Consumers opt to shop local: UK convenience store sales growth more than double

 

       Photo: Urban coordinates from Hugo Boss/Facebook

Convenience store sales growth doubles between 2019 and 2020 while growth in shopping online is deemed to continue and the habit is “irreversible” according to experts.

Market intelligence agency Mintel has written in a new report that convenience store market is set to reach an estimated £47.5 billion in 2020, up 8% from last year,  revealing that 80% of convenience store users agree that convenience stores provide essential services in the community, as 25% of consumers say they are now shopping more with local businesses due to COVID-19.

The pandemic has given an impressive boost to convenience store sales this year helping the market grow by more than double the rate achieved in 2019. According to the latest Mintel research, convenience sales will grow by almost 8% in 2020 - compared to the 3% achieved last year*.   

The significant increase in in-home food and drink experienced as a result of COVID-19 will see the convenience store market increase from £44.1 billion in 2019 to an estimated £47.5 billion in 2020; this is despite the hit to ‘on-the-go trade’ such as items eaten out-of home - including those for breakfast and lunch. This rate of growth is outperforming the wider grocery sector, which is expected to grow by around 6% in 2020.

While Brits flocked to local stores during lockdown, such a peak in demand will not continue into 2021, particularly if social distancing measures continue to be relaxed and consumer budgets are squeezed further. Mintel estimates a decline of -3.9% in the market in 2021, as it rebalances before reaching more consistent lower growth through to 2024 (of 2-3%) when the market is forecast to reach £49 billion. Overall, 94% of convenience store users (or almost 80% of all internet users aged 16+) use a convenience store at least once a month**. 

Nick Carroll, Associate Director of Retail Research, said: 

“The shift to localised shopping during the peak of COVID-19 has benefited the convenience sector, driving larger-basket demand and sales as consumers necessarily shopped more in their local communities. Longer term, the importance of convenience stores within these communities and consumers’ desire to support them will only be reinforced - providing a solid platform for convenience retailers to build upon." 

“Not all aspects of the sector, however, are benefiting. On-the-go food and drink, for example,  is a significant part of convenience trade and has naturally been constricted by lower levels of public movement and more working at home since the lockdown. In particular this has impacted convenience stores in travel hubs. However, this decline in sales has been offset by more spending on in-home food and drink as shoppers look to shop closer to home.”

* Mintel’s latest estimates as of 18 June 2020; subject to change based on ongoing research and economic shifts

** Mintel commissioned research among 2,000 adults aged 16+ in March 2020