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Value of UK convenience market in 2022 revealed

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The UK convenience market is forecast to reach a value of £45.2 billion in 2022, growth of 3.2% versus 2021. That’s according to the new Lumina Intelligence UK Convenience Market Report 2022.

This follows a small decline in 2021 of 0.8%, as market growth slowed as a result of hospitality reopening and coronavirus restrictions easing.

The market is also expected to see positive, albeit modest, outlet growth at 0.6%, with a post pandemic property boom creating greater prospects for operators to expand.

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Co-operatives and convenience multiples set to outperform the market

Co-operatives and convenience multiples 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.

Forecourts (1.6%), symbol groups (2.9%) and unaffiliated independents (1.7%) are all also expected to see growth, but at a slower rate to the total convenience market.

Shoppers revert to pre-pandemic patterns

The percentage of UK adults that have had a convenience occasion (delivery, in-store or click & 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.

Shoppers are reverting back to pre-pandemic patterns. Planned top up missions are down 7.9ppts year on year, stabilising following a pandemic driven boost. However, positively, younger consumers traditionally under-performing in convenience have been retained year on year.

Delivery accounts for 7% of all c-store occasions

The pandemic accelerated growth in delivered convenience store occasions, with shoppers limiting the need to leave home and visit crowded places. Despite restrictions easing, delivery occasions have only declined by 1.6ppts year-on-year and now account for 6.8% of total convenience occasions.

The delivered route to market attracts valuable shoppers with higher frequency (+37%), basket sizes (+48%) and average spends (+134%) versus in-store shoppers.

HFSS location restrictions to impact 47% of purchases

Percentage of HFSS purchases made from locations set to be restricted by HFSS:

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 in order 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.

Discounters win as cost of living rises

There has been a notable uplift in convenience shoppers also visiting discounter stores, driven by increased price sensitivity. In the 12 WE 06/03/22 30.5% of convenience store shoppers also shopped in a discounter each week. In our most recent data (12 WE 29/05/22), this increased by 2.7ppts to 33.2%.

UK convenience to grow by £3.4bn from 2022-2025

The convenience market is expected to total £48.6bn in 2025, with a compound annual growth rate (CAGR) of +2.6% forecast between 2022-2025.

Commenting on the findings, insight director at Lumina Intelligence, 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.”  

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Tags : convenience marketindustry figures
Maria Bracken

The author Maria Bracken

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