C-stores seek growth as retail channels continue to blur

by Eric Schroeder
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Convenience store
Speed, experience and personalization stand out as three strengths that convenience stores have in the battle to attract consumer dollars.
 

NEW YORK — Speed, experience and personalization stand out as three strengths that convenience stores have in the battle to attract consumer dollars, according to research from The Nielsen Co.

“These are the foundation blocks that they can build on as competition rises and channel lines blur,” Nielsen said. “To execute, convenience stores need to get the product mix right (evolving when needed), emphasize health and wellness, and think beyond R.-T.-E. (ready-to-eat).”

Speed has become an essential service element in the quick-service restaurant industry and convenience stores will need to follow suit if they want to compete, Nielsen said. The research firm noted that it will be imperative for convenience stores to ensure customers looking for a quick meal can get in and out quickly.

“Positioning the deli at the front of the store, possibly with separate check-outs, will be big customer pleasers,” Nielsen said. “For a slightly elevated experience, retailers can enhance their offerings by offering restaurant-style seating and broadening their menus for in-store service.”

Convenience store
It will be imperative for convenience stores to ensure customers looking for a quick meal can get in and out quickly.
 

Convenience stores also will need to continue to look for ways to lean on fresh, natural food trends. Other channels have diversified, incorporating foods and services that are a cut above what can be made at home. In the case of convenience stores, being transparent and health conscious will be critical to future growth, Nielsen said.

Staying innovative is another key for convenience stores. This includes focused marketing across digital platforms and developing personalized offers and rewards that are individualized.

“Brands and companies can never afford to get too comfortable and complacent in their positions,” Nielsen said. “Competition can crop up at any time — and in many ways, on any device. Staying in touch with consumer preferences and needs is, and will always be the way to stay ahead of the pack — even for those currently at the front of it.”

According to Nielsen Homescan data, total U.S. retail trips fell to 15.8 billion in 2016 from 17.6 billion in 2012. In the convenience/gas channel, the average number of trips made by Americans fell to 11 in 2016 from 14 in 2015. On the positive side, Nielsen data show consumers are making up for fewer trips with larger purchases. In 2016, convenience store sales eclipsed $140 billion, up 11.5% from $125.9 billion in 2012, Nielsen said.

Convenience store
Convenience stores also will need to continue to look for ways to lean on fresh, natural food trends.
 

Nielsen said convenience stores captured 85% of all sales through six categories: cigarettes, packaged beverages, candy, beer, salty snacks and other tobacco. But a few subcategories, including ready-to-eat meals and enhanced water, delivered mid-to-high double-digit sales growth in 2016.

“The growth in subcategories like R.-T.-E. meals and enhanced water align with broader consumer health and wellness trends,” Nielsen said. “R.-T.-E. options are also amplified by deli sales, which grew 8.3% to $1.2 billion last year, while fresh produce sales slipped about half a per cent to $425 million. Overall, recent sales trends magnify the degree to which consumers seek fast, economical and increasingly healthy options from their convenience stores. That said, convenience stores are also more likely to attract people for meal-time trips rather than ‘fill-in’ and ‘routine shopping’ ventures. And that means being well stocked is now a consumer expectation rather than a desire.”
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