The convenience market sector experienced a significant increase of 4.0% in 2022, reaching a total value of £45.2bn. This growth was primarily driven by the convenience multiples sector, which demonstrated a remarkable growth rate of 6.8%. The return of consumers to city center and workplace locations following the pandemic, as well as a heightened focus on value credentials, played a crucial role in this surge.
As we gradually move towards a post-pandemic ‘normality’, market projections indicate further growth in 2023. It is expected that the convenience market will witness a 4.1% increase, reaching an overall market value of £47.1bn.
However, the journey to achieving these promising figures has not been without obstacles. High energy costs, supply chain challenges, and value-conscious shoppers have posed significant hurdles. Nevertheless, the resilience of the market is evident in its response to these challenges. The industry has managed to endure high inflation, foster strong innovation in own-brand offerings, and adapt new store formats to maximize footfall.
Despite the positive growth, it is worth noting that convenience market penetration has declined by 8 percentage points to 56% in May 2023. This downturn seems to be predominantly driven by older and less affluent shoppers (C2DE group), who have seemingly departed from the channel due to rising prices.
Energy costs, inflation, and supply chain disruptions continue to be major concerns for businesses, creating challenges for retailers’ profitability. However, wholesalers and suppliers are prepared to offer support to retailers in addressing these challenges. They will provide tailored category advice, product recommendations, and strategic promotions to assist retailers in overcoming these obstacles. Additionally, they will offer guidance on energy cost-saving measures, such as implementing energy-efficient fixtures like fridge doors.
Despite the persistent challenges, the robust growth witnessed in the convenience market in 2022, along with the projected growth in 2023, clearly demonstrates the sector’s adaptability and resilience in the face of an uncertain economic climate.