PCL BRIEFING
THE
CONVENIENCE
MARKET
Feb 2012
The convenience market - understanding the
needs of the ‘quick shopper’ and how to
maximise the potato offer
IN BRIEF
48,000 convenience
stores
£33bn market
21% of all grocery sales
25% growth in next 5
years
Mainly used for ‘quick
shop’ top-up
Key life stage - families
but also the time-poor
Convenience stores increasing
While the size of the convenience
segment varies according to who is
defining it, there is no doubt it has seen
a significant increase in the number of
outlets over recent years and looks set
to continue to grow in the near future as
the multiple retailers build their
convenience offering.
A convenience store is usually defined
as being under 3,000sq ft. mainly
because stores above this size are
subject to Sunday
trading laws, below that,
opening hours can be
determined by the
neighbourhood and local
competition.
IGD estimates there are
some 48,000
convenience stores in
the UK covering cooperatives, convenience multiples,
symbol groups, non-affiliated
independents and forecourts, with a total
retail value of c.£33bn. Kantar estimates
the market value at just under 50% of
this but based on the multiples only.
IGD forecasts the sector has grown by
4.6% in 2011 and expects compound
growth of 25% over the next five years.
Twenty-one per cent of all grocery sales
now come through convenience.
Convenience shoppers
Their neighbourhood locations mean
that convenience stores are generally
used for top-up shopping. According to
Mintel, typical shoppers will be in the 25
to 44-year age group that are in the
family life stage, topping up on groceries
between main shops. Larger
households, where items bought during
a large shop can easily run out and
other time-poor
individuals, such as
those working fulltime, are also key
groups for
convenience stores.
This latter group are
often buying for their
next meal on their
way home, hence
the rise in ready and assembly meals in
convenience stores. Mintel further notes
that convenience stores have also, at
least in part, replaced the likes of
Woolworths and other newsagents as a
place for children to spend their pocket
money.
Information Sources
Kantar , Mintel, IGD, him!,
Oxford Partnership, AHDB MI
Understand — provide consumer and market research
1
PCL BRIEFING
THE
CONVENIENCE
MARKET
Feb 2012
Drivers and barriers
According to the IGD the main drivers of
the convenience sector are as follows:
Increased demand for
convenience-based
products
Developing market for
fresh food and food-to-go
offers
Improved operational
standards
Multiples expanding in the
sector and developing
their offer
Changes in shopper lifestyles, with
increasing numbers of working
women, single person households
and longer working hours pushing
demand for convenience-based
products
Further development of fresh food
and food-to-go propositions
High levels of recruitment of nonaffiliated independent stores into
symbol groups
Improved operational standards
The main barriers in the
sector are seen as
follows.
Increasing pressure
on household
budgets making
value key
Decline in store
numbers,
particularly
independents, as market conditions
toughen
Unconsolidated nature of the
sector means store standards can
vary widely
What’s happening in the sector
Some of the more interesting details
from IGD about the multiple retailer’s
convenience offers are shown below.
Waitrose/Little Waitrose – high
dependence on fresh and designed to
fulfill daily shopper needs while also
covering everyday essentials including
non-food. A range of 150+ lines under
the Good to Go brand has now been
launched with a specific focus on
capturing more of the ‘food-on-themove’ convenience market. The range
can also be found in selected Boots
stores.
Tesco Express – 1,271 stores, typically
2,500 SKUs c.10,000 customers per
week (Tesco also owns One Stop which
is operated as a stand-alone business
with 521 stores)
The Co-operative – convenience
makes up 52% of the
portfolio, communityorientated stores which
are located in suburban
areas with typically
small catchments, aims
to be leading
convenience retailer in
the UK.
Sainsbury’s Local –
Wide range of fresh and
ambient products focused on ‘eat-now’
and ‘eat-later’ eating occasions. Strong
emphasis on health and well-being,
premium and indulgence.
Sainsbury’s Fresh Kitchen – one
store, sells a mixture of freshly made instore hot and cold meals.
M&S Simply Food – strategic focus on
convenience and top-up shopping
markets. Franchise schemes in
conjunction with Moto at motorway
service areas and on forecourt sites with
BP Connect.
Information Sources
Kantar , Mintel, IGD, him!,
Oxford Partnership, AHDB MI
Understand — provide consumer and market research
2
PCL BRIEFING
THE
CONVENIENCE
MARKET
Feb 2012
M&S Food on the Move (one store
trial) – sells a selection of hot and cold
takeaway foods. Range aimed at
commuters.
Shoppers typically spend
6-10 secs at the potato
fixture
Decision to buy often
made earlier in the day
Main occasion is for a
simple adult meal
Baking and new potatoes
over index
Want smaller pack sizes
Size and usage are the
main decision variables
Impact of promotions is
less in convenience
Morrisons ‘M Local’ – following a
successful trial, Morrisons plans another
roll-out of convenience stores. Strong
focus on fresh, prices that are in line
with its core
supermarkets, strong
availability and easy
navigation.
SPAR – Proposition is
tailored to meet five
distinct shopping
missions, under the
Stores of the Future
programme:
Neighbourhood affluent,
Community
supermarket,
Neighbourhood value,
Urban lifestyle, In
transit.
Potato shoppers and convenience
Our own PCL research conducted for
the ‘shopper journey’ project in 2010
looked to understand the potato shopper
in different store formats, including
convenience, with some interesting
results.
When speaking to potato shoppers
in store we found that 86% of
shopping trips are ‘quick shop’ topups
As such, shoppers spend the
shortest time at the potato fixture of
all store formats - typically between
6-10 seconds
The decision to buy potatoes is
most likely to be made earlier in the
day but over one third of shoppers
still decide when they are in the
store
Potato shoppers in convenience
stores over index for
shopping for the
‘simple adult meal’
occasion
Not surprisingly,
they are more likely to
look for and buy
smaller pack sizes if
available
They also over
index on buying baking
and new potatoes
Two thirds of
shoppers cannot recall
any signage at the
potato fixture
In terms of the
shopper’s decision
hierarchy, size of potato and how
they are going to be used are the
key factors in shoppers’ minds
followed by price
For shoppers looking for something
for that evening’s meal they can
also be more impulsive and open to
suggestion
The effects of promotions may,
however, be less in the convenience
sector. A recent survey by him! of over
Information Sources
Kantar, Mintel, IGD, him!,
Oxford Partnership, AHDB MI
Understand — provide consumer and market research
3
PCL BRIEFING
THE
CONVENIENCE
MARKET
Feb 2012
Understand the shopper
mission
4,000 convenience shoppers revealed
that 63% had not bought anything on
promotion. Of those who did buy a
promoted product, 43% were planning to
buy it anyway. In the same survey, 79%
claimed not to have a budget.
Match the offer to the mission
Match the offer to the
mission
Inspire and entice
Different segments of the market require
very different approaches, so aligning
function correctly is key to getting the
most from the opportunities. For
potatoes to maximise their potential in
the convenience sector, the offer must
be matched to the shopper mission.
Shoppers are evolving and seek
excitement and innovation from the
sector. For those who know what they
want, the range of potatoes and pack
sizes should be right for their planned
purchase. For those who are undecided,
they need to be inspired and prompted
at the fixture to make sure they choose
potatoes over other carbohydrate
alternatives.
Information Sources
Kantar, Mintel, IGD, him!,
Oxford Partnership, AHDB MI
Understand — provide consumer and market research
4