2021
9
UK Convenience Stores Market Report 2021
2021-07-07T04:16:20+01:00
OX1046055
2195
140079
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Report
en_GB
“The convenience sector has the opportunity to take a position at the confluence of two of the leading trends of the current retail environment. The rise in interest in local…

UK Convenience Stores Market Report 2021

£ 2,195 (Excl.Tax)

Description

Providing the most comprehensive and up-to-date information and analysis of the UK Convenience Stores market, including the behaviours, preferences and habits of the consumer.

Mintel’s economic assumptions are based on the Office for Budget Responsibility (OBR)’s central scenario included in its March 2021 Economic and Fiscal Outlook Report, but also take into account predictions made by other economic forecasts, including the Bank of England.

After the fall of 9.9% over the course of 2020, the OBR’s scenario suggests that UK gross domestic product (GDP) will grow by 4% in 2021 and 7.3% in 2022. GDP isn’t expected to return to preCOVID-19 levels until the second quarter of 2022, although this is six months earlier than the OBR forecast in November 2020, mainly because of the faster-than-expected roll-out of vaccines.

Unemployment is expected to peak at 6.5% in the fourth quarter of 2021. As with GDP, this is more positive than the OBR’s November forecast, but the OBR does raise the prospect of long-term scarring on employment, especially in the more exposed retail and hospitality sectors.

The rapid vaccine rollout and the continued efficacy of the vaccine, however, means that more recent economic forecasts have been significantly more optimistic than the OBR’s March forecast, even given the rise of the Delta variant. We have factored this rise in optimism into our convenience store market analysis and scenario forecasts.

Read on to discover more details or take a look at all of our UK Retail market research.

Quickly understand

  • The impact of COVID-19 on shopping behaviour and its impact on the convenience sector.
  • How consumers shop at convenience stores.
  • The services used at convenience stores.
  • The most popular convenience stores in the UK.
  • Consumer attitudes towards convenience stores.
  • The factors most likely to encourage convenience store shopping.

Covered in this report

Convenience Store Brands: Sainsbury’s, Tesco, Co-op, SPAR, Nisa, M&S, Costcutter, Amazon Fresh, McColl’s, Londis, Premier, One Stop, Morrisons Daily, Little Waitrose, Budgens.

Expert analysis from a specialist in the field

Written by Piers Butel, a leading analyst in the Retail sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The convenience sector has the opportunity to take a position at the confluence of two of the leading trends of the current retail environment. The rise in interest in local communities and local shopping and the vast growth in online retailing. If stores are able to position themselves as centres of their local communities offering services that help local consumers engage with the online channel, there is a great potential for strong growth going forward.

Piers Butel
Retail Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Impact of COVID-19 on the convenience sector
      • Figure 1: Short-, medium- and long-term impact of COVID-19 on the convenience sector, 10 June 2021
    • The market
    • Market size and forecast
      • Figure 2: Convenience store market size (including VAT) and forecast (prepared on 10/06/21), 2016-26
    • Weekly earnings bounce back following record decline
      • Figure 3: Average weekly earnings (excluding bonus pay) growth versus CPIH, January 2016-May 2021
    • Consumer confidence in better shape this year
      • Figure 4: Financial confidence index, January 2018 to June 2021
    • Leading retailers
    • Tesco continues to dominate with Express and Booker
      • Figure 5: Leading convenience stores, market shares (ex-VAT), 2020
    • More consolidation within the symbol group segment
    • Brand Analysis
      • Figure 6: Key metrics for selected brands, April 2021
    • Amazon Fresh represents a challenge to convenience sector
      • Figure 7: Amazon Fresh Ealing, London, March 2021
    • The consumer
    • Nine in 10 UK adults shop at convenience stores
    • Food-for-home the most popular category
      • Figure 8: Items typically bought from convenience stores, March 2020 and 2021
    • Shopping frequency drops off as consumers try to limit time spent in-store
      • Figure 9: Frequency of convenience store visits, March 2020 and 2021
    • Little change in the popular food-for-home product categories
      • Figure 10: Usage of convenience stores for food for the home, March 2020 and 2021
    • Snacks the most popular items in food-to-go
      • Figure 11: Usage of convenience stores for food-to-go, March 2021
    • Services are key to driving footfall
      • Figure 12: Usage of services in convenience stores, March 2020 and 2021
    • Co-op and Tesco Express are the joint most used convenience stores
      • Figure 13: Stores used by regular convenience store shoppers, March 2021
    • Good locations and fresh produce are key for consumers
      • Figure 14: Key factors to encourage shopping at convenience stores, March 2021
    • Consumers think convenience stores should support their neighbourhoods
      • Figure 15: Attitudes towards convenience stores, March 2021
  3. Issues and Insights

