As cost-of-living crisis continues to force Britons to look for cheaper avenues, industry players and experts believe that local convenience stores- with the right mix of offerings- stand a good chance to gain more customers in these tough times.
As grocery inflation touches 13.9 per cent and shoppers face a £643 jump in their annual grocery bill, consumers are looking for all the possible ways to manage budgets- from switching to own label products to buying more canned food and wonky vegetables.
Apart from these practices, a large chunk of shoppers is seen ditching their usual shopping destination in search for better venues- places that can give them better value for their money. According to Kantar September data, Asda saw additional 417,000 customers through its doors over the 12-week period.
What is making shoppers switch? What are they looking for? According to new research from American Express, 77 per cent of Britons are increasingly focused on value for money, with almost seven in 10 (68 per cent) believing that retailers could do more to help counter rising prices. The research adds that 23 per cent of shoppers are seeking out best deals rather than sticking with their usual retailers.
Sarah Coleman, Director of Communications at TWC, claims that value is the number one priority right now among shoppers.
“Consumers are adopting many tactics to manage their grocery spend and this will include trading down, whether that’s across the board or in certain categories where the perception is that quality is less important,” Coleman told Asian Trader.
Shoppers are indeed increasingly seeking better value for money, quality, and convenience during the current economic climate.
According to Dael Links, head of Snappy Shopper, the top priorities for shoppers are price point, convenience with home delivery and sustainability.
“Now more than ever, customers are looking for value when they shop, so it is important that prices are competitive,” Links told Asian Trader, adding that Snappy Shopper allows retailers to offer delivery without the need for higher retail prices, thus keeping online prices the same as instore.
Or maybe, the shoppers are becoming savvier and want way more than just cheaper prices!
Greg Deacon from Jisp points out that the exact experience that shoppers want is quick checkout, “help me save” and rewards, a combination of these which continue to drive them to their local stores.
Shine your USP
In these turbulent times, how local stores can not only make their customers stick but also gain new ones?
Food and Convenience retail industry expert Scott Annan vouches on quality proprietary products (lower price) and genuine ‘yes we can’ customer service for the success of local stores in the present times.
“A robust quality proprietary assortment, local fresh food and value on (lets’ say) the 10 top food and household staples, all this communicated through consistent and planned social media, are some of the things that symbol groups can offer to attract more shoppers to the stores,” Annan told Asian Trader.
Senior retail executive Dev Dhillon seems to agree with Annan here, adding that independent C-stores have to play to their core strengths to retain customers.
“Specifically, focus on high availability, great service and meeting local needs. Offer value but be realistic on how much you can compete on price,” he told Asian Trader.
Dhillon tells retailers to focus on initiatives that are adding real value, not just ticking boxes with suppliers. Own label ranges will be really valuable to retailers right now.
The highlights of local C-stores are quick access and convenience. In the current environment, it becomes more important for retailers to offer discounts and cashbacks to earn shoppers’ loyalty.
Coleman from TWC points out how around one in three shoppers are a member of a grocer’s loyalty scheme. However, uptake is highest amongst older shoppers only while younger shoppers, who are most likely to feel the inflation pinch, are still left out.
“Loyalty schemes provide retailers with an asset- data, which allows them to better understand their customers’ behaviour and therefore better target them with relevant offers to stretch their spend and ensure they return. This benefit, of course, must be off set against the cost of running the scheme,” she said.
Sarah Coleman
To continue to succeed, Coleman feels that convenience store retailers need to understand what their customer base wants, and it will have to be about “more than just lower prices” if there is a discounter nearby.
“Whilst consumers generally accept a price differential in convenience, the current pressure on household budgets will undoubtedly be putting this under greater scrutiny. This means that price marked packs play an important role in providing value reassurance,” she said.
Loyalty schemes are becoming a key differentiator for consumers. The research by American Express too talks about loyalty schemes, claiming that 52 per cent of consumers say they are more likely to shop with a retailer that has a loyalty scheme, and 61 per cent believe retailers can do more when it comes to rewards.
Steve Moore, head of retail at Parfetts, states that loyalty schemes are a great way of retaining consumers.
“At Parfetts, we work tirelessly to ensure our promotions add a real point of difference to our symbol estate whilst also delivering competitive margins for our retailers,” he told Asian Trader.
Deacon from Jisp too feels that loyalty schemes are proven propositions to help retailers, brands and shoppers as they help shoppers “shop, be rewarded, personalise deals and create a direct conversation between the scheme (retailer)”.
Apart from better prices and loyalty schemes, C-stores need to up their game overall too, especially when it comes to home delivery and e-commerce.
