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UK Food and Grocery Convenience Market Will Grow by 22.0% by 2022

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UK Food and Grocery Convenience Market Will Grow by 22.0% by 2022

UK Food and Grocery Convenience Market Will Grow by 22.0% by 2022
January 12
10:09 2018

The UK food and grocery convenience market will grow 4.1% in 2018, outperforming the total UK food and grocery market by 0.9 percentage points (ppt), according to GlobalData, a leading data and analytics company.

The company’s latest report: ‘Convenience Retailing in the UK 2017’ states that the highest growth category in convenience retail* will be food, growing 22.0% in value for the period of 2017-2022. This growth will be driven by food-on-the-go, as convenience stores move to take share from foodservice by offering packaged products similar to those stocked in shops such as Pret and Eat. Growth will also be driven through an increased proportion of fresh food in convenience.

Molly Johnson-Jones, Senior Retail Analyst at GlobalData, comments: “Convenience stores are increasingly becoming mini-supermarkets, providing consumers with sufficient product ranges for them to purchase their entire weekly shop. Both the food-on-the-go and fresh categories are higher margin than many of the usual ambient, branded food items, as they are own-label and prices are more flexible. An increased proportion of higher margin products will help to offset tobacco decline and input inflation.”

According to GlobalData’s 2017 convenience survey, the purchase of a few staple items such as bread and milk drives three quarters of all convenience store purchases.

Tesco is the convenience store with the largest market share, holding 19.8% of the UK convenience market in 2017, with 42.9% of shoppers surveyed in GlobalData’s convenience survey 2017 having purchased items in a Tesco Express/Metro.

Johnson-Jones adds: “Changing consumer shopping habits are driving change in the market. Millennials are doing their food and grocery shopping in convenience stores on an increasingly frequent basis, with 25.3% of 25-34-year-olds saying that they do their weekly shop in a convenience store, versus just 5.7% of 55-64-year-olds.

“The younger generations are using convenience stores for top-up shopping and weekly shops as speed and ease of shopping become increasingly important factors to time-pressured millennials.”

GlobalData’s report also reveals that food and grocery convenience market growth will largely be driven by convenience multiples (+30.3% compound growth for 2017-2022) and symbol groups (+23.6% compound growth for the same period) as they benefit from the buying power and operational scale that consolidation will drive. Mergers, partnerships and consolidation will see space growth in the market slow to 4.4% from 2017-2022, versus 16.9% for the period from 2012-2017, as retailers focus on sweating existing assets and improving sales densities.

* Convenience retailers can be split into five main categories: unaffiliated independents, symbols, petrol station forecourts, multiples, and co-operatives. A more detailed definition is available within the report.

Information based on GlobalData’s report: Convenience Retailing in the UK 2017

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