    • Convenience stores can position themselves at the heart of their neighbourhoods
    • Convenience stores have a chance to embed themselves into the online ecosystem
  4. The Market – Key Takeaways

    • Rise in localism in 2020 benefited the convenience sector
    • The growth in home-working hit some parts of the sector harder
    • 2021 set to be a year of consolidation as the country resets
    • Future looks positive for the convenience sector
  5. Market Size and Forecast

    • Convenience sector benefits from rise in food-for-home and localism
      • Figure 16: Short-, medium- and long-term impact of COVID-19 on convenience sector, 10 June 2021
    • Consolidation in 2021 following strong growth in 2020
      • Figure 17: Convenience store market size (including VAT) and forecast (prepared on 10/06/21), 2016-26
      • Figure 18: Convenience store market size (including VAT), 2016-26
    • Market drivers and assumptions
      • Figure 19: Key drivers affecting Mintel’s market forecast, prepared on 10 June 2021, 2015-25
    • Learnings from the last recession
      • Figure 20: Annual % change in all grocery retail sales (ex-VAT), and by broad category, 2007-12
    • Forecast methodology
  6. Market Drivers

    • Consumer confidence plummeted amid pandemic panic
      • Figure 21: Financial confidence index, January 2018 to June 2021
    • Wages hit by COVID-19 have driven economic downturn
      • Figure 22: Average weekly earnings (excluding bonus pay) growth versus CPIH, January 2016-May 2021
    • Retail sales since lockdown buoyed by greater in-home food demand
      • Figure 23: Retail sales: growth in all retail sales and all food retail sales, by value (excluding fuel), January 2017-May 2021
      • Figure 24: Supermarkets, performance of large and small businesses, January 2019-March 2021
    • Inflation remains low in 2020 and into 2021
      • Figure 25: Inflation in core food and drink categories, 2015-March 2021
    • Housing tenure – home-owning on the rise once again
      • Figure 26: UK households, by tenure status, 2016-20
    • Ageing population placing different demands on convenience stores
      • Figure 27: UK population, by age, 2015-25
    • Household size decreasing
      • Figure 28: UK household size as a percentage of all households, 2015-20
  7. The Consumer – Key Takeaways

    • COVID-19 drives shift to online retail
    • Local shopping on the rise
    • Bigger baskets but less frequent shops
    • Services are vital for convenience customers and the stores themselves
  8. Impact of COVID-19 on Consumer Behaviour

    • Consumers are spending more on food since the outbreak
      • Figure 29: Consumer purchasing on food and alcoholic drinks, 27 May-7 June 2021
    • Lockdowns drive online and local shopping
      • Figure 30: Changes in consumer behaviours due to the COVID-19 pandemic, 27 May-7 June 2021
    • Over a quarter of convenience shoppers shopping more since COVID-19
      • Figure 31: Change in convenience store shopping behaviour, March 2021
      • Figure 32: Change in convenience store shopping behaviour, by age, March 2021
    • Tesco and Sainsbury’s customers cut back on shopping
      • Figure 33: Leading convenience store shoppers’ changes in behaviour as a result of the COVID-19 outbreak, March 2021
  9. Convenience Store Shoppers

