Proprietary freshly made food can be a great way to propel customer visits, store margin and associated impulse sales thus boosting the overall revenue of local convenience stores which are currently burdened by cost-of-living crisis, low footfall and legislative prohibitions, Asian Trader has learnt.
The UK food-to-go (FTG) sector has been tipped to grow 3.5 per cent in 2024, reaching a value of £23 billion, according to a new report from Lumina Intelligence. The report states that convenience store grab and go achieved strong food to go growth versus pre-covid, driven by investment in ranges and value and that value growth is expected to have been +17.4 per cent from 2019-2024.
According to TWC’s MealTrak, FTG sales through convenience stores have risen by 5 per cent in the last 12 months (MAT) despite the cost-of-living crisis and other factors. The segment has thus been emerging as one of the biggest drivers to independent convenience stores.
Many c-stores across the UK are leveraging fresh and hot FTG, either made in-house and/or sourced locally and a few of them are performing really well.
Wigston Fields News & Deli in a sleepy Leicester suburb and Baba’s Kitchen in Glasgow suburb are a few examples of how a corner shop can become a beacon for food lovers in the neighbourhood and thus emerging over and beyond the strict definition of convenience store.
Baba’s Kitchen Costcutter store owner Umar Majid has changed his store’s perception from “a convenience store with a bit of food” to “a food store with a bit of convenience” and is cashing the resulting benefits.
He has a special team of a chef and support staff who make everything in-store, so all the meals are always fresh. The menu remains flexible depending on the performance and changing demands.
“As our food sales have grown over the years, we have also seen an increase in soft drinks, confectionery and crisps as whenever a customer buys food, they usually also buy a drink. We sell between 300-350 meals a week with some of them giving us a minimum of 60 per cent margin,” Majid told Asian Trader.
Food and convenience retail industry guru and pathfinder Scott Annan bats strongly for proprietary fresh food, saying this section can easily be developed into a store’s USP, something that should be nurtured to beat competition and bring more footfall.
Convenience retail expert Scott Annan
Annan told Asian Trader, “With UK independent retail having a 1.4 per cent and declining market share, proprietary fresh Food to Go is the only category that can increase customer visits, store margin and associated impulse sales of confectionery, snacks and drinks.
“Successful foodservice retailers include David’s Kitchen in Scotland, Jempson’s in East Sussex and Milestone in Northern Ireland. Fresh Food to Go is the dominant category across the Island of Ireland and is well established in what I term ‘tier one’ UK independents.”
The key point and the most noteworthy aspect of FTG is the promising margin, which usually falls into a range of 60-80 per cent (even > 100 per cent).
Annan said, “Tier two and three convenience retailers are waking up to the margin available from FTG. It’s taken a while and the profit loss cliff edge from the banning of disposable vapes is acting as a very loud wake up call.
“I recommend UK retailers to visit both Northern Ireland and The Republic to see best practice and the latest food trends. It’s a one-hour flight from most parts of the UK so there’s only lazy excuses not to do this!”
Ireland is only a few miles away, but its convenience sector is radically different in the missions it serves and the customers it reaches compared with that of the UK.
Stating that fresh food can become pivotal to success of corner shops, FTG expert Gavin Rothwell agrees with Annan, recommending UK’s independent retailers to take inspiration from their Irish and other European peer.
Rothwell cited 7-Eleven Denmark as the best example to take inspiration from.
“We have also seen some great developments from SPAR across a range of European markets, with the Netherlands being one such example,” Rothwell told Asian Trader.
“It can be daunting to move your business into a new area, and in particular one that requires different core competences, but there are many fantastic suppliers out there able to support. It’s possible to start small, but this needs to be balanced against the need to create an impact and reset customer perceptions around what your store is able to deliver.”
Rothwell recommends working with well known brands can provide a good route, adding instant credibility to the offer.
He, however added, “If you feel you have the core food competences and the right environment and structures in place, don’t be afraid to build your own proposition.”
Rothwell also feels that the food section can be a great savior amid increasingly volatile legislative environment.
FTG expert Gavin Rothwell
“Many of the traditional drivers of sales and profit are diminishing in importance and, in some cases, are becoming more legislatively challenging and complex. Food-to-go isn’t the only opportunity, but it’s an increasingly well-trodden path for convenience retailers to look to pivot and develop their FTG propositions as core elements of their offer,” he said.
Global FTG expert Matt Cundrick believes that convenience stores are “incredibly well positioned" to cater to changing consumer needs when it comes to ready meals and a quick grab and go.
“Traditional meal cycles and routines have been replaced by snacking and more grab and go approach. Convenience stores are incredibly well positioned to take advantage of this and those that adopted and moved early have seen significant growth.
“Being easily accessible to the customer, and building a trust of fulfilling the mission have always been the mainstay of the sector, and food to go is purely the next step in this journey,” Cundrick told Asian Trader.
