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
- Rising inflation a key trend of 2017
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- Figure 1: Average weekly earnings growth vs CPIH inflation, January 2014-February 2018
- Growth in the convenience sector accelerates for the third consecutive year
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- Figure 2: Convenience store market size, including VAT, 2012-22
- The convenience sector accounts for around a quarter of all grocery sales
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- Figure 3: Estimated breakdown of the grocery sector (inc-VAT), 2012-17
- Companies and brands
- Tesco the largest player, a position only consolidated by the merger with Booker
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- Figure 4: Estimated C-store market shares (ex-vat), 2016 and 2017
- Multiples give far more space to fresh-food
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- Figure 5: Convenience stores: space allocation estimates, April 2018
- The consumer
- One in three regularly shops for groceries in c-stores
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- Figure 6: Where consumers typically shop for groceries, February 2018
- Usage skews toward the younger generations
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- Figure 7: Convenience store shoppers, by age and gender, February 2018
- Most visit at least once a week
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- Figure 8: Frequency of convenience usage, February 2018
- Most visit to top-up shop
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- Figure 9: Reasons for using convenience stores, February 2018
- Tesco Express the most popular destination
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- Figure 10: Convenience retailers regularly used and used most often, February 2018
- C-store users want more hot lunch options on the menu
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- Figure 11: What consumers would like to see more of in the convenience stores they use most, February 2018
- Own brand plays an important role in c-stores
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- Figure 12: Convenience users’ attitudes towards own-brand in c-stores, February 2018
- Just under half agree it is difficult to eat healthily when frequently shopping in c-stores
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- Figure 13: Attitudes to healthy eating and food-to-go in convenience stores, February 2018
- What we think
Issues and Insights
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- Consolidation-on-consolidation: the future of supply and own-brand in c-stores
- The facts
- The implications
- Healthy eating in c-stores: From food-to-go, to top-ups do retailers need to up their health offering?
- The facts
- The implications
- Deliveroo and Co-op: Is this the solution to shatter the glass ceiling to online for the sector?
- The facts
- The implications
The Market – What You Need to Know
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- Rising inflation a key trend of 2017
- Levels of renting remain high with smaller households set to grow
- Growth in the convenience sector accelerates for the third consecutive year
- The convenience sector accounts for around a quarter of all grocery sales
Market Drivers
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- Real incomes under pressure, but growing again
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- Figure 14: Average weekly earnings growth vs CPIH inflation, January 2014-February 2018
- High inflation in core categories
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- Figure 15: Annual percentage change in the price of food and non-alcoholic beverages and alcoholic beverages and tobacco, January 2016-February 2018
- Food retailers continue to underperform
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- Figure 16: Annual percentage change in the value of retail sales at current prices, non-seasonally adjusted, January 2016-February 2018
- Ongoing changes in the housing market
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- Figure 17: UK households, by tenure, 2012-16
- More people living in smaller households
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- Figure 18: UK Households, by size, 2012-22
- Figure 19: Breakdown of UK Households, by size, 2012-22
Market Size and Forecast
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- C-store market estimated to have grown by 2.7% in 2017
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- Figure 20: Convenience store market size, including VAT, 2012-22
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- Figure 21: Total convenience store market size (including VAT), at current and constant (2017) prices, 2012-22
- How the grocery sector breaks down
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- Figure 22: Estimated breakdown of the grocery sector (inc-VAT), 2012-17
- Forecast methodology
The Consumer – What You Need to Know
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- One in three regularly shops for groceries in c-stores
- Usage skews toward the younger generations
- Most visit to top-up shop
- Tesco Express the most popular destination
- C-store users want more hot lunch options on the menu
- Own-brand plays an important role in c-stores
- Just under half agree it is difficult to eat healthily when frequently shopping in c-stores
How They Shop for Groceries
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- More than one in three consumers uses convenience stores
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- Figure 23: Where consumers typically shop for groceries, February 2018
- Almost a third are loyal to one type of store
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- Figure 24: Repertoire of where consumers typically shop for groceries, February 2018
- More than half shop multiple times a week
