With most of the ‘Big Four’ supermarkets in the UK announcing dwindling sales performance and cutting jobs, we look at why convenience retailing is flourishing.
The UK convenience channel set to grow to £49 billon sales by 2019 – it is becoming more important than ever for supermarket retailers to innovate and invest in so-called ‘c-stores’.
Defined as supermarkets that are 3000sq ft or less convenience stores provide an alternative shopping experience for busy consumers.
Often located in high footfall areas such as by office blocks train stations and busy high streets; the c-store is the perfect pit-stop on the journey home from work school or college. Convenience stores provide the perfect middle ground between newsagents and supermarkets simplifying the shopping experience and meeting specific customer needs.
The growth of convenience retail
There are two main factors that are driving the growth in convenience retail these are:
1) Consumer lifestyles and trends
Social and economic changes continue to impact on consumer shopping habits; with shoppers looking for ways to reduce food waste and stick to a tight budget we are seeing a real trend for a ‘little and often’ approach to the weekly shop. Consumers are becoming more time precious and have little time for a typical weekly shop.
With consumers changing their shopping habits it is vital that supermarket retailers follow suit.
2) Maturity of ‘big box’ retail
Big Box retailing was prevalent in the 90’s as consumers and retailers took to the big weekly shop however times have changed and the likes of Tesco and Asda are adapting their retail strategy and halting the development of their larger ‘hyper’ stores. Retailers are moving away from a ‘one-size-fits-all’ approach; instead delivering a shopping experience that delivers exactly what local customers need when they need it.
Key trends driving category growth
Smaller store formats are pushing the boundaries of convenience retail and as the category grows some important trends are emerging:
With busier lives tighter budgets and a deeper understanding of health and wellbeing; the traditional role of the supermarket is changing.
1) Theatre-driven store design
With fruit and vegetables named as the most popular category within c-stores a key trend has been the growth of theatre-driven store design around fresh produce.
For instance props such as wooden crates and baskets are being used to display produce to deliver a local market store feel. Shelf-edge labels and signage are also used to highlight local suppliers to build a connection with customers and drive the focus on fresh food.
C-stores are using these retail design elements to differentiate their spaces from larger supermarkets grocers and newsagents. By building connections with customers in this way shoppers are naturally encouraged to return time and time again.
2) Multichannel retailing is becoming the norm
C-stores have a unique opportunity to act as a link between the digital and physical realms of retail. With the popularity of click and collect services booming convenience retailers are exploring ways they can deliver a seamless multichannel offering.
Amazon lockers home delivery and click and collect services are just some of the ways these stores are meeting customer needs. By allowing shoppers to pick up their groceries and e-commerce deliveries in one place, stores are driving footfall and enhancing their offering.
3) Different stores meet different needs
The growth of the c-store by no means signals the death of the supermarket. Consumers spread their time across discount stores supermarkets and c-stores depending on their needs budget and time.
The ‘weekly shop’ may be on the decline, but supermarkets are still the shop of choice for consumers when they’re looking to spend a lot.
Dwell time in convenience stores is less than supermarkets but shoppers are still spending. Convenience stores play an important part within this cycle and retailers need to be exploring how they can meet the needs of their customers.
As convenience retail plays a bigger role in consumer lives, it is vital that brands look at ways they can incorporate c-stores and smaller spaces into their retail offering. And with the category only continuing to grow there really is no time like the present.
*This blog was originally posted in 2014, and has been updated with the latest consumer trends.*