Local stores lead the way

April 14, 2010, 6:03 PM GMT+0

60% of main grocery shoppers use local shops at least once a week, although one third state that they are unsatisfied with the choice of products offered, a major new report on local store shopping reveals.

What are shoppers purchasing from convenience stores?

Whilst milk (68%), bread (55%) and newspapers (43%) are the most commonly bought items from local stores, lottery and gaming products are also key, with 30% of respondents purchasing lottery tickets or scratch cards from local stores. The results also reveal that 19% of men aged 16-24 buy toiletries from convenience stores, indicating a potential market for the occasional ‘distressed’ shopper.

It is the typically less well-off consumers who comprise a key customer base for convenience stores, a third of whom use such shops several times a week or more. In particular, it is women from these groups who drive sales in convenience stores, buying everyday items such as snacks, confectionery, tobacco products and soft drinks. Such consumers are more price sensitive than the better-off, pointing towards the need for a strong promotion focus on everyday items to ensure that regular customers get a consistently good deal.

Commenting on the results, James McCoy, Research Director for YouGov SixthSense says “While most consumers accept that convenience comes at a price, smaller shops need to ensure that this typically price-sensitive group of shoppers is being catered for with carefully targeted promotions and special offers.”

However limited product availability is restricting further success of convenience stores, with only 26% of respondents stating they can usually get what they want and only one third of shoppers happy with the choice of products offered. With only 23% of shoppers happy to pay more for convenience, it seems that retailers need to improve the range and quantity of stock to keep customers satisfied and improve profitability.

“As smaller stores fight against the major supermarket chains,” continues James McCoy, “it is vital that retailers understand who their customers are and their purchasing motivations. Local stores have every opportunity to capture a share of secondary shopping spend, they just need to really understand what shoppers actually want.”

What stores are shoppers visiting?

The Co-operative is the most widely used local store brand, with 24% of respondents using the store at least once a week. The Co-operative is followed by Tesco Express (16%), Spar (11%) and Sainsbury’s Local (7%). Regional preferences are also apparent: The Co-operative is the most frequented convenience store in Scotland (33%), Tesco Express is favourable amongst
Londoners (22%) and Spar is going strong in Wales (30%). “Store usage reflects the highly fragmented structure of local store retailing,” continues James
McCoy. “This fragmented structure, along with low levels of customer satisfaction, provides impetus for the continued rapid expansion by the major grocery multiples into this sector that will undermine the decreasing number of small local stores.”

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