866-997-4948(US-Canada Toll Free)

CONVENIENCE STORES - UK - APRIL 2018

Published By :

Mintel

Published Date : Apr 2018

Category :

Food

No. of Pages : N/A

Growth in the convenience sector accelerated for the third consecutive year, in part driven by inflation. However, it was the structural changes, both through acquisitions and failures, which made it a defining year for the sector. The increased power of the multiples in the market is likely to be both beneficial to those who find themselves now supplied by some of the biggest names in the grocery sector, but equally challenging to those outside of these new organisations.

Table of contents

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Rising inflation a key trend of 2017
Figure 1: Average weekly earnings growth vs CPIH inflation, January 2014-February 2018
Growth in the convenience sector accelerates for the third consecutive year
Figure 2: Convenience store market size, including VAT, 2012-22
The convenience sector accounts for around a quarter of all grocery sales
Figure 3: Estimated breakdown of the grocery sector (inc-VAT), 2012-17
Companies and brands
Tesco the largest player, a position only consolidated by the merger with Booker
Figure 4: Estimated C-store market shares (ex-vat), 2016 and 2017
Multiples give far more space to fresh-food
Figure 5: Convenience stores: space allocation estimates, April 2018
The consumer
One in three regularly shops for groceries in c-stores
Figure 6: Where consumers typically shop for groceries, February 2018
Usage skews toward the younger generations
Figure 7: Convenience store shoppers, by age and gender, February 2018
Most visit at least once a week
Figure 8: Frequency of convenience usage, February 2018
Most visit to top-up shop
Figure 9: Reasons for using convenience stores, February 2018
Tesco Express the most popular destination
Figure 10: Convenience retailers regularly used and used most often, February 2018
C-store users want more hot lunch options on the menu
Figure 11: What consumers would like to see more of in the convenience stores they use most, February 2018
Own brand plays an important role in c-stores
Figure 12: Convenience users’ attitudes towards own-brand in c-stores, February 2018
Just under half agree it is difficult to eat healthily when frequently shopping in c-stores
Figure 13: Attitudes to healthy eating and food-to-go in convenience stores, February 2018
What we think
ISSUES AND INSIGHTS
Consolidation-on-consolidation: the future of supply and own-brand in c-stores
The facts
The implications
Healthy eating in c-stores: From food-to-go, to top-ups do retailers need to up their health offering?
The facts
The implications
Deliveroo and Co-op: Is this the solution to shatter the glass ceiling to online for the sector?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Rising inflation a key trend of 2017
Levels of renting remain high with smaller households set to grow
Growth in the convenience sector accelerates for the third consecutive year
The convenience sector accounts for around a quarter of all grocery sales
MARKET DRIVERS
Real incomes under pressure, but growing again
Figure 14: Average weekly earnings growth vs CPIH inflation, January 2014-February 2018
High inflation in core categories
Figure 15: Annual percentage change in the price of food and non-alcoholic beverages and alcoholic beverages and tobacco, January 2016-February 2018
Food retailers continue to underperform
Figure 16: Annual percentage change in the value of retail sales at current prices, non-seasonally adjusted, January 2016-February 2018
Ongoing changes in the housing market
Figure 17: UK households, by tenure, 2012-16
More people living in smaller households
Figure 18: UK Households, by size, 2012-22
Figure 19: Breakdown of UK Households, by size, 2012-22
MARKET SIZE AND FORECAST
C-store market estimated to have grown by 2.7% in 2017
Figure 20: Convenience store market size, including VAT, 2012-22
Figure 21: Total convenience store market size (including VAT), at current and constant (2017) prices, 2012-22
How the grocery sector breaks down
Figure 22: Estimated breakdown of the grocery sector (inc-VAT), 2012-17
Forecast methodology
THE CONSUMER – WHAT YOU NEED TO KNOW
One in three regularly shops for groceries in c-stores
Usage skews toward the younger generations
Most visit to top-up shop
Tesco Express the most popular destination
