Discounters are emerging as one of the biggest threats to independent convenience stores’ business in future, according to a new study from HIM Research & Consulting.
The Future of Convenience 2013 study, which carried out online interviews with a nationally-representative sample of 500 UK adults in January this year, revealed that 29% of shoppers expect to use a discounter more in the next 12 months. This is higher than any other retail channel, and compares to just 8% who expect to use c-stores more this year (11% say less).
Although the trend towards smaller, more frequent shopping trips is continuing - 18% of shoppers say they’ll be doing fewer big shops over the next 12 months – the convenience sector is increasingly losing the lucrative ‘routine top-up’ shopper to other channels, notably the discounters, who are now considered more credible than convenience for fresh food, and are gaining strength in the own-label and meal for tonight categories too. Nearly half (46%) of shoppers intend to use discounters more for top-ups in the next 12 months.
The rise of the discounters marks a growing trend towards polarisation in the grocery market, with the highest growth figures in the industry being recorded by Waitrose and Sainsbury at the quality end, and by Aldi, Lidl and Iceland at the value end. According to HIM, this marks a growing divide in shopper decisions based on the currencies of trust and price.
HIM senior client director Jonathon Rons said: “At one end of the scale we have retailers that are trusted, at the other we have the value delivery. The battleground is in the middle and the question to retailers is what is your USP? What can you deliver here?”
The top five key trends that shoppers expect to be doing more of this year are deal shopping, fresh produce, planned grocery shopping, budgeting and buying value products, says the report, with consumers also planning to do more cooking and entertaining at home, and less dining out.
Price perception was identified as the number one barrier to shopping at a c-stores , although this can be improved by price matching with supermarkets (highlighted by 64% of respondents as a positive), regular promotions (49%),and price marked packs (34%).
According to the study, shoppers would visit c-stores more often in future if they offered post office facilities and other services such as parcel and internet shopping collection points, click and collect grocery shopping, and ticket sales points for local entertainment.
HIM suggests that other ways for c-stores to build trust with shoppers in future is via recipe suggestions, community activities and communicating better through social media.