Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Convenience grows just ahead of the overall market
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- Figure 1: Convenience store market size, including VAT, 2011-21
- Are tougher times ahead?
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- Figure 2: Average weekly earnings growth vs CPIH inflation, January 2014-March 2017
- Companies and brands
- Co-op leads the market
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- Figure 3: Leading convenience operators’ estimated market shares, 2016
- Symbols give over more space to non-foods…
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- Figure 4: Convenience stores: space allocation estimates, March 2017
- …which means a higher proportion of revenue comes from non-food
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- Figure 5: Leading convenience stores, estimated proportion of sales, by broad product category, 2016
- The consumer
- Top-ups still driving c-store use
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- Figure 6: Where consumers shop, by how they shop, February 2017
- Younger consumers the driver of the c-store market
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- Figure 7: Convenience store shoppers, by type of shopping completed and age, February 2017
- Tesco out in front
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- Figure 8: Convenience retailers used regularly, February 2017
- A third buy their lunch and a fifth their breakfast from c-stores
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- Figure 9: Shopping missions regularly completed in convenience stores, February 2017
- Over three quarters use non-retail services
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- Figure 10: Non-retail services regularly used in convenience stores, February 2017
- Users would most like to see improvements in price, availability and range of fresh produce
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- Figure 11: What c-store shoppers would change about where they shop, any rank, February 2017
- Will inflation hurt the sector?
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- Figure 12: Attitudes towards shopping in convenience stores, February 2017
- What we think
Issues and Insights
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- What does rising inflation mean for the convenience sector?
- The facts
- The implications
- What does Booker and Tesco joining forces mean?
- The facts
- The implications
- Is online turning from friend to foe?
- The facts
- The implications
The Market – What You Need to Know
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- Convenience grows just ahead of the overall market
- Convenience stores account for a quarter of all grocery retail sales
- Are tougher times ahead?
- Renting remains high
Market Size and Forecast
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- The convenience store sector
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- Figure 13: Convenience store market size, including VAT, 2011-21
- Figure 14: Total convenience store market size (including VAT), at current and constant (2016) prices, 2011-21
- How the grocery sector breaks down
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- Figure 15: Estimated breakdown of sector sales, by channel, 2012-17
- What is a ‘Convenience store’?
- Superstores
- The needs ‘convenience’ serves
- Discounters
- Who do the discounters compete against?
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- Figure 16: Where consumers shop, by how they shop, February 2017
- Forecast methodology
Market Drivers
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- Food retailers underperforming
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- Figure 17: Retail sales growth, all retail and food retail, value and volume, January 2015-February 2017
- A long period of deflation has ended
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- Figure 18: Annual percentage change in the price of food and non-alcoholic beverages and alcoholic beverages and tobacco, January 2015-March 2017
- Real incomes set to be squeezed
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- Figure 19: Average weekly earnings growth vs CPIH inflation, January 2014-March 2017
- Structural changes in the market – the move back into inner cities…
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- Figure 20: UK households, by tenure, 2011-15
- …but renting remains historically high amongst younger consumers
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- Figure 21: UK household tenure of those aged 16-34, 2011-15
The Consumer – What You Need to Know
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- Top-ups still driving c-store use
- Younger consumers the driver of the c-store market
- Tesco out in front
- A third buy their lunch and a fifth their breakfast from c-stores
- Over three quarters use non-retail services
- Users would most like to see improvements in price, availability and range of fresh
- Will inflation hurt the sector?
How They Shop
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- Convenience stores remain primarily a secondary destination
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- Figure 22: Where consumers shop, by how they shop, February 2017
- Frequency of grocery shopping
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- Figure 23: Frequency of grocery shopping, September 2016
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- Figure 24: Frequency of convenience store use, February 2016 and February 2017
- Top-up shops on the rise across the grocery market
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- Figure 25: How top-up trends have developed, February 2014 -17
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- Figure 26: How main shop trends have developed, February 2014-17
- Where grocery shoppers top up
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- Figure 27: Where main shoppers top up, February 2017
Demographics of Convenience Store Use
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- Younger consumers more likely to use convenience stores…
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- Figure 28: Convenience store shoppers, by type of shopping completed and age, February 2017
- …and are also more likely to visit most frequently…
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- Figure 29: Frequency of convenience store use, by age, February 2017
- …but are younger consumers moving away from c-stores?