C-store users want more hot lunch options on the menu
Own-brand plays an important role in c-stores
Just under half agree it is difficult to eat healthily when frequently shopping in c-stores
HOW THEY SHOP FOR GROCERIES
More than one in three consumers uses convenience stores
Figure 23: Where consumers typically shop for groceries, February 2018
Almost a third are loyal to one type of store
Figure 24: Repertoire of where consumers typically shop for groceries, February 2018
More than half shop multiple times a week
Figure 25: Frequency of convenience usage, February 2018
Similar usage against last year
Figure 26: Usage of convenience stores in the last year, February 2018
DEMOGRAPHICS OF CONVENIENCE STORE USERS
Men more likely to use convenience stores
Figure 27: Convenience store shoppers, by age and gender, February 2018
Usage linked to affluence
Figure 28: Convenience store shoppers, by socio-economic status, February 2018
Proximity to convenience stores also influences usage
Figure 29: Convenience store shoppers, by location, February 2018
Young people shop more frequently…
Figure 30: Frequency of convenience store use, by age, February 2018
…and have increased convenience store usage in the last year
Figure 31: Usage of convenience stores in the last year, by age, February 2018
WHY THEY USE CONVENIENCE STORES
Most see convenience stores as an opportunity to top-up
Figure 32: Reasons for using convenience stores, February 2018
Young people more likely to do main shop
Figure 33: Reasons for using convenience stores, by age, February 2018
More than two thirds have multiple reasons for usage
Figure 34: Repertoire of reasons for using convenience stores, February 2018
CONVENIENCE RETAILERS USED
Over half of c-store users regularly visit Tesco Express
Figure 35: Convenience retailers regularly used and used most often, February 2018
Figure 36: Repertoire of convenience stores regularly used, February 2018
Over half of Tesco Express shoppers use it most often
Figure 37: Convenience retailers used regularly, by those used most often, February 2018
Traditional categories a driver for symbols
Figure 38: Leading convenience retailers regularly used, by age, February 2018
M&S under-indexes with 16-34s compared to rivals
Figure 39: Leading convenience retailers regularly used, by age, February 2018
WHAT THEY WOULD LIKE TO SEE MORE OF IN-STORE
Consumer want more lunch-to-go options
Figure 40: What consumers would like to see more of in the convenience stores they use most, February 2018
Local produce would have a broad appeal
Figure 41: What consumers would like to see more of in the convenience stores they use most, February 2018
M&S could offer more premium food-to-go products
Figure 42: What consumers would like to see more of in the convenience stores they use most, by retailer, February 2018
OWN-BRAND IN CONVENIENCE STORES
Three quarters typically buy own-brand when visiting c-stores
Figure 43: Purchasing of own-brand products, February 2018
25-44s most likely to buy own-brand
Figure 44: Purchasing of own-brand products, by age, February 2018
Most see own-brand as a good way to save, and high quality own-brand could drive patronage
Figure 45: Convenience users attitudes towards own-brand in c-stores, February 2018
Premiumisation of own-brand
Figure 46: Grocery Tracker: Purchasing of premium own-brand, March 2016-December 2018
ATTITUDES TOWARDS HEALTHY EATING AND FOOD-TO-GO IN CONVENIENCE STORES
Most agree healthy eating options in c-stores are expensive
Figure 47: Attitudes to healthy eating options and food-to-go in convenience stores, February 2018
16-34s most likely to feel it is hard to eat healthily when shopping in c-stores
Figure 48: Attitudes to healthy eating options and food-to-go in convenience stores, by age, February 2018
Most see range as an issue for more frequent use of food-to-go
Figure 49: Attitudes to food-to-go in convenience stores, February 2018
Limitations of food-to-go felt more by symbol group shoppers
Figure 50: Attitudes towards food-to-go in convenience stores, by convenience retailer used, February 2018
LEADING RETAILERS – WHAT YOU NEED TO KNOW
Tesco the largest player, a position only consolidated by the merger with Booker
The Co-op in line to make its own significant acquisition
Further consolidation was seen throughout the market
M&S winning in the experience stakes but Tesco Express has ubiquity
Multiples give far more space to fresh-food
COMPETITIVE STRATEGIES
