A year in review
Whilst the beer market in the UK saw a value increase of +1.6%, the Convenience channel grew behind the market with +0.7% value growth vs 2022.[1] This was driven by significantly declining shopper penetration ahead of the market. As a result, there is a need for convenience stores to drive penetration and they can do this by targeting more affluent demographics which are in +6% growth vs three years ago in convenience, alongside younger demographics.[2]
Whilst we are seeing beer volume slightly down over the last year, the increase in value highlights consumer demand for premium and super-premium options, highlighting a key area to focus on in 2024.
What’s in store for 2024
Budweiser Brewing Group UK&I is forecasting a steady year in 2024, with the beer category expected to grow +0.4% and the convenience channel to perform in line with the market. This growth will be driven by higher disposable incomes, and retailers entering the convenience channel such as Asda Express and Morrison’s Daily.
In addition, key sporting moments such as the Euros and the Olympics, provide strong incentives for consumers to purchase beer. Retailers can capitalise on this by having the right packs and segments in range.
“As the first month of the year ends, our expectation for the convenience channel remains high. There is an opportunity for the convenience sector to drive sales but understanding who the convenience customer is and their purchasing power is key,” says Joshua Hart, Wholesale Category Manager in the UK at Budweiser Brewing Group. “Shopper behaviour has changed over the last few years and will continue to, so it is key for stores to understand these shopper trends and adapt their offering accordingly.”
Budweiser Brewing Group has identified five key convenience trends that store owners can leverage to set themselves up for a successful 2024.
- Stock up for success
We have seen an increase in consumers wanting to bring the premium drinking experience in-home and this is something we foresee to continue throughout 2024. While premium lager (e.g. Stella Artois & Budweiser) remains by far the largest segment in convenience, we have seen growth in categories such as World Beer (e.g. Corona) and Craft Beer (e.g. Camden).
There is also an opportunity to increase footfall and penetration in-store by adding more NABLAB products to store’s offering. Over the last three years, there has been a +64 value growth in the no-and-low alcohol category – now worth £34.2m in the convenience channel.[3]
When looking at pack sizes, can packs are also becoming the pack type of choice for convenience shoppers with small and mid-pack sales growing mainly at the expense of bottle packs.[4] Convenience stores can capitalise on this demand by introducing new products and providing the right share of assortment, shelf space and promotion slots to these growing segments.
- Fast & Convenient
Given that shoppers spend an average of five minutes in-store, convenience owners need to attract time-conscious shoppers effectively through self-checkouts, clear navigation, and streamlined shopping experiences.[5]
In addition, with 96% of convenience beer sold cold and consumed within the initial three hours by 74% of shoppers, [6] stores should prioritise optimising fridge space to tap into shoppers looking to pick up a beer to drink on the go.
Small changes like this will not only boost basket spend but also make the shopper journey easier encouraging customer loyalty.
Alongside this, convenience shoppers tend to buy beer impulsively compared to shoppers at grocery mults. Convenience stores should capitalise by having in-front-of-store displays and gondola end shelving to grab the attention of shoppers and trigger impulsive purchases.
- Enhancing the Meal Occasion
No matter lunch, dinner, or a quick snack, convenience retailers can drive sales through food and beer pairings – 63% of at-home beer consumption now takes place with food.[7] With these cross-category combinations, we see the average basket spend increasing by £9.20. [8]
Given limited space in-store, convenience owners must consider what food options to stock. Pizza, salty and chilled snacks all present the strongest sales opportunity and will drive basket value up.
- The (Higher) Value Perception
In the face of growing economic uncertainty, 36% of shoppers have opted for more affordable supermarkets, contributing to a shift in spending habits.[9] Shoppers continue to be price-sensitive, by comparing prices across a diverse range of channels.
While price competitiveness poses a challenge for convenience stores, they can differentiate themselves by highlighting their added value.
This can be demonstrated through uplifting the overall experience with clear store navigation and working with brand partnerships. Additionally, the lower perception of time and convenience are the two core reasons why people purchase in convenience stores, and this can be further improved by digitalising the store and creating a one-stop shop through increasing store accessibility.
The value equation consists of costs vs perceived benefits, meaning rewards, costs and time can all influence shoppers perceived value. Optimising these will give convenience store owners a competitive advantage against Grocery.
- Loyalty and Promotions
To boost sales and uplift shoppers’ experiences in-store, Convenience stores should appeal to a range of shopper demographics and invest in cross-category promotions with loyalty schemes. Through elevating the shopping experience, rewards play a pivotal role in making consumers feel valued.
As 70% of consumers desire more discounts[10], stores can utilise coupons or subscription models to enhance perceived value. By offering exclusive deals and enticing loyal customers, retailers can boost shopping frequency while sustaining customer excitement.
Budweiser Brewing Group’s Convenience Vision
Budweiser Brewing Group has launched its new Convenience Vision to work with Convenience customers to drive growth within the Beer category.
“At Budweiser Brewing Group, we are working collaboratively with our customers to unlock for convenience growth,” says Sjors Brandsma, Retail Convenience Category Manager in the UK at Budweiser Brewing Group. “The Vision provides customers with key shopper trends, recommendations, and key actions to take on how to leverage the data to drive incremental sales. In the coming months, Budweiser Brewing Group will be running a host of broadcast sessions to unpick the data and share recommendations.”
To find out more about Budweiser Brewing Group’s Convenience Vision and sign up to the next broadcast session, please contact info@budweiserbrewinggroup.co.uk
[1] Nielsen – Total Coverage & Convenience – Value sales – FY 2023 vs 2022
[2] Oxford Partnerships Snapshot Convenience -1/08/23; Kantar WPO (OOOLtrs) Class split Convenience Total Beer and Cider 03-sep-23 52 w/e vs 2022 & 2021?
[3] GB Total Impulse / NABLAB Segment – Latest 52 Weeks Vs Year Ago – WE 27 January 2024
[4] : Kantar – % spend through promotion – Convenience channel – MAT WE 29.10.2023
[5] BBG – Global C-store playbook
[6] RTP Canal Moderno y Online Cerveza, 2021; 2 Cstore Macro Trends, 2019 Budweiser CAL review for retail convenience 2023
[7] Kantar Alcovision | 1 m/e 30th April 2021?
[8] BE: GFK FY 22 Basket Analysis; UK Kantar Worldpanel Take-Home 52w/e 16 April 2023;
[9] Global Convenience trends 2023 – IGD & Lumina intelligence 2023
[10] Marigold, “UK shopper trends index 2023
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