Description
The UK Convenience stores report identifies consumer attitudes towards the frequency of convenience store visits, purchasing habits and what influences consumers’ choice of visiting a convenience store. This market report covers the market size, market forecast, market segmentation and industry trends for the Convenience Market in the UK.
Current Market LandscapeÂ
After a pandemic-driven boom in 2020, the UK convenience store market struggled in 2021 (with sales declining by 0.9%) as the country gradually reopened. With food service, travel and other sectors opening up again, some proportion of grocery spending was diverted to out-of-home.
However, the UK convenience store market will experience strong growth in 2022 with the end of COVID-19 restrictions and employees returning to work, seeing more footfall returning to high streets, cities and travel hubs.
Market Share and Key Industry Trends
With inflation at levels not seen for decades, many consumers are experiencing a growing cost-of-living crisis. Often convenience stores charge a premium for the convenience they offer, therefore, they will need to be wary of consumers switching away as costs rise. To encourage UK convenience store market growth, retailers will need to ensure they provide value for the shoppers in the communities they serve and use additional services such as receiving and returning purchases made online to drive footfall.
- 42% of consumers typically purchase food-to-go products in convenience stores.
- 26% of consumers typically shop at convenience stores once a week.
- 27% of adults typically use a parcel service at convenience stores.
Future Market Trends in UK Convenience Stores
Mintel’s convenience store market research forecasts that the next couple of years should be exciting ones for the sector. New technologies and services such as checkout-free stores and rapid delivery schemes are already revolutionising the UK convenience store market. At the same time, the rise in hybrid working can be the stimulus for a reimagining of how the convenience store caters to the shoppers that use it, particularly around the food-to-go segment.
Read on to discover more details or take a look at all of our UK Retail Research.
Quickly Understand
- The impact of the cost-of-living crisis on the convenience sector and market size
- How consumers shop at convenience stores
- The services used at convenience stores
- The most popular convenience stores in the UK
- Satisfaction with convenience stores used
- Consumer attitudes towards convenience stores
Covered in this Report
Product Types:Â Chilled goods, fresh fruit/vegetables, freshly baked goods, fresh meat, fresh fish, crisps/confectionery, tinned goods.
Brands: Tesco (Metro, Express), Waitrose (Little Waitrose), Sainsbury’s (Sainsbury’s Local), Morrisons (Morrisons Daily), McColl, M&S (M&S Simply Food), Co-op, SPAR, Premier, One Stop, Londis, Nisa, Costcutter (Mace, Kwiksave, SimplyFresh), Amazon (Amazon Fresh), Asda (Asda On the Move), Budgens, Best-One, Select & Save, Unitas, Musgrave (Lifestyle Express, Today’s, Day Today).
Expert Analysis from a Specialist in the Field
This report, written by Piers Butel, a leading analyst in the Retail sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.
“New technologies, ways of living and government legislation are opening up exciting opportunities for the convenience sector but retailers must adapt quickly to tap into them. A renewed focus on making the experience convenient as well as revamping food-to-go will be top of the agenda, but rising inflation, growing costs and more price-sensitive shoppers could see further consolidation within the market.”
