What you need to know
The convenience sector is a diverse one in terms of both the retailers that operate within it and the consumers, and needs, that it can serve. However, it is clear that the recent growth is being driven by the younger Millennials generation, those aged 16-34. This age group shows the highest and most frequent c-store usage and is also most likely to use c-stores for a broader set of needs than older consumers. Within this age group there has been a shift to more top-up grocery shopping habits, particularly amongst those living in urban areas, and convenience stores are perhaps the best suited grocery format to satisfy these needs.
The total convenience market grew by an estimated 1.8% in 2015 to reach £38.7 billion, a slowdown of the 2.8% growth seen in 2014 but a continued outperformance of the wider grocery market which saw sales fall by 0.2% in 2015. However, not all within the market are benefiting equally from the shift to more convenience-based grocery buying habits, with the convenience operations of the multiples outperforming the market. The success of retailers such as Tesco Express and Sainsbury’s Local has been to redefine what convenience stores can offer consumers, particularly in the areas of fresh products and food-to-go, and their offering is well tailored to the high-usage Millennials generation. Their success has meant that the smaller chains in the market are coming under increasing pressure and the growth in the store numbers of the symbol groups in recent years shows that many are seeking the protection of a wider organisation.
Areas covered within this report
This report combines both market and consumer data along with key retailer metrics to give an overview of the UK convenience market.
Broadly speaking a convenience store (c-store) is a small-store grocery-focused retail format which is in effect complementary to grocery formats more geared towards large weekly shops, such as supermarkets and online channels. Conventionally, it offers a convenience service for people needing to undertake top-up shopping or make distress purchases. With the entrance of major grocers into the sector in recent years, with higher standards of fresh and chilled foods and trusted own-brands, the sector has become increasingly prominent in consumers’ last-minute meal shopping.
In practice, c-stores should:
Be open seven days a week and have extended hours of opening
Sell a range of groceries beyond simply CTN (confectionery, tobacco, news) categories
Usually trade from a unit of less than 3,000 sq ft (280 sq m). Stores above this size cannot trade all day on a Sunday. Due to its larger size Tesco Metro falls outside this report; however, Tesco Express is included. Although some M&S Simply Food stores are larger than 3,000 sq ft, the retailer is predominantly a top-up shopping destination and therefore included as a c-store operator.
The scale and offer of a convenience store is dictated by its location and the amount of business it can attract.
At one end of the spectrum, a c-store can come close to fulfilling the primary shopping needs for a particular location. This is particularly true of the c-stores of the major grocers such as Tesco and Sainsbury’s, but also of symbol groups such as Spar and Nisa.
At the other end, smaller stores serving more limited catchments can be more akin to a super-CTN. One Stop, Mace and Best-One are examples of these smaller c-stores.
The following are excluded:
All food specialists, from bakers and greengrocers to off-licences and tobacconists.
Hard discounters and Iceland.
