Two weeks ago saw the release of the 2014 ACS Local Shop Report, which looks at the state of the convenience channel from the perspective of those people at the heart of it, the retailers, writes HIM’s Blake Gladman. As an industry barometer it paints a positive picture of the growth of the channel, but if we were to rewind 10 years the convenience store of then would be very different. Categories such as tobacco, newspapers, confectionery and crisps would have been the bedrock of many a successful business, and the competition would most likely be out of town rather than on the doorstep.
If we look at the store of today, though, it’s a different picture. Newspaper and magazine sales are in decline due to the rise of digital, shoppers are more and more aware of health concerns, and legislation has impacted the tobacco industry. What’s more, the rest of the retail space has opened its eyes to the opportunity that exists in the convenience channel and the local competition, in the form of supermarket convenience stores and discounters, are very much on the doorstep.
What is everyone fighting for? To win the lucrative basket of the top-up shopper. The top-up shopper is the most valuable shopper in convenience: our latest research shows that 31% of all convenience shoppers are on a top-up mission, which equates to a total value of £12.3bn to the channel. It’s no surprise then that this is a key mission that is at the heart of the discounter and supermarket strategies.
At HIM we have looked at the key categories that make up the top-up shopper basket and 40% of larger baskets (five items or more) contain fresh fruit & vegetables, fresh meat, fish & poultry or fresh bakery. These fresh categories are critical in ensuring shoppers buy more and spend more when in-store.
Competition is everywhere and it’s no longer okay to get away with a poor fresh offer. Quality, availability and a relevant range are no longer a ‘nice to have’, but are imperative if convenience retailers are to compete with the discounters and supermarkets and win back these top-up shoppers to ensure that the future is bright and the future is orange – or apple, or broccoli.