Convenience retailers aren’t letting the pandemic get them down
If the pandemic served up lemons for convenience store retailers in 2020, the vast majority were able to turn them into lemonade based on the results of a new survey by NACS.
Nearly twice as many operators (59 percent versus 30 percent) reported achieving same-store sales increases than decreases last year. The channel, which represents 80 percent of all fuel purchased in the U.S., saw declines in gas sales and customer traffic during the year. Many quickly shifted focus to ready-to-eat and heat-and-eat foodservice items.
“More than anything else, stores had to look at how they fit into new routines,” Jeff Lenard, vice president, strategic industry initiatives, told RetailWire. “In some cases, that was a significant challenge, especially for stores that previously had heavy commuter traffic. In other cases, there were opportunities as some consumers looked to convenience stores more as an option for quickly picking up pantry items.”
Thirty-nine percent of those surveyed increased their emphasis on cleaning/toiletry categories and 34 percent percent did the same on grocery items. Stores, which are heavily reliant on the sales of alcoholic products, increased their focus on take-home sales as on-premise consumption was severely limited by COVID-19 transmission concerns.
The channel had to overcome numerous pandemic-driven challenges in 2020, including product supply, coin circulation and labor.
Sixty-nine percent say they had difficulty remaining in stock on cleaning products and toiletries. Forty-eight percent reported alcoholic beverage shortages and 42 percent had the same problem with non-alcoholic drinks.
Labor was a major challenge that convenience operators had to confront last year with 69 percent reporting difficulty in finding qualified candidates to fill open positions.
Convenience retailers, hardened by the experience of the past year, are moving into 2021 with the pandemic raging at record levels across much of the country.
“There really isn’t a one-size-fits-all answer for what will stick in 2021 and beyond,” said Mr. Lenard, who sees three areas retailers will concentrate on going forward: people, added convenience with take-home and pantry items, and the deployment of technology.
NACS reports that 38 percent of those surveyed plan to expand app-based ordering and payments. Thirty-two percent will build out mobile ordering for store pickup and 14 percent will include offers at gas pumps for pickup. One-third will offer more curbside pickup, 18 percent will employ drive-throughs and 17 percent will add home delivery.
DISCUSSION QUESTIONS: Do you think that convenience stores will come out the other end of the pandemic in a stronger or weaker competitive position than they were going in? Where do you see the greatest opportunities for retailers in the channel going forward?