, by value (excluding fuel), January 2017-May 2021
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- Figure 24: Supermarkets, performance of large and small businesses, January 2019-March 2021
- Inflation remains low in 2020 and into 2021
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- Figure 25: Inflation in core food and drink categories, 2015-March 2021
- Housing tenure – home-owning on the rise once again
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- Figure 26: UK households, by tenure status, 2016-20
- Ageing population placing different demands on convenience stores
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- Figure 27: UK population, by age, 2015-25
- Household size decreasing
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- Figure 28: UK household size as a percentage of all households, 2015-20
The Consumer – Key Takeaways
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- COVID-19 drives shift to online retail
- Local shopping on the rise
- Bigger baskets but less frequent shops
- Services are vital for convenience customers and the stores themselves
Impact of COVID-19 on Consumer Behaviour
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- Consumers are spending more on food since the outbreak
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- Figure 29: Consumer purchasing on food and alcoholic drinks, 27 May-7 June 2021
- Lockdowns drive online and local shopping
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- Figure 30: Changes in consumer behaviours due to the COVID-19 pandemic, 27 May-7 June 2021
- Over a quarter of convenience shoppers shopping more since COVID-19
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- Figure 31: Change in convenience store shopping behaviour, March 2021
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- Figure 32: Change in convenience store shopping behaviour, by age, March 2021
- Tesco and Sainsbury’s customers cut back on shopping
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- Figure 33: Leading convenience store shoppers’ changes in behaviour as a result of the COVID-19 outbreak, March 2021
Convenience Store Shoppers
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- Nine in 10 UK adults use convenience stores
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- Figure 34: Items typically bought from convenience stores, March 2020 and 2021
- Convenience stores are used across urban and rural areas
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- Figure 35: Usage of convenience stores, by area, March 2020 and 2021
- Convenience shoppers skew younger
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- Figure 36: Profile of c-store shoppers, by age and income, March 2021
- Convenience stores used for more varied shopping missions
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- Figure 37: Number of different types of items bought from convenience stores, March 2020 and March 2021
- Those shopping across more categories are younger and more affluent
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- Figure 38: Profile of c-store shoppers, by number of items bought, March 2021
- Shoppers shifting to less regular visits
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- Figure 39: Frequency of convenience store visits, March 2020 and 2021
- Younger and more affluent consumers shopping more often
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- Figure 40: Frequency of convenience store shopping by age and income, March 2021
In-home Food Purchasing
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- Six in 10 convenience shoppers pick up food-for-home items
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- Figure 41: Usage of c-stores for food for the home, March 2020 and 2021
- Food-for-home shopping skews towards younger consumers
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- Figure 42: Profile of shoppers of food items, by age and income, March 2020
- Nearly half of consumers buy four or more different types of products
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- Figure 43: Number of different types of food-for-home items bought from convenience stores, March 2022
On-the-go Food
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- Food-to-go seriously impacted by shift to work from home
- Snacking remains the most popular food-to-go mission
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- Figure 44: Usage of c-stores for food-to-go, March 2021
- Affluent shoppers more likely to pick up breakfast items
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- Figure 45: Profile of shoppers of food-to-go items, by age and income, March 2021
- Over half of shoppers are picking up three or more items
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- Figure 46: Number of different types of food-to-go items bought from convenience stores, March 2021
Services Used in Convenience Stores
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- Nearly 70% of shoppers use services at their convenience stores
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- Figure 47: Usage of services in convenience stores, March 2020 and 2021
- Post Office and ATMs appeal to broad demographic
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- Figure 48: Users of convenience store services, by age and income, March 2021
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- Figure 49: Use of services at convenience stores by area, March 2021
- Over a third of consumers using two or more services
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- Figure 50: Repertoire of number of convenience store services used, March 2021
Convenience Retailers Used
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- Tesco and Co-op remain the most popular
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- Figure 51: Stores used by regular convenience store shoppers, March 2021
- Over two fifths of consumers visit just one convenience store regularly
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- Figure 52: Number of convenience stores used, March 2021
- The Co-operative takes pole position as most used convenience store
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- Figure 53: Convenience store most often used by regular convenience store shoppers, March 2021
- Co-op’s older more affluent shopper base reflects its locations
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- Figure 54: Profile of shoppers at leading convenience stores, by age and income, March 2021
- Sainsbury’s Local impacted by estate’s city-centre focus
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- Figure 55: Distribution of customers for most often used stores, by location, March 2021
- Clear differences in missions across different convenience stores
