The UK convenience market is set to reach a value of £45.2 billion (€53.1 billion) this year, a 3.2% increase on 2021, according to a new study by Lumina Intelligence.
The Lumina Intelligence UK Convenience Market Report 2022 found that the convenience segment is set to grow at a CAGR of 2.6% between now and the mid part of the decade, and be worth £48.6 billion by 2025.
Last year, the channel saw a slight decline (-0.8%), as market growth slowed due to the loosening of coronavirus restrictions and the reopening of the hospitality sector.
Spearheading the growth in 2022 are co-operatives and convenience multiples, which are expected to grow turnover by +5.6% and +3.8% in 2022, respectively, the report notes. This growth is likely to be underpinned by investment in store refits, physical expansion, and developments in delivery services.
Elsewhere, forecourts, symbol groups and unaffiliated independents are also expected to see growth, albeit at a slower rate than the overall convenience market.
'A Strong Position'
“UK convenience retail remains in a strong position," commented Blonnie Whist, insight director at Lumina Intelligence. "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.”
UK shoppers are returning to pre-pandemic patterns when it comes to their level of engagement with convenience stores, Lumina Intelligence found, with 64% having a 'convenience occasion' (either in-store, delivery or click and collect) in May 2022.
Year-on-year, basket spend is down 10.5% to £7.18, whiled basket size is down 15.6% to 2.7 items. In addition, following a pandemic-driven boost, planned top-up missions at convenience store are down 7.9 percentage points per year, and are also showing signs of stabilisation.
Delivery currently accounts for 6.8% of all c-store occasions, with the delivery route to market resulting in higher frequency (+37%), basket sizes (+48%) and average spends (+134%) compared to in-store shoppers.
“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," Whist added.
Read More: Top-Up Shopping Fuelling Convenience Growth Across Europe, Says IGD
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