The convenience channel is forecast to grow almost 18% between now and 2022 to £47.1bn, according to IGD’s latest research.
The value of the overall UK food and grocery market is predicted to increase by 15% in the same time period, with discounters set for particularly strong growth of 49.8% to £30.1bn.
Online is to remain the fastest-growing channel, with IGD forecasting growth of 53.8% to £16bn, while the future looks “more positive” for supermarkets and hypermarkets. The predicted growth of 5.9% and 1.0% respectively will be driven by a combination of inflation and investment in the big store experience, IGD said.
IGD chief executive Joanne Denney-Finch said it was not hard to see why convenience would remain the third-fastest growing grocery channel, given its research revealed that nine out of 10 shoppers claimed to have visited a c-store in the last month.
“Small stores have an enduring appeal and there are some clear opportunities for them to engage the younger generation. There’s also a huge opportunity for food to go, with more than eight in 10 (83%) c-store shoppers saying they could be encouraged to buy more food to go at their main convenience store,” she added.
Speaking at the IGD convenience conference in London on Tuesday, chief economist James Walton also urged retailers to consider the needs of the ‘post Millennials’ – those born around 2000 – who he described as the shoppers of the future. Speed of service and health are two priorities for the demographic. Convenience stores should be used as a ‘lab’, in which retailers can experiment at relatively little risk, he added.
Elsewhere, Musgrave chief executive Chris Martin spoke of the success of the Irish group’s premium coffee brand, Frank and Honest, which is now in 400 Centra and SuperValu stores. “The quality of the coffee has enabled us to increase the price from €1.80 to €2.50 and it now outsells the two main coffee brands in Ireland,” he said.
Martin added that Irish retailers had “no choice” but to innovate and meets customers’ demand for healthy choices, especially given the Irish government’s “draconian” approach to healthy policy.
“In impulse we’re seeing a faster rate of sales in health bars than Mars,” he said.
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