    • Nine in 10 UK adults use convenience stores
      • Figure 34: Items typically bought from convenience stores, March 2020 and 2021
    • Convenience stores are used across urban and rural areas
      • Figure 35: Usage of convenience stores, by area, March 2020 and 2021
    • Convenience shoppers skew younger
      • Figure 36: Profile of c-store shoppers, by age and income, March 2021
    • Convenience stores used for more varied shopping missions
      • Figure 37: Number of different types of items bought from convenience stores, March 2020 and March 2021
    • Those shopping across more categories are younger and more affluent
      • Figure 38: Profile of c-store shoppers, by number of items bought, March 2021
    • Shoppers shifting to less regular visits
      • Figure 39: Frequency of convenience store visits, March 2020 and 2021
    • Younger and more affluent consumers shopping more often
      • Figure 40: Frequency of convenience store shopping by age and income, March 2021
  10. In-home Food Purchasing

    • Six in 10 convenience shoppers pick up food-for-home items
      • Figure 41: Usage of c-stores for food for the home, March 2020 and 2021
    • Food-for-home shopping skews towards younger consumers
      • Figure 42: Profile of shoppers of food items, by age and income, March 2020
    • Nearly half of consumers buy four or more different types of products
      • Figure 43: Number of different types of food-for-home items bought from convenience stores, March 2022
  11. On-the-go Food

    • Food-to-go seriously impacted by shift to work from home
    • Snacking remains the most popular food-to-go mission
      • Figure 44: Usage of c-stores for food-to-go, March 2021
    • Affluent shoppers more likely to pick up breakfast items
      • Figure 45: Profile of shoppers of food-to-go items, by age and income, March 2021
    • Over half of shoppers are picking up three or more items
      • Figure 46: Number of different types of food-to-go items bought from convenience stores, March 2021
  12. Services Used in Convenience Stores

    • Nearly 70% of shoppers use services at their convenience stores
      • Figure 47: Usage of services in convenience stores, March 2020 and 2021
    • Post Office and ATMs appeal to broad demographic
      • Figure 48: Users of convenience store services, by age and income, March 2021
      • Figure 49: Use of services at convenience stores by area, March 2021
    • Over a third of consumers using two or more services
      • Figure 50: Repertoire of number of convenience store services used, March 2021
  13. Convenience Retailers Used

    • Tesco and Co-op remain the most popular
      • Figure 51: Stores used by regular convenience store shoppers, March 2021
    • Over two fifths of consumers visit just one convenience store regularly
      • Figure 52: Number of convenience stores used, March 2021
    • The Co-operative takes pole position as most used convenience store
      • Figure 53: Convenience store most often used by regular convenience store shoppers, March 2021
    • Co-op’s older more affluent shopper base reflects its locations
      • Figure 54: Profile of shoppers at leading convenience stores, by age and income, March 2021
    • Sainsbury’s Local impacted by estate’s city-centre focus
      • Figure 55: Distribution of customers for most often used stores, by location, March 2021
    • Clear differences in missions across different convenience stores
      • Figure 56: Buyers of food-to-go goods relative to the proportion of all shoppers, March 2021
  14. Key Factors for Convenience Stores

    • Location is key for convenience shoppers
      • Figure 57: Key factors to encourage shopping at convenience stores, March 2021
    • Rural shoppers want to see more local produce
      • Figure 58: Key product and range factors by location, March 2021
    • City dwellers want the extra convenience of delivery options
      • Figure 59: Key convenience factors by location, March 2021
  15. Attitudes towards Convenience Stores

    • Almost 40% of consumers are happy to pay for convenience
      • Figure 60: Attitudes towards convenience stores, March 2021
    • Younger shoppers drawn to click-and-collect services
      • Figure 61: Agreement to attitudes concerning convenience stores, by age, part one, March 2021
    • Social distancing is a problem for convenience stores
    • Time running out for sweet treats at the checkout
      • Figure 62: Agreement to attitudes concerning convenience stores, by age, part two, March 2021
  16. Leading Retailers – Key Takeaways

    • A mixed year for convenience retailers
    • Tesco remains top of the pile
    • Further consolidation among symbol groups
    • Amazon launches first foray into convenience in the UK
    • Surge in demand for deliveries leads to new solutions
  17. Competitive Strategies

