Budgen’s is to roll out new convenience format stores. This move follows the success of major food retailers and takes advantage of new trends in consumer behaviour, including more frequent top-up shopping and greater flexibility. However, knowing the market will be the key to making a success of this venture.
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Budgen’s is launching new convenience stores called ‘Quickstop’ in response to the success that other retailers such as Tesco and Sainsbury have enjoyed with the format. The convenience store format initially failed to live up to its promise in the UK, but is now becoming more popular with consumers as retailers learn its strengths and weaknesses.
When done well, convenience stores succeed because of three main drivers – the growing number of singletons, the increasing amount of time spent on the road, and more spontaneous social lives, which demand greater flexibility from people.
Convenience stores are most often used for making top-up purchases, either as people try to come up with new solutions for their evening meals or because some, for example young singles, do not make regular shopping trips. To this end, Budgen’s new stores will be stocked with items such as ready-meals, fresh fruit and vegetables, prepared salads, bakery items, beer and wine, and non-food goods.
However, convenience stores are not, as was originally imagined, the preserve of young, mobile, socially active professionals. C2DE (blue collar) consumers actually represent over 60% of the overall market for convenience stores. To cater for this group, Budgen’s (and other convenience chains) will have to focus on offering price savings, rather than simply charging a premium for convenience.
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By GlobalDataThe convenience retail format is an important one as it enables retailers to capitalise on a new form of consumer shopping behaviour, expand their market share and offer a more complete service to their customers. However, the growing attention that major supermarkets such as Sainsbury’s and Tesco are paying to the segment will translate into the rapid development of a highly competitive marketplace. Budgen’s will need to carve out a niche that does not rely merely on convenience if it wants to ensure long-term success.
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