Report 2020 - ACS

The Local Shop Report 2020

A report by the Association of Convenience Stores #LocalShopReport

Contents

Introduction

02 INTRODUCTION 03 WHO WE ARE 04 WHERE WE TRADE 06 WHAT WE CONTRIBUTE TO THE ECONOMY 08 WHAT WE SELL 10 THE SERVICES AND TECHNOLOGY WE OFFER 12 OUR COLLEAGUES 14 HOW WE OPERATE 17 COVID-19 RESPONSE 18 WHO WE SERVE 20 OUR COMMUNITIES 22 METHODOLOGY 23 ABOUT ACS 23 ACKNOWLEDGEMENTS

The Local Shop Report provides a comprehensive view of the UK convenience sector, looking at where stores trade, the colleagues we employ, our contribution to the economy and the essential role we play in local communities. The information in this report is gathered from our own primary research, surveying 2,431 independent retailers in addition to multiple and cooperative businesses representing over 6,700 stores. The report also draws on data supplied by William Reed, IGD, Plunkett Foundation, The Retail Data Partnership and Lumina Intelligence.

While this report is intended to look at the normal conditions of a store in 2020/21, some of the figures have been influenced by Covid-19. We address the response of convenience stores to lockdown on page 17 of this report. Some of the figures in the report have been scaled to reflect the entire convenience sector. Detailed information about the methodology and calculations in the report can be found on pages 22-23 and online at .uk/research

Who we are

Why we are important

46,955 ?44.7bn There

are

convenience stores in mainland UK

total sales

are run by

?10.1bn in GVA

independent retailers

?585m invested

What we offer

412,000 jobs

Most positive impact on the local area

76%

Bill payment services

49%

Free to use cash machines

.uk ? @ACS_Localshops

17%

Local grocery delivery

2

1. Convenience stores

2. Post offices

?W HO WE ARE

46,955 There

are

convenience stores in mainland UK

Shop ownership

Independent retailers

40% Unaffiliated independents (including unaffiliated forecourts)

32% Symbol group independents (including franchises)

Source: WRBM 2020

Multiples

28%

7% Co-operatives

21% Other multiples (including multiple owned forecourts and multiples trading under symbol groups)

Entrepreneurs

The people who own and run stores are:

26%

21% 14%

24% 15%

30

or under

31 ? 40

Source: ACS/Lumina 2020

41 ? 50

51 ? 60

60+

3

Unaffiliated independents Independent retailers operating under their own fascia.

Symbol groups Independent retailers who trade under a common fascia e.g. Nisa. Multiple businesses can also trade under a symbol group e.g. A.F. Blakemore (SPAR).

Co-operatives Groups of stores that are owned by their members.

Convenience multiples Retail businesses operating chains of 10 or more convenience stores under a centrally-owned fascia e.g. McColl's.

Forecourts Convenience stores located on petrol filling stations. Forecourts are included within each of the retailer types and can be unaffiliated, symbol group, multiple or co-operative businesses. For more information about the forecourt sector please see the ACS Forecourt Report.

33% Female

67% Male

White British

48%

Asian or Asian British 44%

Other

8%

SEPTEMBER 2020

?WHERE WE TRADE

46,955 There

are

convenience stores in mainland UK

Shop numbers

Scotland

5,025

One shop per 1,082 people

Wales has more shops per head than any other part of mainland UK

North East

2,060

One shop per 1,290 people

England total

38,963

One shop per 1,437 people

North West

5,131

One shop per 1,421 people

Yorks/Humber

4,007

One shop per 1,368 people

East Midlands

3,551

One shop per 1,353 people

Wales

2,967

One shop per 1,058 people

Eastern

3,981

One shop per 1,558 people

West Midlands

4,487

One shop per 1,315 people

London

5,845

One shop per 1,524 people

South West

4,133

One shop per 1,355 people

South East

5,768

One shop per 1,583 people

The copyright in this material is vested in William Reed Business Media Ltd and may not be reproduced or transmitted in any form or by any means, or stored in a retrieval system of any nature, without the prior written permission of the copyright holder.

4 .uk ? @ACS_Localshops

All data on this page ? source: WRBM 2020 and ONS 2019

Location

Rural

A `traditional' convenience store, often providing the only shopping option for the local community.

SHOP

Rural: 37%

Suburban

Providing a focal point for suburban communities and estates sometimes standalone or alongside a small number of other local services.

SHOP

HAIRDRESSER

Suburban: 26%

COFFEE SHOP

SHOP

FASHION

Urban: 37%

Urban

Operating as part of a mix of stores serving the

needs of those living in centres and the shopping

needs of workers and residents.

Neighbouring businesses

Source: WRBM 2020

37% Isolated store No other retail/service businesses close by.

LOCAL SHOP

39% Located on a small parade Up to five retail/service businesses close by.

LOCAL SHOP HAIRDRESSER BUTCHER

9% Located on a larger parade or a high street Up to 10 retail/service businesses close by.

PUB

BANK

COFFEE SHOP LOCAL SHOP

FASHION

PHARMACY RESTAURANT

15% Located on a main high street or within a city centre More than 10 retail/service businesses close by.

