Good News for Convenience Stores
Northern Ireland retailers benefit from upsurge in sales
The convenience retail market is set to grow by +9.2 per cent or £3.8bn in 2020, due to the impact of the coronavirus pandemic, new research reveals.
The UK Convenience Market Report Update 2020 from Lumina Intelligence shows that while all convenience channels are forecast to grow in 2020, co-operatives, symbol groups and unaffiliated independents are set to outperform the total market, with forecasted growth rates of +11%, +10.9% and +9.9%, respectively.
The report predicts that the UK convenience retail market will reach a value of £46bn by 2023, as weekly sales per store return to more typical levels in 2021 and beyond. In addition, consumers are expected to return to foodservice, with out-of-home food and beverage spend expected to regain the share it lost in 2020.
Anecdotal evidence garnered by NR in talking to its readers demonstrates that many are reporting that trade is buoyant, with many consumers opting to shop closer to home. Northern Ireland convenience retailers could stand to benefit from the trends highlighted in this report.
HIM and MCA Insight’s UK Convenience Market Report 2020, shows that the convenience retail market within the UK is set to grow 8 per cent to £44.7bn in 2020 – up from 2.6% growth in 2019.
Increased volume and sales
The report highlights increased volume and sales during the coronavirus lockdown period, as consumers favour in-home consumption due to risk aversion as well as watching their discretionary spend – a trend that HIM & MCA Insight forecast to continue despite lockdown measures easing.
Convenience retail has benefitted from larger basket sizes and spend since the start of the coronavirus pandemic. Basket value has grown 17% year-on-year to £7.46 and average basket size is 2.5 items – up from 2.3 in 2019.
Lockdown has also exacerbated a pre-coronavirus growth trend in planned top-up shopping. Shoppers have turned to convenience for main and planned top-up shopping, with independent retailers more flexible when faced with stock pressures. Planned top-up shops have increased by four percentage points year-on-year, accounting for 22% of all convenience trips in 2020.
Blonnie Walsh, Head of Insight at HIM & MCA Insight, commented: “The turn of the decade has seen a transformative year for the convenience retail market. Convenience retailers have been forced to adapt to new basket dynamics and an evolving core consumer base. A shift in shopper missions has resulted in increased basket spend and size, rewarding retailers for the support and commitment they have shown to their local communities”.
Economy in crisis
Ironically the buoyancy of the convenience sector bucks the trend – as the overall economy is set to nosedive. A front page report on the Belfast Telegraph reported a dark Christmas ahead for many sectors – with the economy to be hit by a £360m downturn.