Michael Fletcher Co-op

Co-op commercial director Michael Fletcher speaking at the IGD Big Debate 2016

Convenience is the only retail sector forecast to grow over the next three years, according to a combination of IGD data and research by the Co-op.

Research into anticipated store openings in the convenience and supermarket sectors showed that while supermarket space is expected to contract by two per cent, the convenience sector is predicted to grow by 2.2 per cent.

“This trend of digital enabling people to shop more conveniently, discounters meeting the needs of economically distressed customers and customers leading increasingly unstructured lives means that the convenience sector is the only sector growing,” said Co-op’s commercial director Michael Fletcher.

And when it comes to fresh produce ranges, consumers are increasingly looking for prepared products such as dauphinoise potatoes, frozen jackets and courgetti to cut down on cooking time and work around their busy schedules.

Sales of chilled potato products grew by almost 10 per cent in the 52 weeks to 22 May, according to Kantar.

But retailers have their work cut out when it comes to meeting the in-store needs and expectations of convenience consumers, Fletcher suggested. “Convenience used to be really simple – it was about CTN [confectionary, tobacco, newspapers],” he said. “Now it’s really, really complex” – and this requires retailers to tailor individual convenience stores to their location and customers.

Of primary importance is the need to build product ranges that reflect the needs of the community a convenience store serves, according to Fletcher. And the Co-op has developed a matrix that takes into account factors such as customer demographics, store type and store location when deciding on what products to stock.

Other speakers insisted upon the continued importance of large supermarkets, however, maintaining that despite the growth of online and convenience shopping, large stores can continue to drive sales.

“I still believe that the large stores for retailers have a real role to play but they have to change the relationship with the consumer,” said IGD president and former Asda chief executive Andy Clarke.

“There has to be this excitement factor that takes somebody to a large store. That in itself is a loyalty factor. It’s about the relationship that customer has with that brand.”