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Bright Future for UK's Convenience Stores
The convenience retail sector in the UK is growing rapidly - by 7.3% in the last year - according to Convenience Retailing 2004, the latest report from grocery think tank IGD. The sector is now worth £23bn and could exceed the £30bn mark by 2008. Convenience retail now accounts for 20p in every £1 of grocery spending.
IGD surveyed 12,000 convenience stores and found that growth in 2003 was at more than twice the rate of the total grocery market (3.3%). A 0.4% reduction in overall site numbers over the year was less significant than a 3% growth in average store size (from 1,371 sq ft in 2003 to 1,418 sq ft in 2004). IGD believes that this trend will continue as operators seek to improve their customer offer in terms of the breadth of product ranges and the services available.
Average weekly sales increased by 9.7% year on year, within the sample. The Co-operative segment is the top performer, with average weekly store sales of £22,568, followed by the convenience multiple sector with £19,589. Performance in these segments has been boosted by factors including store development programmes, re-ranging following acquisitions, and a larger average store size than for the convenience sector as a whole.
Suppliers are realising the potential of convenience - 77% of suppliers interviewed said that their company devoted more resources to the sector than last year, and 73% of retailer respondents agreed that suppliers were doing so (compared to 50% last year).
IGD Chief Executive Joanne Denney-Finch says convenience stores have changed from entry level retail operations to 'a very slick and dynamic sector with suppliers ... working with retailers to understand customers and develop specific strategies'. She adds: 'Over the coming year we expect to see a wider roll out of better operational practices, with continuing upgrades of both store environments and product ranging. Consumers have shown their enthusiasm for convenience and it is up to suppliers and retailers, working together, to achieve the full potential of he sector'.
More information is available from www.igd.com
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