Lessons for U.S. C-Stores From the U.K., Ireland

Foodservice helps leading retailers across the pond see year-over-year sales increases amid COVID-19.

August 17, 2020

LONDON—Fuel and convenience retailers in the United States built their businesses around a routine that was disrupted by COVID-19. Work commutes were stopped by stay-at-home orders, impulse gave way to stocking up, and health concerns drove many consumers to embrace eCommerce solutions. Now that the dust is settling, many retailers are questioning how to best move forward.

A new report suggests a closer look at the United Kingdom and Ireland convenience retailing model. Backed by years of investment in exceptional foodservice, leading retailers across the pond are enjoying year-over-year sales growth. Proprietary in-store offers have helped bolster their performance without being over-reliant on fuel, tobacco, and impulse.

“Many U.S. retailers have privately stated a desire to reshape their post-COVID strategies around fresh food demand,” said Scott Annan, founder of the Independent Retail Owners Forum (IROF) and a co-author of the report. “Since many were already progressing away from a “smokes and Cokes” offer before the pandemic, now is the time to look closer at their counterparts in the U.K. and Ireland to see what the end result of that transformation may look like.”

Key highlights include:

  • Neighborhood Markets. For the past 15 years, the U.K. and Ireland convenience sector has experienced continued growth in “Fresh Food for Today.” This model originated from their heritage as neighborhood grocers.
  • Strong Sales Performance. Sales data from the Independent Retail Owners Forum (IROF), whose members are 20 of the U.K. and Ireland’s leading convenience retailers, show in-store sales increases of 25% to 50% YoY (as of July 24). This is despite fuel sales remaining between 50% to 65% of pre-lockdown volumes.
  • Future-Forward Offer. Tobacco share of sales for leading “Fresh Food for Today” retailers in the U.K. and Ireland is 10% or less. “All customers eat and drink” is the lead strategy.
  • Global Outliers in Fresh Foodservice. IROF members’ store sales contribution from “Fresh Food for Today” ranges from 40% to 75%. Northern Ireland and Republic of Ireland retailers are the best-of-breed across global convenience retail, with up to 50% of sales originating from proprietary products made in-store.
View the full report here