Links from Snappy Shopper believes that providing outstanding customer service and a personal touch elevate local store above “faceless supermarkets”.
Home delivery is an essential part of the future success of convenience stores, Links told Asian Trader, adding that such a service enable them to widen their community network and future-proof their business against the competition.
“It has grown significantly in recent years, driven predominantly by the increase in consumer demand. And multiple consumer habits established over the past two years look set to stay, so offering this service brings many benefits to stores, beyond increased sales, profit, and customer loyalty. It also enables them to reach a much larger customer audience,” he said.
Home delivery is so convenient for today’s consumers, yet some convenience retailers lack the manpower and expertise to initiate the service and could therefore be losing out, Link said.
However, it is one of the easiest forms of expanding customer base.
“According to our retailer network, around 80 per cent of their customers who use the Snappy Shopper app were acquired through the platform and would never have visited their physical store,” Links said.
Bring it On
Retail environment is set to become even more competitive, presenting local stores with newer opportunities to engage customers and drive loyalty- a fact that most industry voices, from retail experts to service providers to data analysts, believe firmly.
Moore from Parfetts states that the market is becoming more competitive, and retailers must ensure that they take advantage of their symbol partners or cash and carry offers to pass the savings onto their customers.
Head of retail at Parfetts Steve Moore
“In such a challenging financial environment, it will help ensure repeat shopping journeys and also increase basket spend,” Moore told Asian Trader.
Deacon from Jisp strongly believes that indies have an edge in this new tussle.
“Independents can move quicker and be even more competitive on convenience for shopper, price and rewards whilst ensuring they are maintaining or growing margins in doing so,” he said.
Local stores can offer great service, value, rewards, and availability, then “communicating the hell out of it locally”, Deacon from Jisp said, adding that the Big Four can’t do this at a hyper local level.
Referring back to American Express research’s findings, claiming that 65 per cent of those surveyed value businesses that accommodate last-minute purchases and quick delivery, local retailers need to offer a positive customer experience to stay ahead of competitors.
Coleman from TWC feels C-store can play to their strengths through these difficult times by being a go-to convenient choice in their local area and offering exceptional customer service.
“It can be both time and cost efficient to shop local for many different reasons, including cost of travel, avoiding impulse purchase made in major supermarkets, and time taken,” she told Asian Trader.
Get Personal
As shoppers move away from Big Four, it is not only discounters that can gain them.
Local C-stores stand a considerably good chance to attract the displaced shoppers by offering them best prices, cashbacks schemes, loyalty schemes suited to their needs, home delivery solutions, PMPs and the most importantly, a personal touch.
Retail experts Dhillon and Annan however state that Big Four will not sit idle.
“It is inevitable that share of spend will move to discounters. However, don’t underestimate the response of market leaders,” Dhillon warns, adding that two of the top four grocers have massively raised their game on value - the remaining two will soon follow."
iStock image
Dhillon specifically called on forecourt retailers to up their game.
“Forecourt retailers have traditionally resisted promoting impulse products as it’s been regarded as unnecessarily giving away margin. They may have to think twice to convince fuel customers to part with extra cash. Meal Deals are important too,” he said.
“Despite the challenging headwinds, we mustn’t forget just how resilient the independent c-store industry is. I am sure retailers will come out of this period with stronger propositions and leaner/fitter businesses,” Dhillon said.
Annan, on the other hand, banks heavily on the personal touch.
“An abundant offer, served with a smile and some flexibility to local customers’ need will always beat space shelves, a scruffy store and surly service as value is secondary to these for many customers,” he concluded.
The UK retail sector is bracing for a challenging but opportunity-filled 2025, according to Jacqui Baker, head of retail at RSM UK. While the industry grapples with rising costs and heightened crime, advancements in artificial intelligence and a revival of the high street offer potential pathways to growth, she said.
The latest Budget delivered a tough blow to the retail sector, exacerbating existing financial pressures. Retailers, who already shoulder a significant portion of business rates and rely heavily on a large workforce, face increased costs from rising employers’ National Insurance Contributions.
“Higher costs will also eat into available funds for future pay rises, benefits or pension contributions – hitting retailers’ cashflow in the short term and employees’ remuneration in the longer term,” Baker said.
“Retailers must get creative to manage their margins and attract footfall and spend, plus think outside the box to incentivise employees if they’re to hold onto talented staff.”
On the brighter side, falling inflation and lower interest rates could ease operational costs and restore consumer confidence, potentially driving retail spending upward.
