The UK convenience store market has rocketed in value in the last year as consumers turn to local retail to counter large food bills and fuel costs.
The convenience market has increased in value by 6.1 per cent over the last 12 months, making it worth £29.1 billion.
New figures released by international food and grocery expert IGD and William Reed Business Media have revealed that the convenience market could be worth as much as £39.7bn by 2014, which accounts for population growth.
The growth of the fresh foods sector continues to be strong, with the category now representing 29.9 per cent of c-store sales.
IGD’s Evolution of Convenience Retailing report reveals that the growth of the sector continues to outpace the growth of the UK grocery market overall.
The report also shows that new format innovation by retailers, new product development by manufacturers and broadened food-to-go propositions all offer growth opportunities for the convenience sector.
The report’s author, Stewart Samuel, told freshinfo: “This growth in value is an impressive continuation of recent trends. Last year we saw customers shopping locally to save on fuel costs and, although fuel prices have subsided, people are still looking to save costs.
“Fruit and vegetables continue to do well and remain one of the best performing categories. There has been more and more investment in store displays and convenience snack pack sizes have seen healthy sales.
“It is a great performance in spite of the recession because the sector has responded to that value challenge with a strong propensity to shop at convenience stores.
“One of the main reasons is improved shop formats - stores are now easier to use. Store numbers will still be under pressure from spin-offs from the main supermarkets, with independent retailers still struggling.”
The report reveals the number of non-affiliated independents has been in decline partly due to migration to symbol groups for their strong promotional packages, private label ranges and shopper mission-based store formats.
The report also revealed that 49 per cent of consumers who buy food or drink to go choose a convenience store to make that purchase.
James Lowman, chief executive of the Association of Convenience Stores, said: “These figures, which are the benchmark for the sector, show convenience stores to once again be benefiting from the trend towards local shopping and community retailers. In part this trend is driven by changing lifestyle - for example, the ageing population and the growing proportion of single person households - but they are also a reflection of the improving standards in local shops, which are attracting more and more people to do their shopping in smaller stores.
“The continued decline in overall convenience store numbers is expected but still raises important questions that government should consider: why are fewer stores now viable, is regulation a contributing factor to their closure and what is the true impact of these closures on communities? Nearly 800 stores closed last year, meaning that more consumers will not have a local shop within five minutes walk of their home - a facility that we know people need. This should concern policy-makers.
“The double-digit sales growth for convenience multiples means that now while these stores represent just over five per cent of the market, their sales represent nearly 15 per cent of sector turnover.”
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