Boosted by pandemic restrictions whereby proximity stores gained prominence in line with greater demand for at-home consumption, and a greater focus among the Portuguese to support local neighbourhoods or bairros, convenience stores recorded double-digit current value growth in 2020. Whilst the channel maintained a solid performance in 2021, growth slowed in comparison with an increasing number of consumers starting to return to large supermarkets for higher-value grocery shops.
The change in Portuguese consumption patterns, where convenience and digital payments gained further momentum, posed challenges to a channel where franchising and small retailers (although incorporated as part of larger master franchisees) dominate. Some retailers during the pandemic started to accept orders over the telephone or even via social networks, guaranteeing home delivery to customers, especially for those isolating or shielding during the pandemic and who did not want to come into contact with others.
Operators of forecourt retailers saw their business change during the pandemic. In 2020, tobacco, the largest product category sold through the channel, gained even greater penetration as these stores gained share from other distribution channels, namely vending or small specialist retailers, leading to double-digit current value growth.
After the strong growth recorded in 2020 and the further positive results noted in 2021, convenience stores is predicted to experience a marginal value decline (at constant 2021 prices) heading into 2022 as home consumption drops and the number of Portuguese working from home wanes. Nevertheless, while sales adjust to a “new normal”, overall value of the channel will remain higher than pre-pandemic levels with predictions for solid growth over the forecast period.
Although the pandemic may have initially delayed some expansion plans of players, the channel is expected to see a further increase in the number of outlets opening over the coming years, given the recovery of outlet networks in 2021. For instance, Spar plans to continue its expansion plan in Portugal through the franchising model.
Demand for growing convenience will continue to shape consumption patterns of the Portuguese over the forecast period, with proximity formats gaining in popularity by adding specific services. Home delivery services or in-store collection services are therefore, anticipated to continue to develop the channel, enabling them to compete with larger modern grocery retailers with similar offers.
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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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