Grocers in the UK need to focus on price positioning to remain competitive, according to data and analytics firm GlobalData.
Expenditure on food and grocery in UK convenience stores is expected to reach £43.2 billion by 2028, growing at a compound annual growth rate (CAGR) of 2.0% between 2024 and 2028, GlobalData added.
This presents an opportunity for convenience stores as this growth outpaces hypermarkets, supermarkets, and discounters.
Between 2023 and 2024, the big four grocers, Tesco, Sainsbury’s, Asda, and Morrisons, collectively added 800 new convenience stores to their network, with Asda and Morrisons leading the growth with acquisitions.
This expansion underscores increasing competition in the convenience market, GlobalData noted.
Aliyah Siddika, retail analyst at GlobalData, commented, “This replication of price focus from larger format stores to grocers’ expanding their convenience offer will encourage consumers to impulse buy due to increased affordability.
“The shift in UK consumer behaviour towards frequent top-up shopping has also created substantial growth potential in the convenience market.”
Consumer Behaviour
Data from GlobalData’s October 2024 monthly survey of 2,000 UK respondents revealed that 78.4% of UK consumers would visit a grocer on the way home from work. This figure stood at 81.6% before the pandemic.
This trend is primarily driven by budget limitations as well as the rise of hybrid working.
Before the pandemic, people working in offices had less time to cook dinner after work.
The shift to hybrid working has resulted in shoppers preparing meals ahead of the days they are in the office to save money.
Siddika added, “When offering deeper price cuts in convenience formats, grocers must target price promotions towards items that consumers are more inclined to purchase during the workweek.
“Such as food-to-go ranges, ready meals, quick dinners, and treats to capture spending from commuters. By targeting these specific categories, grocers can avoid cannibalising sales from larger stores and ensure that customers still have a reason to visit bigger grocery stores for weekly shopping journeys.”
