The UK convenience market is expected to reach a value of £45.2 billion this year, representing a growth of 3.2%, compared to the same period last year.
According to the new Lumina Intelligence UK Convenience Market Report 2022, the market is also expected to see a slight positive outlet of 0.6% with a post pandemic property boom creating greater prospects for operators to expand.
This follows a small fall in 2021 of 0.8%, as market growth slowed because of hospitality reopening and coronavirus restrictions easing.
READ MORE: Ocado to raise £575 million as online grocery shows significant growth
The new report states that Co-operative and convenience stores are expected to grow turnover by 5.6% and 3.8% in 2022, respectively. This growth will be underpinned by investment in store refits and physical expansion, as well as developments in delivery services.
The percentage of UK adults that have had a convenience occasion (delivery, in-store or click and collect) stabilised at 64% in May 2022, with basket spend and basket size down 10.5% to £7.18 and 15.6% to 2.7 items year-on-year, respectively.
The delivered route to market attracts valuable shoppers with higher frequency (37%), basket sizes (48%) and average spends (134%) versus in-store shoppers.
Confectionary is most at risk, over indexing in HFSS restricted locations, which accounts for 53% of purchases. Signposting in store will be important to guide consumers in aisle to the products on the main shelf.
Reformatting stores to place HFSS products near categories with a high footfall, such as bread, eggs or milk will help maintain sales; or moving these items to the back of store could force shoppers to walk through aisles with HFSS products.
The convenience market is expected to total £48.6 billion in 2025, with a compound annual growth rate (CAGR) of 2.6% forecast between 2022-2025.
Commenting on the findings, Lumina Intelligence insight director Blonnie Whist, said: “UK convenience retail remains in a strong position.
“Despite cost-of-living challenges, the market will benefit from a resurgence in on-the-go missions in 2022, as shoppers seek more accessibly priced options compared to foodservice channels.
“Leveraging different store formats, including grocery-led, food to go-led, service-led and delivery will be key to growth across the next three years.
“From a delivery perspective, retailers need to capitalise on events including the Women’s Euros and the FIFA World Cup through encouraging shoppers to use delivery for entertaining and nights in.”
Click here to sign up to Grocery Gazette’s free daily email newsletter
