UK convenience market forecast to reach £54.9bn by 2031

By Olivia Hart

IGD forecasts the UK convenience market will grow from £48.6bn in 2026 to £54.9bn in 2031, even as the group's first-half 2026 data show sales falling.

What changed in the first half of 2026?

IGD reports that UK convenience sales fell 1.2% in the first half of 2026. Excluding tobacco and vape, the same market grew 0.7%. The 1.9-percentage-point gap shows how the two declining categories pulled down the headline result.

Patrick Mitchell-Fox, insight partner at IGD, said: “H1 2026 represents a historic low point for convenience market performance in recent years. While 11 of 17 categories recorded growth, only five grew by more than 2%, underlining just how difficult meaningful growth has become across much of the channel.”

The category split points to breadth without depth: six of 17 categories did not grow, while most of the 11 that did recorded gains of no more than 2%. The supplied research provides no same-store sales, store-count or transaction-volume breakdown, so it cannot show how much change came from customers spending more or the channel operating more locations.

Takeaway: Growth reached most of the channel, but not deeply enough to erase tobacco and vape weakness.

What drives the forecast to £54.9bn?

IGD's forecast requires the UK convenience market to add £6.3bn over five years, from £48.6bn to £54.9bn. Its forecast compound annual growth rate (CAGR), a smoothed rate across the period, is 2.5%; excluding tobacco and vape lifts that rate to 3.4%.

The forecast does not state whether its values adjust for inflation. That omission leaves real volume growth inseparable from price changes and limits how confidently operators can interpret the £6.3bn increase.

The category shift matters because sales outside tobacco and vape carry the faster forecast growth. Yet IGD provides no gross-margin data—a measure of sales remaining after direct product costs—so higher sales cannot be equated with higher profitability for convenience operators, distributors or suppliers. If the faster-growing categories carry lower margins, a sales shift could raise revenue while diluting profit.

Customer economics remain unresolved. The research does not separate unit demand from price changes, compare shopping baskets or show whether spending came from existing customers. For distributors, the forecast identifies where sales growth sits; it does not establish purchasing terms, supplier concentration or the working-capital burden, meaning cash tied up in inventory and receivables, of serving that growth.

Takeaway: The forecast is a sales-growth case, not yet a margin or cash-generation case.

Could alcohol become the No. 1 category?

Tobacco and vape's category share—the percentage of convenience sales attributed to that product group—has fallen to 15.4% in 2026. Alcohol remained comparatively stable at 15.1%, leaving the two groups only 0.3 percentage points apart.

If those trends continue, IGD forecasts that alcohol could overtake tobacco and vape as the channel's largest category as early as 2027. This is a conditional forecast, not an observed crossover, and it would mark a broader change in the sources of convenience-store growth.

For distributors and suppliers, alcohol carrying the largest sales share would make its assortment and replenishment decisions more commercially important. The evidence does not establish a corresponding shift in channel power: IGD names no suppliers and provides no data on negotiations, margins, promotions or retailer concentration. Nor can shoppers' economics be assessed without price and basket data.

Takeaway: A 2027 alcohol crossover would change the revenue mix before it changes the economics.

What must operators verify before betting on the forecast?

IGD's first-half result provides a weak base for a growth forecast. The research identifies 11 growing categories, but only five above 2%, and does not distinguish existing-store performance from expansion. It also omits inventory turns—the number of times stock is sold and replaced—leaving stock efficiency untested as the sales mix changes.

The missing evidence is specific:

• Margin: IGD reports sales and category shares but no gross-margin rates, so the forecast cannot be translated into operating profit for retailers, distributors or suppliers.
• Inventory: The source omits inventory turns and stock levels, leaving the cash tied up in goods and the risk of cutting prices on unsold stock unresolved.
• Customer economics: Without basket size, unit volumes or price changes, the research cannot show whether customers bought more, spent more or simply faced higher prices.

The source also points to TWC's launch of a cross-channel tracker using card transaction data. That tracker could offer transaction-level evidence, but the source gives no sample size, coverage period, participating retailers or transaction volume, so it cannot corroborate IGD's numbers here.

Takeaway: If the reported category trends persist, 2027 could mark alcohol overtaking tobacco and vape, but better returns will depend on margin, stock and customer data that IGD has not disclosed.