For decades, convenience stores have been the cornerstone of local communities across the UK, offering a quick and reliable option for day to day essentials. However, as shopper demands shift, so does the landscape of this fragmented industry, driving innovation and change at a rapid pace.
The phrase "a nation of shopkeepers" has often been used to describe the UK. This description feels especially fitting when considering the role of the British corner shop, a fixture in our communities since Victorian times. These shops, with their humble yet sturdy trade, have evolved from formal counter-service to the grab-and-go convenience we know today. Many of us grew up visiting these local shops, whether to indulge in a snack, grab a missing ingredient, or pick up a bottle of wine for an impromptu supper.
The Shifting Retail Landscape
In recent years, the convenience store sector has seen significant changes, driven by multiple retailers entering the market. The multiple retailers are growing their convenience store presence at a quick pace.
As of the latest count, there are over 49,000 convenience stores in mainland UK, employing 437,000 people and generating more than £47.1 billion in sales. Retailers operating under symbol group fascias and truly independent stores make up 70% of the total with Co-operative groups operating about 7% and the multiple retailers making up the rest.
Behind Post Offices and Pharmacies, the Convenience Store has the most positive impact on local communities cementing it’s importance to local people.
Why Convenience Stores Are Thriving
Several factors have contributed to the renewed importance of convenience stores. First, the once-popular superstores and hypermarkets have seen a decline in appeal. These large, car-dependent stores face challenges from cost of living concerns, changing consumer demands, and competition from discounters. While they still hold a large market share, they are no longer the growth area they once were. Perhaps hence why the multiple retailers are showing interest in expanding their footprint into the convenience sector.
Second, the rise of online shopping, especially in the food sector, has made top-up shopping more crucial. The convenience store's role has expanded with the growth of “quick commerce,” where online and mobile retailing offer on-demand delivery using convenience stores as supply points.
Finally, the rise of the Gen Z population and their changing preferences has further boosted the convenience store sector. Modern lifestyles, work patterns, and travel habits are increasingly focusing on smaller, more conveniently located stores with amenable opening hours.
Challenges on the Horizon
Despite the positive outlook, the convenience store sector faces challenges. Some consumers still perceive local stores as having limited ranges and high prices, even though this is not the case for many. Retailers are also under pressure from rising costs and changing consumer behaviours, requiring them to constantly adapt their offerings and services.
Regulatory burdens and potential government legislation targeting core ranges, such as cigarettes, alcohol, and processed foods, pose additional threats. Convenience stores may struggle more than the larger multiples to meet these requirements.
Retail crime, which has surged post-pandemic due to the rising cost of living, is another major concern.
A Sector Ready for Investment
Nevertheless, the convenience store sector is ripe for investment. It’s an exciting channel and retailers, both large and small, are recognising that when convenience is done right, shoppers and consumers respond positively. And retailers know this full well with value added services being introduced widely encouraging footfall - 76% offer bill payment services, 40% have free to use cash machines and 33% now provide a local grocery delivery service.
Refrigeration is the principal area receiving investment from those retailers investing, followed by shelving and store signage.
As the sector continues to evolve, it remains a vital part of the UK’s retail landscape, proving that even in a rapidly changing world, there is still a place for the humble, yet modernised corner shop.
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