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- Figure 30: Trend data: Convenience store shoppers, by type of shopping completed and age, 2015-17
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- Figure 31: Trend data: Convenience store shoppers, by type of shopping completed and age, February 2015-17
- Big in the city
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- Figure 32: Convenience store shoppers, by type of shopping completed and type of area lived in, February 2017
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- Figure 33: Convenience store shoppers, by type of shopping completed and location lived in, February 2017
- Pricing clearly a barrier to entry
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- Figure 34: Convenience store shoppers, by socio-economic group, February 2017
Retailers Used
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- Tesco attracts the most shoppers
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- Figure 35: Convenience retailers used regularly, February 2017
- Trend data: Co-op continues to gain shoppers
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- Figure 36: Convenience retailers used regularly, February 2014-17
- Customer profiles
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- Figure 37: C-stores most often used, February 2017
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- Figure 38: C-stores used regularly, February 2017
- Number of shops used
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- Figure 39: C-stores – Number of different shops used, February 2017
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- Figure 40: Profile of c-store shoppers, by number of stores used, February 2017
- Number of items bought
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- Figure 41: Number of items purchased, by retailer most used, February 2017
- Number of services used
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- Figure 42: Number of services bought, by retailer most used, February 2017
Shopping Missions
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- Something for now, something for tonight
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- Figure 43: Shopping missions regularly completed in convenience stores, February 2017
- Younger consumers far more likely to go for food-to-go
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- Figure 44: Shopping missions regularly completed in convenience stores, by age, February 2017
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- Figure 45: Shopping missions regularly completed in convenience stores, by age, February 2017
- Mission repertoire
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- Figure 46: Shopping missions repertoire, February 2017
- Services used
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- Figure 47: Non-retail services regularly used in convenience stores, February 2016 and February 2017
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- Figure 48: Non-retail services regularly used in convenience stores, by age, February 2017
- Repertoire of services used
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- Figure 49: Repertoire of convenience services used, February 2017
What They Would Change About Shopping in Convenience Stores
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- Price the biggest concern
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- Figure 50: What c-store shoppers would change about where they shop, any rank, February 2017
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- Figure 51: What c-store shoppers would change about where they shop, by rank of importance, February 2017
- Those younger are more concerned with food-to-go options
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- Figure 52: What c-store shoppers would change about where they shop, any rank by age, February 2017
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- Figure 53: What c-store shoppers would change about where they shop, any rank by age, February 2017
- Improvements by retailer
- What would customers like to see improved?
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- Figure 54: What c-store shoppers would change about where they shop, any rank by retailer used most often, February 2017
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- Figure 55: What c-store shoppers would change about where they shop, any rank by retailer used most often, February 2017
- Thoughts of the focus group
Attitudes towards Shopping in Convenience Stores
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- Threats and the future of convenience grocery retailing
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- Figure 56: Attitudes towards pricing and fuel prices and convenience stores, February 2017
- Is online about to turn from friend to foe?
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- Figure 57: Attitudes towards online and convenience stores, February 2017
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- Figure 58: Agreement with statements regarding online and convenience stores, by where consumers do grocery shopping, February 2017
- Attitudes towards foodservice
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- Figure 59: Attitudes towards food-to-go in convenience stores, February 2017
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- Figure 60: Agreement with statements around food-to-go in convenience stores, by age, February 2017
- Almost half agree too many payment options is confusing…
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- Figure 61: Attitudes towards payment options within convenience stores, February 2017
- …so are they ready for a store without any?
