Company News • 10.06.2015

Convenience store numbers on upward trend

2015 was another year of significant activity in the convenience sector

Joanne Denney-Finch, chief executive, IGD, said: Convenience stores are now...
Joanne Denney-Finch, chief executive, IGD, said: "Convenience stores are now visited on average 12 times a month – more often than any other type of grocery format."
Source: IGD Retail Analysis

Store numbers across the convenience channel continue to rise, with many groups and retailers adding a considerable number of new sites over the latest 12 months.

This is according to the latest data from IGD Retail Analysis and William Reed Business Media. However, further growth was moderated by rationalisation amongst certain retailers.

Key findings include the following:

  • Independent store numbers saw a marginal decline, although this still remains the largest segment in store numbers and is proving resilient despite intensifying competition
  • Once again the fastest growing segment was the multiple retailers, with 401 new stores boosting numbers by 10.6%. This does, however, represent a slowdown on the previous 12 months, when 451 new stores were added. In this latest year, it was the Tesco subsidiary One Stop that saw the biggest step up, adding 109 stores
  • Growth in the co-op segment (up 3.2%) was led by the national Co-operative Group, fuelled by the acquisition and conversion of new site types such as pubs
  • In the symbol segment, Booker’s Premier continued its rapid expansion and confirmed its status as the biggest single convenience network, while Best-One boosted its store numbers by 214. Meanwhile, Musgrave took the strategic move to divest 327 stores from its Londis and Budgens fascias, as it sought to rebase the loyalty and discipline of its retailer networks. The net effect was symbol numbers were up just 1.5% over the 12 months
  • The long-term decline in the number of forecourt sites stabilised this year

Joanne Denney-Finch, chief executive, IGD, said: “Our figures show that 2015 was another year of significant activity in the convenience sector, with a number of retailers and groups adding stores at a considerable pace. This was tempered by rationalisation in other areas of the channel.

“Convenience stores are now visited on average 12 times a month – more often than any other type of grocery format, according to findings from IGD’s ShopperVista research. This would explain why all types of retailers are now placing significant focus on this channel.

“However, the convenience channel is facing stiff competition from other parts of the grocery market. Shoppers are telling us that they are increasingly top-up shopping throughout the week, but using a number of different channels to meet their needs, from convenience stores and food discounters to supermarkets and hypermarkets.

“As the trend for shopping little and often shows no signs of slowing down, maintaining momentum in the convenience channel requires a clear understanding of local shoppers’ requirements on pricing, promotions, range and missions. Those convenience players that stay close to these requirements will be well placed to unlock the genuine growth opportunities presented by the channel.”

Adam Leyland, editor of The Grocer, said: “Although the supermarkets continue to grow their convenience store estates, the announcements by Tesco and Morrisons earlier this year to close some convenience stores and scale back expansion plans are a timely reminder that just being in convenience isn’t enough to ensure success. It’s all about execution.

“To survive and thrive in such a dynamic and demanding market, retailers have to ensure they have the right store formats, in the right locations, selling the right products – and yes, offering the right prices and increasingly promotions too.

“The other clear message from our figures is that symbol convenience operators have stepped up to the plate – as they needed to do. While some are clearly struggling through loss of scale, the ones that have improved their propositions have been able to grow store numbers and encourage unaffiliated independents to join their fold in increasing numbers. As a result, they are proving much more effective at competing against the multiples.”

Source: IGD Retail Analysis

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