Grocery operators are subsequently capitalising on the increasing desire for a retail offering closer to home and rising investment in city-centre ‘express’ stores, in turn strengthening their foothold within local neighbourhoods.

As a result, supermarkets across Europe are gradually gaining market share as operators concentrate on openings in this format.

In France, urban convenience stores continue to grow, with food retailer groups now operating circa 40 brands and 14,000 points of sale. Neighbourhood convenience stores such as Carrefour City, U Express, Franprix, and Casino Shop have experienced a 48% rise in sales. Convenience stores now account for nearly 11% of mass distribution turnover, while hypermarkets have seen declines of between 2.5% and 36.5%.

In Germany, food retailer Rewe is expanding into the convenience market, having recently partnered with specialist Valora as part of a larger strategy with the aim to expand the ‘Rewe-To-Go’ network, as consumer preference for small, local stores intensifies. 

In the UK, this trend has been underway for a while, but continues apace. Asda has plans to open 300 convenience stores by the end of 2026 as part of the company’s long-term strategy to become the UK’s second-largest supermarket, aligning its business plan with the evolving consumer desire to shop more frequently and more locally. Sainsbury’s has also repositioned its strategy to drive its convenience business, which grew by 10% year-on-year in 2023, as it plans to open 75 new Sainsbury’s Local convenience stores over the next three years.

Why has this format grown?

Multiple factors have contributed to the expansion of the convenience format. A rising consumer preference to shop quickly is being facilitated by food retailers increasing their online offering and expanding delivery services across much of Europe. This is enabling customers to make larger grocery shops from home, driving consumers to make smaller and more frequent, ‘top-up’ purchases in smaller retail formats in more convenient locations. As a result, shoppers are becoming much more reliant on local stores.

Technological advancements will further drive footfall to convenience formats as retailers target consumer data to personalise store product offerings, in turn increasing their loyalty and preference to shop locally. In France, Casino Group has developed a strategy with retail data organisation relevanC to enhance its consumer experience by tracking and collating spending data. Grocers who have a strong local presence across their market, like Casino Group, will be able to serve their unique customer base by optimising product offerings.

As much of Europe has returned to the office, for example Madrid has an office occupancy rate nearly back in line with the European pre-pandemic average rate of approximately 70%, the availability of convenience retail in city centre locations will allow office workers the flexibility of choosing when to shop. Convenience stores offering food on the go will also drive footfall to this type of retail format. More than 130 of the Sainsbury’s Local stores specifically cater for customers looking for ‘food-on-the-move’ in urban areas.

Sustained demand for convenience retail presents an opportunity for grocery operators and investors alike. The stability and longevity of income streams from supermarket assets make the grocery market an attractive option for investors seeking long-term revenue, with the convenience sector in particular showing positive signs of growth.

Further information

Contact Georgia Ferris

Positive Outlook for Retail Sales in Europe