Discount, Convenience Stores to Grow Fastest in U.S., Reflecting Consumer Focus on Price, Speed
Defying 'retail apocalypse,' food discount, non-food discount, convenience stores project highest annual growth rate through 2024, at more than 5 percent each, among offline retailers
Oct 17, 2019, 07:30 ET
BOSTON, Oct. 17, 2019 /PRNewswire/ -- Discount and convenience stores in the U.S. are projected to grow faster than all other offline retail channels over the next five years, reflecting consumers' increased focus on price and speed, even if it means more limited assortment, according to an analysis from ecommerce insights company Edge by Ascential.
Non-food discount, food discount and convenience stores are all projected for annual growth rates above 5 percent, whereas all other offline retailers, aside from membership club stores, are projected at annual growth rates of 3 percent or below. Convenience stores are projected for the highest growth at 5.4 percent, with discount and non-food discount stores projected at 5.3 percent and 5 percent, respectively.
The forecast seems to reflect broader economic trends. While paychecks remain relatively steady with unemployment continuing at historic lows, wages remain stagnant for many workers, placing increased sensitivity on overall value.
"What we're seeing offline is similar to what we're seeing online," said David Gordon, research director at Edge by Ascential. "There's an increasing emphasis on low cost and convenience. You can see it through the lens of Amazon, and it will continue to play out online in similar ways."
U.S. projections largely reflect what's projected on a global scale where convenience stores (6.6 percent), non-food discount stores (5.2) and discount stores (4.9) join membership club stores as experiencing the fastest growth.
This growth can be manifested in the chains that were planning to add U.S. stores in 2019. German-owned discounter Aldi was expected to open 100 new locations. More than 900 Dollar General stores were expected to open, with hundreds of locations adding produce and fresh foods. There was expected to be a net increase of 160 Dollar Tree and Family Dollar stores.
Food discount stores, in particular, are projected to continue gaining overall share, increasing to 9.7 percent of food sales in 2024, from 8.8 percent today and 7.4 percent in 2014.
Convenience stores will continue to thrive due to urbanization, declining household sizes and preferences for smaller shopping missions. They are also proving relatively resistant to share loss from online retailers, with only a .2-percent loss in share from 2013-2018.
Discount stores are also seeking to future-proof their share. Many are partnering with online delivery intermediaries, which help support a last-mile solution that fits with the lower cost, low-complexity discount model.
The findings are drawn from Edge by Ascential's Retail Market Monitor, which analyses how individual sectors are currently performing and how they are forecast to grow by 2024.
About Edge by Ascential
Edge by Ascential gives global brands the edge they need to win in ecommerce-driven retail by providing actionable, next-generation data, analytics, insights and strategic consulting. Our unparalleled suite of solutions - including Market Share, Digital Shelf, Price & Promotions and Retail Insights - enables brands and retailers to develop and implement strategies that maximize revenue growth; optimize product listings; increase sales faster than the category and the competition; and drive margin growth. More than 600 global brands and retailers depend upon our weekly, daily and real-time data-driven insights.
A subsidiary of Ascential plc, the London-based global specialist information company, Edge by Ascential has more than 400 employees in 10 offices across North America, Europe and Asia. For more information, visit www.ascentialedge.com.
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SOURCE Edge by Ascential
