LONDON -- "Convenience, convenience, convenience may soon replace location, location, location as the retail mantra," said Sandy Skrovan, U.S. research director for Planet Retail and author of U.S. Convenience: Changing Face of Small-Box Grocery Retailing. "Small-box convenience stores will be among the fastest-growing banners through 2018 with the likes of Walmart Express and Dollar General Market leading the charge."
In a five-year span, the average store size across grocery formats is set to shrink from 25,500 square feet today to less than 24,000 sq. ft. by 2018, according to Planet Retail research.
"Everyone covets convenience--shoppers and retailers. Busy lifestyles--two working parents, hectic home and job schedules, lengthy commute times--are driving up demand. Modern meal preparation and eating habits speak to a move toward on-the-run, grab-and-go consumption," she added. ""It's no surprise 'everyone'--dollar stores and hard discounters, supermarkets and supercenters--is targeting convenience. After all, the huge size of the U.S. convenience store and forecourt channel (about twice that of U.S. Walmart operations) and its fragmented structure make it a relatively easy play."
Planet Retail expects the fast-paced advance of alternative convenience locations to disrupt traditional c-store and forecourt retail models.
"Channel blurring will make it increasingly difficult to distinguish between formats; i.e., is it a c-store, dollar store, hard discounter or 'mini' Walmart? But shoppers don't care--they're channel-agnostic. They just want an easy-to-shop experience fitting their shopping mode: stock-up, fill-in or immediate need."
This growing small-box trend, however, has huge vendor implications. Skrovan said: "Packaged goods suppliers will find themselves fighting for shrinking shelf space. Product innovation (think small, single-serve, foodservice) becomes paramount. Due to space constraints, small-box stores require large volumes of high-frequency SKUs. Nothing less will be tolerated. Items either fulfill productivity demands or get replaced--quickly."
London-based Planet Retail is a leading provider of global retailing information, from news and analysis to market research and digital media. Covering more than 9,000 retail and foodservice operations across 211 markets around the world, Planet Retail provides global data and insight for retail, technology, banking and consultancy organizations worldwide.
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