As Tesco begins to open a new wave of convenience stores, what is the current state of play for the convenience channel?
Despite 2025 finding UK convenience in a challenging situation, the format is now, more than ever, a strategic focus for the country’s grocery retailers. Companies use the format to grow their store estates and extend their market reach.
However, the channel is coming under pressure from several angles, especially as costs rise sharply, challenging margins and profitability. The channel, at a total level, is no longer shielded from the wider market’s price competition.
Tesco, and other multiples, are driving these changes
Tesco, along with the other multiples and Co-ops, were the fastest-growing parts of the convenience market in 2024. New store development and investment in improving existing stores helped offset the downward pressure of sharply slowing inflation. These retailers’ capabilities in chilled and fresh enabled them to capitalise on the rising demand for food-to-go and evening meal solutions.
This growth has been supported by Tesco’s continued investment in their quick commerce solution, Whoosh. While not all are serviced from convenience stores, quick commerce fulfils small-basket needs and competes for convenience spending.
To challenge the perception that convenience stores do not offer value, Tesco’s rollout of Clubcard Prices to the Express format was a key development. Adding meal deals to the loyalty mechanic has driven its use in the format and enabled the retailer to spotlight value for shoppers on a key convenience store mission.
This was built on, when, in August 2023, Tesco added over 50 products from its entry price point private label product range to its Express stores. Tesco claimed that on average, the products were 40% cheaper than the items they were replacing.
Ranges set to evolve further
To support its long-term growth in the channel, as part of phase two of its Fit for Growth range review, Tesco will assess its convenience stores. The reset has already seen an enhanced bakery service being rolled out, with a target of reaching about 350 sites at a point in the future.
Separately, Tesco plans to incorporate AI in ongoing range reviews. This will lead to location-specific product ranges based on store location and demographics, making stores more relevant to local shoppers.
Evolving strategy to be supported by store expansion
Alongside investing in price, store, and quick commerce expansion, Tesco will continue to open new convenience stores. Tesco views the channel as an essential part of its strategy to be ‘Easily the most convenient’ retailer and enable shoppers to shop with Tesco ‘wherever, whenever and however’ they want.
Despite Tesco, with its Express and One Stop stores, being the UK’s largest mass-selling convenience retailer, it remains the channel the retailer is most actively opening new stores in. 60 new Tesco Express and 27 One Stop stores opened in its 2023/24 financial year, with this pace likely to be maintained in the medium term.
Together, these steps will keep Tesco at the forefront of the convenience channel’s expansion and development.
Marianne Aitken, Tesco Category Director for Express, says: “Convenience is at the heart of Tesco’s strategy, and we’re committed to ensuring our Express stores offer shoppers the right combination of value, quality, and accessibility. Through continued focus on price, store expansion, and digital innovation, we’re making convenience shopping easier and more relevant than ever. Our data-led approach, supported by AI and Clubcard insights, allows us to tailor ranges to local communities, ensuring every store meets the unique needs of its shoppers. As we expand our footprint, we remain focused on delivering a best-in-class convenience experience – wherever, whenever, and however customers choose to shop with us.”
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