Forthcoming restrictions on the marketing and advertising of high fat, sugar and salt (HFSS) products in the UK aren't likely to have that much of an impact on the country's convenience sector, FMCG data analyst firm IRI claimed recently, citing the smaller size of majority of such stores in the country.
As smaller stores – those under 2,000 square feet – are exempted from the in-store display restrictions under the upcoming HFSS regulations, the c-store sector isn't likely to be as affected by the new regulations as the mainstream sector.
Having claimed that, IRI maintains that loss due to HFSS regulation for convenience store owners will still be substantial since about a third of c-stores in the country are above 2,000 square feet in size.
As per data estimates, the new HFSS rules may lead to around £583 million in sales being 'at risk' in the UK convenience sector, apart from £1.1 billion worth of sales being at risk across the major multiples.
Acknowledging that HFSS regulation will impact impulse buying due to a great extent since it is otherwise purely dependent on displays, IRI claimed that the impact will vary across convenience retailers and store types.
Just over a third (35.9 per cent) of UK convenience stores are above 2,000 square feet in size while almost 64.3 per cent of the c-stores are below that size, IRI said. Once the new regulation comes into force, the smaller stores will be the only store type not to be impacted by the display restrictions- something which may lead to future opportunities for stores of this size.
Moreover, shopper mission for convenience retailers differs from larger supermarkets as they rely more heavily on impulse categories, IRI pointed out.
“Despite these figures, retailers and manufacturers should be reassured that there are options to mitigate the risks of HFSS and create opportunities, especially in the larger convenience format," said Joe Harriman, HFSS Strategic Consultant at IRI.
"As a result of the HFSS restrictions retailers will need to make larger than usual range changes, and whilst this will mean that some manufacturers will find themselves needing to justify shelf space, others could be well placed to take advantage of the premium space opportunity that will become available to non-HFSS brands," said Harriman.
