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Retail

Suburban Stores Surge In UK, As City Centre Locations Decline: Nielsen

Grocery outlets in suburban areas of the UK have seen a surge in sales in recent months, while city centre locations have found the going tougher, a new study by Nielsen has found.

According to Nielsen, UK FMCG grocery sales growth in the year to date were up by around 8%, which is equivalent to around £9 billion (€10.06 billion) in incremental sales in the January to November period.

However, at the same time, some 41% of grocery outlets are experiencing a decline in sales volumes, with shoppers increasingly working from home, and therefore not frequenting city centre outlets.

Deep Changes

“COVID-19 has forced us all to shop differently but this investigation demonstrates just how deep the changes in our habits are - and the need for retailers and manufacturers to respond quickly to the massive changes we’re now seeing in store dynamics," commented Scott McKenzie, global intelligence leader at Nielsen.

According to Nielsen, last year, some 20% of UK retail outlets accounted for 80% of sales. This year, that figure has lowered to 19%, a shift that may seem small, but has led to billions being spent in different locations.

Around London, for example, sales in suburban areas have seen significant growth, with 9% of stores seeing more than 100% growth in sales year-on-year.

Store Geography

This could have a lasting impact on future store geography and planning, adds McKenzie, “Companies around the world are already signalling they will no longer operate the way they did in the past. People will commute less, work from home more and move further away from urban settings.

"The consequences of this for the locations of stores, the formats of stores, and the assortment in those stores are far reaching. If you add in the dynamic of a massive rise in e-commerce for the FMCG space, the need to respond to these new shifts are critical.”

Below is a map of London, indicating in red where stores are seeing declines in spend, and green where they are seeing growth.

© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine

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