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UNITED KINGDOM -- The convenience sector here is growing faster than mainstream grocery retailing, up 4 percent over 2005 and now worth £24.9 billion a year, according to leading research organization IGD, and reported by FreshInfo.com.
But levels of consolidation and acquisition activity were muted in comparison to 2003 and 2004, and store numbers have declined by 1.1 percent this year, falling to 51,526, the report stated.
The highest level of growth came from c-stores, where store numbers increased by 5.1 percent. For example, Bestway, Landmark and Booker have increased the number of stores operating by more than 600 in total. This has led to a 10.2-percent increase in the c-store group's value, with the segment generating sales worth £8.2 billion a year.
There also has been an increase in convenience multiples, up 2 percent on last year, with sales up by 16 percent. Tesco Express, Sainsbury's Local, M&S Simply Food, along with regional operators Davis Sands, Mills and Smile, have benefited from strong like-for-like sales and the conversion of stores into high performing formats.
But it was the forecourt sector that experienced the greatest degree of change over the year, as oil companies continued to divest their company-owned stores to focus on their upstream activities. The report also stated the long-term decline of non-affiliated independent stores has slowed down over 2005, with a 3.6-percent fall in store numbers. Some of these retailers will have been recruited by larger operators, although others would have chosen to leave the sector as a result of problems with succession, and the impact and costs of new legislation, FreshInfo.com reported.
IGD forecasts that the value of the sector will continue to grow, with sales reaching between £30.8 billion and £33.9 billion by 2011.