Piers Butel
Retail Analyst, May 2022
Table of Contents
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Overview
- Key issues covered in this Report
- Market context
- Products covered in this Report
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Executive Summary
- The five-year outlook for the convenience sector
- Figure 1: Convenience stores outlook, 2022-27
- The market
- Market size and forecast
- Figure 2: Market forecast for Convenience sector, 2022-26
- Inflation surges as wages remain low
- Figure 3: Average weekly earnings (excluding bonus pay) growth versus CPIH, January 2917-May 2022
- Financial wellbeing drops once again as cost-of-living crisis sets in
- Figure 4: Household financial wellbeing index, 2016-22
- Leading retailers
- Tesco and Co-op dominate sector with almost half of the market between them
- Figure 5: Leading Convenience stores, market shares, (ex-VAT), 2021
- McColl’s saved by Morrisons following difficulties
- Following Amazon’s lead, retailers launch their own checkout-free stores
- Figure 6: Sainsbury’s checkout-free store, Holborn, 2022
- Tesco is the UK’s favourite convenience retailer in this year’s brand research
- Figure 7: Key metrics for selected brands, 2022
- The consumer
- Convenience store shopping remains ubiquitous
- Figure 8: Items typically bought from convenience stores, March 2021 and 2022
- Frequency has changed little despite the relaxation of pandemic restrictions
- Figure 9: Frequency of convenience store visits, 2021 and 2022
- Frequency has changed little despite the relaxation of pandemic restrictions
- Figure 10: Usage of convenience stores for food for the home, 2021 and 2022
- Snacking remains a key mission for convenience stores
- Figure 11: Usage of convenience stores for food-to-go, 2022
- Additional services key for driving footfall
- Figure 12: Usage of services in convenience stores, 2021 and 2022
- Tesco’s vast estate sees it reach the most customers
- Figure 13: Stores used by regular convenience store shoppers, 2021 and 2022
- Shoppers are satisfied across all key factors
- Figure 14: How satisfied consumers are with key factors in the convenience sector, 2022
- Retailers face battle to retain price-sensitive shoppers
- Figure 15: Attitudes towards convenience stores and value, 2022
- The five-year outlook for the convenience sector
-
Issues and Insights
- Rising cost of living puts convenience store prices in the spotlight
- Technology making convenience stores super convenient
- Working from home means food-to-go focused stores may have to re-evaluate their offerings.
-
Market Drivers
- The conflict in Ukraine will hurt the UK economy
- GDP reached pre-pandemic levels in November 2021
- Consumers’ financial wellbeing has slipped from its recent high point
- Figure 16: Household financial wellbeing index, 2016-22
- Inflation is the key concern for 2022 for consumers, brands and the economy
- Figure 17: Average weekly earnings (excluding bonus pay) growth versus CPIH, January 2017-May 2022
- In-home demand drops as restrictions are relaxed and weather picks up
- Figure 18: All grocery retail sales, non-seasonally adjusted, annual monthly growth, by value and volume, 2020-22
- Concerns over inflation are coming to the fore
-
Market Size and Performance
- The strong demand seen in 2020 drops off slightly in 2021
- Food-to-go focused stores unable to cover shortfall
- Figure 19: Market size for Convenience sector, 2017-21
- Figure 20: Convenience store market size 2016-21
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Market Forecast
- Convenience sector in good position for growth in years ahead
- Figure 21: Convenience stores outlook, 2022-27
- Sales set to surge in 2022 as inflation hits
- End of pandemic restrictions sees life gradually return to city centres
- Uncertainty as the world continues to struggle with unknown factors
- Growth will return to more normal levels as inflation falls
- Government legislation represents possible pain-point for sector
- Figure 22: Market size and forecast for Convenience sector (inc VAT), 2016-26
- Market drivers and assumptions
- Figure 23: Key drivers affecting Mintel’s market forecast, 2016-26
- Forecast methodology
- Convenience sector in good position for growth in years ahead
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Competitive Strategies
- Convenience stores and their place in the grocery sector
- Major grocery retailers
- Tesco reinforces top convenience retailer status
- Sainsbury’s hoping to bounce back after difficult period
- M&S provides a premium convenience service
- Co-operative groups
- The Co-operative Group’s suburban focus sees it benefit from rise in localism
- Leading co-operatives
- Figure 24: Leading Co-operatives’ sales, 2019/20-21/22
- Figure 25: Leading Co-operatives’ outlets, 2019/20-21/22
- Figure 26: Leading Co-operatives’ sales per outlet, 2019/20-21/22
- Symbol groups
- SPAR continues to drive change across its extensive store estate
- Nisa partnership with Co-op continues to bear fruit