Best practices and New Trends
Demand for nuanced health and premium quality is driving new product development in the market, with most new products surveyed aligned with healthier eating, carrying price points of +£4.00, states the Lumina Intelligence report. Vegan, high protein and high fibre products all gained share year-on-year while gut health and immune system boosting products are the new kids on the block.
The introduction of tiered meal deal ranges allows store operators to avoid hiking costs of meal deals whilst bringing-in more premium and foodservice-standard ranges.
Cundrick cautions retailers to do a bit of research before embarking on this journey.
Global FTG expert Matt Cundrick
“Think over which missions are you serving and who is your customer. Getting branded support in for example hot snacks or pastries can help add instant credibility.
“If you have hot food to offer, don’t feel the need to offer it throughout your entire opening hours. Of course, make sure there are options, but think about focusing your key solutions just during the peak lunchtime and breakfast trading hours.”
Think about waste – and accept that you will have some.
“Think about how you serve products in their best state. For example don’t be tempted to stretch hot hold times beyond supplier recommendations – a bad experience in food-to-go will have a significant impact on the likelihood of a customer returning to your store.
Cundrick also reminds retailers to keep their neighborhood’s demography in mind.
“If you are going down the bespoke route, think about how you can make both unique to your store and relevant to the customers in your catchment. For example, if you’ve a lot of families, maybe consider children’s ranges or deals.
“Don’t underestimate the importance of coffee in driving footfall. But it does need to be done well. A sad-looking, poorly maintained coffee machine will likely detract from the rest of the store rather than enhance its appeal so consider the ongoing resource you will need to dedicate to upkeep and maintenance.
Talking about best practices in this section of the store, Cundrick recommends local retailers to group and signpost FTG proposition as well as keep it neat, attractive and well-lit.
“Retailers should consider coffee dwell time (during preparation of the drink) as an up-selling opportunity by offering pastries, donuts or sweet treats alongside the coffee unit,” he told Asian Trader.
If the space allows, having a small sitting area is another great way to boost FTG as well as other related sales. A little sitting area, either inside or right outside, can also work as a community meet and greet place.
One of the latest trends in FTG is vending machine which is increasingly becoming more prevalent. Growth here is huge in minimising labour costs but delivering increasingly better-quality product.
Self-serve solutions are also interesting and promising. Retailers looking to make ground here can help make their FTG section more profitable.
Food for thought
Industry experts cite fresh proprietary FTG as a great opportunity though they also want retailers to tread in this section with caution and only after extensive research.
Rothwell said, “Food-to-go won’t be right for everyone. But it’s a growing sector with broad appeal and the ability to attract new customer to your stores as well as getting existing customers returning to store more often – so think carefully before dismissing it as an opportunity.”
TWC Development Director Tom Fender also echoes Rothwell’s thoughts saying FTG is not for everyone.
“A full FTG offer isn’t right for every independent convenience retailer – certainly not from day one. We have to be realistic. But those who have started on their FTG journey should be ready to accelerate their offering. Marketing and communication are also keys, especially while introducing new lines.”
“Many convenience retailers already offer a very comprehensive and impressive FTG range. The benefits are clear – more footfall, higher margins, diversifying away from other categories which might be in decline and tailoring towards local community needs,” Fender told Asian Trader.
Looking beyond 2024, Lumina Intelligence believes that the sector could reach a market value of £25bn by 2027.
Be it Indian snacks and meals like samosa or a vegetarian curry or biryani, Italian delicacies or quick grab options like burgers and sandwiches to locally-made Polish bakeries, c-stores can create their own unique offering.
Annan strongly feels proprietary fresh FTG should be the way forward as it is one of the most effective ways to beat nearest multiple and/or discounter.
“Independent retail has traditionally relied on suppliers and symbol wholesalers to provide guidance on assortment and store layouts. However, proprietary fresh food means retailers can be their own supplier and store planner.
“This does not mean you are alone as there are hundreds of Tier-one retailers who can provide ‘do this and don’t do that’ advice,” he said.
C-stores can always offer more than just groceries. With a little research about clientele and lots of innovation, local shops can even position themselves as a more affordable, quick and a wholesome alternative to foodservice outlets.
Scottish business conglomerate Glenshire Group has hired Daniel Arrandale as its new Property Director.
Starting in the newly created role last week, Arrandale brings a wealth of industry experience to the business, including his most recent position as Acquisitions Manager for Asda and his previous position as Development Manager at EG Group.
“I am thrilled to be joining Glenshire Group in a period of tremendous growth, with many exciting opportunities on the horizon,” said Arrandale. “I’m looking forward to working with the existing development team to maximise the opportunities within our current estate, whilst also growing the business further with the acquisition of new sites.”
