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Convenience Stores - UK - June 2019

Covered in 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.

“Driven by continued shifts in grocery buying behaviour, a good summer and key events, the convenience sector is estimated to have enjoyed its strongest growth in three years in 2018. The year also saw consolidation, meaning the leading two players now control around half the market which will continue to add pressure to the smaller players in a diverse sector where growth opportunities are not evenly shared by all.”
– Nick Carroll, Associate Director of Retail Research

This Report will cover the following areas:

  • Leveraging the ethical angle for c-stores
  • Automated convenience

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Real incomes grow and confidence holds up despite uncertainty
              • Figure 1: Average weekly earnings (excluding bonus pay) growth versus CPIH, January 2016-April 2019
            • Growth in the convenience sector accelerates for the third year running
              • Figure 2: Convenience store market size, including VAT, 2013-23
            • C-stores account for a quarter of the sector
              • Figure 3: Estimated breakdown of all grocery sales, by format/channel, 2013-18
            • Companies and brands
              • Tesco leads the way
                • Figure 4: Leading c-stores, market shares, 2018
              • M&S has the most differentiated brand
                • Figure 5: Attitudes towards and usage of selected brands, April 2019
              • The consumer
                • Nine in 10 do some shopping in c-stores
                  • Traditional categories still a key footfall driver
                    • Figure 6: Use of convenience stores, by broad category and detailed non-food and drink purchasing, March 2019
                  • Food-for-home being driven by younger consumers
                    • Figure 7: Types of food-for-home products typically purchased in convenience stores, March 2019
                  • Lunch key in food-to-go
                    • Figure 8: Types of food-to-go typically purchased from convenience stores, March 2018
                  • Three quarters visit once a week
                    • Figure 9: Frequency of convenience store use, March 2018
                  • Most shop at c-stores in urban areas, although travel locations receive the greatest footfall
                    • Figure 10: Area of convenience store use, March 2018
                  • Tesco Express and Co-op most popular c-stores
                    • Figure 11: Convenience retailers regularly used and most often, March 2019
                  • The sector is strong on convenience and locality, but value for money an issue…
                    • Figure 12: Correspondence Analysis, March 2019
                  • …but other benefits offset the added cost
                    • Figure 13: Attitudes towards shopping in convenience stores, March 2018
                  • What we think
                  • Issues and Insights

                    • Leveraging the ethical angle for c-stores
                      • The facts
                        • The implications
                          • Automated convenience
                            • The facts
                              • The implications
                              • The Market – What You Need to Know

                                • Real incomes grow and confidence holds up despite uncertainty
                                  • Private renting climbs as urbanisation grows
                                    • Growth in the convenience sector accelerates for the third year running
                                      • C-stores account for a quarter of the sector
                                      • Market Drivers

                                        • Real incomes continue to grow…
                                          • Figure 14: Average weekly earnings (excluding bonus pay) growth versus CPIH, January 2016- April 2019
                                        • …confidence holding up relatively well given the circumstances
                                          • Figure 15: Mintel’s Financial Confidence Tracker, January 2017-March 2019
                                        • Retail sales are holding up well
                                          • Figure 16: Retail sales: growth in all retail sales and all food retail sales, by value and volume, January 2017-February 2019
                                        • Food inflation eases in 2018
                                          • Figure 17: Inflation in core food and drink categories, 2014-February 2019
                                        • Private renting continues to climb
                                          • Figure 18: UK households, by tenure status, 2012-17
                                        • UK population is ageing
                                          • Figure 19: UK population, by age, 2013-23
                                        • Two thirds of households contain one or two people
                                          • Figure 20: UK household size as a percentage of all households, 2013-17
                                      • Market Size and Forecast

                                        • C-store sector returns to stronger growth in 2018
                                          • Figure 21: Convenience store market size, including VAT, 2013-23
                                        • Trends still in favour for convenience stores, but competition is fierce
                                          • Figure 22: Total convenience store market size (including VAT), at current and constant (2018) prices, 2013-23
                                        • Convenience stores account for a quarter of the grocery sector
                                          • Figure 23: Estimated breakdown of all grocery sales, by format/channel, 2013-18
                                        • Forecast methodology
                                        • The Consumer – What You Need to Know

                                          • Nine in 10 do some shopping in c-stores
                                            • Traditional categories still a key footfall driver
                                              • Food-for-home being driven by younger consumers
                                                • Three quarters visit once a week
                                                  • Most shop at c-stores in urban areas, although travel locations receive the greatest footfall
                                                    • Tesco Express and Co-op most popular c-stores
                                                      • The sector is strong on convenience and locality, but value for money an issue…
                                                        • …but other benefits offset the added cost
                                                        • Who Shops in Convenience Stores

