It’s revealed that the global convenience store market size is estimated to grow by $930 billion from 2024-2028, based on a recent report from Technavio. The market is estimated to grow at a compound annual growth rate of 6.78% during the forecast period. Growing demand for convenient food products is driving market growth, with a trend toward increase in demand for private-label brands. However, changing buying behavior due to increasing online retailing and e-commerce poses a challenge.
Market Driver
In 2022, private-label grocery and apparel products experienced significant growth worldwide. Major retailers, who dominate the industry, have expanded their private-label product lines. Popular private grocery items, including soft drinks, frozen and refrigerated foods, alcohol, snacks, confectionery, meat, dairy, and sausages, have seen increased demand. Private-label brands offer these products at lower prices, driving demand from retailers. Changing consumer expectations demand premium products at affordable prices, leading to the launch of new private-label brands. This trend is boosting the growth of discount convenience stores. Thus, the rising preference for private-label brands presents lucrative opportunities for the growth of discount convenience stores during the forecast period.
C-stores have become a staple in urban areas due to fast-paced living and increased population density. These retail establishments offer necessities like groceries, household goods and essentials. Impulse purchases such as snacks, soft drinks and confectionery items also drive sales. Emergency products and fresh food are growing trends, with some stores expanding into the foodservice segment. Traditional corner stores are evolving into mini, expanded and hyper convenience stores. Strategic locations, self-checkout systems, contactless payment options and mobile apps are key features. Kiosks and franchising concepts are popular, with home deliveries and fresh food becoming important offerings. Societal trends like holidays and urban lifestyles influence promotional strategies. Necessities like groceries, essentials, and household consumables remain the backbone, while impulse items such as periodicals, tobacco products and alcohol continue to attract customers. Retail investments are on the rise, making convenience stores a lucrative retail business opportunity.
Market Challenges
The e-commerce sector’s continuous growth and the changing consumer buying behavior have significantly impacted the convenience stores market. With the increasing use of technology and the widespread availability of the Internet, consumers now prefer online shopping due to its convenience and flexibility. E-commerce platforms offer secure transactions, cash-on-delivery options, convenient return policies, integrated customer service, product availability and 24-hour accessibility. These services have encouraged consumers to purchase consumer goods online, leading to a decrease in sales for traditional convenience stores. The growing preference for online shopping among millennials, who have a higher purchasing power, further exacerbates this trend. As a result, the global convenience store market is expected to experience a negative growth during the forecast period.
Convenience stores face several challenges in today’s market. With increased population density in metropolitan areas, retail investments lead to more retail establishments in congested venues. Franchising concepts are popular, but offering unique product offerings, including important items like home consumables, packaged beverages, confectionery items, tobacco products, periodicals and fresh produce, is crucial. Holidays and emergency purchases drive sales, especially for items like ice, milk, eggs, and cigarettes and tobacco. Traditional stores must adapt to digital transformation, offering home delivery, online goods, foodservice, and time-saving options like self-checkout and inventory management systems. Real estate costs are high in urban areas, making it essential to cater to middle-class populations’ everyday needs. Sustainability initiatives like low-alcoholic beverages and fresh, organic and low-sugar options are important. Private-label brands and national brands must coexist, and plastic waste reduction is a pressing concern.
Technavio is a global technology research and advisory company. Its research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.
