Convenience: the opportunities as physical expansion recovers

Date : 05 February 2021

Charles Chan

Senior Retail Analyst

Last month, we outlined five global trends that will shape the convenience channel this year and beyond. While it is still early, we are already seeing new proof-points in support of our views.

Acqusitions supporting physical expansion recovery

Physical expansion in convenience retail is much more fluid compared to larger formats. While this has slowed since the pandemic, plans that were placed on hold are being relaunched, and investment in new locations recovering.

…global case studies from Europe, North America and Asia

In Germany, EG Group has successfully completed the acquisition of KMS Autohof. MAXI locations are designed for long-distance lorry and truck drivers to stop off for fuel, food and drink. This follows EG Group’s acquisition of 285 fuel retail sites from OMV Deutschland GmbH in southern Germany last year. While penetration of convenience in Germany is low, there is no clear convenience player in the market. Increasingly, forecourt operators are moving into this space. BP, for example, continues to rebrand many of its sites to the Rewe To Go banner.

Source: EG Group

In the U.S, Weigel's is creating over 200 jobs due to its growing network in Bristol, White Pine, Morristown and Wears Valley. Weigel’s is a family-owned business trading 68 convenience stores in East Tennessee. It prides itself for delivering strong customer service by knowing the neighbourhoods it serves.

In Hong Kong and Macau, Couche-Tard has completed the acquisition of Convenience Retail Asia’s Circle K business. The move represents a significant milestone for the retailer as it looks build regional presence in Asia. Circle K’s North American and European operations are mainly forecourt stores, the complete opposite to those in Hong Kong and Macau. This will give Couche-Tard the opportunity to learn how to develop formats in densely populated cities and locations. Circle K Hong Kong is reinventing its stores, beginning with those located in residential areas focusing more on grocery missions.

Source: IGD Research

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