- Figure 27: Leading symbol groups, 2021
- Other convenience players
- McColl’s struggles with rising costs and teeters on the brink of administration
- Rapid deliveries providing opportunities and challengers
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Leading Retailers
- Combination of Express, One Stop and Booker makes Tesco dominant
- Co-op invests in its store estate and logistics
- M&S looks to optimise its store estate
- McColl’s struggles to adapt and faces administration
- Nisa targets small format market
- Figure 28: leading convenience stores’ sales, 2017/18-21/22
-
- Figure 29: Leading convenience stores outlets, 2017/18-21/22
- Sales-per-outlet demonstrates differences between different store types
- Figure 30: Leading convenience stores sales per outlet, 2017/18-21/22
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Market Share
- Tesco’s broad offering sees it cement position as market leader
- Figure 31: Leading Convenience stores, market shares, (ex-VAT), 2021
- Little change in overall rankings in 2021
- Figure 32: Leading convenience retailers’ market shares 2017-2021
- Tesco’s broad offering sees it cement position as market leader
-
Launch Activity and Innovation
- The future is increasingly checkout-free
- Figure 33: Sainsbury’s checkout-free store, Holborn, 2022
- New formats and local leanings
- Figure 34: Sainsbury’s Neighbourhood Hub Format, 2022
- Convenience stores facing a new future with new government rules
- Food-to-go has opportunity to bounce back in post-pandemic world
- Figure 35: Tesco food-to-go offering, 2022
- New drinks dispensers providing healthier on-the-go drinking options
- Figure 36: Smart Soda healthier drinks dispenser, 2022
- The future is increasingly checkout-free
-
Advertising and Marketing Activity
- Marketing activity bounces back following pandemic decline
- Figure 37: Total above-the-line, online display and direct mail advertising expenditure by UK supermarket and convenience store operators, 2018-21
- Shifts in spending by leading convenience stores in 2020
- Figure 38: Leading UK supermarket and convenience store operators’ recorded above-the-line, online display and direct mail total advertising expenditure, 2018-21
- TV maintains top spot
- Figure 39: 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
- Marketing activity bounces back following pandemic decline
-
Brand Research
- Brand map
- Figure 40: Attitudes towards and usage of selected brands, 2022
- Key brand metrics
- Figure 41: Key metrics for selected brands, 2022
- Brand attitudes: M&S Simply Food is worth paying more according to consumers
- Figure 42: Attitudes, by brand, 2022
- Brand personality: Leading convenience retailers rated highly for accessibility
- Figure 43: Brand personality – Macro image, 2022
- Spar still struggles with basic reputation
- Figure 44: Brand personality – Micro image, 2022
- Brand analysis
- M&S Simply Food
- Tesco Express
- Sainsbury’s Local struggles to match rival Tesco
- Co-op stores have high usage, but consumers did not rate the experience highly
- SPAR’s large estate yet to translate into high usage or recommendations
- Brand map
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Convenience Store Shoppers
- Convenience store usage drops slightly
- Food for home the most popular mission
- Cigarettes and rolling tobacco see decline, but vaping remains stable
- On-the-go food purchases stable over the last two years
- Figure 45: Items typically bought from convenience stores, March 2021 and 2022
- Location use returning to pre-pandemic levels
- Figure 46: Usage of convenience stores, by area, March 2020, 2021 and 2022
- Convenience store shoppers skew younger
- Figure 47: Profile of c-store shoppers, by age and income, 2022
- Almost a fifth shop from just one category
- Figure 48: Repertoire of items purchased, 2022
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Frequency of Convenience Store Use
- Little change in shopping frequency despite end of COVID restrictions
- City-centre locations will be hoping for the return of more frequent visits
- Figure 49: Frequency of convenience store visits, 2021 and 2022
- Younger shoppers drive footfall with daily visits
- Figure 50: Frequency of convenience store visits, by age and income, 2022
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In-home Food Purchasing
- In-home food purchases are key for convenience stores
- Little change in items purchased despite shift in pandemic restrictions
- Figure 51: Usage of convenience stores for food for the home, 2021 and 2022
- Fresh purchasing skews towards the more affluent
- Figure 52: Profile of shoppers of food items, by age and income, 2022
- Over a third of shoppers just pick up one or two food-for-home items
- Figure 53: Number of different types of food-for-home items bought from convenience stores, 2022
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On-the-go Food Purchasing
- On-the-go food purchases hit by pandemic driven footfall decline
