BOSTON — Convenience stores and discount stores will grow faster than all other offline retail channels in the United States in the next five years, reflecting consumers' increased focus on price and speed, even if it means more limited assortment, according to an analysis from e-commerce insights company Edge by Ascential.
Nonfood discount, food discount and convenience stores are all projected for annual growth rates of more than 5%, whereas all other offline retailers, aside from membership club stores, are projected at annual growth rates of 3% or less. C-stores are projected for the highest growth at 5.4%, with discount and nonfood discount stores projected at 5.3% and 5%, respectively.
The forecast reflects broader economic trends, the report said. While paychecks remain relatively steady with unemployment continuing at historic lows, wages remain stagnant for many workers, placing increased sensitivity on overall value, it said.
"What we're seeing offline is similar to what we're seeing online," said David Gordon, research director for Edge by Ascential. "There's an increasing emphasis on low cost and convenience. You can see it through the lens of Amazon, and it will continue to play out online in similar ways."
U.S. projections largely reflect what's projected on a global scale, with c-stores (6.6%), nonfood discount stores (5.2%) and discount stores (4.9%) joining membership club stores as experiencing the fastest growth.
This growth can be seen in the chains that were planning to add U.S. stores in 2019. German-owned discounter Aldi expected to open 100 new locations. Dollar General expected to open more than 900 stores, with hundreds of locations adding produce and fresh foods. Dollar Tree and Family Dollar stores expected a net increase of 160 locations.
Edge by Ascential projects food discount stores to continue gaining overall share, increasing to 9.7% of food sales in 2024, from 8.8% today and 7.4% in 2014.
C-stores will continue to thrive due to urbanization, declining household sizes and preferences for smaller shopping missions. They are also proving relatively resistant to share loss from online retailers, with only a 0.2% loss in share from 2013 to 2018.
Discount stores are also seeking to future-proof their share, the report said. Many are partnering with online delivery intermediaries, which help support a last-mile solution that fits with the lower cost, low-complexity discount model.
The findings are drawn from Edge by Ascential's Retail Market Monitor, which analyzes how individual sectors are performing and how they are forecast to grow by 2024.
Boston-based Edge by Ascential provides data, analytics, insights and strategic consulting. It is a subsidiary of Ascential plc, a London-based global specialist information company.
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