High street resurgence
Consumers’ shopping habits are evolving, with a hybrid approach blending online and in-store purchases. According to RSM UK’s Consumer Outlook, 46 per cent of consumers prefer in-store shopping for weekly purchases, compared to 29 per cent for online, but the preference shifts to 47 per cent for online shopping for monthly buys and to 29 per cent for in-store. The most important in-store aspect for consumers was ease of finding products (59%), versus convenience (37%) for online.
“Tactile shopping experiences remain an integral part of the purchase journey for shoppers, so retailers need to prioritise convenience and the opportunity for discovery to bring consumers back to the high street,” Baker noted.
The government’s initiative to auction empty shops is expected to make brick-and-mortar stores more accessible to smaller, independent retailers, further boosting high street revival, she added.
A security guard stands in the doorway of a store in the Oxford Street retail area on December 13, 2024 in London, EnglandPhoto by Leon Neal/Getty Images
Meanwhile, retail crime, exacerbated by cost-of-living pressures, remains a significant concern, with shoplifting incidents reaching record highs. From organised social media-driven thefts to fraudulent delivery claims, the methods are becoming increasingly sophisticated.
“Crime has a knock-on effect on both margins and staff morale, so while the government is cracking down on retail crime, retailers also have a part to play by investing in data to prevent and detect theft,” Baker said.
“Data is extremely powerful in minimising losses and improving the overall operational efficiency of the business.”
AI as a game-changer
Artificial intelligence is emerging as a transformative force for the retail sector. From personalised product recommendations and inventory optimisation to immersive augmented reality experiences, AI is reshaping the shopping landscape.
“AI will undoubtedly become even more sophisticated over time, creating immersive and interactive experiences that bridge the gap between online and in-store. Emerging trends include hyper-personalisation throughout the entire shopping journey, autonomous stores and checkouts, and enhanced augmented reality experiences to “try” products before buying,” she said, adding that AI will be a “transformative investment” that determines the long-term viability of retail businesses.
The Amazon Fresh store in Ealing, LondonPhoto: Amazon
As financial pressures ease, sustainability is climbing up the consumer agenda. RSM’s Consumer Outlook found 46 per cent would pay more for products that are sustainably sourced, up from 28 per cent last year; while 44 per cent would pay more for products with environmentally friendly packaging, compared to 36 per cent last year.
“However, ESG concerns vary depending on age and income, holding greater importance among high earners and millennials. With financial pressures expected to continue easing next year, we anticipate a renewal of sustainability and environmentally conscious spending habits,” Baker noted.
“Retailers ought to tap into this by understanding the preferences of different demographics and most importantly, their target market.”
Southend-on-Sea City Council officials have secured food condemnation orders from Chelmsford Magistrates Court, resulting in the seizure and destruction of 1,100 unauthorised soft drinks.
The condemned drinks, including Mountain Dew, 7-UP, Mirinda, and G Fuel energy drinks, were found during routine inspections of food businesses across Southend by the council’s environmental health officers.
Council said these products contained either banned additives like Calcium Disodium EDTA or unauthorised novel ingredients such as Potassium Beta-hydroxybutyrate.
Calcium Disodium EDTA has been linked to potential reproductive and developmental effects and may contribute to colon cancer, according to some studies. Potassium Beta-hydroxybutyrate has not undergone safety assessments, making its inclusion in food products unlawful.
Independent analysis certified that the drinks failed to meet UK food safety standards. Magistrates ordered their destruction and ruled that the council's costs, expected to total close to £2,000, be recovered from the businesses involved.
“These products, clearly marketed towards children, contain banned or unauthorised ingredients. Southend-on-Sea City Council will always take action to protect the public, using enforcement powers to ensure unsafe products are removed from sale,” Cllr Kevin Robinson, cabinet member for regeneration, major projects, and regulatory services, said.
“As Christmas approaches, we hope this sends a strong message to businesses importing or selling such products: they risk significant costs and possible prosecution.”
The council urged residents to check labels when purchasing imported sweets and drinks, ensuring they include English-language details and a UK importer's address.
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A customer browses clothes inside Charity Super.Mkt at Brent Cross Shopping centre in north London on, December 17, 2024
Bursting with customers one afternoon the week before Christmas, a second-hand charity shop in London's Marylebone High Street looked even busier than the upscale retailers surrounding it.
One man grabbed two puzzle sets and a giant plush toy as a present for friends, another picked out a notebook for his wife.
“Since the end of September, we've seen a huge uplift in people coming to our shops and shopping pre-loved,” said Ollie Mead, who oversees the shop displays - currently glittering with Christmas decorations - for Oxfam charity stores around London.
