The discounters have laid down the gauntlet when it comes to price and challenged competitors to either enter a price war or seek alternative ways to generate footfall and sales, writes HIM’s Giorgio Rigali. So what can convenience retailers do to combat the discounters?
Both Aldi and Lidl have continued to grow the proportion of their shoppers on a main shopping mission, indicating an increase in higher value shoppers. In addition, both have seen an increase in the visit frequency of shoppers. This demonstrates that more shoppers are using discounters to top up, creating a huge challenge for the convenience sector.
However, there is still plenty of opportunity for convenience retailers to exploit. Food to go (FTG) is one of the key areas that the discounters are yet to tap into. FTG is the third largest mission driving shoppers into convenience. However, this has been in decline over the past five years, despite the wider FTG mission forecast to grow. This highlights a need for change, with retailers having to up their game in order to tap into this growing trend.
A lack of fresh choices is a barrier for a sizeable share of FTG shoppers to buying more FTG. Investment in this area will be crucial for the convenience sector, along with a greater focus on freshness to help to boost quality and health perceptions, with health being of particular importance to the FTG shopper (compared with the average c-store shopper).
In addition, HIM research also highlights clear differences between the convenience shopper and the discounter/supermarket shopper. The top three drivers to store within convenience are quality of staff, store appearance and ease of shop. In comparison, the top three drivers to store for discounters and supermarkets are price, product availability and quality of fresh.
Convenience retailers need to use these differences to their advantage. Top-up continues to be key, so ensure your store is easy to navigate. Drive satisfaction and sales by keeping your store and fixtures clean and well stocked.
The landscape of grocery may be changing, but the need for convenience still exists.