This follows a slight decline of -0.8% in 2021 as market growth slowed due to the reopening of the hotel industry and the easing of coronavirus restrictions.
The market is also expected to see positive, albeit modest, POS growth at +0.6%, with a post-pandemic property boom creating greater scope for expansion for operators.
Co-operatives and proximity multiples are expected to increase their turnover by +5.6% and +3.8% in 2022, respectively. This growth will be supported by investments in the renovation and physical expansion of stores, as well as the development of delivery services.
Gas stations (+1.6%), symbol groups (+2.9%) and unaffiliated independents (+1.7%) are also expected to see growth, but at a slower pace for the overall convenience store market.
The percentage of UK adults who had a convenience opportunity (delivery, in-store or click & collect) stabilized at 64% in May 2022, with spending and basket size down 10.5% to £7.18 and 15.6% at 2.7 items per year- over a year, respectively.
Shoppers are returning to pre-pandemic habits. Planned recharge missions are down -7.9ppts year over year, stabilizing following a surge due to the pandemic. However, positively, younger consumers who have traditionally underperformed in convenience have been held back year after year.
The pandemic has accelerated the growth of delivered convenience store opportunities, with shoppers limiting the need to leave their homes and visit crowded places. Despite the easing of restrictions, delivery opportunities were down only -1.6 ppt year-over-year and now represent 6.8% of total convenience opportunities.
The delivered route to market attracts value shoppers with higher frequency (+37%), basket sizes (+48%) and average spend (+134%) compared to in-store shoppers.
Percentage of HFSS purchases made from locations set to be restricted by HFSS:
| End of aisle display | 23% |
| Display at the front of the store | 12% |
| Display at checkout | 9% |
| Display in the queue system | 3% |
Confectionery is most at risk, over-indexed in HFSS restricted locations, which account for 53% of purchases. In-store signage will be important in guiding consumers down the aisle to main shelf products. Reformatting stores to place HFSS products close to high-traffic categories, such as bread, eggs or milk, will help maintain sales; or moving these items to the back of the store could force shoppers to browse the aisles with HFSS products.
There has been a noticeable increase in the number of convenience shoppers also visiting discount stores, due to heightened price sensitivity. As of 12 WE 06/03/22 30.5% of convenience store shoppers also shopped at a discounter every week. In the most recent data from Lumina Intelligence UK (12 WE 5/29/22), this rose by +2.7ppts to 33.2%.
The convenience market is expected to reach £48.6 billion in 2025, with a compound annual growth rate (CAGR) of +2.6% expected between 2022 and 2025.
Commenting on the results, Blonnie Whist, Director of Knowledge at Lumina Intelligence, said: “Convenience retail in the UK remains in a strong position. Despite cost-of-living challenges, the market will benefit from a resurgence in on-the-go assignments in 2022 as shoppers seek more accessible priced options compared to restaurant channels. Leveraging different store formats including grocery, take-out, service and delivery will be key to growth over the next three years.
“From a delivery perspective, retailers need to capitalize on events such as the Women’s Euro and FIFA World Cup by encouraging shoppers to use delivery for entertainment and overnight stays.”
Learn more about the Lumina Intelligence UK Convenience Market Report 2022 here.
