IGD forecasts changes to the convenience retail sector, with sales projected to exceed US$1trn by 2029
Market analyst IGD has released its Global Convenience Trends Report 2025, in which it predicts ”significant changes ahead” for the convenience retail sector.
Sales are projected to exceed US$1trn by 2029, driven by a compound annual growth rate (CAGR) of 4.1 per cent.
This growth will be fuelled by five key trends, it said, namely tech evolution, food mission, shifting space, targeted value and striving for better.
”Retailers need to adopt new convenience models, enhance store formats, and integrate digital tools, while suppliers need to adapt product strategies to emerging food trends and convenience needs,” IGD stated,
The analyst said that while the convenience channel remains the third-largest modern trade channel over the next five years it faces strong competition, impacting its growth.
While the global grocery market is projected to grow annually by 4.2 per cent, the convenience channel’s growth is slightly behind, at 4.1 per cent.
This will mean the convenience channel will lose market share, from 10.7 per cent in 2024 to 10.6 per cent in 2029.
IGD explained that the share loss is largely due to the faster growth of smaller, but rapidly expanding, channels: discount and online.
Discount retailers will attract budget-conscious shoppers, it outlined, while online retailers will offer a breadth of range that convenience stores struggle to match.
Supermarkets, despite their slower growth, are also becoming a greater threat to convenience stores, with operators expanding their smaller footprint formats.
To stay competitive, retailers must differentiate through enhanced in-store experiences, strategic space allocation, and value-driven promotions, IGD pointed out.
Sustainability and health initiatives are also crucial for meeting consumer demands and enhancing brand image.
“Convenience retail is evolving from quick transactions to smart, seamless experiences,” emphasised Sneha Haria, insights manager at IGD.
”Our report highlights key trends like digital innovation and healthier food options that will define success in 2025 and beyond.
”While the sector uses its proximity and adaptability to meet consumer trends, it must address costs and competition challenges,” she continued.
”Retailers need to close the price perception gap with other channels and make targeted value visible across regions.
”Sustainability and health are emerging trends globally, even though they are not typically front of mind for convenience shoppers,” Haria added,
Retailers can stay competitive, the report outlined, but they must enhance the in-store experience and showcase food-to-go and food-for-later propositions.
By exploring new ways to stand out with food counters and differentiated ranges and cuisines, as well as bundling products as part of meal deals, these enhancements will help increase spend per trip and provide greater value to shoppers, IGD concluded.
