Shopping locally is here to stay. We're time-pressured, we buy little and often, and the convenience channel is forecast to keep outgrowing the supermarkets. But store owners face real headwinds. The winners will be those who make their shop relevant to more people, more often.
The headwinds are real
Operators are facing higher National Living Wage and National Insurance costs. Some store managers need a 3% reduction in cost of goods just to stand still.
At the same time, the categories convenience was built on are declining. Smoking has been falling for years, the disposable vape ban hit a high-margin category, and we don't buy newspapers and magazines like we used to. The old CTN missions are largely a thing of the past.
Price is harder too. Customers used to accept around a 10% premium for shopping up the road. With the big grocers price-matching the discounters in their own convenience formats, and loyalty pricing widening the gap, that premium is under pressure.
1. Win the missions customers are crying out for
The way forward is fresh food, food to go and the meal for tonight. The best convenience stores now offer:
- A strong meal-for-tonight and food-to-go range.
- Fresh deli, and in some cases quality local meat.
- Bake-off: fresh bread, savoury snacks and cakes baked on the premises.
- A good own-label range offering real value across several hundred lines.
Customers feel more comfortable buying fresh food in modern, clean, well-lit stores. Investing in the estate is part of the proposition.
2. Take share at seasonal moments
Track your market share against the supermarkets across the year and the peaks and troughs tell you where the opportunities are. Easter and Halloween are buoyant because confectionery sells. Christmas is tough because the big shop covers most missions.
But there's so much share to win at other events. Take Mother's Day. You don't need a big range. A few quality bouquets covering good, better and best, cards alongside, luxury chocolates and a keenly priced bottle of Prosecco will do.
Customers don't automatically think of convenience stores for these occasions. Many are on autopilot when they visit, so market the offer and use disruptive merchandising front of store to take them off course. Sometimes you have to speculate to accumulate.
3. Become the community hub
As banks, pubs and ATMs close, convenience stores are becoming the hub for everyday services. Post Office counters, cash, bill payments, parcel collection and returns all bring customers in. They'll invariably buy something else while they're there.
A service like this is a genuine differentiator. It's the kind of thing that makes a customer walk past one convenience store to get to another.
4. Use the relationship the supermarkets can't copy
Convenience stores have always played a key role in the community. Many customers are on first-name terms with the staff, and the experience is far more personal than the high street.
One customer told me she shopped locally because she felt "like a somebody" there, and "a nobody" at the supermarket. Build on that. Recognise regulars, reward them, and give them a reason to keep coming back.
5. Promotions that drive visits and basket
Smart promotions can grow both footfall and basket. Coupon-at-till programmes reward the next visit. Gamification, a digital take on scratchcards, invites customers to play a quick game for a prize or coupon. Brands can fund the prizes, which protects margin, and you get proper redemption data by offer and by store.
Always keep some stores or a region out of the promotion. It's the only way to know for sure what was incremental.
6. Run the shop more efficiently
With costs rising, technology can help protect margin: electronic shelf-edge labels, self-checkouts, AI-driven forecasting and tools to reduce shrink. Retail media screens can even turn store space into supplier income.
Putting the customer front and centre
As long as we put the customer front and centre in our thinking, the convenience sector will thrive. Satisfy more missions, deliver value, own your seasonal moments and look after the relationship. That's where like-for-like growth comes from.