                                                            • Nearly nine in 10 do some form of shopping via convenience stores
                                                              • Figure 24: Use of convenience stores, by broad category, March 2019
                                                            • Usage high across all age groups, but peaks among those aged 16-24
                                                              • Figure 25: Any use of convenience stores, by age, March 2019
                                                            • Price reality/perception putting some off
                                                              • Figure 26: Any use of convenience stores, by household income, March 2019
                                                            • C-store use peaks in urban areas
                                                              • Figure 27: Any use of convenience stores, by region and type of locations lived in, March 2019
                                                          • What They Use Convenience Stores For

                                                            • Traditional categories still a key footfall driver
                                                                • Figure 28: Use of convenience stores, by broad category and detailed non-food and drink purchasing, March 2019
                                                              • Drinks and household items a driver for younger consumers
                                                                  • Figure 29: Use of convenience stores, by detailed non-food and drink purchasing, by age, March 2019
                                                                • Higher-income households more likely to buy alcohol
                                                                    • Figure 30: Use of convenience stores, by detailed non-food and drink purchasing, by household income, March 2019
                                                                • Food-for-Home, Food-to-Go Purchasing

                                                                  • Younger consumers particularly crucial for food-to-go
                                                                    • Figure 31: Food-for-home, food-to-go purchasing at convenience stores, by age, March 2019
                                                                  • Food-for-home staples still key
                                                                    • Figure 32: Types of food-for-home products typically purchased in convenience stores, March 2019
                                                                  • Particular spike in frozen purchasing among younger shoppers
                                                                    • Figure 33: Types of food-for-home products typically purchased in convenience stores, by age, March 2019
                                                                  • Snacking and lunch crucial in food-to-go
                                                                    • Figure 34: Types of food-to-go typically purchased from convenience stores, March 2019
                                                                • Frequency of Convenience Store Use

                                                                  • Three quarters of c-store shoppers visit once a week
                                                                    • Figure 35: Frequency of convenience store use, March 2018
                                                                  • Younger consumers visit most frequently 
                                                                    • Figure 36: Frequency of convenience store use, by age, March 2019
                                                                  • Traditional categories still drive the most frequent footfall
                                                                    • Figure 37: Frequency of convenience store use, by broad use, March 2019
                                                                    • Figure 38: Frequency of convenience store use, by detailed non-food use, March 2019
                                                                • Locations of Convenience Store Use

                                                                  • Urban c-stores most popular types of location 
                                                                      • Figure 39: Area of convenience store use, March 2019
                                                                    • Stores in travel hubs see greater daily visitation
                                                                      • Figure 40: Area of convenience store use, by frequency of c-store shop, March 2019
                                                                  • Retailers Used

                                                                    • Tesco Express and the Co-op show similar style usage
                                                                      • Figure 41: Convenience retailers regularly used and most often, March 2019
                                                                      • Figure 42: Repertoire of convenience stores regularly used, March 2019
                                                                    • M&S Simply Food falls behind in usage from 16-24s
                                                                      • Figure 43: Leading convenience retailers regularly used, by age, March 2019
                                                                    • Food items for home are the top purchase
                                                                      • Figure 44: Types of products purchased in the leading convenience store retailers, March 2019
                                                                  • Perceptions of Convenience Stores

                                                                        • Figure 45: Where c-store users also shop for groceries, March 2019
                                                                      • Convenience strong, but value for money still a concern at c-stores
                                                                          • Figure 46: Correspondence Analysis, March 2019
                                                                          • Figure 47: Convenience Stores, March 2019
                                                                        • Co-op and Spar shoppers most likely to associate c-stores with supporting the local area
                                                                          • Figure 48: Perceptions of grocery store format, by c-store shopped with, March 2019
                                                                        • Methodology
                                                                        • Attitudes towards Shopping in Convenience Stores

                                                                          • Over half are put off c-stores when incomes are squeezed
                                                                            • Figure 49: Attitudes towards pricing and convenience stores, March 2019
                                                                          • Savvier ways of paying would be most appealing to 16-34s
                                                                            • Figure 50: Attitudes towards payment options within convenience stores, by age, March 2019
                                                                          • Recycling initiative would resonate with majority of consumers…
                                                                            • Figure 51: Attitudes towards sustainability and convenience stores, March 2019
                                                                          • …whilst 16-34s associate usage with cutting back on food waste
                                                                            • Figure 52: Attitudes towards sustainability and convenience stores, by age, March 2019
                                                                        • Leading Retailers – What You Need to Know

                                                                          • Tesco the market leader
                                                                            • Co-op consolidates its position
                                                                              • M&S has the most differentiated brand
                                                                                • Smartphone-driven c-store shopping takes off
                                                                                • Competitive Strategies

                                                                                    • Multiples
                                                                                        • Figure 53: Leading multiples, key metrics, 2018
                                                                                      • Co-operatives
                                                                                        • Figure 54: Co-operatives in the UK, stores and sales, 2018
                                                                                      • Symbol groups
                                                                                          • Figure 55: Leading convenience store retailers, total store numbers by type of operation, 2015-18
                                                                                        • Petrol forecourts
                                                                                          • Figure 56: Total number of, and breakdown in ownership of, UK forecourts, 2016-18
                                                                                      • Leading Retailers – Key Metrics

