The convenience retail sector in the UK experienced minimal expansion last year, with sales rising by a modest 1.6% to reach £48.2 billion. This slow growth reflects the dual impact of cost-of-living pressures on consumers and the government’s new regulations on disposable vapes. According to the Lumina Intelligence UK Convenience & Wholesale Market Report, released this week, the disposable vape ban played a significant role in stalling momentum for the channel.
Discounters gained market share as households tightened their budgets. Consumers turned to discounters to save money, allowing convenience multiples and symbol groups to grow despite the wider market slowdown. Sales for these larger operators increased by 6% to £11.1 billion, while symbol group sales rose by 2.8% to £18.7 billion.
Store expansion supported this growth. The number of convenience multiples grew by 3% to 6,281 outlets, driven by new openings like Morrisons Daily, Asda Express, and Tesco Express. Symbol groups also added locations, increasing their total count by 3.9% to 18,793 stores. Their ability to offer lower prices and less reliance on tobacco and vape products helped them outperform independent retailers.
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In contrast, traditional formats struggled. Co-operatives, forecourts, and unaffiliated independents all saw declining sales. The unaffiliated independents segment, which relies heavily on tobacco and vape products, was hit the hardest, dropping 2% in value to £7.6 billion. This decline was accompanied by a 1.8% reduction in the number of these outlets, which fell to 15,420.
Forecourts experienced a 1.2% drop in value to £4.6 billion, while co-operatives saw sales fall 2.3% to £6.1 billion. The latter decline was linked to a cyberattack on the Co-op Group that severely disrupted operations. The Lumina report notes that the channel is preparing for continued challenges in 2026.
The sector is expected to reach £49.1 billion in 2026, a slight increase of 1.8%. However, this growth will likely be driven by estate expansion rather than stronger underlying demand. Lumina Intelligence head of insight Andy Crossan explains that inflation will be the primary factor pushing spend growth higher.
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Multiples and symbol groups are expected to maintain their lead through investments in new stores, refurbishments, value-led propositions, and food-to-go offerings. Independents face a tougher environment due to ongoing cost pressures and their greater reliance on categories affected by regulation, particularly vaping. The report highlights that shop theft, the disposable vape ban, and rising operating costs will continue to impact the industry.
Retailers are focusing on food-to-go, meal deals, and vending as potential growth opportunities. However, they must balance these initiatives against the costs of operation and legislative changes, such as the deposit return scheme. The Lumina report suggests that investment in store refits, range reviews in food to go, fresh, chilled, and own label products, and technology to boost operational efficiency will be key drivers for the coming year.
