Changing face of convenience shopping

Related tags Consumers Convenience store Retailing

Consumers are increasingly making grocery purchases for immediate,
or atleast very short-term, consumption. A major reason for this
change is thatpeople's schedules and diaries are changing with only
a few days notice, the report continues.

Our increasingly hectic lifestyles are having a major impact on the way we shop for our groceries, reports market research company Datamonitor this week.

Consumers are increasingly making grocery purchases for immediate, or atleast very short-term, consumption. A major reason for this change is thatpeople's schedules and diaries are changing with only a few days notice, the report continues.

Datamonitor suggests that it will be convenience stores (c-stores) that will benefit the most from the change in trends, with consumers' visits to c-stores increasing from 18.9 billion in2001 to 20.4 billion in 2006.

The extra visits will also benefit sales asconvenience stores will see their share of the total European food and drinkmarket increase from 12.5 per cent in 2001 to 13.3 per cent in 2006, the equivalent to an extra€16.2 billion of sales.

The pattern is not uniform across the different countries in Europe, however, as the nature and structure of local retailingpatterns will have a profound effect. For example, in France, where the hypermarket format is very strong, the rise in c-store visits will not actually lead to an overall increase in convenience stores' share of thefood and drinks market. Although French consumers will visit conveniencestores more often, they will tend to purchase fewer items and spend less ineach shop in the future.

In Italy, where small local convenience stores area major grocery channel, consumers will increase their already high numberof convenience store visits, which will see these stores share of the foodand drinks market increase from 19 per cent in 2001 to 20.5 per cent in 2006.

More 'singletons', greater demands upon leisure time and time spent travelling are leading to more 'top-up' shopping. A range of reasons has contributed to this phenomenon.

First, there has been a rise in the number of 'singletons' over the past decade. Without the ties of familylife these consumers tend to go out and socialise more often than others andgenerally lead more hectic lifestyles, with plans being made and changedregularly.

Secondly, the growth in the entertainment and leisure industrymeans that consumers now have more activities in which they can participatein during their free time. The range of activities has greatly increased, ashave consumers' desires to maximise their free time by participating inthese activities after work.

Thirdly, time spent travelling is alsoincreasing the propensity to make top-up shops. For example, the averageEuropean spent an extra thirty-six-and-a-half hours time travelling in 2001than they did in 1995. As a result consumers have sought to multitask while'on-the-move', which has led to consumers increasingly purchasing (andeating) food, drinks and personal care items while en route.

Datamonitor writes that retailers will need to react by working back from consumer needs and behaviour.

"Retailers will need to account for the growth in top-up shopping and offermore convenience goods, and not just position themselves as small-scalelocal supermarkets. Furthermore, most convenience goods are currently beingtargeted at ABC1 consumers, but C2DEs have the same convenience demands andare largely overlooked. The key to unlocking the potential in the marketwill be updating retail formats and overhauling product lines to attract awide range of consumers through the doors.

Only one or two players in eachcountry are likely to succeed by targeting a very strictly defined set ofconsumers,"​ said Piers Berezai, Datamonitor consumer markets analyst andauthor of the report.

Datamonitor suggests that there are other clear areas of opportunity to players involved in themarket. Some retailers in the UK have already seized upon the first area -offering a full range of convenience goods. There is much more potential tooffer convenience goods such as ready meals, meal components as well assnacks and confectionery. In-store foodservice could also be offered.

Asecond area is targeting 'on-the-move' consumption - people eating anddrinking while travelling. The total value of the European on-the-move foodand drinks market is expected to increase from €68.8 billion in 2001 to€81.2 billion in 2006. Convenience stores are ideally located in order to offerconsumers goods like hand-held snacks, bakery and confectionery while theyare travelling to and from work.

Many retailers should also considerupdating their store layouts, writes Datamonitor​, to allow consumers to shop more easilyaccording to the specific consumption occasion. For example, many have adedicated lunch area but there are also opportunities to co-ordinate othercategories around dinner and snacking occasions. Furthermore, vendingmachines could easily be used to offer consumers a retail service even whenstore are closed.

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