Tesco and BP are likely to be the most successful convenience operators in five years’ time, according to shoppers and industry experts.
In a survey of 500 shoppers and 150 retailers, suppliers and experts, a massive 96% ranked Tesco in the top five, while 54% chose BP in their top five, putting the company above Sainsbury, which garnered 46% of the vote.
The ranking of Tesco is unsurprising, given its aggressive acquisition policy and brand strength, but BP’s inclusion in second place is unexpected.
“It is a fantastic recognition of the investment this oil company is making in forecourt retailing,” commented Andy Thornton,
managing director of convenience market research agency Srcg, which includes the survey in its third annual Shape of Convenience report.
But he added: “One has to question if the halo effect is a little ahead of the actual delivery of the concept.”
Sainsbury and The Co-operative Group tied in third place, followed closely by Spar. However, a quarter put Jacksons in the top five. The survey was carried out before Sainsbury acquired the company.
Further market consolidation is seen as the main challenge facing the industry in the next two years. “All trends suggest that the convenience hurricane will be blowing for a while yet,” Thornton said.
Other top 10 challenges include recruitment, health and the need to develop innovative formats, remain price competitive and improve the efficiency of the supply chain.
In 2002 fresh and chilled was seen as a challenge, but this year it is viewed more positively. The clear number one priority this time is differentiating through a local offer. Developing a food for later offer is also a key priority.
“The majority of retailers were adamant food service would be ‘astronomical’ or ‘the role’ in the future. So it is puzzling why it has been so successful in c-stores in Ireland and the US but has yet to be translated in the UK,” said Thornton. “There is a clear view that whoever cracks this first will be a big winner.”
Both the above are areas in which independents could steal a march over big box entrants. “Tesco clearly wants to keep it simple and is not going down the local differentiation route for the foreseeable future,” he said.
The Shape of Convenience 2005 report will be released at the Future of International Convenience Retailing conference in London next Wednesday. See next week’s issue for a full report.
Siân Harrington
In a survey of 500 shoppers and 150 retailers, suppliers and experts, a massive 96% ranked Tesco in the top five, while 54% chose BP in their top five, putting the company above Sainsbury, which garnered 46% of the vote.
The ranking of Tesco is unsurprising, given its aggressive acquisition policy and brand strength, but BP’s inclusion in second place is unexpected.
“It is a fantastic recognition of the investment this oil company is making in forecourt retailing,” commented Andy Thornton,
managing director of convenience market research agency Srcg, which includes the survey in its third annual Shape of Convenience report.
But he added: “One has to question if the halo effect is a little ahead of the actual delivery of the concept.”
Sainsbury and The Co-operative Group tied in third place, followed closely by Spar. However, a quarter put Jacksons in the top five. The survey was carried out before Sainsbury acquired the company.
Further market consolidation is seen as the main challenge facing the industry in the next two years. “All trends suggest that the convenience hurricane will be blowing for a while yet,” Thornton said.
Other top 10 challenges include recruitment, health and the need to develop innovative formats, remain price competitive and improve the efficiency of the supply chain.
In 2002 fresh and chilled was seen as a challenge, but this year it is viewed more positively. The clear number one priority this time is differentiating through a local offer. Developing a food for later offer is also a key priority.
“The majority of retailers were adamant food service would be ‘astronomical’ or ‘the role’ in the future. So it is puzzling why it has been so successful in c-stores in Ireland and the US but has yet to be translated in the UK,” said Thornton. “There is a clear view that whoever cracks this first will be a big winner.”
Both the above are areas in which independents could steal a march over big box entrants. “Tesco clearly wants to keep it simple and is not going down the local differentiation route for the foreseeable future,” he said.
The Shape of Convenience 2005 report will be released at the Future of International Convenience Retailing conference in London next Wednesday. See next week’s issue for a full report.
Siân Harrington
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