Mobile phone top-ups, bus tickets and TV Licence top customers' list of service  needs from convenience stores

Bill and top-up service customers spend more per visit at their local convenience store than other shoppers and one in seven customers buy items in the store that they weren’t planning to buy when they walked in.

The latest figures from him! research & consulting’s Convenience Tracking Programme (CTP) have been released by PayPoint, the leading cash payment network.

The value of sales1 in the convenience sector rose by 6.3 per cent last year, outstripping the grocery market’s growth of 4.1 per cent. At the same time, the number of convenience sector stores fell from 48,672 to 48,410. Average sales per store among symbol group affiliated stores rose by 2.7 per cent to over £735,000, while average sales at unaffiliated independents grew by 4.5 per cent to £329,000.

Commenting on the results, Tom Fender, Director, him! research & consulting, said:

“The convenience industry has shown tremendous resilience in recent years, and continues to grow at a significantly faster rate than the grocery market as a whole.
Central to this success is the sector’s focus on delivering against consumers’ needs, whether it be for meal solutions, top-up items, an indulgent treat, to pick up everyday essentials or to prepay their electricity meter late in the evening.”

On the day they were interviewed, 6 per cent of shoppers at convenience stores said they had used a utility bill service at the shop – an increase from 4 per cent in the previous CTP research. Two-thirds (67 per cent) of the shoppers who had used PayPoint also bought other products, ranging from newspapers (21 per cent), cigarettes (21 percent) and confectionery (19 per cent) to milk (17 per cent) and groceries (13 per cent). Less than a third of shoppers had planned to visit the store just to use PayPoint.

Additional purchases by customers topping up mobile phones were even higher: newspapers (38 per cent) and confectionery (22 per cent), milk (20 per cent), groceries (19 per cent) and soft drinks (17 per cent).

Many customers who used PayPoint (14 per cent) admitted to making impulse purchases while in the shop, further increasing the sales that wouldn’t have been made at the shop if the customer hadn’t gone in to use the PayPoint service.

Bill payment customers visit the shop an average of 4.4 times a week, compared with the average convenience shopper, who visits 3.7 times a week. Combined with the higher average spend of £6.68 when in the store (excluding the bill payment itself), compared with £5.31 by average c-store shoppers, PayPoint bill payment customers spend, on average, half as much again over a week: £29.39 against £19.65 (+50 per cent).

When asked what services they would most like to see offered in convenience stores2, those most frequently requested by customers were: mobile phone top-ups (30 per cent), bus tickets (27 per cent), TV licence payment (21 per cent) and council tax payments (20 per cent). 19 per cent also wanted to be able to pay gas, electricity and water bills.

“The fact that so many customers say they want to be able to pay for these services at their local convenience store is a clear reminder to retailers of the importance of offering them in their store – and if they already do, making sure their local community is aware they can pay for them at their local neighbourhood shop,” said Mike Igoe, Retail Strategy Director at PayPoint.

“But additional sales isn’t the only way that our retailers benefit. PayPoint-only services,  such as British Gas pre-pay, help to bring even more customers to our retailers’ shops, while the majority of independents – both symbol and unaffiliated with a store turnover of under £1 million – can benefit from the banking arrangements we’ve set up for them with Barclays, which discounts their banking charges by up to 69%.”

“The most successful retailers offer their customers exactly what they want, whether that be the product ranges they sell, the services they offer, the store layout, in-store promotions, an ATM or more recent innovations such as food-to-go.”

Tom Fender of him! concludes:
“Services have become a ‘must have’ for convenience retailers and for c-stores to become hubs of their communities, services play a central and fundamental part in their offer.

“Our research shows that shoppers using c-stores for services visit more frequently and spend more per trip than none-services shoppers.

“We expect the number and type of services offered to consumers will evolve over time, as consumer shopping habits change.“

Ends…

Enquiries:
PayPoint Press Office
Robin Granger / Katie Buckett
Brands2Life
020 7592 1200 / 07940 422 931 / 07832 286400
PayPoint@Brands2Life.com
Peter Brooker
Head of Corporate Affairs
PayPoint
01707 600356 / 07900 418960
peterbrooker@paypoint.co.uk

NOTES TO EDITORS
About the research
All figures except those marked otherwise are from him! research & consulting CTP 2010 research. Total sample size was 24,640 adults. Fieldwork was undertaken between 15 Feb and 17 March 2010 and was carried out face-to face with shoppers as they entered and exited 1,235 stores throughout the UK.

¹ Grocery market sales values and store numbers provided by IGD Convenience Retailing 2010.
² CTP web study 2010 of 1,000 shoppers at convenience stores.

ABOUT PAYPOINT
PayPoint is a leading specialist payments company with operations in the UK, Ireland, Romania, France, USA and Canada. It handles over £9.5 billion from over 550 million transactions annually for more than 6,000 clients and merchants.
PayPoint processes consumer payments across a wide variety of markets (energy pre and post-payment, telecoms, housing, water, transport, e-commerce, parking and gaming) through its retail networks, internet and mobile phone channels:

Retail networks
The PayPoint branded retail network in the UK numbers over 22,000 terminals located in local shops (including Co-op, Spar, McColls, Costcutter, Sainsbury’s Local, One Stop, Londis and thousands of independents). Collect+, a joint venture with Yodel, former Home Delivery Network Limited, provides a parcel collection and drop off service at more than 3,400 PayPoint retailers. Its ATM network numbers more than 2,300 ‘LINK’ branded machines across the UK, mainly in the same sites as PayPoint terminals.

In Romania, the branded retail network numbers over 4,800 terminals located in local shops, processing cash bill payments for utilities and mobile phone top-ups. In Ireland, over 500 outlets in shops and credit unions process mobile top-ups and bill payments.

Internet
PayPoint.net is an internet payment service provider linking into all major UK acquiring banks to deliver secure online credit and debit card payments for over 5,600 web merchants. It offers a comprehensive set of products ranging from a transaction gateway through to a bureau service and FraudGuard, an advanced service to mitigate the risk of fraud.

PayByPhone
PayByPhone is a leading international provider of services to parking authorities allowing consumers to use their mobile phones to pay for their parking by credit or debit card. It has contracts in the UK, France, Canada and the USA.

PayPoint floated on the London Stock Exchange in September 2004. It is widely recognised for its leadership in prepayment systems, smart technology and consumer service.