Convenience store sales growth set to slow in 2021 but pick up after that

Growth for this year will be 0.3% bringing total sales to £43.2bn, following the 6.3% increase last year.

The report says that growth is likely to be highest among convenience multiples (2.1%) and co-operatives (5.3%).

Following an increase of 9.6% last year independents are likely to see a 2.2% drop as shoppers return to larger stores, says Lumina, although this still leaves sales much higher than before the pandemic.

Symbol group sales are set to remain almost the same (-0.4%), partly down to very few new stores opening (a 0.1% increase).

Average spend within managed convenience stores is £11.60 per visit – 30% higher than average spend at symbol and independent convenience stores (£8.92).

However, average visit frequency to a symbol or independent convenience store is 2.9 times per week – 26% higher than for managed convenience stores (2.3 visits per week).

Shopper spend in managed convenience is higher due to wider ranges of more lucrative items including fresh and chilled, food to go and alcohol.

In the medium and longer term, growth is expected to continue. After a slowdown in 2021, convenience market growth is set to increase again between 2022- and 2024 and be worth £47.1bn in 2024 – a net increase of £3.9bn from 2021.

Blonnie Whist, insight director at Lumina Intelligence, said, “Following an extraordinary 2020, it is unsurprising that growth within UK convenience retail has slowed.

“As restrictions ease and hospitality fully reopens, there will be a rebalancing of meal occasions.

“Co- operatives are set to continue to achieve strong growth in value and outlets with ambitious growth plans, further expansion into delivery operations and developments in own label.

“The convenience market has a unique opportunity to build on the customers and spend gained throughout the pandemic to continue to grow as a core shopping channel for consumers.

“Growth drivers in convenience will include the continued expansion and roll out of on-demand and delivery services as well as click & collect for larger more urban stores.

“Suburban stores can continue to enhance their role as key community destinations including continuing to provide core household essentials and increasing reach into attractive lunchtime meal solutions for home workers.”