Non-affiliated independent store operators are set to resist the pressures of consolidation and will still control nearly 50% of UK convenience stores at the end of the decade, according to new research from food and grocery think tank IGD.
IGD’s report suggests that, despite rapid consolidation over recent years, convenience store ownership remains highly fragmented, with 60% of stores and 33% of sales currently controlled by non-affiliated independents (operators with fewer than ten stores under common ownership, all of them independently branded).
Whilst the number of non-affiliated independent retailers is in long-term decline, those that remain represent a hard core of the most able and dedicated and IGD expects them to continue to remain the most common providers of convenience retailing for some time to come, making up 48% of stores and 30% of sales in five years time.
Many small retail businesses have also chosen to enter Symbol operation, affiliating to a group such as SPAR or Londis in order to gain scale advantages and to benefit from additional support and expertise. IGD believes symbol groups will continue to recruit from the independent segment and will lead the market with 27% of stores and 34% of sales by 2010.
Add to these stores the thousands of small fuel dealerships which have been redeveloped as modern convenience stores and it becomes clear that independent retailers are set to remain the market leaders for some time to come.
“The consolidation of convenience retailing will continue and recent corporate activity has given additional portfolio share to a small number of retailers that also have proven, modern store formats and high-quality convenience offers,” said IGD chief executive Joanne Denney-Finch.
“There is no denying there have been casualties in the independents, however they are upping their game plan and we are confident that they will make up the bulk of stores for some time to come. The development of new types of convenience stores across the UK will drive market growth and we believe will actually generate extra demand for convenience rather then merely fulfilling demand which is already present. This would mean that it is possible for growth to occur across all retailers, despite the apparently finite potential of the sector,” she added.
To find out more about IGD’s reports, click here.