Indie retailers remain resilient in face of growing competition

Woman shopping

The number of convenience stores in the UK is continuing to rise, with many groups and retailers adding a considerable number of new sites over the latest 12 months, however independent stores numbers have seen a nominal decline.

That’s the finding of the latest data from IGD Retail Analysis and William Reed Business Media. However, IGD says that further growth was moderated by rationalisation amongst certain retailers, and competition is set to become even more fierce.

Independent store numbers saw a decline of just -0.7% in the last 12 months, and it remains the largest segment in store numbers, proving resilient despite intensifying competition. There were 18,507 independent stores in the UK.

In the symbol segment, Booker’s Premier continued its rapid expansion and confirmed its status as the biggest single convenience network, while Best-One boosted its store numbers by 214. Meanwhile, ahead of news of their acquisition by Booker, Musgrave took the strategic move to divest 327 stores from its Londis and Budgens fascias, as it sought to rebase the loyalty and discipline of its retailer networks. The net effect was symbol numbers were up just 1.5% over the 12 months.

Once again the fastest growing segment was the multiple retailers, with 401 new stores boosting numbers by 10.6%. This does, however, represent a slowdown on the previous 12 months, when 451 new stores were added.

In this latest year, it was the Tesco subsidiary One Stop that saw the biggest step up, adding 109 stores

Growth in the Co-op segment (+3.2%) was led by the national Co-operative Group, fuelled by the acquisition and conversion of new site types such as pubs.

The long-term decline in the number of forecourt sites stabilised this year

Joanne Denney-Finch, Chief Executive, IGD, said that the figures confirmed 2015 was another year of significant activity in the convenience sector, with a number of retailers and groups adding stores at a considerable pace, however she pointed out that this was tempered by rationalisation in other areas of the channel.

“Convenience stores are now visited on average 12 times a month – more often than any other type of grocery format, according to findings from IGD’s ShopperVista research,” she said. “This would explain why all types of retailers are now placing significant focus on this channel.  However, the convenience channel is facing stiff competition from other parts of the grocery market. Shoppers are telling us that they are increasingly top-up shopping throughout the week, but using a number of different channels to meet their needs, from convenience stores and food discounters to supermarkets and hypermarkets.”

Denney-Finch’s advice was that given the trend for shopping little and often shows no signs of slowing down, maintaining momentum in the convenience channel requires a clear understanding of local shoppers’ requirements on pricing, promotions, range and missions. “Those convenience players that stay close to these requirements will be well placed to unlock the genuine growth opportunities presented by the channel,” she said.

 

Number of stores 2014 Number of stores 2015 Share of stores 2015% Stores change 2014  – April 2015%
Unaffiliated independents 18,630 18,507 38 -0.7
Symbol groups 15,173 15,423 32 1.6
Convenience forecourts 7,641 7,655 16 0.2
Convenience multiples 3,772 4,173 9 10.6
Co-operatives 2,680 2,765 6 3.2
Total convenience 47,896 48,523 100 1.3
Joint ventures (JVs) 2,162 2,362   9.3
Total convenience excluding JVs 45,734 46,161   0.9

Source: IGD Retail Analysis and William Reed Business Media, data for year ending 31.03.15

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