KUALA LUMPUR (April 9): Asia’s major convenience retailers are predicted to grow 6.6% a year to 2022 by US$5.1 trillion, according to the latest forecast from international research charity for the food and grocery industry organisation IGD.
In a statement today, IGD said that based on a survey of the top 10 Asian convenience retailers, the new research anticipates that convenience will be the fastest growing bricks and mortar channel in Asia over the next five years, resulting from both retailers expanding their networks and shoppers changing their shopping habits.
IGD Asia senior retail analyst Charles Chan said the Asia convenience channel is definitely one to watch over the next five years with the strong growth expected for c-store retailers.
Chan said Indonesia in particular will continue to stand out as the fastest growing retailer country and the increasing number of single and two-person households is driving the growth of South Korean retailers, increasing growth of smaller formats.
“This reflects consumer behaviour of purchasing smaller portions and pack sizes along with ready-to-eat solutions.”
“Asia’s large and congested cities, growing young and increasingly affluent populations are ideal incubators for proximity retailing – however, formats and retailers are emerging in many forms, as identified by IGD’s four main proximity store formats in the region: CVS, forecourts, neighbourhood retailers and 1k supermarkets2,” said Chan.
IGD’s convenience model is defined as follows:
- Forecourt formats: pioneered in North America, with a focus on transient trade - snacking, foodservice and food-to-go solutions
- CVS formats: led by retailers in Asia servicing densely populated, congested urban areas, serving a demand for impulse, speed and time of day
- Neighbourhood convenience: influenced by leading supermarket operators in Western Europe, with a focus on fresh food, meal solutions and top up
- 1k supermarkets: 1,000 square meter stores in many forms and locations, driven by the changing competitive landscape and shopper patterns, focused on top up ranges
“CVS and neighbourhood convenience are the most widely adopted models currently, with both specialists and multichannel retailers operating formats under these types. 1k supermarkets are a growing trend, particularly in urban locations where hypermarket growth is challenging or space for new stores is limited – these stores serve limited catchment areas and have high footfall.
“Although the model we’ve outlined provides a nice way to segment customers, inevitably elements of each type do appear in other models, resulting in a blurring of store types,” said Chan.
He said online and digital solutions should be a focus.
“Online and digital solutions should be a focus – all major retailers have online operations, delivery and collection services and are experimenting with digital and mobile, maximise this opportunity to test and learn,” said Chan.