A new wave of independent entrepreneurs has entered the convenience market over the past year amid overall sector growth, according to IGD chief economist James Walton.
Speaking at a recent IGD event, Walton told C-Store: “In the past three years the number of c-stores has gone up and interestingly the number of non-affiliated independents is also up in the latest year - what this is telling us is that we have a new wave of independent convenience entrepreneurs coming into the market.
“They see there is an opportunity to offer shoppers something different, something exciting and something that they’re willing to pay for.”
Latest forecasts from IGD reveal that the convenience store sector will grow by a further 11.7% in value from £37.5bn to £41.9bn over the next five years.
However, that growth will come at a slower rate as increased competition takes its toll. Convenience will remain the third fastest-growing sector behind online and the discounters, which are projected to grow by 68.3% and 39.5% respectively by 2021.
“The market is increasingly competitive and to a large degree that challenge is a price challenge. We know that discounters are increasingly keen to get into the convenience opportunity,” Walton said.
He added that there was a great opportunity for independents to develop a greater distinctiveness in their offer.
“There’s lots of ways you can do that - food to go is becoming increasingly easy to do, and the use of local ranges is something independents can do that discounters often can’t.”
The IGD revealed that 63% are using convenience for top up, compared with 44% using supermarkets for that purpose.