The New Retail Mantra: Convenience, Convenience, Convenience

JERSEY CITY, N.J. -- Convenience may just trump location when it comes to success in retailing.

"Convenience, convenience, convenience may soon replace location, location, location as the retail mantra. Small-box convenience stores will be among the fastest-growing banners through 2018 with the likes of Walmart Express and Dollar General Market leading the charge," said Planet Retail US Research Director Sandy Skrovan.

In a new report, US Convenience: Changing face of small-box grocery retailing, Planet Retail explains that the average store size across grocery formats is set to shrink from 25,500 square feet today to less than 24,000 square feet by 2018.

"Everyone covets convenience -- shoppers and retailers," Skrovan said. "Busy lifestyles -- two working parents, hectic homes and job schedules, lengthy commute times -- are driving up demand. Modern meal preparation and eating habits speak to a move toward on-the-run, grab-and-go consumption."

Skrovan added that it's no surprise that other retail channels are targeting convenience.

"After all, the huge size of the U.S. convenience and forecourt channel (about twice that of U.S. Walmart operations) and its fragmented structure make it a relatively easy play," Skrovan explained.

Planet Retail expects the fast-paced advance of alternative convenience locations to disrupt traditional c-store and forecourt retail models.

"Channel blurring will make it increasingly difficult to distinguish between formats, i.e. Is it a c-store, dollar store, hard discounter or 'mini' Walmart? But shoppers don't care -- they're channel-agnostic. They just want an easy-to-shop experience fitting their shopping mode: stock-up, fill-in or immediate need," the report said.

This growing small-box trend, however, could have vendor implications. For example, according to Skrovan, packaged good suppliers will begin fighting for shrinking shelf space. Product innovation and order fulfillment of high-frequency SKUs will also become more important.

London-based Planet Retail, a division of WGSN Group, is a provider of global retail intelligence.