The convenience retail market is predicted to grow £3.8bn in 2020 as shoppers stay close to home and show reluctance to visit larger, busier stores, new research shows.
The latest Lumina Intelligence UK Convenience Market Report Update 2020 has revealed the channel is well placed to capitalise on growth opportunities due to its ability to adapt quickly to changes in demand.
Co-operatives, symbol groups and independents are due to grow in value at a particularly fast pace, with forecasted growth rates of 11%, 10.9% and 9.9% respectively.
As the UK government tightens restrictions, convenience stores have an opportunity to continue this growth trajectory and increase loyalty.
Food-to-go offers an opportunity for convenience retail to grow its share and compete with foodservice specialists. according to the report.
Convenience shoppers on a food-to-go mission have also increased, accounting for more than one in 10 shoppers post-lockdown.
The report said retaining these shoppers through competitive value and promotions was key as consumers became increasingly price sensitive going into the recessionary impact period.
“Throughout the lockdown period, convenience retailers offered a lifeline to local communities across the UK,” said Lumina Intelligence insight manager Katherine Prowse.
“Record year-on-year growth is a testament to the efforts of these frontline workers. As restrictions begin to tighten again, retailers can reassure shoppers that they will continue to support them.
“Whilst we forecast growth to normalise in 2021, this period provides the perfect opportunity for retailers to cement their position within the local community and drive loyalty in order to maintain footfall once the pandemic is over.”
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.
Consumers are also expected to return to foodservice, with out-of-home food and beverage spend forecast to regain the share it lost in 2020.