Retail

Convenience Retailers Likely To Be 'Less Affected' By New HFSS Rules In UK

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Forthcoming restrictions on the marketing and advertising of high fat, sugar and salt (HFSS) products in the UK aren't likely to have that much of an impact on the country's convenience sector, IRI has said.

As smaller stores – those under 2,000 square feet – are exempt from the display space restrictions, the c-store sector isn't likely to be as affected by the new regulations as the mainstream sector.

However, IRI data estimates that the new HFSS rules could lead to around £583 million in sales being 'at risk' in the UK convenience sector, added to £1.1 billion worth of sales being at risk across the major multiples.

Convenience Store Network

Just over a third (35.9%) of UK convenience stores are above 2,000 square feet in size, while an estimated 64.3%) are below that size.

“Despite these figures, retailers and manufacturers should be reassured that there are options to mitigate the risks of HFSS and create opportunities, especially in the larger convenience format," said Joe Harriman, HFSS Strategic Consultant at IRI.

"High selling HFSS products will be moving from display into the aisles and so the competition for in-aisle space will be tough for manufacturers. They firstly need to understand what impact HFSS restrictions will have on them right across convenience and then create an appropriate response."

Impact On Display Promotions

IRI's analysis shows that the impulse categories of Confectionery, Crisps, Snacks & Nuts, Biscuits and Soft Drinks are the most impacted categories due to having the most reliance on display promotions. However, the impact at a category level will vary across convenience retailers and store types (symbols, independents, convenience multiples, forecourts) and reliance on display sales of HFSS categories.

"As a result of the HFSS restrictions retailers will need to make larger than usual range changes, and whilst this will mean that some manufacturers will find themselves needing to justify shelf space, others could be well placed to take advantage of the premium space opportunity that will become available to non-HFSS brands," said Harriman.

© 2021 European Supermarket Magazine. Article by Stephen Wynne-Jones. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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