The convenience store channel’s outlet growth rate in 2021 was expected to remain well below the level seen before the outbreak of COVID-19. While the outlet growth rate was still very high in the previous year, it decreased drastically in 2021.
Alfamart looked set to retain its position as the leading brand in the convenience stores channel in 2021. The brand’s strength has been reinforced by its success in maintaining the stability of its selling prices, as well as the promotion of low prices every weekend.
Besides Alfamart, Alfamidi and Indomaret partnered with ShopeePay (Shopee is an e-commerce platform with its own online digital payment system) in April 2021. Starting from Ramadan 2021 (a key shopping season in June 2021), consumers can benefit from cashback and promotions under Deals.
The convenience stores channel is expected to see value growth recover more rapidly than larger scale modern grocery retailing formats, such as supermarkets, during the forecast period. The speed of this recovery will derive from changes in consumer spending patterns, as consumers appreciate the convenience of stores located near to their homes, as well as feeling more comfortable remaining close to home than going into city centres and crowded places such as shopping centres.
The expansion of the convenience store network is expected to soften during the forecast period, not only because of players’ caution resulting from the COVID-19 crisis, but also because it is getting harder and harder to find really good selling locations. In addition, the number of outlets within close distance of one another is high, which creates a pattern of opening and closing outlets due to increasingly fierce competition between stores.
Players in this category are expected to continue to strive to maintain the selling price of their products, especially for food and beverage products, in response to the decline in consumer purchasing power resulting from measures imposed to limit the spread of COVID-19. Given the economic impact of the pandemic, with the population experiencing higher levels of unemployment and reduced incomes, consumers have become more frugal.
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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 Definitions
This report originates from Passport, our Convenience Stores research and analysis database.
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