U.K. Supermarkets Aggressively Expand Into Convenience Market

The big-name grocers are infiltrating the smaller format marketplace.

February 28, 2014

LONDON – In a channel worth more than £35 billion annually, it’s no wonder that U.K. supermarkets are busily making plans to grab some of the convenience store market share, Retail Week reports. From Sainsbury’s to Tesco, Co-operative and Morrisons, big grocery store chains are getting aggressive in expansion plans for smaller format stores.

“Lifestyles are changing. More people are shopping locally, customers are looking to do top-up shops and they’re being flexible about where they want to shop,” said Simon Twigger, director of convenience for Sainsbury’s.

In the United Kingdom, the convenience store market has long been ruled by independents and symbol groups — only 30% of spending channels through units connected to large supermarket companies. The leading chains are hoping to increase that percentage by adding more locations in the coming years.

For example, last month, Sainsbury’s will operate 1,000 convenience stores by 2016, a nearly twofold increase from its current locations. Co-operative will open more than 400 units by 2017, while Morrisons will add 100 annually. Tesco, Aldi and Lidl are all looking to build smaller footprint stores

“Convenience stores are becoming bigger, more diverse and more fresh food-focused. The independents have a large chunk of the market and it’s fair to say that we see that as an opportunity. Where we see a lack of quality convenience with small stores with limited fresh food, we will look to squeeze them,” said Stuart Hookins, head of acquisitions for Co-operative.

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