At the chain of second-hand stores run by the British charity, shoppers can find used, or "pre-loved", toys, books, bric-a-brac and clothes for a fraction of the price of new items.
Popular for personal shopping, charity stores and online second-hand retailers are seeing an unlikely surge in interest for Christmas gifts, a time of year often criticised for promoting consumerism and generating waste.
A report last month by second-hand retail platform Vinted and consultants RetailEconomics found UK customers were set to spend £2 billion on second-hand Christmas gifts this year, around 10 per cent of the £20 billion Christmas gift market.
A woman browses some of the Christmas gift ideas in a store on December 13, 2024 in London, England. Photo by Leon Neal/Getty Images
In an Oxfam survey last year, 33 per cent were going to buy second-hand gifts for Christmas, up from 25 percent in 2021.
“This shift is evident on Vinted,” Adam Jay, Vinted's marketplace CEO, told AFP.
“We've observed an increase in UK members searching for 'gift' between October and December compared to the same period last year.”
According to Mead, who has gifted second-hand items for the last three Christmas seasons, sustainability concerns and cost-of-living pressures are “huge factors”.
Skimming the racks at the central London store, doctor Ed Burdett found a keychain and notebook for his wife.
“We're saving up at the moment, and she likes to give things another life. So it'll be the perfect thing for her,” Burdett, 50, told AFP.
“It's nice to spend less, and to know that it goes to a good place rather than to a high street shop.”
'Quirky, weird
Wayne Hemingway, designer and co-founder of Charity Super.Mkt, a brand which aims to put charity shops in empty shopping centres and high street spaces, has himself given second-hand Christmas gifts for “many, many years”.
“When I first started doing it, it was classed as quirky and weird,” he said, adding it was now going more “mainstream”.
Similarly, when he first started selling second-hand clothes over 40 years ago, “at Christmas your sales always nosedive(d) because everybody wanted new”.
Now, however, “we are seeing an increase at Christmas sales just like a new shop would”, Hemingway told AFP.
“Last weekend sales were crazy, the shop was mobbed,” he said, adding all his stores had seen a 20-percent higher than expected rise in sales in the weeks before Christmas.
“Things are changing for the better... It's gone from second-hand not being what you do at Christmas, to part of what you do.”
Young people are driving the trend by making more conscious fashion choices, and with a commitment to a “circular economy” and to “the idea of giving back (in) a society that is being more generous and fair,” he said.
At the store till, 56-year-old Jennifer Odibo was unconvinced.
Buying herself a striking orange jacket, she said she “loves vintage”.
But for most people, she confessed she would not get a used gift. “Christmas is special, it needs to be something they would cherish, something new,” said Odibo.
“For Christmas, I'll go and buy something nice, either at Selfridges or Fenwick,” she added, listing two iconic British department stores.
Hemingway conceded some shoppers “feel that people expect something new” at Christmas.
“We're on a journey. The world is on a journey, but it's got a long way to go,” he added.
According to Tetyana Solovey, a sociology researcher at the University of Manchester, “for some people, it could be a bit weird to celebrate it (Christmas) with reusing.”
“But it could be a shift in consciousness if we might be able to celebrate the new year by giving a second life to something,” Solovey told AFP.
“That could be a very sustainable approach to Christmas, which I think is quite wonderful.”
Lancashire Mind’s 11th Mental Elf fun run was its biggest and best yet – a sell-out event with more than 400 people running and walking in aid of the mental charity, plus dozens more volunteering to make the day a huge success.
The winter sun shone on Worden Park in Leyland as families gathered for either a 5K course, a 2K run, or a Challenge Yours’Elf distance which saw many people running 10K with the usual running gear replaced with jazzy elf leggings, tinsel and Christmas hats.
And now the pennies have been counted, Lancashire Mind has announced that the event raised a fantastic £17,000.
This amount of money allows Lancashire Mind to deliver, for example, its 10-week Bounce Forward resilience programme in eight schools, reaching more than 240 children with skills and strategies that they can carry with them throughout their lives, making them more likely to ‘bounce forward’ through tough times.
The event was headline sponsored by SPAR for a third year through its association with James Hall & Co. Ltd, SPAR UK’s primary retailer, wholesaler, and distributor for the North of England.
“On behalf of the entire team at Lancashire Mind, we want to extend a heartfelt thank you to the 400+ incredible participants who joined us for Mental Elf 2024!” said Organiser Nicola Tomkins, Community and Events Fundraiser at Lancashire Mind.
“Your support, energy and commitment to raising awareness for mental health makes all the difference. Together, we've taken another important step towards breaking the stigma around mental health and promoting wellbeing for all in our community. We couldn't have done it without you!”
