Are convenience stores holding their own against supermarkets?

By August 19, 2019 June 8th, 2021 Retail

Why are convenience stores firmly standing their ground against the big supermarkets? Convenience stores have over one-fifth of the total grocery market resulting in a total value of sales of £39.1bn. By 2018 there were over 45,000 convenience stores in mainland UK, compared to around 6,000 supermarkets. This immediately suggests that location is a leading factor in customer loyalty.

Having a store in an accessible location is crucial to capitalise on time-poor shoppers allowing them to grab some groceries on their way home from work. Due to the close proximity of these stores, often within ¼ mile, research shows that 54% of consumers walk to them. Consumers will opt for the easiest and most accessible option, increasing loyalty towards convenience stores.

The lifestyle of the consumer influences loyalty towards certain stores, whether that is convenience stores or supermarkets. Many smaller households will focus on shopping for what they need over the next couple of days; resulting in loyalty towards convenience stores. With more and more convenience stores offering additional services, there is a greater incentive for consumers to use these stores and therefore purchase more.  These other services include cash machines, post offices and pharmacies.

Convenience stores have a lot of valuable real estate, and Amazon is looking to partner with existing businesses to host drop-off locations.

Additionally, 29% of convenience stores have introduced a loyalty card scheme providing discounts to regular customers, providing the incentive for the customer to return regularly. With almost every major supermarket offering a loyalty scheme, it created a tremendous amount of competition for convenience stores to compete. Rewards and offers must be targeted to each specific consumer to make them feel valued and identified, further increasing loyalty towards the convenience brand.

“Latestop” opened a new store in Dorset which, since opening, has traded at 25% over budget. The store offers a range of chilled, fresh and frozen foods, food to go, Costa coffee, a free ATM, PayPoint, contactless payment and lottery tickets. These are prime examples of services that convenience stores can use to increase loyalty and ease for consumers.

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