Trading tough but convenience stores resilient, says analyst

Digital and data consultancy TWC says food inflation should peak in the first quarter of next year, followed by a gradual decline.

The food inflation figure used by TWC is the IGD’s analysis that the peak will be 17% to19% in the first quarter of next year.

Sarah Coleman, TWC’s director of communications, said: “A significant factor in the current high inflation we are experiencing is a lack of supply and, unfortunately, we can expect this to continue due to the war in Ukraine and the ongoing implications of Brexit.

“Most recently, we have seen this affect availability of eggs and we are also facing emerging challenges such as bird flu impacting the availability of our Christmas turkeys.”

TWC added that most analysts believe consumers will spend less this Christmas and that there is an anticipated decline in spending of 3% to 4%.

But there is a potential advantage for local stores to perform better than the overall market.

Coleman said: “What we have seen in the past, and is proving true so far, is that convenience stores generally hold up well in recessions.

“Little-and-often shopping minimises waste and provided retailers have a strong value proposition, they can prosper in times of economic hardship.”

She added that a drop in eating out could also mean local shops will benefit.

She said: Operators across the spectrum will call on their entrepreneurial spirit and resilience, which has been necessary through the ‘permacrisis’ of the last few years.”