Multiples
Figure 51: Leading multiples, key metrics, 2017
Co-operatives
Figure 52: Co-operative food, members by estimated stores and sales, 2017/18
Symbol groups
Figure 53: Top 20 convenience store retailers total store numbers by type of operation, 2014-17
Petrol forecourts
Figure 54: Total number of, and breakdown in ownership of UK forecourts, 2015-17
LEADING RETAILERS – KEY METRICS
Sales: Co-op had a positive 2017 despite store consolidation
Figure 55: Leading c-stores, sales, 2013/14-2017/18
Stores: Tesco & Booker provide a significant store presence
Figure 56: Leading c-stores, outlets, 2013/14-2017/18
Sales-per-outlet: multiples see a far greater return per unit
Figure 57: Leading c-stores, sales per outlet, 2013/14 - 2017/18
MARKET SHARES
Co-op the largest player in 2017, but Tesco and Booker will become market leader
Figure 58: Estimated C-store market shares (ex-vat), 2016 and 2017
Figure 59: Estimated C-store market shares (ex-vat), 2013/14-17/18
BRAND RESEARCH
What you need to know
Retailer map
Figure 60: Attitudes towards and usage of selected retailers, April 2018
Key retailer metrics
Figure 61: Key metrics for selected retailers, April 2018
Retailer attitudes: M&S seen to be worth paying more for
Figure 62: Attitudes, by retailer, April 2018
Retailer personality: Tesco Express has the edge in accessibility
Figure 63: Retailer personality – macro image, April 2018
Spar seen as basic by many
Figure 64: Retailer personality – micro image, April 2018
Retailer analysis
M&S Simply Food: Seen as expensive, but recognised for its quality
Figure 65: User profile of M&S Simply Food, April 2018
Tesco Express: Broad usage driven by accessibility
Figure 66: User profile of Tesco Express, April 2018
Sainsbury’s Local: High awareness and usage but lacking a distinctive trait
Figure 67: User profile of Sainsbury’s Local, April 2018
The Co-operative: history weighs heavy but the message is connecting with younger consumers
Figure 68: User profile of The Co-operative, April 2018
Spar: Lagging behind rivals
Figure 69: User profile of Spar, April 2018
SPACE ALLOCATION SUMMARY
Space allocation overview
Figure 70: Convenience stores: space allocation estimates, April 2018
Fresh food is a key footfall driver for convenience stores
Figure 71: Convenience stores: Fresh food and other food mix, by percentage share of total in-store space allocated to food, April 2018
Food-to-go and RTE meal options are popular reasons to visit a convenience store
Figure 72: Budgens of Islington, Cook freezers, April 2018
Detailed space allocation estimates
Figure 73: Convenience stores: Detailed space allocation estimates, April 2018
Figure 74: Convenience stores: Detailed space allocation estimates, April 2018
RETAIL PRODUCT MIX
Figure 75: Leading convenience stores, estimated proportion of sales by broad product category, 2017
Figure 76: Leading convenience stores, estimated sales by broad product category, 2017
INNOVATION AND LAUNCH ACTIVITY
On-demand convenience store that brings groceries to your door step
24/7 fully automated convenience stores
Carrefour trialling new convenience store format for immediate consumption
Embracing digital currency
Co-op speeding up the checkout process with ‘shop, scan and go’ app
Hard Rock-branded c-store
7-Eleven redefining convenience with expanded delivery options
Connecting and engaging with today’s digital-savvy consumers
ADVERTISING AND MARKETING ACTIVITY
Supermarket and c-store advertising spend down 8% year on year in 2017
Figure 77: Recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarket and convenience store operators, 2013-17
Convenience store campaigns
Figure 78: Leading UK supermarket and convenience store operators: Recorded above-the-line, online display and direct mail total advertising expenditure, 2013-17
TV attracts the lion’s share of advertising expenditure
Figure 79: Recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarket and convenience store operators, by media type, 2017
Nielsen Ad Intel coverage
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data sources
Financial definitions
Trade definitions
Sales per store, sales per square metre
Exchange rates
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology

Make an enquiry before buying this Report

Please fill the enquiry form below.

  • Full Name *
  • Your Email *
  • Job Title
  • Company
  • Phone No. * (Pls. Affix Country Code)
  • Message
  • Security Code *