Fresh baked goods lead way in c-stores - but there's still room for growth

By Vince Bamford

- Last updated on GMT

Fresh bread can be a big draw for c-store shoppers. Photo: iStock - sergeyryzhov
Fresh bread can be a big draw for c-store shoppers. Photo: iStock - sergeyryzhov

Related tags Retailing

Fresh baked goods are the most popular item for UK convenience store shoppers, a new study has shown.

Research by analysts Mintel revealed that, of those UK consumers who said they regularly shop at convenience stores, more than half (57%) regularly buy freshly baked goods, followed by 55% who regularly buy fresh food. (See graph below.)

Fresh bakery had proved to be one of the big strengths of convenience formats operated by major UK supermarket chains, Mintel retail analyst Nick Carroll told BakeryandSnacks.

When the likes of Tesco and Sainsbury’s came into convenience, they offered new formats that promoted fresh products in a big way​,” he added. “Fresh bakery was a big part of this​.”

Carroll said the scale of the major supermarkets could give them advantages over other convenience store operators such as independents or symbol groups.

Margins thinner in convenience

The margins a convenience store operates under compared to a supermarket will be much thinner – and the major retailers can offset this​,” he added.

There were potentially gaps in the market for UK retailers to increase the variety of their food-to-go offer, suggested Carroll, particularly when it was an area some were already strong in.

There may be an opportunity for retailers to operate dedicated food-to-go stores – it is hard to fully compete with the likes of​ [café/food-to-go business] Pret A Manger when only a third of your store is food to go​,” he added.

Changing face of retail

In general terms, said Mintel, convenience stores are benefitting from the transformation in UK retail that has seen growing consumer interest in shopping for groceries online, and in shopping at discounters such as Aldi and Lidl.

This has been good news for convenience stores as both these channels require a level of top-up shopping, said Mintel retail analyst Nick Carroll.

And he added that convenience stores had also benefited from the shift away from the habit of doing one major shop a week.

Mintel found that 22% of shoppers say they regularly do their main shop in a discount supermarket, with 46% of this group regularly topping up their shopping in convenience stores. Researchers also found that  24% regularly do their main shop online, and that 56% of this group regularly visit convenience stores for top-up shopping.

Shopping on a when-needed basis

Consumers in urban areas – particularly younger consumers ​ may not want to do a big weekly shops​,” Carroll told BakeryandSnacks. “We have seen a shift to more fluid grocery shopping habits with consumers shopping on a more when-needed basis​.”

Three quarters of the British shoppers polled for Mintel said the opening times of convenience stores make it easier to fit shopping into their daily schedule, while half said shopping at convenience stores allowed them to be more flexible with their meal choices.

The increasingly busy nature of modern life means consumers are looking to cut back on the time it takes to do certain activities​,” added Carroll. “Grocery retailing is no different, and the convenience sector is perhaps the best suited to take advantage of this​.”

As a result of such changes, the convenience market is estimated to have grown 1.8% to reach £38.7bn ($56.3bn) in 2015, versus a 0.2% decline in the wider grocery market.

Products bought in c-stores, February 2016

Which of the following do you buy at least once a month from a convenience store?

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