Convenience sector feeling squeeze as Covid-19 restrictions are eased

The convenience sector has been feeling the squeeze as consumers have returned to spending more at bigger supermarkets and in the hospitality sector following the easing of Covid-19 restrictions.

According to the latest data from the Lumina Intelligence Convenience Tracking Programme, the average weekly value of convenience store shoppers decreased by 1% during the four weeks ending July 25.

The average weekly value of a convenience store shopper declined from £23.56 in the four weeks ending June 27 to £23.27 in the following four weeks.

During the same periods, average basket size remained stable at 2.8 items per trip. According to Lumina this indicates that shoppers are becoming more budget conscious and opting for alternatives to higher value items.

This trend is apparent in a decline in impulse purchasing, which decreased by 0.7 percentage points during the four weeks to July 25 as consumers increasingly restrict spending on non-essentials. Impulse items were increasingly purchased due to promotions, further emphasising a move towards value-conscious shopping.

The average visit frequency of convenience shoppers has also fallen slightly, from 2.8 times per week to 2.6. This reflects the easing of restrictions and pre-pandemic shopping habits returning.

This is further highlighted by a steep decline in the proportion of shoppers using delivery and click & collect. The proportion of shoppers using delivery fell 4 percentage points, from 7.1% to 3.1%. Click & collect saw a decline of 1.9 percentage points, from 2.2% to 0.3%.

Commenting on the results, senior insight manager at Lumina Intelligence, Katherine Prowse, said: “With restrictions easing, convenience stores are having to compete with other grocery channels, as well as hospitality. Shoppers are becoming more comfortable out and about, so larger shops within supermarkets are more prominent. As hospitality reopens and events return, there is also a challenge around budgets.

“Shoppers will be keen to make up for lost time, which could result in them becoming more budget conscious with their groceries. This is already apparent with spend declining and impulse purchasing on promotions increasing. Retailers can lean on this demand for promotions to drive footfall and highlight value.”