Convenience stores, which are predominantly located in tier 1 and tier 2 cities in India, witnessed lower footfall than pre-pandemic in 2021, as consumers preferred to order groceries from home through e-commerce channels, or visit bigger supermarkets because of lucrative offers and discounts, or visit traditional grocery retailers because of their competitive pricing. Convenience stores, which are smaller than supermarkets, have less bargaining power in terms of offers and discounts to attract customers, even though they have the convenience of proximity.
Convenience stores is a very small channel with low penetration in India, with just a few major players, such as Future Retail (Easy Day) and Central Government Employees Consumer Cooperative Society (Kendriya Bhandar). Although the potential of convenience stores in India is huge, the major competition that comes from traditional grocery retailers remains a concern for these players.
COVID-19-related rules and regulations mandated that stores which were not selling essential items such as milk and staples had to remain closed during the lockdown. In such conditions, convenience stores remained open and provided a hygienic and sanitised space for shoppers to buy the items they needed.
With changes in consumer behaviour, the high disposable incomes of the middle-income group, and the preference for packaged food, retailers have realised the potential for convenience stores in India, and are increasingly working towards increasing their penetration and providing products at competitive prices. With major players such as Reliance’s 7-Eleven, AMPM and Fresho stores announcing expansion plans in India, this retail channel is expected to grow further in the forecast period.
Having an omnichannel business model is imperative to meet consumers’ needs in the future. With the capabilities and resources available to retailers involved in the convenience stores business, they will be able to manage and operate this channel efficiently, while being closer to and catering to all kinds of shoppers.
India is a vast country, with varied customer demands and needs. To cater to these demands, a one-size-fits-all strategy would not work.
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Chained grocery retail outlets selling a wide range of groceries and fitting several of the following characteristics: Extended opening hours Selling area of less than 400 sq metres Located in residential neighbourhoods Handling two or more of the following product categories: audio-visual goods (for sale or rent), foodservice (prepared take-away, made-to-order, and hot foods), newspapers or magazines, cut flowers or pot plants, greetings cards, automotive accessories. Sales data excludes foodservice sales. Example brands include 7-Eleven, Spar. Note: The number of branches required to be termed chained varies from country to country but is usually ten or more. If a multinational is operating in the country, then this is included, even if there are fewer than ten outlets under the brand.
See All of Our DefinitionsThis report originates from Passport, our Convenience Stores research and analysis database.
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