CHARITY

TAKEAWAY

PUB

BANK

COFFEE SHOP LOCAL SHOP

FASHION

PHARMACY RESTAURANT HAIRDRESSER

BETTING

SPORTS

5 Source: ACS/Lumina 2020 (independents only)

SEPTEMBER 2020

?W HAT WE CONTRIBUTE TO THE ECONOMY

Economic contribution

Over the last year, the convenience sector contributed

Over ?10.1bn in GVA

and over ?8.9bn in taxes

?274m Business rates

?304m Corporation tax

?286m Employer National Insurance contributions

&HMCuRsetovemnsue VAT Return &HMCuRsetovemnsue Tax Return

?669m VAT

?343m PAYE

?6,585m Excise duties (exc. fuel)

Direct taxes

?0bn

?1bn

?2bn

Investment

Over the last year

convenience stores have

invested

Indirect taxes

?3bn

?4bn

?5bn

?6bn

?7bn

?8bn

?9bn

Source: ACS 2020/Retail Economics 2019

?585m in their businesses

Average annual investment by store type

Unaffiliated Symbols independents: ?12,178 ?8,022

Multiples: ?19,339

.uk ? @ACS_Localshops

6 Source: ACS Investment Tracker 2019/2020

Proportion of stores investing

27%

Unaffiliated independents

30% Symbols

36% Multiples

Areas of investment (of those investing)

Refrigeration 42%

Internal building maintenance 35%

In-store lighting 30%

Shelving 23%

Store signage 15%

Air conditioning 12%

Crime prevention measures 12%

Till systems (e.g. EPOS) 10%

Freezer space 8%

NEW Store Opening Soon!

Full store refits 5%

Sources of investment

Internal building development 5%

Parking provision 5%

Improving store access 4%

67%

16%

7% 5% 5%

Funded from own reserves

All data on this page ? source: ACS Investment Tracker 2019/20 (Sources of investment refers to independents only)

Funded/provided by suppliers Funded/provided by symbol group Other business/wholesale funding Financial institutions

7

SEPTEMBER 2020

?WHAT WE SELL

Total value of sales

?44.7bn=

(in the convenience sector in the year to March 2020)

over one fifth of the total grocery market

21% A store's product

margin typically ranges from:

Convenience market share

to

31%

Source: ACS/Lumina 2020

Store type

Symbols

Market share of sales

35.3%

Multiples

23.8%

Unaffiliated Independents

17.7%

Co-operatives

12.4%

Forecourts*

10.9%

*Excludes forecourt stores operated as symbol, multiple grocer or co-operative fascias. Forecourt sales excludes fuel 8

.uk ? @ACS_Localshops

Source: IGD 2020

Category sales: Independents only (2020)

Pet food and pet care products

1.1%

Fruit & vegetables

Non-food Health & Sandwiches beauty & wraps

Hot foodto-go

0.3%

20.1%

Alcohol

32.7%

Tobacco and E-cigarettes

1.2%

1.2%

1.8%

Frozen foods

1.1% 0.6%

2.9%

Savoury snacks

4.1%

News & magazines

6.6%

Confectionery

2.0%

Household

4.0%

Chilled foods

3.9%

Canned & packaged grocery

3.6%

Bread & bakery

10.0%

Soft drinks

2.6%

Fresh milk

Source: The Retail Data Partnership 2020 ? data refers to independent retailers only

Category sales: Overall market (2019)

3.2%

Savoury snacks

3.0%

Non-food

Hot food & drinks

1.5%

3.0% Sandwiches & Wraps

2.1%

4.2%

Frozen foods

Fruit & vegetables

Health & beauty

1.3% 1.5%

Household

15.1%

Alcohol

7.1%

Soft drinks

4.5%

3.4%

Fresh milk

Bread & bakery

3.3%

News & magazines

5.9%

Confectionery

20.9%

Tobacco and E-cigarettes

12.8%

Chilled foods

7.2%

Canned & packaged

grocery

Source: IGD 2019 ? data refers to overall convenience market

The percentage of stores in the convenience sector that sell each of the following products is:

Alcohol licence

78%

25% Wood/

domestic burning fuel

33% Plants or

horticulture products

9 Source: ACS/Lumina 2020

SEPTEMBER 2020

?THE SERVICES AND TECHNOLOGY WE OFFER

The percentage of stores in the convenience sector that provide each service is as follows:

84%

Mobile phone top-up

2 7 32

18 25

46

82%

Lottery

76%

Bill payment services

68%

Cash back

49%

Free to use cash machines

28%

Parcel collection point

27%

Click and collect service (e.g Collect Plus)

22%

Charged cash machine

8%

Dry cleaning

8%

Recycling bins

22%

Post office

Car wash

5%

Jet wash (manual)

3%

Automatic machine car wash

2%

Hand car wash (attended)

