With the ongoing cost-of-living challenges, British consumers are increasingly reliant on budget-friendly options. Recent data reveals convenience store shoppers face higher costs compared to larger supermarkets.
- A recent Which? investigation highlighted that consumers who shop at convenience stores can pay over £800 more annually than in larger supermarkets.
- Tesco has taken a pivotal step by revising its product offerings in Express stores, introducing cheaper alternatives, primarily from its own-brand range.
- Morrisons has followed suit, launching entry-level products in over 500 Morrisons Daily stores, responding to customer demand for affordability.
- Pressure is mounting on other retailers to adapt, with calls for more budget-friendly options across convenience store chains.
With inflation relentless and the cost-of-living crisis ongoing, UK shoppers are keen to maximise value from their local shops. However, according to Which? those frequenting convenience stores rather than large supermarkets pay more than £800 extra annually. This discrepancy arises partly from the absence of budget grocery lines in store-branded convenience outlets.
In response to these challenges, Tesco has announced a major revision in its Express stores. It has replaced 50 everyday items with more affordable alternatives, largely from its own-brand product line, some costing less than one-third of the original prices. This initiative has been received positively and has reinforced Tesco’s reputation as the leading value convenience store chain in the UK. The supermarket cites customer data indicating a trend towards own-brand products, as shoppers seek value without sacrificing quality.
Morrisons has taken a similar approach by introducing products from its Savers budget range to over 500 Morrisons Daily stores. The range, encompassing essentials like eggs and butter, as well as household items, aims to provide customers with affordable options. This move caters to growing customer demand for economical products, particularly in areas with limited access to larger supermarkets.
Despite these initiatives, the broader acceptance of budget ranges in convenience stores lags. Sue Davies of Which? underscores the potential impact of value lines on consumer budgets, especially for low-income families. She urges supermarkets to extend these offerings to ease the financial burden on consumers. Nevertheless, Morrisons CEO David Potts notes that the economics often don’t favour stocking low-margin items in convenience stores.
Pressure is mounting on other retailers. Although some politicians demand action, the high operational costs of convenience outlets, highlighted by Shore Capital’s Clive Black, often impede the transition to budget-friendly offerings. Yet, with surveys showing a significant portion of consumers struggling to find affordable choices, the call for competitive pricing is growing stronger.
Change is underway in the convenience retail sector, driven by consumer demand and economic necessity.
