According to the new Lumina Intelligence UK Convenience Market Report 2022, the UK convenience market is forecast to reach a value of £45.2bn in 2022, a growth of +3.2% year-on-year.
This follows a small decline in 2021 of 0.8%, when the market slowed as a result of hospitality reopening and coronavirus restrictions easing. The market is also expected to see positive (albeit modest) outlet growth at +0.6%, with a post-pandemic property boom creating greater prospects for operators to expand.
Lumina said that co-operatives and convenience multiples are expected to grow turnover by +5.6% and +3.8% in 2022, respectively. This growth will be underpinned by investment in store refits and physical expansion, as well as developments in delivery services.
Forecourts (+1.6%), symbol groups (+2.9%) and unaffiliated independents (+1.7%) are all also expected to see growth, but at a slower rate to the total convenience market.
The report also found that UK shoppers are reverting to pre-pandemic patterns. 64% of UK adults had a convenience occasion (delivery, in-store or click & collect) in May 2022, with basket spend down 10.5% to £7.18 and basket size down 15.6% to 2.7 items year-on-year.
Planned top-up missions are down -7.9ppts year on year, stabilising following a pandemic driven boost. However, younger consumers traditionally under-performing in convenience have been retained year on year.
Lumina also found that despite restrictions easing, delivery occasions have only declined by -1.6ppts year-on-year and now account for 6.8% of total convenience occasions. The delivered route to market attracts valuable shoppers with higher frequency (+37%), basket sizes (+48%) and average spends (+134%) versus in-store shoppers.
The report also identified the percentage of HFSS purchases made from locations that are set to be restricted by HFSS:
| Display on the end of an aisle | 23% |
| Display at the front of the store | 12% |
| Display at the till | 9% |
| Display within the queue system | 3% |
Confectionary is most at risk, over indexing in HFSS restricted locations, which accounts for 53% of purchases. Signposting in-store will be important to guide consumers in aisle to the products on the main shelf. Reformatting stores in order to place HFSS products near categories with a high footfall (such as bread, eggs, or milk) will help maintain sales; or moving these items to the back of store could force shoppers to walk through aisles with HFSS products.
Looking ahead, Lumina predicts that the convenience market will amount to £48.6bn in 2025, with a compound annual growth rate (CAGR) of +2.6% between 2022-2025.
Blonnie Whist, Insight Director at Lumina Intelligence, said: “UK convenience retail remains in a strong position. Despite cost of living challenges, the market will benefit from a resurgence in on the go missions in 2022, as shoppers seek more accessibly priced options compared to foodservice channels. Leveraging different store formats, including grocery-led, food to go-led, service-led and delivery will be key to growth across the next three years.”
“From a delivery perspective, retailers need to capitalise on events including the Women’s Euros and the FIFA World Cup through encouraging shoppers to use delivery for entertaining and nights in.”
NAM Implications:
- Key for convenience suppliers to compare their businesses with these stats.
- As a basis for identifying strengths.
- And revealing potential opportunities…
- Hopefully re-engineering your business offering to suit…
