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What counts as a convenience store?


Convenience is a word increasingly mentioned across the grocery sector but what do companies mean when they use it?

Whether through a Tesco Metro, Sainsbury’s Local or Little Waitrose, the major retailers are becoming evermore visible on high streets in smaller format stores.

The top supermarkets call these outlets convenience stores and see them as a major part of their expansion plans.

Morrisons is the latest to trial smaller format stores but, some suggest that it is misleading to label these outlets as convenience.

In a recent discussion with Retail Gazette, the CEO of the Association of Convenience Stores (ACS) James Lowman argued that these smaller formats are not necessarily convenience stores.

Although noting it is a complicated issue, he stated that if a store is bigger than two units, has a wide spectrum of product lines and is not anchored in the local community, there is an argument that it is not really convenience.

“In all honesty, I don’t think there is a hard and fast definition,” said Neil Saunders, Consulting Director for Verdict Research.

“The ACS has an axe to grind so of course it’ll say that supermarkets’ smaller stores are not proper convenience stores.”

Independents and traditional players in the sector like Spar are experiencing increasing competition from the top retailers, who are finding it more difficult to secure larger sites for new superstores.

Saunders added: “As for not having connections to the local community, I wonder who they think staffs such stores if not people who often live and work in the local area.”

By definition the word convenience means to make things simple, handy or easy to obtain and people refer to a convenient time or convenient place.

Using this basic meaning, according to Retail Analyst Jonathan Banks, many larger stores could qualify for this categorisation.

“A study I did of baskets showed that even hypermarkets are used as convenience stores. They pick up on lunch time trade by having separate displays very near the front of the store for sandwiches, crisps and soft drinks so that you don’t have to walk for miles around the store,” he said.

“They use technology to ensure that checkout queues are minimal - and they also make the checkout process easier by having self-scanning and ‘ten or less’ lanes for basket shoppers.

“Free parking at a big store is more convenient (to some people) than either a long walk to a high street location or parking in a grotty multi-storey that you have to also pay to use.”

Spar is a more conventional convenience store but is it any different to the smaller outlets from the large grocers?
Spar is a more conventional convenience store but is it any different to the smaller outlets from the large grocers?

Banks points towards the success of food trading in travel locations to show how grabbing a meal on the move, or topping up supplies in-between a big weekly shop, is a vital part of the grocery industry.

Last week Network Rail produced healthy retail sales growth at their stations, with supermarkets at its locations recording a 14.63 per cent year-on-year rise in trade in 2010.

Retailers like Marks & Spencer and WHSmith already cover many travel locations and if you add the convenience ambitions of the major supermarkets as well, it becomes clear that this is set to be an overcrowded market.

Saunders said: “Inevitably as the market becomes more crowded the big players will start to bump into each other more, especially in urban locations that can support more than one store.”

Major retailers will fight it out for space but it will be the independents who will find it hardest to compete in this new environment.

“Independent players are almost certain to be the biggest losers as they often can’t offer the same levels of price or choice as the mainstream grocers,” Saunders continued.

“That said, the ones under real threat are those which add no value or give consumers no reason to use them over the larger grocers.”

Banks believes that quality not price will be the most important factor for these independent stores to survive, as consumers will still pay more for the convenience of being able to buy exactly what they want when they want it.

“The economic downturn does not mean that consumers are no longer interested in quality, tasty, healthy food,” Banks argued.

“I think the 93 per cent of us in employment are mostly prepared to pay a (not too large) premium for good solutions to our shopping problems.”

So what makes a store ‘convenience’, it seems, is simply giving the customer what they want, locally and quickly.

Published on Friday 18 March by Editorial Assistant

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