As part of Arrandale’s remit, he will oversee acquisitions, development, and growth for Greens Retail, Pizza Hut, and wider Glenshire Group property development and investment interests.
The bulk of Arrandale’s career has been as Retail Director at commercial agents Christie & Co, focussing on the convenience, forecourt and franchise markets. Arrandale served at Christie & Co. for 23 years.
Harris Aslam, Managing Director at Glenshire Group added: “We are very excited to welcome Dan into the Glenshire family. Having worked with Dan many times over the years on several transactions, I can confidently say his breadth of knowledge and experience in this sector will give us a huge advantage as we continue to expand our portfolio.”
Currently operating 27 convenience stores and 20 Pizza Hut franchises in Scotland, Glenshire Group has committed to significantly furthering new location openings in Scotland as well as bolstering their property portfolio.
Brewer Carlsberg is shifting some of its marketing focus to cheaper brands, it said on Thursday (31), as consumers in major markets bought cheaper beer and in reduced quantities.
The maker of Kronenbourg 1664, Tuborg and Somersby said beer sales volumes fell by 1.3 per cent in the third quarter, noting declines in China, France and the United Kingdom. Premium sales fell 0.5 per cent in the quarter."In Western Europe, there's no doubt that the average consumer is holding back," CEO Jacob Aarup-Andersen told Reuters.
"In Asia, China stands out as a market where the consumer is very weak. Most other Asian markets are actually okay," he said, adding the company had not yet seen Chinese stimulus measures having any impact on consumer behaviour.For years, brewers have relied on a strategy of developing and promoting their more expensive premium brands to offset an overall decline in drinking.
Aarup-Andersen said he remained confident in the long-term growth potential of premium beer and that the category will comprise a significantly larger portion of Carlsberg's business in a decade.For now, however, the company is adjusting its marketing.
"In markets where we are seeing a significant pressure on premium, we are reallocating some of our focus into making sure that we are promoting properly around the right mainstream brands," he said.
The world's third-largest brewer behind Anheuser-Busch Inbev and Heineken said third-quarter sales rose 1 per cent to 20.5 billion Danish crowns ($2.98 billion), compared with 20.7 billion expected on average by analysts in a poll gathered by the company.
Despite the shift in consumer behaviour, Carlsberg said it still expects full-year organic operating profit growth to be between 4 per cent and 6 per cent. The company lifted its full-year guidance in August.
Also on Thursday (31), the world's largest beer maker Anheuser-Busch InBev reported third-quarter profits, revenues and volumes behind forecasts. AB InBev's third-quarter statement highlighted stronger growth for its more expensive beers, like Corona, which grew 10.2% outside of its home market, Mexico, during the period.
Consumers now want a greater commitment from retailers in cutting food waste, refilling stations, sustainable packaging, and partnering with social purpose organisations, states a recent research, which also highlights that a good majority (69 per cent) of younger consumers are more likely to shop with what they see as socially responsible retailers though price sensitivity still plays a crucial role.
According to the findings, published in Vypr’s Consumer Horizon Report, reducing food waste is the most important factor for the majority of UK consumers (29 per cent), especially for Gen Z women aged 18-24 (38 per cent). More than a third (37 per cent) of men aged 18-24 said they needed food storage advice. A similar number of women aged 18-24 (33 per cent) want meal kits with the exact amount of ingredients included for them to cut down on food waste.
Refill stations for personal care, cleaning products, dry goods, and beverages are also in high demand. Consumers, particularly Gen Z women, are keen to use these stations, provided they offer a cost-saving of 6-10 per cent compared to packaged goods. The study indicates that older shoppers are less likely to use refill stations unless prices are reduced by 15 per cent or more, which Vypr said shows the importance of price in driving consumers to adopt sustainable shopping habits.
The third priority for brands and retailers is to adopt sustainable packaging. Awareness of eco-friendly packaging is high, especially among younger generations. Two-thirds of UK consumers say they expect to pay more for sustainably packaged products, and that figure rises to 86 per cent among Gen Z and Millennials. However, Vypr’s research suggests that while shoppers express willingness to pay more, price sensitivity still plays a crucial role.
Ben Davis, founder of Vypr, said: “There’s often a disconnect between consumer intentions and actions. Brands need to understand that simply offering sustainable options may not be enough if price points don’t match consumer expectations.
“For Gen Z and Millennials, sustainable products need to be competitively priced or risk losing long-term loyalty. We tested this by presenting products with and without the label ‘100 per cent Recycled Packaging’ and found price remained the key purchase decision-making factor for most consumers.”
Another factor in building loyalty among younger consumers is to showcase social responsibility. The research reveals that 60% of shoppers are more likely to shop at retailers that partner with food rescue organisations or promote a charitable cause. Among Gen Z and Millennials, this figure jumps to 69%, showing a strong preference for brands that demonstrate a social purpose.
