A report has forecast key challenges and opportunities for convenience retailers in 2026.
The report from the Institute of Grocery Distribution (IGD) stated that set against a growth forecast projecting the market to reach £56.2 billion by 2030, convenience retailers face a period “marked by both opportunities and headwinds”.
IGD identified five key trends that it believes are driving “structural change” and retailer responses in the channel in 2026.
It went on to say that the convenience channel is expected to see a CAGR of 2.7% over the next five years, “lagging slightly” behind the wider grocery market’s 3% CAGR.
The five key trends identified by IGD are:
- Retailers facing financial stress: rising retail operating costs are accentuating a fall in sales, said IGD, creating an “unsustainable challenge” for some stores.
- Symbol growth driven by B2B value.
- Competing with specialists in food-to-go: IGD highlighted travel hubs as key locations.
- Quick commerce and aggregator alternatives: the report said that while partnering with the aggregators on quick commerce is “effective”, retailers lose transaction value and do not wholly control the customer interaction.
- Increasing, but selective, focus on price: high-profile value and price-matching activity have “heightened shopper perceptions” that the convenience channel is expensive.
Assessing the impact of these factors, the IGD Convenience trends report provides insights into navigating the shifting landscape for retailers and suppliers, aiming to help them identify “where the real opportunities and challenges lie”.
Patrick Mitchell-Fox, insight partner at IGD, commented: “The UK convenience channel is facing a future of mixed fortunes, with potential offset by a range of challenges. Retailers and suppliers will need to be aware of how these impact on a store-by-store and category-by-category basis.
“Secular trends in demographics and shopper behaviour will continue to create opportunities for ongoing growth in the UK convenience market. However, its structural over-dependence on the declining tobacco category will create headwinds that will limit growth overall.”
