Brits too busy to shop help boost convenience stocks in UK

London

BRITS are still spending money on groceries, but only when it suits their busy lives.

Consumers no longer want to spend two or three hours on a Saturday buying essentials for the week and prefer to visit stores more frequently to purchase fewer items, said Trevor Green, head of UK equities at Aviva Investors in London.

He sees the pattern of shoppers combining online buying with convenience store trips continuing. "This is all about people's view on time rather than price," he said in a phone interview. "It's a long-term trend and it's running independent of consumer confidence or spending decisions."

Researcher IGD estimates that convenience sales in the UK grocery market will increase by almost 18 per cent to 46.2 billion pounds (S$85 billion) in the five years ending 2022, compared with 5.9 per cent growth in supermarkets.

Convenience will be the third-fastest expanding sector after online and discounters, according to IGD. "The growth rate in convenience will continue to outstrip the grocery retail market overall, supported by changing shopper behaviour," Patrick Mitchell-Fox, a senior business analyst at IGD, said Wednesday in an email.

The shift is partly because of the increasing number of households with just one or two people, "but also reflects the significantly improved retailer capability developing in smaller formats".

Here's a look at some stocks that benefit from Britain's time-pressured consumers:

Sales for the 13-week period to Nov 26 rose 29 per cent from a year earlier, leading to annual sales of more than one billion pounds for the first time, chief executive officer Jonathan Miller said in December.

The company is scheduled to publish its full-year results on Feb 19.

The stock has jumped more than 400 per cent in the past decade, although the shares are down about 14 per cent so far in 2018 as the retailer's UK high street stores continue to suffer from declining sales.