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- Figure 25: Frequency of convenience usage, February 2018
- Similar usage against last year
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- Figure 26: Usage of convenience stores in the last year, February 2018
Demographics of Convenience Store Users
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- Men more likely to use convenience stores
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- Figure 27: Convenience store shoppers, by age and gender, February 2018
- Usage linked to affluence
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- Figure 28: Convenience store shoppers, by socio-economic status, February 2018
- Proximity to convenience stores also influences usage
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- Figure 29: Convenience store shoppers, by location, February 2018
- Young people shop more frequently…
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- Figure 30: Frequency of convenience store use, by age, February 2018
- …and have increased convenience store usage in the last year
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- Figure 31: Usage of convenience stores in the last year, by age, February 2018
Why They Use Convenience Stores
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- Most see convenience stores as an opportunity to top-up
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- Figure 32: Reasons for using convenience stores, February 2018
- Young people more likely to do main shop
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- Figure 33: Reasons for using convenience stores, by age, February 2018
- More than two thirds have multiple reasons for usage
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- Figure 34: Repertoire of reasons for using convenience stores, February 2018
Convenience Retailers Used
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- Over half of c-store users regularly visit Tesco Express
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- Figure 35: Convenience retailers regularly used and used most often, February 2018
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- Figure 36: Repertoire of convenience stores regularly used, February 2018
- Over half of Tesco Express shoppers use it most often
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- Figure 37: Convenience retailers used regularly, by those used most often, February 2018
- Traditional categories a driver for symbols
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- Figure 38: Leading convenience retailers regularly used, by age, February 2018
- M&S under-indexes with 16-34s compared to rivals
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- Figure 39: Leading convenience retailers regularly used, by age, February 2018
What They Would Like to See More of In-Store
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- Consumer want more lunch-to-go options
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- Figure 40: What consumers would like to see more of in the convenience stores they use most, February 2018
- Local produce would have a broad appeal
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- Figure 41: What consumers would like to see more of in the convenience stores they use most, February 2018
- M&S could offer more premium food-to-go products
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- Figure 42: What consumers would like to see more of in the convenience stores they use most, by retailer, February 2018
Own-brand in Convenience Stores
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- Three quarters typically buy own-brand when visiting c-stores
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- Figure 43: Purchasing of own-brand products, February 2018
- 25-44s most likely to buy own-brand
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- Figure 44: Purchasing of own-brand products, by age, February 2018
- Most see own-brand as a good way to save, and high quality own-brand could drive patronage
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- Figure 45: Convenience users attitudes towards own-brand in c-stores, February 2018
- Premiumisation of own-brand
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- Figure 46: Grocery Tracker: Purchasing of premium own-brand, March 2016-December 2018
Attitudes Towards Healthy Eating and Food-to-Go in Convenience Stores
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- Most agree healthy eating options in c-stores are expensive
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- Figure 47: Attitudes to healthy eating options and food-to-go in convenience stores, February 2018
- 16-34s most likely to feel it is hard to eat healthily when shopping in c-stores
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- Figure 48: Attitudes to healthy eating options and food-to-go in convenience stores, by age, February 2018
- Most see range as an issue for more frequent use of food-to-go
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- Figure 49: Attitudes to food-to-go in convenience stores, February 2018
- Limitations of food-to-go felt more by symbol group shoppers
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- Figure 50: Attitudes towards food-to-go in convenience stores, by convenience retailer used, February 2018
Leading Retailers – What You Need to Know
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- Tesco the largest player, a position only consolidated by the merger with Booker
- The Co-op in line to make its own significant acquisition
- Further consolidation was seen throughout the market
- M&S winning in the experience stakes but Tesco Express has ubiquity
- Multiples give far more space to fresh-food
Competitive Strategies
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- Multiples
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- Figure 51: Leading multiples, key metrics, 2017
- Co-operatives