Worden Hall became the hub of the event where people could enjoy music from the Worldwise Samba Drummers and BBC stars Jasmine and Gabriella T, plus lots of family friendly activities and a chance to meet Father Christmas. Pets also got in on the act in the best dressed dog competition.
Lancashire Mind CEO David Dunwell said: “It was heart-warming day, full of community spirit and festive cheer, but with a serious aim to raise funds for mental health.
“We are so grateful to everyone who bought a ticket and fundraised or donated to help us smash our target. The money raised goes directly to supporting Lancashire Mind’s life-changing mental health services. These funds help provide wellbeing coaching, support groups, and educational programmes to individuals and families in need of mental health support in our community.”
The concept of Mental Elf was created by Lancashire Mind and news of the event has spread right across the country in recent years, with around 40 other local Mind charities hosting a similar event in 2024.
Lancashire schools were also encouraged to host their own Mental Elf-themed event this year, whether that was a run, bake sale or dress up day, and raised more than £1,000 in total.
Philippa Harrington, Marketing Manager at James Hall & Co. Ltd, said: “There was a lovely festive feel in the air at Mental Elf and we were delighted to see even more individuals, families, and canine companions taking part in its new home of Worden Park.
“We are also very pleased to see the uptake that Mental Elf has had in schools, and congratulations go to the Lancashire Mind team for taking it to new participants and for raising a fantastic amount of money for an important cause.”
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A woman walks past a window display promoting an ongoing sale, on December 13, 2024 in London, England.
UK retail sales rose less than expected in the runup to Christmas, according to official data Friday that deals a fresh blow to government hopes of growing the economy.
Separate figures revealed a temporary reprieve for prime minister Keir Starmer, however, as public borrowing fell sharply in November.
The updates follow news this week of higher inflation in Britain - an outcome that caused the Bank of England on Thursday to leave interest rates unchanged.
Retail sales by volume grew 0.2 per cent in November after a drop of 0.7 per cent in October, the Office for National Statistics said Friday.
That was less than analysts' consensus for a 0.5-percent gain.
"It is critical delayed spending materialises this Christmas to mitigate the poor start to retail's all-important festive season," noted Nicholas Found, senior consultant at Retail Economics.
"However, cautiousness lingers, slowing momentum in the economy. Households continue to adjust to higher prices (and) elevated interest rates."
He added that consumers were focused on buying "carefully timed promotions and essentials, while deferring bigger purchases".
The ONS reported that supermarkets benefited from higher food sales.
"Clothing stores sales dipped sharply once again, as retailers reported tough trading conditions," said Hannah Finselbach, senior statistician at the ONS.
Retail sales rose 0.2% in November 2024, following a fall of 0.7% in October 2024.
Growth in supermarkets and other non-food stores was partly offset by a fall in clothing retailers.
The Labour government's net borrowing meanwhile dropped to £11.2 billion last month, the lowest November figure in three years on higher tax receipts and lower debt-interest, the ONS added.
The figure had been £18.2 billion in October.
"Borrowing remains subject to upside risks... due to sticky interest rates, driven by markets repricing for fewer cuts in 2025," forecast Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics.
Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, commented that the later than usual Black Friday weekend meant November’s retail sales figures saw only a slight uptick as cost-conscious consumers held off to bag a bargain.
“Despite many retailers launching Black Friday offers early, November trade got off to a slow start which dragged on for most of the month. This was driven by clothing which fell to its lowest level since January 2022. The only saving grace was half-term and Halloween spending helped to slightly offset disappointing sales throughout November,” Baker said.
“As consumer confidence continues to build and shoppers return to the high street, this should translate into more retail spending next year. However, there are big challenges coming down the track for the sector, so retailers will be banking on a consumer-led recovery to come to fruition so they can combat a surge in costs.”
Thomas Pugh, economist at RSM UK, added: “The tick up in retail sales volumes in November suggests that the stagnation which has gripped the UK economy since the summer continued into the final months of the year.
“While the recent strong pay growth numbers may make the Bank of England uncomfortable, it means that real incomes are growing at just under 3 per cent, which suggests consumer spending should gradually rise next year. However, consumers remain extremely cautious. The very sharp drop in clothing sales in particular could suggest that consumers are cutting back on non-essential purchases.
“We still expect a rise in consumer spending next year, due to strong wage growth and a gradual decline in the saving rate, to help drive an acceleration in GDP growth. But the risks are clearly building that cautious consumers choose to save rather than spend increases in income, raising the risk of weaker growth continuing through the first half of next year.”