The 2022 festive season was a challenging one for the convenience sector. A continual rise in food prices, tightened incomes and more shoppers socialising and eating out of home during the festive period meant that consumers shopped less frequently in convenience this year and purchased less when they did.

The cost-of-living crisis has caused a shift shopper behaviour and attitudes, including what is important. In line with observations from across 2022, this Christmas saw shoppers placing greater emphasis on value, as they traded out of convenience to manage spend, moving towards discounters. In previous years, shoppers have traded up across the festive season, seeking higher quality and branded products, often as gifts. Both quality and brand were less important this year, declining -5ppts and -4ppts, respectively, showcasing the impact of the economic landscape on shopper attitudes.

Growth towards discounter shoppers peaked in the summer when inflation hit 10.1% in July. Since then and more positively for convenience, the rate shoppers are visiting discounters has started to slow, falling another -1ppt in December versus the previous month. Lumina Intelligence expects that discounter shopping will continue with financial strains expected to endure long into 2023, convenience will have to remain agile and build on its benefits to compete.

Shoppers were most likely to shop in convenience for top up items over Christmas, with urgent top up shops growing year-on-year. A restriction-free December allowed increased household socialising, driving shoppers to purchase last minute items for these occasions. Chilled products, bakery items and wrapped bread loaves were the most popular categories purchased, with crisps and snacks, carbonated soft drinks and confectionery the top growing categories versus last year. This displays that despite ongoing efforts to budget and reduce spending, shoppers remain reliant on convenience.

Purchasing for a treat was the top growing occasion this Christmas compared to last year, meaning indulgence was more of a driving factor for shopping in convenience this year. For those seeking a treat, tinned and packaged grocery items, crisps and snacks, and confectionery were the most popular categories shoppers purchased. These were also the top-growing categories, highlighting their importance over the festive period. Co-op and Little Waitrose are excellent examples of convenience stores who successfully capitalised on those purchasing for a treat. Both implemented a range of promotions across crisps and snacks and confectionery in the lead up to Christmas, appealing to the value for money credentials shoppers were seeking and driving purchasing.

This festive season saw more shoppers out and about, driving an increase in in-store convenience trips, while delivery and click and collect’s share of the market declined. Despite this, delivery amongst 25–34-year-old shoppers grew versus last December, emphasising how they are a key demographic for delivery platforms to target in the future. This growth was also driven by males with lower disposable income, suggesting this group traded down from eating and drinking out of home and turned to convenience delivery as a treat instead. As shopping for top up items was the most common occasion this Christmas, delivery aggregators, retailers and suppliers should make these items clearly visible on delivery platforms. Highlighting specific categories and using eye catching advertising is one way to encourage purchasing and drive delivery growth going forward.

Whilst Christmas 2022 may have been a challenging time for the convenience sector, the future looks more positive. Inflationary pressure has started to ease, and it is expected that towards the end of 2023, the strain on household spending power will also subside. In the short to medium term, the pressure and consumer scrutiny around value will remain. Into the longer term, convenience is well positioned to navigate the future, expanding in newer avenues including in-store technology, delivery and competing with out of home, as well as its core of providing an essential service to communities.