Grocery operators are subsequently capitalizing on the increasing desire for a retail offering closer to home and rising investment in city-center ‘express’ stores, in turn strengthening their foothold within local neighborhoods.
As a result, supermarkets across Europe are gradually gaining market share as operators concentrate on openings in this format.
In France, urban convenience stores continue to grow, with food retailer groups now operating circa 40 brands and 14,000 points of sale. Neighborhood convenience stores such as Carrefour City, U Express, Franprix, and Casino Shop have experienced a 48% rise in sales. Currently, convenience stores account for nearly 11% of mass distribution turnover, while hypermarkets have seen declines of between 2.5% and 36.5%.
In Germany, food retailer Rewe is expanding into the convenience market, having recently partnered with specialist Valora as part of a larger strategy with the aim to expand the ‘Rewe-To-Go’ network, as consumer preference for small, local stores intensifies.
In the UK, this trend has been underway for a while but continues apace. Asda has plans to open 300 convenience stores by the end of 2026 as part of the company’s long-term strategy to become the UK’s second-largest supermarket, aligning its business plan with the evolving consumer desire to shop more frequently and more locally. Sainsbury’s has also repositioned its strategy to drive its convenience business, which grew by 10% year-on-year in 2023, as it plans to open 75 new Sainsbury’s Local convenience stores over the next three years.
Among the contributing factors to the expansion of the convenience format, the most notable is the rising consumer preference to shop quickly, which is being facilitated by food retailers increasing their online offerings and expanding delivery services across much of Europe. This enables customers to make larger grocery purchases from home, thus, driving consumers to do smaller, and more frequent, ‘top-up’ shopping in smaller retail formats in more convenient locations. As a result, shoppers are simultaneously becoming much more reliant on local stores.
Moreover, technological advancements will further drive footfall to convenience formats as retailers target consumer data to personalize store product offerings, in turn increasing their loyalty and preference to shop locally. In France, Casino Group has developed a strategy with retail data organization relevanC to enhance its consumer experience by tracking and collating spending data. Grocers who have a strong local presence across their market, like Casino Group, will be able to serve their unique customer base by optimizing product offerings.
As much of Europe has returned to the office, the availability of convenience retail in city center locations will allow office workers the flexibility of choosing when to shop. Convenience stores offering food on the go will also drive footfall to this type of retail format. More than 130 of Sainsbury’s local stores specifically cater to customers looking for ‘food-on-the-move’ in urban areas.
Sustained demand for convenience retail presents an opportunity for grocery operators and investors alike. The stability and longevity of income streams from supermarket assets make the grocery market an attractive option for investors seeking long-term revenue, with the convenience sector in particular showing positive signs of growth.
