Private Label Seen As Key Growth Driver For Convenience Stores
The global convenience store marketplace is forecast to grow by more than $900 billion through 2028, with further expansion of private label products cited as a key driver in the coming years, according to a new report from Technavio.
Using the five-year period of 2024 to 2028, the market is estimated to grow at a compound annual growth rate of 6.78% with total sales growth of $930 billion. Increasing demand for convenient food products is driving market growth, with a trend toward increasing demand for private label brands. However, changing buying behavior due to increasing online retailing and e-commerce poses a challenge, the report said.
In recent years a number of retailers have expanded their private-label product lines. Popular private grocery items, including soft drinks, frozen and refrigerated foods, alcohol, snacks, confectionery, meat, dairy, and sausages, have seen increased demand. Private-label brands offer these products at lower prices, driving demand from retailers.
Additionally, changing consumer expectations are leading to an increase in demand for premium products at affordable prices, leading to the launch of new private-label brands. This trend is boosting the growth of discount convenience stores and the rising preference for private-label brands presents lucrative opportunities for the growth of discount convenience stores during the forecast period, the report said.
Beyond private label growth, convenience stores are playing a larger role in the lives of consumers. More shoppers today view retailers in the channel as the go-to place for household necessities, the report said. But impulse purchases, such as snacks, soft drinks, and confectionery items, also continue driving sales.
