07 May 2019
Posted in Press Release
Retailer diversification drives additional US$1,109bn spend in global convenience channel, says GlobalData
The global convenience stores market is forecast to rise 30% (equivalent of US$1,109bn) over the next three years to reach US$4,902bn in 2022, taking a 22% share of all global retail spend, says GlobalData, a leading data and analytics company.
Convenience formats are one of the few physical retail channels achieving impressive growth, but intensifying competition and innovation in online delivery propositions is forcing convenience players to introduce new concepts to secure footfall – rather than relying on new space.
Honor Strachan, Retail Analyst at GlobalData commented: “Despite Russia’s Magnit and the UK’s Sainsbury’s exposure to the convenience market, their lacklustre like-for-like performances announced last week signal, among other flaws in their strategies and tough retail conditions, that even operating in a winning channel cannot safeguard footfall. Sainsbury’s has identified the need to innovate, with the trial of its new Scan and Go convenience store opening in London this week, but this is far from the level of transformation we are seeing in Asia.”
GlobalData’s report: ‘Global Convenience Stores Retailing’ reveals that Asia Pacific is the largest and fastest growing region in the convenience market, with a forecast CAGR of 10.6% over the 2017-2022 period, with store modernisation, inclusion of technology and a shift in consumer shopping habits encouraging retailers to invest in the channel and leverage consumers appetite for convenience.
Auchan Minute, BingoBox, 7-Eleven, FamilyMart and Lawson are just a few retailers in the region investing in unmanned stores, cashier-less checkouts, smart shelves, personalization, automated payment options and home delivery. While consumer willingness to adopt the latest technology has been crucial to the success of store diversification in Asia, these players are becoming well equipped to offset rising labor costs, reduce the impact of labor shortages and maximize efficiencies in the supply chain.
Strachan concluded: “In a bid to attract new customers and prevent shopper desertion as the market becomes more competitive, convenience retailers are also refurbishing stores to incorporate new ranges (fresh, organic and free-from are all gaining shelf space) and include new concepts such as food service, mobile charging points and online purchase collection desks to help drive footfall, average basket size and customer satisfaction. This will benefit sales densities and store profitability as space continues to get more expensive and margins come under pressure from inflation and discounting.”