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| Convenience retailing is the fastest growing
sector of the grocery market.
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What is a Convenience store?
For a store to be defined as a Convenience store it must satisfy three criteria:
- Size and Opening hours: The store must be under 3,000 sq ft and open for long hours every day of the week.
- Main Business Activity: All stores must retail food and drink, for consumption off the premises, as their main business activity.
- Product Categories: A group of fifteen products have been identified as being central to the offering of a convenience store. It must sell at least eight of these core products to qualify as a true convenience store. These categories are as follows:
| Alcohol |
Household/non-food |
Health and Beauty |
| Confectionery |
National Lottery |
Packaged groceries |
| Food-to-go |
Newspapers/magazines |
Savoury snacks |
| Fresh |
Bread/bakery products |
Soft drinks |
| Fruit/vegetables |
Milk/dairy |
Tobacco |
Who operates Convenience stores?
Convenience store ownership is highly fragmented, with a large number of operators present. Store operators may be divided into several types (also known as segments):
- Co-operative (eg United Co-op, The Co-operative Group)
- Forecourts (dealer and company-owned e.g BP, Shell, Total)
- Multiples (convenience specialists and some supermarket based chains) (e.g Mills, Tesco Express)
- Symbols, Franchise and Fascias (eg SPAR, Londis, Bestway)
- Non-affiliated independents
How many Convenience stores are there?
There are 49,530 convenience stores in the UK. The following table shows the breakdown of store numbers within each segment and the corresponding market share:
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Store Numbers |
Market Share |
| Co-operatives |
2,409 |
4.7% |
| Forecourts |
8,629 |
16.9% |
| Multiples |
2,604 |
5.1% |
| Symbols |
14,340 |
28.1% |
| Non-affiliated Independents |
23,108 |
45.2% |
| Total Convenience |
51,090 |
100% |
| Joint Ventures |
1,560 |
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| Total Excluding Joint Ventures |
49,530 |
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Source: IGD Research 2008
What is the market worth and how well is it performing?
The UK convenience market was valued at £27.4bn in 2008, a 5.1% increase on the previous year. The following table shows the market value of each segment and corresponding market share:
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Sales (£) |
Share |
| Co-operatives |
3,060 |
11.2% |
| Forecourts |
3,906 |
14.2% |
| Multiples |
3,850 |
14.0% |
| Symbols |
9,681 |
35.3% |
| Non-affiliated Independents |
6,926 |
25.3% |
| Total |
27,423 |
100.0% |
Source: IGD Research 2008
The total UK grocery market was worth £134.8bn in May 2008 and convenience therefore took a 20.3% market share.
With annual growth of 5.1%, the convenience retail sector significantly outperformed the total grocery market which grew by 4.1% over the same period.
What is happening in the Convenience sector?
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Co-operatives:
Co-operatives continue to move away from supermarket operations and towards convenience retailing. Expansion of the co-operatives has been led by the Co-operative Group, Soctmid and United Co-op. Improved trading at the Co-operative Group and continued strong results from United Co-operatives have helped to deliver an improved performance.
Forecourts:
The number of forecourt stores is in decline but the quality of the remaining sites is improving. Many oil companies are divesting their company owned stores in order to focus on their upstream activities, creating opportunities for a number of forecourt retailers to expand their operations, including Somerfield, Snax 24 and Pace.
Convenience Multiples:
Convenience multiples perform well with high store standards continuing. Supermarket retailers are achieving significant presence in this segment and now operate 1,714 dedicated c-stores accounting for more than half of the segment. Their high performing store formats continue to make a significant contribution to overall sector growth.
Symbol Groups:
The number of stores affiliating to a symbol group continues to grow rapidly, with over 700 stores recruited in the latest year. Symbol groups offer retailers a range of benefits including strong marketing and branding, wider product ranges, and more sophisticated supply chain systems.
Independents:
Independent store numbers are in decline. As store standards continue to improve in the c-sector, competition is intensifying, resulting in a number of independents either leaving the sector or affiliating to a symbol operation. |
What will the convenience market look like in the future?
IGD has predicted that in 2013 the convenience market could be worth as much as £37.6bn.
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