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Convenience is leading the expansion race in the global grocery market. And nowhere is the trend more pronounced than in the U.K., where recently released figures from intelligence agencies Nielsen and IGD verify that convenience store growth is outrunning that of out-of-town supermarkets.

Given that only 15% of convenience stores are owned by supermarkets, the FMCG retail heavyweights are keen to seize hold of unoccupied territory. Sainsbury's is one of a number of UK grocers to target convenience as a central vehicle for growth. The retailer aims to add 75 - 100 new convenience stores to its 335-strong number in 2010/2011, and has its sights set on another 100 thereafter.

Not only was the convenience sector one of the key beneficiaries of recessionary shopper behaviour, but the consequent improvements made to its offering - particularly by way of private label and fresh produce expansion - have helped it retain its appeal to the post recessionary, value-coveting consumer. And, with the convenience store concept denying any manner of standard format, the scope for profit-yielding, complementary - rather than competitive - activity across city centre, high street and neighbourhood operations is almost a given.

In South Africa we have seen a similar trend of inversion of big and small where smaller stores, more accessible locations and abbreviated product assortments have secured return on investment. And it is the forecourt retailer that leads the trend as stakeholders Pick n Pay, Woolworths and Fruit & Veg City jostle for pole position.

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New kid on the block

Having tucked its labour dispute into bed last week, Pick n Pay is powering forward and, well…downward. On Tuesday, the retailer unveiled its pilot C-format store - Pick n Pay Daily - at the Worldwear Centre in Johannesburg.

The convenience store is all about easy reach and time-saving. With its limited product offering and its emphasis on ready-prepared meals, fresh produce and grab-and-go drinks, the C-store is a product of the global retailer’s keeping pace with increasingly time-governed consumers for whom choice has become secondary to accessibility.

The supermarket shrink trend is particularly evident in the US. An article published in The New York Times this month bemoans the hassle that “miles of aisles” presents to the time-starved shopper who knows exactly what he wants as he enters the store. The figures abbreviate the story. For the first time in 20 years, the average grocery store size dipped - by some 38 000 square feet - in 2007, while the average grocery shop now lasts 22 minutes. The pulling power of assortment is clearly on the wane.

The C-store is a ‘smart’ stop whose limited product offering and easy-to-park-and-shop features enable the consumer to get what he needs when he needs it. And, according to research conducted by Pick n Pay, it’ll be the obvious shop-stop for the retailer’s core consumers in the higher LSM brackets, for whom several shopping trips a week is already a given.

Growing at approximately 14% pa, the convenience store format is the fastest growing segment in the retail market, but it’s also a risky time to downsize. Consumers’ ‘flight to value’ at the bigger store formats, as well as the smaller store’s higher staffing costs per square metre, cannot be ignored. Then again, at an average size of 850m2, and with a carefully balanced fresh food/grocery offering comprising some 6 500 product lines, Pick n Pay Daily may strike the elusively happy medium.

Either way, the newcomer will pose an interesting challenge to Woolworths, which has led the convenience store movement in South Africa and which has recognized the need to increase the size of its smaller franchise stores. Competition is always good news for the consumer and, with the Pick n Pay-BP joint venture to launch in November this year, Pick n Pay will be able to meet its rival at the critical forecourt level too.