Convenience stores, small but mighty, make it quick and easy for consumers to get their everyday essentials.
Who wants to travel to a large supermarket and navigate the store just to buy a loaf of bread?
We’ve checked out what’s going on in the sector and current opportunities.
Business is rising
According to the Office for National Statistics (ONS), retail sales volumes are estimated to have risen by 1% in August 2024, following a rise of 0.7% in July 2024. And, sales volumes rose by 1.2% in the three months to August 2024, when compared with the three months to May 2024.
August volumes rose with unseasonably strong food and clothing sales. Food stores sales volumes rose by 1.8% in August 2024, following a rise of 0.3% in July 2024. Compared with August 2023, sales volumes rose by 0.6%, the largest yearly increase since July 2021.
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Retailers have attributed the rises in sales volumes to better weather conditions.
What’s affecting convenience store spending?
The high cost of living is still having an impact, but with interest rates finally easing, retailers are hopeful this will lead to greater consumer spending.
As retail businesses plan their investment strategies, many will be looking ahead to the Autumn Budget, keen to end 14 years of Conservative business rate rises that have seen the tax rate rise by 30%.
Opportunities
A rise in the consumer preference for convenience and smaller stores has led to many retailers focusing on city-centre ‘express’ shops. Convenience stores, which have become increasingly prominent since the onset of the pandemic, allow consumers to make smaller and more frequent purchases close to home, and they’ve become much more reliant on what’s local.
To make the most of the potential for growth, convenience stores should address the specific needs of their customers and provide a range of services such as post, ATMs, or even luggage check. With limited shelf space, it’s crucial to analyse and ensure that the right product reaches the right customer at the right location.
In recent years, the vape and alternative nicotine products category has been very lucrative for convenience retailers, but it’s clear that legislation is going to have a substantial impact.
The opportunities for profit exist, but they’re ever-changing, so operators need to conduct thorough and regular research to ensure success.
Evolving preferences
The sector will be affected by changing economic conditions, but as customer preferences evolve, there will be opportunities for operators willing to put in the work to examine and tailor the services they offer.
It’s also worth keeping an eye on the growth of online food shopping and to look for new developments to advance convenience store offerings and meet consumer demand for quick and easy ways to shop.