    • Convenience stores and their place in the grocery sector
    • Major grocery retailers
    • Tesco maintains pole position
    • Sainsbury’s Local suffered from plummeting footfall
    • M&S Food struggles as Ocado deal succeeds
    • Co-operative groups
    • The Co-operative Group’s local stores perform strongly
    • Leading co-operatives
      • Figure 63: Leading Co-operatives’ sales, 2018/19 – 2020/21
      • Figure 64: Leading Co-operatives’ outlets, 2018/19 – 2020/21
      • Figure 65: Leading Co-operatives’ sales per outlet, 2018/19 – 2020/21
    • Symbol groups
    • SPAR leads the way for symbol groups
    • Nisa looking to new, smaller formats
    • Costcutter purchased by Bestway Wholesale
      • Figure 66: Leading symbol groups, 2020-21
    • Petrol forecourts
      • Figure 67: Total number, and breakdown in ownership of, UK forecourts, 2017-20
  18. Leading Retailers – Key Metrics

    • Tesco takes top spot with Express, One Stop and Booker formats
      • Figure 68: Leading convenience stores’ sales, 2016/17-2020/21
      • Figure 69: Leading convenience stores’ outlet numbers, 2016/17-2020/21
    • Sales-per-outlet underlines differences between convenience store types
      • Figure 70: Leading convenience stores’ sales per outlet, 2016/17-2020/21
  19. Market Share

    • Market dominated by Tesco and Co-operative
      • Figure 71: Leading convenience stores, market shares (ex-VAT), 2020
      • Figure 72: Leading convenience retailers’ market shares 2016-2020
  20. Launch Activity and Innovation

    • Amazon enters the physical world
      • Figure 73: Amazon Fresh Ealing, London, March 2021
    • Late entrants move into the convenience sector
    • Sustainability on the agenda for convenience
    • New services bringing convenience stores to the consumer
    • New technologies making convenience stores ever more convenient
      • Figure 74: Co-op and Starship Deliveries partnership, Milton Keynes, July 2020
  21. Advertising and Marketing Activity

    • Marketing activity declined amid pandemic and national lockdowns
      • Figure 75: Total above-the-line, online display and direct mail advertising expenditure by UK supermarket and convenience store operators, 2016-20
    • Shifts in spending by leading convenience stores in 2020
      • Figure 76: Leading UK supermarket and convenience store operators’ recorded above-the-line, online display and direct mail total advertising expenditure, 2016-20
    • Cinema spend drops off as radio grows
      • Figure 77: Recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarket and convenience store operators, by media type, 2016-20
    • Nielsen Ad Intel coverage
  22. Brand Research

    • Brand map
      • Figure 78: Attitudes towards and usage of selected brands, April 2021
    • Key brand metrics
      • Figure 79: Key metrics for selected brands, April 2021
    • Brand attitudes: SPAR and Co-op trusted and good value
      • Figure 80: Attitudes, by brand, April 2021
    • Brand personality: accessibility important for the UK’s leading smaller-format chains
      • Figure 81: Brand personality – macro image, April 2021
    • Tesco is considered welcoming and responsive
      • Figure 82: Brand personality – micro image, April 2021
    • Brand analysis
    • M&S Simply Food has cornered the premium segment
      • Figure 83: User profile of M&S Simply Food, April 2021
    • Tesco Express has broad appeal
      • Figure 84: User profile of Tesco Express, April 2021
    • Sainsbury’s Local trailing Tesco for experience
      • Figure 85: User profile of Sainsbury’s Local, April 2021
    • Co-op Food stores were widely used but experience was lacking
      • Figure 86: User profile of Co-op Food, April 2021
    • SPAR usage is low despite large estate
      • Figure 87: User profile of SPAR, April 2021
    • Reading word clouds
  23. Appendix – Data Sources, Abbreviations and Supporting Information

    • Data sources
    • Financial definitions
    • Trade definitions
    • Abbreviations
    • Consumer research methodology
  24. Appendix: Market Size and Forecast

    • Forecast methodology

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This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

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