Convenience sector growing fast in the UK

Convenience stores are increasingly demanding fresh food.

The UK convenience sector has shown rapid growth during the last ten years. In 2010, the value of this sector reached 30.9 billion pounds, an increase of approximately 6.3% compared with 2009 and 61.8% more than in the year 2000, when the sector was worth 19.2 billion pounds, according to a recent IGD report entitled Convenience Retailing 2010, Future Trading Strategies.

This sector now accounts for 20.9% of the total UK grocery market, which is worth 147.5 billion pounds. The report also highlights the fact that the convenience sector is increasing at a faster pace than the overall UK grocery market, the value of which has risen 4.1% this year, below the growth rate of convenience stores.

UK convenience sector turnover: 2000-2010

Own elaboration, with data from IGD

Several factors explain the sector’s good health in the last few years, according to the IGD study. On the one hand, many of the social factors that sparked off the growth of this sector continue to exist. These include an increase in the population, a rise in the number of households with small families and single person households, and the fact that people have less time due to spending more hours at work.
On the other hand, convenience stores have recently made efforts to become more innovative and effective, with strong promotional programmes, initiatives to win customer loyalty, marketing campaigns and new convenience concepts.
As the convenience sector develops, it is important to note that convenience stores in the UK are increasingly demanding fresh food, which currently accounts for 30% of their sales, as well as locally produced food.

Tesco Express and Sainsbury’s Local are two examples of convenience stores that accelerated the number of new store openings in the last year, with plans in place to open more this year.
 
According to the study, the convenience sector will continue to grow in the next few years and its value is forecast to rise to 41.3 billion pounds by the year 2015.

S&G Brassicas Today – June 2010