Food service

19%

Home news delivery

17%

Local grocery delivery

12%*

Click and collect services

for groceries

4%

Photo booth

3%

Prescription collections

2%

Key cutting services

Source: ACS/Lumina 2019/2020. *Source = ACS/Lumina 2020

37%

Customer operated coffee

machine

28%

In-store bakery

22%

Hot food counter or

cabinet

Most valuable services

19%

Food preparation area/kitchen

14%

Serve over coffee

machine

12%

Food-to-go concession

12%

Microwave for customers

Source: ACS/Lumina 2019/2020

Consumers think that

the most valuable services offered in their convenience store are:

.uk ? @ACS_Localshops

Cash machine

10

Post office

Click and collect

ACS Consumer Polling 2020 ? collected by Populus

The percentage of stores in the convenience sector that have each of the following are:

74%* EPoS

Social media

44%

32%

21%

10%

41% Store website

30% SAVE 30%

Digital advertising screens

27% In-store Wi-Fi

11% Mobile marketing platform/ loyalty scheme

9% Digital shelf edge labels

Facebook

Twitter

Instagram WhatsApp

More customers searched for local shops on Google during the start of lockdown (March 23-29) than any other time in the last 12 months.

Source: Google Trends

Top five rising searches related to convenience stores

7% Self-service checkouts 4% Power outlets/USB ports for

charging customer devices

91%* of stores have CCTV

1. Shop near me 2. Local shop near me 3. Local farm shop 4. Local shop delivery 5. Local parcel shop

Payment methods

Energy saving

Source: Google Trends

100% Cash

50% 47%*

95% Debit card

DEBIT

92% Credit card

CREDIT

88%* Contactless payment

40% 30% 20% 10%

80%*

Mobile payment

0% LED lighting

All data on this page: Source: ACS/Lumina 2019/2020 unless stated otherwise.

11

*Source = ACS/Lumina 2019

43%

32%*

Chiller doors Smart meters

5%

Solar panels

SEPTEMBER 2020

?OUR COLLEAGUES

412,000 Convenience stores provide around

jobs in

mainland UK

Source: ACS/Lumina 2020

Colleagues in the convenience sector are:

23%

16-24 years old

Hours worked

66% 34%

Source: ACS Colleague Survey 2020

65% 12%

25-60 years old Over 60

Source: ACS/Lumina 2020

43%

0-16

hours

34%

17-30

hours

17% 6%

31-40 40+

hours hours

Source: ACS/Lumina 2020

33% of colleagues have childcare commitments

37% of colleagues care for other family members

Travel to work

Average travel cost

Average travel time

?1.44 13 minutes

per day

Mode of travel to work

Source: ACS Colleague Survey 2020

0 55

50

5 10

45

15

40

20

35

25

30

44%

Walk/on foot

.uk ? @ACS_Localshops

43%

Drive

12

7%

Public transport

6%

Other

Source: ACS Colleague Survey 2020

71% are satisfied with their job 70% feel valued by their employer

Length of employment

Source: ACS Colleague Survey 2020

20%

45%

16%

19%

Less than one year

One to five years

Six to 10 years

Contribution to household income

More than 10 years

Source: ACS/Lumina 2020

32%

I am the only income earner in my household

Job security

43%

There is more than

one earner, I do not

earn the most

17%

There is more

than one earner,

I earn the most

8%

There is more than one income earner in my household and we earn

roughly the same

Source: ACS Colleague Survey 2020

Neither secure nor insecure Somewhat insecure

21% Very

secure

Somewhat secure

45% 18% 10% 5%

Very insecure

Future plans

93%

of colleagues have a permanent employment contract

Source: ACS Colleague Survey 2020

1 The same/similar role with my current employer

2 A more senior role with my current employer

3 A job outside of the sector

Source: ACS Colleague Survey 2020

39% 18% 13%

4 11% A similar/more senior role with a different employer in the same industry

5 Other

11%

6 Not working/retired

8%

13

SEPTEMBER 2020

?HOW WE OPERATE

92%

of independents

operate one store

Typical convenience stores are open

7am until 10pm

Sales space

Multiples

19%

32%

49%

Independents

1-999 sq. ft.

59%

1,000-1,999 sq. ft.

2,000-3,000 sq. ft.

34%

7%

22% of shop owners work more than

60hours per week

24%

take no holiday

per year

Source: ACS/Lumina 2020 (independents only)

How independent retailers source their products

36%

I get all of my products delivered

27%

I get some products

delivered and some from

a cash and carry

37%

I get all of my products

from a cash and carry

Opening

Opening hours

5am and earlier 6am 7am 8am 9am and later

4% 27% 42% 14% 13%

Closing

5pm and earlier 6pm 7pm 8pm 9pm 10pm 11pm and later

12% 7% 8% 13% 13% 25% 23%

are open

4%

.uk ? @ACS_Localshops

6%

Closed on Sunday

14

Average opening hours

14.8 13.5

Monday to Saturday

Sunday

All data on this page: Source: ACS/Lumina 2020

5%

Majority from a

cash and carry

5%

Majority of

products

delivered

Premises ownership

16%

Roughly the

same amount

58% Own

42% Rent Source: ACS/Lumina 2020 (independents only)

Multiples

31% Own 69% Rent

Independents

Source: ACS/Lumina 2019

58% Own 42% Rent

15

SEPTEMBER 2020

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