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LONDON -- The value of the European convenience retailing market is estimated to be worth €251bn (US$306.1bn) and has huge potential for growth, according to a report by food industry think tank IGD.
IGD said that a number of structural and economic trends, including demographic and lifestyle changes, are driving growth. The sector will also benefit from gaining share from other formats and developing added-value products and services to encourage consumers to trade up from basic groceries.
According to IGD's report, convenience stores are fast becoming an essential format for leading international retailers as the format is relatively unrestricted by legislation in most markets, responds directly to changing consumer needs and is flexible and profitable. IGD said it believes that the future retail winners in European convenience retailing will have to exhibit a number of characteristics, including customer focus, a strong retail concept, scale, supply-chain expertise and well-trained, motivated staff.
The European convenience sector has been undergoing a period of consolidation, driven by major retailers such as Carrefour, Colruyt and Rewe acquiring operations from weaker groups such as Laurus and Bon Appetit. IGD believes that this consolidation is in its early stages and will continue for the foreseeable future, driven by major multiples seeking to generate growth in mature markets. Consolidation is expected to become increasingly important and will drive the modernization of the sector.
IGD said it expects that there will be a growing convergence of concepts and products across Europe as international retailers and suppliers gain a greater share of the market. Internationalization will be driven by the growth of pan-European players such as the major oil companies and international retailers such as Carrefour, Tesco, Delhaize and Spar.