                                                                                        • Two types of c-store operation
                                                                                          • Acquisitions and concentration
                                                                                            • Complicated structure
                                                                                              • Multiples vs symbol groups
                                                                                                • Sales
                                                                                                  • Figure 57: Leading c-stores sales, 2014/15-2018/19
                                                                                                • Stores
                                                                                                  • Figure 58: Leading c-stores outlet numbers, 2014/15-2018/19
                                                                                                  • Figure 59: Leading c-stores, sales per outlet, 2014/15-2018/19
                                                                                              • Market Share

                                                                                                • Two players account for half the market
                                                                                                  • Figure 60: Leading c-stores, market shares (ex-VAT), 2018
                                                                                                  • Figure 61: Estimated c-store market shares (ex-VAT), 2014-18
                                                                                              • Space Allocation Summary

                                                                                                  • Food is the biggest occupier of in-store shelf space
                                                                                                    • Figure 62: Convenience stores: space allocation estimates, April 2019
                                                                                                  • Fresh food and other food split
                                                                                                    • Figure 63: Convenience stores: fresh food and other food mix, by percentage share of total in-store space allocated to food, April 2019
                                                                                                  • Detailed space allocation estimates
                                                                                                    • Figure 64: Convenience stores: detailed space allocation estimates, April 2019
                                                                                                    • Figure 65: Convenience stores: detailed space allocation estimates, April 2019
                                                                                                • Retail Product Mix

                                                                                                      • Figure 66: Leading Convenience stores, estimated proportion of sales by broad product category, 2018
                                                                                                      • Figure 67: Leading convenience stores, estimated sales by broad product category, 2018
                                                                                                  • Brand Research

                                                                                                      • What you need to know
                                                                                                        • Brand map
                                                                                                          • Figure 68: Attitudes towards and usage of selected brands, April 2019
                                                                                                        • Key brand metrics
                                                                                                          • Figure 69: Key metrics for selected brands, April 2019
                                                                                                        • Brand attitudes: Co-op maintains image as a trusted brand
                                                                                                          • Figure 70: Attitudes, by brand, April 2019
                                                                                                        • Brand personality: Sainsbury’s Local improves its accessibility
                                                                                                          • Figure 71: Brand personality – macro image, April 2019
                                                                                                        • Spar is basic, whilst M&S is aspirational and stylish
                                                                                                          • Figure 72: Brand personality – micro image, April 2019
                                                                                                        • Brand analysis
                                                                                                          • M&S Simply Food is a distinctive brand with high satisfaction
                                                                                                            • Figure 73: User profile of M&S Simply Food, April 2019
                                                                                                          • Tesco Express has a broad demographic base
                                                                                                            • Figure 74: User profile of Tesco Express, April 2019
                                                                                                          • Sainsbury’s Local usage lags behind rivals
                                                                                                            • Figure 75: User profile of Sainsbury’s Local, April 2019
                                                                                                          • The Co-operative’s defining trait is its ethical credentials
                                                                                                            • Figure 76: User profile of The Co-operative, April 2019
                                                                                                          • Spar is lacking in differentiation
                                                                                                            • Figure 77: User profile of Spar, April 2019
                                                                                                        • Launch Activity and Innovation

                                                                                                          • Cashierless shopping: the innovation of the moment
                                                                                                            • Expansion of Amazon Go
                                                                                                              • Is the future of convenience retail automated?
                                                                                                                • Innovating for greater convenience
                                                                                                                  • 7-Eleven unveils ‘lab’ store
                                                                                                                    • Pizza convenience
                                                                                                                      • Robo Shopkeep
                                                                                                                        • Click-and-collect butchers
                                                                                                                        • Advertising and Marketing Activity

                                                                                                                          • Supermarket and c-store advertising spend falls by 8% in 2018
                                                                                                                            • Figure 78: Recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarket and convenience store operators, 2014-18
                                                                                                                          • Convenience store campaigns
                                                                                                                            • Figure 79: Leading UK supermarket and convenience store operators: recorded above-the-line, online display and direct mail total advertising expenditure, 2014-18
                                                                                                                          • TV attracts just under half of all advertising expenditure
                                                                                                                            • Figure 80: Recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarket and convenience store operators, by media type, 2018
                                                                                                                          • Nielsen Ad Intel coverage
                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                            • Data sources
                                                                                                                              • Financial definitions
                                                                                                                                • Trade definitions
                                                                                                                                  • Sales per store, sales per square metre
                                                                                                                                    • Exchange rates
                                                                                                                                      • Abbreviations
                                                                                                                                        • Consumer research methodology
                                                                                                                                        • Appendix – Market Size and Forecast

                                                                                                                                          • Forecast methodology

                                                                                                                                          Convenience Stores - UK - June 2019

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