The report also reveals that 85% of shoppers are willing to pay a deposit for reusable products, though it is younger consumers, particularly those aged 18-24 who express the strongest support for such initiatives.
The Consumer Horizon report which provides insights shaping retail, product innovation, and consumer behaviour going into 2025, can be seen here.
Sugro UK, the number one buying and marketing buying group*, in partnership with b2b.store, is thrilled to announce a further expansion of its existing E-Loyalty scheme programme, which has proven to be very popular with its members and retailers, by introducing E-Loyalty Extra Compliance and Execution scheme as well as E-Coupons.
The E-Loyalty Extra is aimed to boost compliance and execution at retail store level to drive new product launches, core range compliance, some exciting fixture trials with its supply partners and more! It will be available to all member owned and member affiliated retail stores within the group.
The E-Loyalty Extra loyalty scheme will be accessible by retailers via WhatsApp platform and will allow retailers to capture evidence of compliance by simply clicking “take photo” button.
With the addition of another digital enhancement introduced to the group recently – Coupon - based loyalty mechanic, members are now empowered to incentivise and reward customers, driving stronger consumer connections and fostering brand loyalty at a granular level. Retailers can now simply redeem a coupon at the point of check out. Another key digital development within the group is WhatsApp E-Presell which enables Sugro UK’s retail partners to provide advance product volume commitments for new product launches. This functionality is particularly powerful as it ensures that suppliers have accurate forecasts before product launches, enabling better stock availability from day one of product being available on the market.
The ease and speed of using WhatsApp for these commitments simplifies the presell process, ensures accuracy and strengthens relationships across the supply chain.
While other industry players may soon consider introducing similar digital tools, Sugro UK are proud to be at the forefront of enhancing retail-focused digital solutions. This early adoption not only ensures that Sugro UK members remain competitive but also guarantees them access to the best digital tools available in the market. These efforts are part of Sugro UK's ongoing commitment to delivering value to its members and empowering them with innovative solutions for growth and success in an increasingly digital retail environment.
Sugro Head of Commercial and Marketing, Yulia Petitt said: “I am delighted that Sugro UK members are now able to provide photographic evidence of retail compliance and in-store execution to our supplier partners, using a wide range of display and compliance criteria such as planograms, secondary displays, trials, and new product developments (NPDs).These digital features allow members to share real-time proof of execution, enhancing accountability and building supplier confidence. The launch of E-Presell functionality opens a huge digital advantage for the group which will benefit all – members, retailers and suppliers in gaining accurate forecast and ensuring product visibility in store from day one of product being on the market and with the ease of using WhatsApp, the entire pre-sell process becomes a much quicker and easier process to manage for all parties.
"The Group has had 18 consecutive years of growth and, once again, on track to deliver in 2024, with the year-to-date performance of +15% year on year and growth across all categories.” Rob Mannion, CEO of b2b.store, added: “The rate of innovation in the wholesale sector is increasing and these launches are further great examples of that. We’re particularly excited about the developments and different uses of WhatsApp in the industry, with more coming in the pipeline for 2025 – it’s a tool no wholesaler or buying group can afford to ignore because of the level of influence it’s having in the sector and there’s no sign of that direction of travel changing any time soon.”
Sugro UK is proudly owned by its 90 plus independent wholesale members, with a combined turnover of over £2.5 billion.
Expanding its footprint in the World Foods category, Paulig has acquired Panesar Foods, a prominent UK-based producer of sauces and condiments.
Founded in 1992 and headquartered in Tipton, Panesar Foods is a family-owned business with three production facilities, employing 308 staff and achieving a turnover of £59 million in the 2023 fiscal year.
This collaboration is expected to accelerate product launches and drive growth in diverse offerings, including sauces, salsas, marinades, dips, and condiments.
"We have collaborated with Panesar Foods for 17 years, and we are very pleased to welcome the company to Paulig," said Rolf Ladau, CEO of Paulig. "Today, our combined taste expertise and innovation skills unite around a shared ambition: to accelerate our international growth and expand our World Foods offerings."
Bill Panesar, CEO of Panesar Foods, expressed confidence in the partnership, stating, “As Panesar Foods becomes part of Paulig, I am confident that our ambitions for international growth will be realised, and the business will continue to thrive. We share a strong commitment to innovation and delivering high-quality, flavourful products, and I look forward to bringing even more delicious products to the market, together."
Jas Panesar, MD of Panesar Foods, echoed, “This partnership will allow us to reach new markets and deliver our authentic World Food flavors to a broader audience. We look forward to combining our passion for quality food with Paulig’s commitment to sustainability and innovation.”
All 308 Panesar employees will transition to Paulig’s team. Financial details of the transaction remain undisclosed.