Convenience set to outperform the UK grocery market

January 1, 2010

The convenience sector is set to continue to outperform the total UK grocery market over the next five years, according to new research from the IGD.

The IGD’s latest report UK Grocery Retail Outlook 2009 - Repositioning for growth reveals the convenience market is projected to increase by 37% from £30.3bn today to £41.4bn in 2014.

The IGD report underscores recent research by convenience experts Him! In October 2009, Him! interviewed 1,700 convenience store shoppers exiting from 18 different UK c-store chains including Tesco Express, Sainsbury's Local, Spar, Premier, Budgens, BP, Exxon Mobil and the Co-operative Group.

It found UK c-stores were getting more customers and also getting more spend from customers in the autumn than they had been in spring 2009.

The Him! survey showed that despite the recession, 500,000 more British shoppers were shopping in c-stores every week in October, compared to six months before. It also showed that 19% of c-shoppers said they were spending more in c-stores versus six months previously (for further information visit Global Convenience Store Focus article)

The IGD reports the UK food and grocery market is currently worth £146.3bn and is forecast to grow 20% to £175.9bn in 2014.

Online and non-food sales are also tipped to perform well with the online grocery channel forecast to almost double from £3.7bn to £7.2bn in 2014 and non-food sales set to reach £16.2bn in five years’ time.

Currently worth £11.6bn, non-food sales within the grocery market have strongly outperformed the non-food retail market as a whole in 2009, said the IGD. With growth of 40% forecast, non-food will account for 10p in every pound spent in UK supermarkets in 2014.

Joanne Denney-Finch, chief executive, IGD said: “The food and grocery industry has demonstrated resilience during a period of economic uncertainty. Food and grocery retailers have been steadily investing in non-food, both in-store and online and will increasingly reap the rewards, prospering in a value-conscious and convenience-driven marketplace.”

Gavin Rothwell, senior business analyst at the IGD, added: “While retailers continue to strengthen their core food and grocery business, many are also broadening their non-food ranges beyond toys, DVDs and clothing with items as diverse as fitness equipment, dishwashers and bathroom suites. Others are expanding the services they offer such as banking, eye care and travel services - helping drive further growth.

Joanne Denney-Finch: resilient marketplace