Industry news
The convenience store market is poised for significant growth, projected to expand by 3.7% by 2029. Let's delve into the evolving shopper priorities and technological advancements driving this growth.
According to IGD data (Institute of Grocery Distribution), the convenience store market is projected to grow by approximately 3.7% over the next five years, reaching £59.5 billion by 2029. This growth will be driven by improved economic conditions (such as higher average earnings), and shoppers having more diverse priorities, seeing them seek both healthy and indulgent options while also balancing caution with aspiration.
Let’s explore some of these driving factors and other key areas in more detail...
A ban on volume promotions, paid-for on-line ads, along with pre-watershed TV ads for HFSS (high fat, sugar, and salt) products will start in October 2025. This follows the first phase of HFSS restrictions brought in October 2022, which saw limitations on how these products were being displayed in larger stores.
Smaller stores are still exempt from these rules, so can focus more on selling treats.
Lumina Intelligence predicts that certain product categories will become more important in convenience stores from 2024 to 2027, with stores beginning to use premium and local products to increase spending.
Lumina also expects that value and loyalty will be enhanced using technology and past purchase data. This means more digital loyalty apps and personalised deals.
Currently, loyalty programs are already changing the convenience sector by improving relationships between retailers and suppliers, increasing sales, and boosting customer engagement. These programs encourage repeat business and offer good value for money.
Technological advancements are expected to drive market growth in convenience stores. Using technology like QR codes, electronic shelf labels (ESELs), and data analysis tools, retailers can maximise sales and improve efficiency. Artificial intelligence (AI) is expected to drive digital innovation, freeing up staff time to interact with shoppers. This can reduce staff costs and improve operations.
In summary, the convenience store market is set to grow, driven by better economic conditions, changing shopper priorities, and technological advancements. Smaller stores will focus on treat-led occasions, and technology will play a key role in enhancing value, loyalty, and efficiency.
Sources:
IGD Research
Lumina Intelligence Convenience Strategy Forum Q4 2024 & June 2024 Market Report