- Snacks remain top of the pile
- Figure 54: Usage of convenience stores for food-to-go, 2022
- On-the-go food shoppers tend to be more affluent and younger
- Figure 55: Profile of shoppers of food-to-go items, by age and income, 2022
- Over half of consumers picking up one or two food-to-go products
- Figure 56: Number of different types of food-to-go items bought from convenience stores, March 2021
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Services Used in Convenience Stores
- Additional services at convenience stores remain key
- ATMs are the most used service, followed by post offices
- Figure 57: Usage of services in convenience stores, 2021 and 2022
- Postal services in convenience stores hold broad appeal
- Figure 58: Users of convenience store services, by age and income, 2022
- City dwellers needing cash as those in rural areas seek out Post Offices
- Figure 59: Use of services at convenience stores by area, 2022
- Almost half of shoppers use just one or two services
- Figure 60: Number of convenience store services used, 2022
-
Convenience Stores Visited
- Tesco takes top spot as Co-op falls slightly behind
- Amazon Fresh bursts onto scene
- Figure 61: Stores used by regular convenience store shoppers, 2021 and 2022
- Almost half say they shop across two or more stores regularly
- Figure 62: Number of convenience stores used, 2022
- Tesco Express used most often
- Figure 63: Convenience store most often used by regular convenience store shoppers, 2022
- Tesco Express’ wide range and extensive estate gives it broad appeal
-
- Figure 64: Profile of shoppers at leading convenience stores, by age and income, 2022
- Co-op’s strength in rural areas clear
- Figure 65: Distribution of customers for most often used stores, by location, 2022
- Different shopping missions for different retailers
- Figure 66: Buyers of food-to-go goods relative to the proportion of all shoppers, 2022
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Satisfaction with Convenience Store Used
- Consumers are satisfied with the convenience store typically used
- Figure 67: How satisfied consumers are with the convenience store they shop at most regularly, 2022
- Shoppers are happy with convenience store locations
- Consumers are satisfied with availability despite supply issues
- Shoppers are less happy with value when visiting convenience stores
- There is still room to improve the additional services offered
- Figure 68: How satisfied consumers are with key factors in the convenience sector, 2022
- Consumers are satisfied with the convenience store typically used
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Key Driver Analysis for Convenience Store Shopping
- Key Driver Analysis Methodology
- Competitive sector leads to broad consumer satisfaction
- Retailers can differentiate themselves on price
- Additional services can also provide opportunities for differentiation
- Figure 69: Key drivers of overall satisfaction with Convenience Stores, 2022
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- Figure 70: Overall satisfaction with Convenience Stores – key driver output, 2022
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Attitudes towards Convenience Shopping
- Consumers wrestling with value proposition of convenience stores
- Convenience stores under pressure from rapid delivery companies
- Figure 71: Attitudes towards convenience stores and value, 2022
- Checkout-free stores are popular but have serious drawbacks
- Two fifths of consumers support aims of HFSS legislation
- Figure 72: Attitudes towards convenience stores and new innovations/changes, 2022
- Rising prices of meal deals may impact value positioning
- Figure 73: Attitudes towards convenience stores and food-to-go, 2022
- Key target demographic for checkout-free stores remains unconvinced
- Figure 74: Attitudes Towards Convenience Stores – CHAID – Tree output, 2022
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- Figure 75: Attitudes Towards Convenience Stores – CHAID – Table output, 2022
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Appendix – Data Sources, Abbreviations and Supporting Information
- Data sources
- Financial definitions
- Trade definitions
- Abbreviations
- Consumer research methodology
- CHAID Analysis methodology
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Appendix: Forecast Methodology
- Market forecast and prediction intervals
- Figure 76: All Convenience stores sales (inc VAT), current price prediction intervals, 2021-26
- Market drivers and assumptions
- Forecast methodology
- Market forecast and prediction intervals
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Appendix: Key Driver Analysis
- Key Driver Analysis: Methodology
- Interpretation of results
- Figure 77: Overall satisfaction with Convenience Stores – key driver output, April 2022
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- Figure 78: Satisfaction with Convenience Stores, April 2022
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