C-stores will beat supermarkets while store expansion tails back
CONVENIENCE store sales should see significantly more growth than supermarkets’ in the next five years but will achieve much less growth than discounters and online retail, according to latest figures from industry education and research organisation IGD.
And the organisation expects the expansion of the convenience sector estate to slow.
A separate report just published by analysis firm Local Data Company has also found that expansion in the convenience sector is slowing.
The IGD forecast, which was issued before it was known that UK voters had chosen to leave the European Union, said the UK food and grocery market is likely to grow by 10% between now and 2021, giving it a total value of £197bn.
It put the 2015 value of the convenience sector sales as £37.5bn and it expects sales to increase by 11.7% between 2015 and 2021 to reach £41.9bn.
The biggest share of sales is taken by the combination of big brand hypermarkets and supermarkets. But it expects only minimal growth of 0.2% for hypermarkets to reach £16.6bn and 0.8% for supermarkets to reach £87.3bn. In sharp contrast it expects sales through online grocery retail to grow by more than 68% and discounter sales to rise by almost 40% by 2021.
IGD chief executive Joanne Denney-Finch said: “Convenience stores have historically been seen as the ‘go-to’ channel for a top-up shop and 63% of all shoppers still visit these stores for that reason. However, they are now facing increased competition from other channels, such as discounters and supermarkets. We still expect convenience to grow, but that is slowing down as the sector comes to maturity and other channels compete more effectively for the top-up pound.”
The LDC Convenience Stores report said five fascia had seen store numbers decline in 2015 and 288 towns saw more c-store closures than openings.
