Convenience Store Numbers Hold Steady But Sector Facing Increased Competition From Other Channels

The number of convenience stores in the UK remains stable, with growth in certain segments balanced by rationalisation in others, according to the latest data from IGD Retail Analysis and William Reed Business Media. However, the research suggests that the convenience sector is now facing increased competition from supermarkets and discounters who have also spotted the trend for top-up shopping.

  Number of stores 2015 Number of stores 2016 Share of stores 2016 % Stores change 2015 – April 2016 %
Unaffiliated independents 18,700 19,054 38 1.9
Symbol groups 15,169 15,060 30 -0.7
Convenience forecourts 8,745 8,748 17 0.0
Convenience multiples 4,163 4,383 9 5.3
Co-operatives 2,765 2,850 6 3.1
Total convenience 49,542 50,095 100 1.1
Joint ventures 2,312 2,868   24.0
Total convenience excluding JVs 47,230 47,227   0.0

Source: IGD Retail Analysis and William Reed Business Media, data for year ending 31.03.16

Key findings from the research include:

  • The multiple and co-operative segments once again grew in store numbers over the last 12 months, with key players implementing strategic opening programmes
  • However, the rate of store openings in the multiple segment has slowed markedly, falling from over 10% in 2015 to just 5% in 2016. To some extent, this reflects the structural changes seen in 2015, when Morrisons sold the core of its convenience portfolio to the new My Local operation
  • Unaffiliated independents saw some growth, which is a significant reversal from recent years. Rather than new store openings, this growth is primarily the result of rationalisation in the symbol segment. A focus on increasing compliance and discipline has seen several symbol groups downgrade previous members; these stores now continue to trade on an unaffiliated basis
  • This also explains the fall in the total number of symbol stores. However, there are still some notable elements of growth here, with Booker acquiring the Londis/Budgens operation in September and reinforcing Premier as the single largest symbol fascia group in the market. Another key player, Spar, also had a successful year of store additions in 2015
  • For the second year in a row the number of forecourt stores remains substantially unchanged, suggesting that the long decline in this segment may have bottomed out. However, the ownership structure of this segment continues to undergo significant change. The oil companies have disposed of more than 400 fuel retailing sites over the last year, with many acquired by fast-expanding independent dealer operations

Joanne Denney-Finch, chief executive, IGD, said: “Our figures demonstrate that growth in certain areas of the market over the last 12 months has been tempered by rationalisation in other segments. This has led to overall store numbers remaining stable.

“Our latest ShopperVista research reveals that more people than ever before are top-up shopping, to fit in with their busy lifestyles. Convenience stores have historically been seen as the ‘go-to’ channel for a top-up shop and this remains the case, with 63% of all shoppers visiting c-stores to conduct this type of shop.

“However, convenience is now facing increased competition from other channels that have also spotted the trend for top-up shopping, such as supermarkets and food discounters. Offering shoppers the ability to save time will therefore become increasingly important to convenience retailers as this competition intensifies. We expect to see them building loyalty by giving shoppers convenient and effortless ways to get the products, meals and food-to-go options they want, in the shortest time possible. Whoever manages to get this combination right has a unique opportunity to build on these changing shopper habits and become a real top-up shopping destination.”

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