Supermarket ‘fightback’ sparks fears for independents

Figures have shown that the entrance of the 'big four' supermarkets into the convenience sector has led to the market becoming saturated.

The number of UK convenience stores rose by a fifth to the end of 2015, prompting a warning that independent retailers must understand their competition.

According to figures from the Local Data Company (LDC), there were 16,426 convenience stores at the end of last year, with the ‘big four’ supermarkets seeing the fastest rate of new openings.

Matthew Hopkinson, director at the LDC, said the market had become saturated and compared the growth rates to “a car crash in slow motion”.

“It is clear that there is major oversupply,” he said.

Dr Clive Black, head of research for Shore Capital Markets, added that few in the sector have truly recognised the importance of rising food and drink consumption outside of the home.

“Food-to-go is perhaps the fastest-growing element of the convenience segment,” he said.

Meanwhile, Tim Billson, senior retail analyst at the IGD, recently identified the supermarkets’ “fightback” within the sector as a concern.

“Convenience is no longer confined to the convenience channel,” he added, addressing an audience at the IGD Convenience Retailing Summit. “This is becoming a threat.”

Retailers were also warned by Michael Freedman, IGD’s senior shopper insight manager, to make sure they understood the competitive threat.

“Other channels are fighting to steal market share from established retailers because they want a share of the growth,” he said.

IGD research revealed that symbol group numbers fell by 0.7% in 2015.


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