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- Figure 62: Attitudes towards an Amazon Go-type convenience format, February 2017
Leading Retailers – What You Need to Know
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- Co-op leads the market
- Booker the largest of the symbol operators
- Symbols give over more space to non-foods…
- …which means a higher proportion of revenue comes from non-food
- Amazon aims to revolutionise the convenience format
Competitive Strategies
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- High-footfall stores
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- Figure 63: Leading c-store operators, outlets and space, 2016/17
- The Co-op – Where does it stand in the market?
- Symbol groups
- Other businesses
- Petrol forecourts
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- Figure 64: Total number of, and breakdown in ownership of UK forecourts, 2006-2016
Leading Retailers – Key Metrics
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- Sales
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- Figure 65: Leading c-stores, sales, 2012/13-2016/17
- Outlets
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- Figure 66: Leading c-stores, outlets, 2012/13-2016/17
- Sales per outlet
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- Figure 67: Leading c-stores, sales per outlet, 2012/13-2016/17
- Market shares
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- Figure 68: Leading convenience stores, share of all c-store sales, 2012/13-2016/17
Space Allocation Summary
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- Space allocation overview
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- Figure 69: Convenience stores: space allocation estimates, March 2017
- Fresh food more prevalent in multiple-owned convenience stores
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- Figure 70: Convenience stores: Fresh food and other food mix, by percentage share of total in-store space allocated to food, March 2017
- Food-to-go
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- Figure 71: Spar, Camden Town, Food-to-go counter, March 2017
- Detailed space allocation estimates
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- Figure 72: Convenience stores: Detailed space allocation estimates, March 2017
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- Figure 73: Convenience stores: Detailed space allocation estimates, March 2017
Retail Product Mix
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- Figure 74: Leading convenience stores, estimated sales by broad product category, 2016
- Figure 75: Leading convenience stores, estimated proportion of sales by broad product category, 2016
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Brand Research
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- Brand map
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- Figure 76: Attitudes towards and usage of selected brands, October 2016 and February 2017
- Key brand metrics
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- Figure 77: Key metrics for selected brands, October 2016 and February 2017
- Brand attitudes: the Co-op’s ethical credentials are recognised
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- Figure 78: Attitudes, by brand, October 2016 and February 2017
- Brand personality: Sainsbury’s and Tesco picked out as fun and engaging
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- Figure 79: Brand personality – Macro image, October 2016 and February 2017
- M&S thought of as expensive but hits the right aspirational tones
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- Figure 80: Brand personality – Micro image, October 2016 and February 2017
- Brand analysis
- Sainsbury’s scores well on trust and recommendation but usage lags behind rivals
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- Figure 81: User profile of Sainsbury’s Local, February 2017
- Tesco Express shows market leading awareness, usage and trust
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- Figure 82: User profile of Tesco Express, February 2017
- M&S Simply Food singled out as expensive but a third this cost is justified
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- Figure 83: User profile of M&S Simply Food, October 2016
- Spar lags behinds its rivals although there are positives
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- Figure 84: User profile of Spar, February 2017
- The Co-operative showing that it takes time to change brand perceptions
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- Figure 85: User profile of The Co-operative, October 2016
Innovation and Launch Activity
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- Checkout-free stores
- New supermarket convenience store formats
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- Figure 86: Carrefour Express “Urban Life” store Milan, pizza counter
- Ancillary goods and services give more reasons to visit
- Apps
- Ultra-luxury convenience store
- 7-Eleven makeover
Advertising and Marketing Activity
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- Supermarket and c-store advertising spend down 6.9% year on year in 2016
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- Figure 87: Recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarket and convenience store operators, 2012-16
- Leading convenience store advertisers
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- Figure 88: Leading UK supermarket and convenience store operators: Recorded above-the-line, online display and direct mail total advertising expenditure, 2012-16
- Majority of advertising spend channelled through TV and press
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- Figure 89: Recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarket and convenience store operators, by media type, 2016
- Nielsen Ad Intel coverage
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources:
- Financial definitions:
- Abbreviations
- Trade definitions
- VAT
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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