The convenience sector is on the brink of a major growth surge, according to the latest forecasts from the Institute of Grocery Distribution (IGD). In their report titled ‘UK Grocery Retail Channel Forecasts 2024-2029‘, IGD predicts that convenience stores will experience the highest rates of growth among all retail channels, including large stores, online platforms, and discounters.
So, what’s driving this growth, and why should you care? Let’s dive into the details of this exciting trend and explore how it’s set to shape the future of UK grocery retail.
The Rise of Convenience: A £10.7 Billion Surge
Convenience stores are set to see an impressive increase in market share over the next five years. Currently holding a 20.4% share of the UK grocery market, this figure is expected to rise to 20.9% by 2029. In monetary terms, that’s an increase of £10.7 billion, or a whopping 20.8% growth.
What’s Fueling the Growth?
This surge isn’t just a random occurrence. It’s being driven by several key factors that make convenience stores the go-to choice for a growing number of shoppers.
- Fresh-Food Focus: One of the major drivers of this growth is the focus on fresh food. Convenience stores are increasingly expanding their fresh-food offerings to cater to local shoppers’ needs. With more people looking for quick, healthy options close to home, this strategy is hitting the mark.
- AI and Technology: Advances in technology, particularly AI, are also playing a crucial role. Retailers are using AI to tailor store ranges to specific locations, ensuring that each store offers the products most likely to attract local customers. This personalized approach is expected to increase footfall and drive growth in the convenience sector.
- Food-to-Go Missions: The shift towards food-to-go missions is another significant factor. Convenience stores are changing their formats to better cater to customers looking for quick, on-the-go meal solutions. This trend is expected to increase the use of convenience stores as more people opt for easy, ready-to-eat options.
The Bigger Picture: UK Grocery Market Growth
While convenience stores are set to lead the pack, the overall UK grocery market is also expected to grow, albeit at a slightly slower pace. According to IGD, the market is anticipated to grow by 18% over the next five years, reaching £296 billion by 2029.
However, not all channels are expected to grow at the same rate. Supermarkets, for example, are forecasted to see a slight drop in market share, from 42% to 41.7% by 2029. On the other hand, online retailing is also set to boom, driven by improvements in customer experience and increased product availability.
Challenges on the Horizon
Despite the positive growth forecast, the convenience sector isn’t without its challenges. The IGD report highlights a few potential hurdles that retailers will need to navigate over the next five years:
Price Increases: The introduction of new duties on vaping and increases in tobacco duty could lead to higher prices, which may impact sales in these categories.
Reliance on Like-for-Like Sales: With the peak of new store openings behind us, retailers will need to focus more on like-for-like sales growth. This means finding ways to increase sales in existing stores, rather than relying on the expansion of new locations.
The Role of MPOS in Convenience Store Growth
Now, you might be wondering, how can convenience store owners capitalize on this growth? This is where MPOS Till systems come into play.
MPOS systems can significantly streamline operations in convenience stores by enabling faster, more efficient transactions. These systems are particularly useful in handling the high volume of quick purchases that convenience stores typically see. By reducing transaction times, MPOS systems help increase customer satisfaction, which in turn can boost sales and drive growth.
Moreover, MPOS systems offer flexibility, allowing store owners to set up temporary checkout points during peak hours or even manage payments on the go. This can be particularly beneficial in convenience stores located in high-traffic areas where every second counts.
Looking Ahead: The Future of Convenience Retail
As we look ahead to the next five years, it’s clear that the convenience sector is poised for significant growth. With a focus on fresh food, the use of AI to tailor product ranges, and the ongoing shift towards food-to-go missions, convenience stores are set to become an even more integral part of the UK grocery landscape.
For convenience store owners, now is the time to start thinking about how to leverage this growth. Whether it’s by expanding fresh-food offerings, embracing new technologies, or investing in MPOS systems, there are plenty of opportunities to capitalize on this trend and ensure your store is ready for the future.
In conclusion, the convenience sector’s projected growth isn’t just a trend – it’s a sign of changing consumer behaviors and preferences. By staying ahead of the curve and adapting to these changes, retailers can ensure they’re not just part of the growth, but leading it.
