With extended hours of operation and convenient locations, convenience stores (c-stores) have long been a quick and easy stop for shoppers to grab snacks, hot and cold drinks and tobacco products. However, as the retail landscape evolves and consumers have more choices in terms of where they shop, c-store retailers are innovating new ways to engage consumers and keep them coming back to their stores.
Compared with other retail channels, U.S. c-stores have boasted relative strength and sales growth in recent years. In fact, annual dollar sales for c-stores increased 1.4% in the 52 weeks ending April 1, 2017 while dollars sales dropped 1.0% in supermarkets, 0.1% in drug stores and 1.3% in warehouse club stores over the same period. Non-traditional c-store categories, like lunch combinations and refrigerated sandwiches, are the leading fresh categories driving growth for this channel, as c-stores adapt their strategy to fit consumer demands for healthier items.
Beyond non-traditional categories, fresh categories including freshly prepared cold and hot foods and breakfast sandwiches/wraps are bringing in more dollars to c-stores. In addition, c-stores that lead in fresh are also seeing higher overall brand equity. For example, Wawa and Sheetz, two c-store chains based in the Northeast region of the U.S., are leading c-stores for fresh and rank in the top five of c-stores with overall brand equity across the U.S.
Despite the growth in fresh, only one-third of c-store shoppers say they expect to purchase fresh foods at c-stores in the future. Consumers’ perceptions that the products offered are not high quality, don’t don’t taste good enough, and are not a good value for the money are the biggest barriers for buying fresh products at c-stores. Nevertheless, the convenience of c-stores for today’s on-the-go consumers means there is still tremendous opportunity for retailers in this channel to up their game and address the barriers consumers perceive when it comes to purchasing fresh products in this channel.
As fresh categories are relatively new ground for c-stores, retailers must understand these new items are a near-term investment that will deliver continuous long-term benefit. However, c-stores offering fresh items should not expect instant gratification, particularly because consumers still perceive c-store fresh food to be of a lower quality than that available at quick serve restaurants or grocery stores. C-stores that are winning consumers are not just increasing or improving the fresh assortment in store. These stores are focusing on connecting with shoppers in relevant ways to drive perception change, through items such as digital engagement, customer service and store cleanliness, which all contribute to the retailing experience.
Consumers don’t always have the time or patience to shop at large grocery stores, preferring at times to make quick stops at smaller stores or markets to pick up selected items through the week. As consumers make these mid-week fill-in shopping trips, c-stores can fill the void. So c-store retailers need to be sure the products shoppers want are available and are of the same quality that they’re used to seeing in grocery stores.
The insights in this article were derived from Nielsen Convenience Store Choice Drivers 2017.