Convenience Stores - UK - April 2015
“Convenience stores are most used in urban environments with the majority of consumers using c-stores close to their home. The millennial generation, aged 16-35, are the most likely to visit c-stores and also are the most frequent users of the format. This generation is increasingly migrating to urban areas and should become the focus for convenience store retailers.”
– Nick Carroll, Retail Analyst
This report discusses the following key topics:
- Which locations are convenience stores most used in?
- What demographics are worth focusing on and who are the most frequent shoppers?
- Use of convenience stores for top-up and main shopping
- The impact of online and the discounters on c-stores
- Replacing footfall lost from the declining markets of traditional footfall drivers
In recent years the convenience market has benefitted from increased investment from the major grocery retailers. This has raised standards across the market and brought a greater focus on fresh, frozen and food-to-go products expanding the range of needs that convenience store operators can accommodate.
Alongside this the market has benefitted from both the growth in online shopping and more recently the rise of the discount retailers. Shopping at these two grocery formats requires a level of top-up shopping and the convenience market was and remains well placed to pick up this demand.
Convenience stores have also benefited from the changing grocery shopping habits of younger consumers, a key demographic for the market. Younger consumers are increasingly shopping on a when needs basis – smaller more frequent shops that include food-to-go purchases. The convenience market has in some part facilitated this changing behaviour. The market continues to out-grow the overall grocery market although growth slowed in 2014 to 2.6% in part due to lower food prices.
A convenience store (c-store) is a small-store grocery-focused retail format which in effect is complementary to a supermarket. 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 – these are in competition with the superstores and are not convenience stores.
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