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- Figure 52: Co-operative food, members by estimated stores and sales, 2017/18
- Symbol groups
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- Figure 53: Top 20 convenience store retailers total store numbers by type of operation, 2014-17
- Petrol forecourts
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- Figure 54: Total number of, and breakdown in ownership of UK forecourts, 2015-17
Leading Retailers – Key Metrics
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- Sales: Co-op had a positive 2017 despite store consolidation
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- Figure 55: Leading c-stores, sales, 2013/14-2017/18
- Stores: Tesco & Booker provide a significant store presence
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- Figure 56: Leading c-stores, outlets, 2013/14-2017/18
- Sales-per-outlet: multiples see a far greater return per unit
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- Figure 57: Leading c-stores, sales per outlet, 2013/14 - 2017/18
Market Shares
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- Co-op the largest player in 2017, but Tesco and Booker will become market leader
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- Figure 58: Estimated C-store market shares (ex-vat), 2016 and 2017
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- Figure 59: Estimated C-store market shares (ex-vat), 2013/14-17/18
Brand Research
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- What you need to know
- Retailer map
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- Figure 60: Attitudes towards and usage of selected retailers, April 2018
- Key retailer metrics
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- Figure 61: Key metrics for selected retailers, April 2018
- Retailer attitudes: M&S seen to be worth paying more for
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- Figure 62: Attitudes, by retailer, April 2018
- Retailer personality: Tesco Express has the edge in accessibility
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- Figure 63: Retailer personality – macro image, April 2018
- Spar seen as basic by many
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- Figure 64: Retailer personality – micro image, April 2018
- Retailer analysis
- M&S Simply Food: Seen as expensive, but recognised for its quality
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- Figure 65: User profile of M&S Simply Food, April 2018
- Tesco Express: Broad usage driven by accessibility
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- Figure 66: User profile of Tesco Express, April 2018
- Sainsbury’s Local: High awareness and usage but lacking a distinctive trait
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- Figure 67: User profile of Sainsbury’s Local, April 2018
- The Co-operative: history weighs heavy but the message is connecting with younger consumers
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- Figure 68: User profile of The Co-operative, April 2018
- Spar: Lagging behind rivals
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- Figure 69: User profile of Spar, April 2018
Space Allocation Summary
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- Space allocation overview
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- Figure 70: Convenience stores: space allocation estimates, April 2018
- Fresh food is a key footfall driver for convenience stores
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- Figure 71: Convenience stores: Fresh food and other food mix, by percentage share of total in-store space allocated to food, April 2018
- Food-to-go and RTE meal options are popular reasons to visit a convenience store
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- Figure 72: Budgens of Islington, Cook freezers, April 2018
- Detailed space allocation estimates
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- Figure 73: Convenience stores: Detailed space allocation estimates, April 2018
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- Figure 74: Convenience stores: Detailed space allocation estimates, April 2018
Retail Product Mix
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- Figure 75: Leading convenience stores, estimated proportion of sales by broad product category, 2017
- Figure 76: Leading convenience stores, estimated sales by broad product category, 2017
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Innovation and Launch Activity
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- On-demand convenience store that brings groceries to your door step
- 24/7 fully automated convenience stores
- Carrefour trialling new convenience store format for immediate consumption
- Embracing digital currency
- Co-op speeding up the checkout process with ‘shop, scan and go’ app
- Hard Rock-branded c-store
- 7-Eleven redefining convenience with expanded delivery options
- Connecting and engaging with today’s digital-savvy consumers
Advertising and Marketing Activity
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- Supermarket and c-store advertising spend down 8% year on year in 2017
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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, 2013-17
- Convenience store campaigns
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- Figure 78: Leading UK supermarket and convenience store operators: Recorded above-the-line, online display and direct mail total advertising expenditure, 2013-17
- TV attracts the lion’s share of advertising expenditure
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- Figure 79: Recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarket and convenience store operators, by media type, 2017
- Nielsen Ad Intel coverage
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Financial definitions
- Trade definitions
- Sales per store, sales per square metre
- Exchange rates
- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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