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- Figure 56: Buyers of food-to-go goods relative to the proportion of all shoppers, March 2021
Key Factors for Convenience Stores
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- Location is key for convenience shoppers
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- Figure 57: Key factors to encourage shopping at convenience stores, March 2021
- Rural shoppers want to see more local produce
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- Figure 58: Key product and range factors by location, March 2021
- City dwellers want the extra convenience of delivery options
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- Figure 59: Key convenience factors by location, March 2021
Attitudes towards Convenience Stores
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- Almost 40% of consumers are happy to pay for convenience
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- Figure 60: Attitudes towards convenience stores, March 2021
- Younger shoppers drawn to click-and-collect services
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- Figure 61: Agreement to attitudes concerning convenience stores, by age, part one, March 2021
- Social distancing is a problem for convenience stores
- Time running out for sweet treats at the checkout
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- Figure 62: Agreement to attitudes concerning convenience stores, by age, part two, March 2021
Leading Retailers – Key Takeaways
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- A mixed year for convenience retailers
- Tesco remains top of the pile
- Further consolidation among symbol groups
- Amazon launches first foray into convenience in the UK
- Surge in demand for deliveries leads to new solutions
Competitive Strategies
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- Convenience stores and their place in the grocery sector
- Major grocery retailers
- Tesco maintains pole position
- Sainsbury’s Local suffered from plummeting footfall
- M&S Food struggles as Ocado deal succeeds
- Co-operative groups
- The Co-operative Group’s local stores perform strongly
- Leading co-operatives
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- Figure 63: Leading Co-operatives’ sales, 2018/19 – 2020/21
- Figure 64: Leading Co-operatives’ outlets, 2018/19 – 2020/21
- Figure 65: Leading Co-operatives’ sales per outlet, 2018/19 – 2020/21
- Symbol groups
- SPAR leads the way for symbol groups
- Nisa looking to new, smaller formats
- Costcutter purchased by Bestway Wholesale
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- Figure 66: Leading symbol groups, 2020-21
- Petrol forecourts
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- Figure 67: Total number, and breakdown in ownership of, UK forecourts, 2017-20
Leading Retailers – Key Metrics
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- Tesco takes top spot with Express, One Stop and Booker formats
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- Figure 68: Leading convenience stores’ sales, 2016/17-2020/21
- Figure 69: Leading convenience stores’ outlet numbers, 2016/17-2020/21
- Sales-per-outlet underlines differences between convenience store types
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- Figure 70: Leading convenience stores’ sales per outlet, 2016/17-2020/21
Market Share
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- Market dominated by Tesco and Co-operative
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- Figure 71: Leading convenience stores, market shares (ex-VAT), 2020
- Figure 72: Leading convenience retailers’ market shares 2016-2020
Launch Activity and Innovation
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- Amazon enters the physical world
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- Figure 73: Amazon Fresh Ealing, London, March 2021
- Late entrants move into the convenience sector
- Sustainability on the agenda for convenience
- New services bringing convenience stores to the consumer
- New technologies making convenience stores ever more convenient
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- Figure 74: Co-op and Starship Deliveries partnership, Milton Keynes, July 2020
Advertising and Marketing Activity
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- Marketing activity declined amid pandemic and national lockdowns
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- Figure 75: Total above-the-line, online display and direct mail advertising expenditure by UK supermarket and convenience store operators, 2016-20
- Shifts in spending by leading convenience stores in 2020
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- Figure 76: Leading UK supermarket and convenience store operators’ recorded above-the-line, online display and direct mail total advertising expenditure, 2016-20
- Cinema spend drops off as radio grows
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- Figure 77: Recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarket and convenience store operators, by media type, 2016-20
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 78: Attitudes towards and usage of selected brands, April 2021
- Key brand metrics
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- Figure 79: Key metrics for selected brands, April 2021
- Brand attitudes: SPAR and Co-op trusted and good value
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- Figure 80: Attitudes, by brand, April 2021
- Brand personality: accessibility important for the UK’s leading smaller-format chains
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- Figure 81: Brand personality – macro image, April 2021
- Tesco is considered welcoming and responsive
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- Figure 82: Brand personality – micro image, April 2021
- Brand analysis
- M&S Simply Food has cornered the premium segment
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- Figure 83: User profile of M&S Simply Food, April 2021
- Tesco Express has broad appeal
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- Figure 84: User profile of Tesco Express, April 2021
- Sainsbury’s Local trailing Tesco for experience
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- Figure 85: User profile of Sainsbury’s Local, April 2021
- Co-op Food stores were widely used but experience was lacking
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- Figure 86: User profile of Co-op Food, April 2021
- SPAR usage is low despite large estate
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- Figure 87: User profile of SPAR, April 2021
- Reading word clouds
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Financial definitions
- Trade definitions
- Abbreviations
- Consumer research methodology
Appendix: Market Size and Forecast
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- Forecast methodology
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