U.K. Convenience Stores Soldiering On

While groceries and upscale chains battle over market share, the convenience store sector appears to be thriving.

February 08, 2019

LONDON – The convenience store channel in the United Kingdom is a fifth of the nation’s total grocery market, generating £38 billion ($49.2 billion), BBC News reports. The Association of Convenience Stores (ACS) finds the sector is thriving despite pressure from grocery stores, online shopping and High Street shop mergers.

Larger supermarket chains have eyed the convenience store market lately, with Sainsbury Local and Tesco Express making up a small share of the 50,000 U.K. convenience stores. Around 40% of convenience stores in the United Kingdom are located in rural areas. Three-quarters of the stores are independently owned and operated.

“They are very good and adaptable at keeping their costs down,” said Chris Noice, who heads communications at ACS. “Tesco's business model means that a store manager will have data from Tesco Club Cards to guide him, but he or she can't react fast to demand. A small independent will react to his customer more by feel - if they see something is needed they'll do it.”

Convenience stores also serve as pickup locations for online orders. “The competition from online can actually work to their advantage because they can serve as a pick-up and drop-off point,” said Noice. “It is that last mile that the online delivery services really struggle with, and convenience stores can play an important role in getting stuff to customers.”