The convenience retail market in the UK is set to grow only 0.3% in 2021, to a value of £43.2bn. This follows a year of exceptional growth (+6.3%) in 2020 off the back of the pandemic.
This is according to Lumina Intelligence’s ‘UK Convenience Market Report 2021’ which expects the sector’s growth this year to be led by convenience multiples (+2.1%) and co-operatives (+5.3%).
Following growth of 9.6% in 2020, unaffiliated independents are set to experience a decline of 2.2% in 2021 as shoppers return to larger stores in the second half of the year. However, their value will remain higher than pre-pandemic.
A lack of outlet growth (+0.1%) from symbol groups will lead to a relatively static sales performance (-0.4%), with shoppers continuing to use in-store and delivery services.
The report shows that the average spend per visit to a convenience store is £10.82, with the average shopper buying 3.3 items and visiting 2.5 times per week.
Average spend within managed convenience stores is £11.60 per visit – 30% higher than average spend at symbol and independent convenience stores (£8.92). However, average visit frequency to a symbol or independent convenience store is 2.9 times per week – 26% higher than for managed convenience stores (2.3 visits per week). Shopper spend in managed convenience is said to be higher due to wider ranges of more lucrative items including fresh and chilled, food-to-go and alcohol.
Top shopper missions within convenience:
| Top up (planned) | 31% |
| Newsagent | 16% |
| Meal occasions | 14% |
| Top up (distress) | 12% |
| Food to go | 11% |
Lumina Intelligence found that shop visits have become more planned due to the impact of coronavirus, as shoppers have grown used to quieter diaries and less frequent shopping. The Meal occasion mission ranked in the top three most common missions, driven by the government restrictions placed on the hospitality industry. The report suggests that retailers can drive spend within the meal occasion mission through meal merchandising and promotions that encourage upsell.
After a slowdown in 2021, convenience market growth is expected to pick up between 2022-24 and be worth £47.1bn in 2024 – a net increase of £3.9bn from 2021.
Blonnie Whist, Insight Director at Lumina Intelligence, commented: “Following an extraordinary 2020, it is unsurprising that growth within UK convenience retail has slowed. As restrictions ease and hospitality fully reopens, there will be a rebalancing of meal occasions. Co-operatives are set to continue to achieve strong growth in value and outlets with ambitious growth plans, further expansion into delivery operations and developments in own-label.
“The convenience market has a unique opportunity to build on the customers and spend gained throughout the pandemic to continue to grow as a core shopping channel for consumers. Growth drivers in convenience will include the continued expansion and roll out of on-demand and delivery services as well as click & collect for larger more urban stores. Suburban stores can continue to enhance their role as key community destinations, including continuing to provide core household essentials and increasing reach into attractive lunchtime meal solutions for home workers.”
