IGD predicts strong growth for convenience stores

The UK convenience market is set to grow by £6.9bn in the next five years, to reach £48.2bn by 2024, the IGD has forecast.

Total convenience sales are expected to grow by 2.6 per cent in 2019, following 3.2 per cent growth last year.

“This growth is being led by the co-operatives segment above all, driven not only by a focus on opening new stores, but also by outstanding like-for-like performance underpinned by strong private label development, better fresh and chilled ranges and more competitive value, said analyst Patrick Mitchell-Fox.

“While we expect relatively muted store development across the sector as a whole in the next two years, with the sector undergoing a period of consolidation, we forecast key segments – in particular co-operatives, multiples and symbols – to benefit from strong store growth again from 2021.”

The IGD identified three factors driving growth:

– Top-up shopping with retailers using shopper data to understand consumer needs better.

– Attracting new shoppers with retailers are looking to build new merchandising focuses into store layouts, with such things as coffee stations.

– Evolving the mission-based shop. While the lunchtime meal deal is a familiar and successful driver of food-to-go purchases, similar deals are taking a bigger role in how shoppers are using convenience stores, such as meal for tonight, the IGD said.