The UK convenience market is set to grow by £6.9bn in the next five years, to reach £48.2bn by 2024, according to a new forecast from IGD.
Analysts from the organisation maintain that sales in the channel will benefit from more new store openings over the five-year period, helping to fuel a compound annual growth rate of 3.1%.
Patrick Mitchell-Fox, senior business analyst at IGD, said: “While we expect relatively muted store development and a period of consolidation across the sector as a whole in the next two years, we forecast key segments – in particular co-operatives, multiples and symbols - to benefit from strong store growth again from 2021.”
He continued “After a stronger 2018 (+3.2%), total convenience sales are expected to grow by 2.6% in 2019. This growth is being led by the co-operatives segment above all, driven not only by a focus on opening new stores, but also by outstanding like-for-like performance underpinned by strong private label development, better fresh and chilled ranges and more competitive value.
“Multiples, though still seeing solid growth, are now opening new stores at a more modest pace, targeting only those sites with the best potential. Meanwhile, after a year of slower growth, the symbols segment is beginning to pick-up again, though it remains restrained as it stabilises after a period of notable disruption and instability.”
IGD has identified three key factors that need to be optimised in order to continue satisfying customer needs in the convenience sector, namely driving top-up shopping in a way that is space-efficient and quick to shop; attracting new shoppers by building items such as food-to-go and takeaway coffee into store layouts; and evolving ‘mission-based’ shopping by creating value for customers through meal deals and ‘meal for tonight’ propositions.