80% of consumers claim to buy something from a CTN at least once a week. Who uses CTNs and what are they buying?

With supermarkets, petrol retailers and convenience stores increasing their share of CTN products - is there a future for traditional CTN retailers?

Can CTNs develop their products and services to meet changing consumer needs?

Mintel last examined the CTN sector in August 1997, when many of the current trends were already becoming apparent. This report aims to chart the progress over the last few years from the perspective of both the multiples and the independent retailers.

In the last three years there has been major consolidation among the larger chains in the CTN sector and an accelerated drive towards a convenience-style offer. At the same time the supermarkets, petrol forecourt retailers and convenience stores are all increasing their share of the traditional CTN products, as well as improving and expanding their own c-store chains. The future for the traditional CTN retailer looks bleak and there is a general agreement across the CTN sector that, for many of the smaller CTN retailers, it is still a case of 'adapt or die'.

The concept of the local newsagent who offers a product range of sweets, cigarettes and newspapers no longer seems sufficient to satisfy the needs of today's customers, who are reading fewer newspapers, smoking fewer cigarettes, and have less time for grocery shopping than ever before. CTNs have traditionally been a vital outlet for newspapers and magazine publishers but, as more and more sales are made through the major multiple retailers, it is debatable how long they will receive that vital support.

This report examines consumer usage of newsagents and spending patterns and also looks ahead to investigate the types of goods and services that consumers would like to be able to buy from CTNs in future. It is clear that, although the traditional CTN products such as confectionery, tobacco and newspapers are static or in decline, there are also new product and service opportunities opening up for CTN retailers with the money to invest in new technology. The closure of local banks and Post Offices has opened up a gap for CTNs to develop a role as a local banking and payment centre. These can offer cash machines, paypoints, Lottery terminals selling theatre and football tickets, as well as a wider product range which includes pharmacy-type offerings of medicines and toiletries. New technology is opening up further retail opportunities: Lottery terminals may soon be able to sell theatre and football tickets. If CTNs can run their business professionally and develop their products and services fast enough to keep pace with changing customer needs, there is no reason why they cannot survive - but their business will look quite different to that of the traditional CTN.

Other Mintel reports of relevance include:

Chocolate Confectionery, Market Intelligence, November 2000

Railway & Motorway Retailing, Retail Intelligence, May 2000

National Newspapers, Market Intelligence, November 1999

Cigarettes, Market Intelligence, October 1999

Petrol Forecourt Retailing, Retail Intelligence, September 1999

Convenience Retailing, Retail Intelligence, April 1999

Magazine Distribution, Market Intelligence, July 1998

Newspaper Distribution, Retail Intelligence, July 1998.