Despite growing inflation and the repercussions of the global pandemic, the UK convenience market demonstrated impressive resilience and growth in 2022, according to new Convenience & Wholesale Market Report 2023.
The sector marked a substantial increase of four per cent in 2022, amounting to a total value of £45.2 billion. The primary driver of this growth was the convenience multiples sector, which led the growth at 6.8 per cent. This surge was partly driven by the return of consumers to city centre and workplace locations post pandemic, as well as a heightened focus on value credentials.
As consumers gradually return to a post-pandemic “normality”, market projections indicate further growth in 2023, with an expected increase of 4.1 per cent to reach an overall market value of £47.1 billion.
However, the journey to these promising figures hasn’t been without obstacles. High energy costs, supply chain challenges and value-conscious shoppers have posed significant hurdles. But the resilience of the market is evident in its response to these challenges, including enduring high inflation, strong innovation in own-brand offerings, and the adaptation of new store formats to maximise footfall.
Despite the positive growth, it’s noteworthy that convenience market penetration has declined by eight percentage points to 56 per cent in May 2023. This downturn appears to be driven by older and less affluent shoppers (C2DE group), who seem to have exited the channel due to rising prices.
Energy costs, inflation, and supply chain disruptions continue to be business concerns, posing challenges to retailers’ profitability. To combat these challenges, wholesalers and suppliers are poised to offer support to retailers through tailored category advice, product recommendations and strategic promotions. This includes guidance on energy cost-saving measures, such as the implementation of energy-efficient fixtures like fridge doors.
While challenges persist, the robust growth in the convenience market in 2022 and its projected growth in 2023 clearly illustrate the sector’s adaptability and resilience in the face of an uncertain economic climate.
