The past few months, and in particular, the past few weeks have seen many of the UK’s leading supermarkets investing in expanding and improving their convenience store portfolios, in a bid to win over local shoppers.

In fact, investment in local UK shops hit record highs over the last year as convenience retailers spent a combined £1bn, up from £646m in the previous 12 months, according to the Association of Convenience Stores’ (ACS) 2024 Local Shop Report.

While this investment figure is the highest on record since the report’s inception in 2012, it’s likely this will only continue to grow in 2025 as some supermarkets are just beginning to deliver on their multi-year investment plans.

As the likes of Morrisons, Waitrose, M&S and Tesco look to make their stamp in the market, from new stores to revamped sites, we take a look at why convenience is a priority for so many retailers right now and how this is going to shake up the sector.

Morrisons was one of the first UK supermarkets to ramp up its convenience expansion this year, having acquired 38 stores in the Channel Islands in May and a month later, unveiled plans to open 400 more of its Daily convenience sites, with an aim of hitting a total of 2,000 smaller stores in 2025.

M&S followed suit in July with plans to open 10 new convenience stores this year while renewing up to 50 in a move which “complements” the retailer’s wider business and “provides a halo effect”, according to food MD Alex Freudmann.

M&S convenience store in London Liverpool Street Station

Meanwhile, Waitrose has unveiled plans to open up to 100 new convenience shops over the next five years and just last month, opened its first new convenience shop in six years.

And last month Tesco joined the charge of grocers increasing convenience ambitions. The supermarket giant plans on opening more than 150 new Express stores over the next three years in a move that will create more than 2,000 jobs.

According to data from PwC there were 85 convenience store openings in the first half of 2024. This was driven in part by several major grocery chains prioritising convenience sites over full-sized supermarket openings.

PwC leader of industry for consumer markets Lisa Hooker points to the rise of flexible and hybrid working ushered in during the Covid-19 pandemic as a key driver of the growing and continued demand for convenience stores.

She explains that grocers “need to adapt to the hybrid world and satisfy consumer trends for convenience, variety and fun by creating spaces that fill an immediate need or feel exciting for consumers to step into,” she explains.

IGD global insight leader Bryan Roberts concurs that one of the reasons behind the larger focus on convenience sites over more traditional supermarkets is “the endurance of hybrid working” alongside other long-term incentives such as “an ageing population, decreasing car ownership and smaller households”.

He adds that in retail specifically, the “bounce-back in food-for-now, growth in food-for-later and the fragmentation of shopping trips” has given the consumer appetite for the convenience store format.

“The fact that c-stores are an important component in quick commerce also helps,” he notes.

The majority of the UK’s leading supermarkets now partner with rapid grocery delivery giants including Deliveroo, Uber Eats and Just Eat, while some also operate their own quick commerce brands, such as Tesco Whoosh.

Many of these delivery companies use supermarket convenience stores as a quick and easy pick-up location to deliver groceries to customers ordering online.

Waitrose is one of the grocers which has looked to advance its partnerships with these delivery players through its convenience channels. The upmarket grocer’s recently launched Hampton Hill store is the first of its c-stores to feature a hatch, allowing delivery riders to make collections more easily.

Retail Economics senior consultant Josh Holmes says that convenience stores are now “pivotal to omnichannel strategies” and “are no longer just smaller versions of supermarkets.”

“Acting as hubs for click-and-collect, returns via lockers, and rapid delivery through features like hatches, these stores are effective at bridging the gap between physical and digital retail,” he explains.

“These capabilities not only drive footfall but also generate incremental revenue streams, making convenience stores essential to the modern grocery ecosystem.”

Holmes believes retailers will continue to expand their convenience portfolios as “competitive pressures are driving this increased investment.”

He notes that Aldi and Lidl’s continued expansion highlights the “success and appeal of compact, efficient formats, forcing traditional grocers to defend their territory in residential and local markets”.

“This has created a domino effect, further accelerating momentum in the convenience sector, as no retailer wants to risk being left behind in such a dynamic market,” he continues.

But Holmes adds that, despite pressure from the discounters, the momentum behind convenience formats isn’t just about longstanding grocers defending their turf.

“They provide long-term strategic assets – serving as localised hubs for fulfilment, offering higher-margin opportunities with premium ranges, and anchoring customer loyalty schemes,” he says.

Roberts agrees that c-stores have been a “focal point for growth” pre and post-pandemic and believes there is “no reason why this won’t continue”.

However, he suspects that high quality sites will be in “increasingly short supply given that high demand by retailers”.

While investing in the location, design and features of the stores themselves are key to the retailers expanding in this market, others are going beyond by also investing in price to get shoppers through their doors.

Just last month, Sainsbury’s become the first UK grocer to extend its Aldi Price Match scheme – which promises to offer the same price for select products as in discounter Aldi – into convenience stores, taking its investment into value to nearly £1bn in four years.

This came hot on the heels of a recent reset of the grocer’s convenience experience, in which Sainsbury’s updated store layouts and product ranges to provide shoppers with more choice.

Holmes says that while convenience stores typically carry higher operating costs and therefore charge a premium, “Sainsbury’s should be commended for reducing the price gap on essential items and streamlining its value proposition across its stores”.

“This will likely put pressure on others to follow suit, ensuring that convenience formats remain accessible and competitive where it matters most,” he predicts.

Indeed, Tesco swiftly followed Sainsbury’s by cutting the prices of more than 200 own-brand and branded products in its Express stores, with milk, bread, pasta and coffee among 222 household essentials reduced in price by an average of more than 10%.

While the grocery giants’ increased focus on the convenience sector begs the question whether local, non-supermarket branded retailers will be affected, according to Roberts, IGD’s data shows that in the face of increased competition, “independents and symbol groups have been incredibly resilient”.

He believes “the latest offensive by multiples is unlikely to change that” adding, “they can compete the way they always have done – the right range delivered with a more personalised service.”

With big plans at leading UK supermarkets, the convenience channel is certainly going to ramp up in 2025, from new and refurbished stores to more variety among products and a better price point at certain retailers. However, it’s likely competition will be fierce as consumers are offered more choice on where to bag their groceries.