The Convenience Store industry has been growing significantly in spite of pandemic era challenges including supply chain and employee shortages. Two-thirds of retailers report that in-store sales were higher in 2021 than in 2020, while only 16% reported lower sales according to a NACS survey. *
When asked about 2022, a majority of convenience retailers expected the first quarter to be strong. They also appear to be embracing new ways of operating and are optimistic about new technologies like self-checkout and app-based services and payments.
The sector grew almost 8% in the third quarter of 2021 alone outpacing the wider market for the calendar year to date. The pandemic forced consumers to change their behavior which led to greater customer mobility and more frequent visits. The industry has also listened to customers by providing a greater variety of healthy food and beverage choices.
“The convenience store sector is reporting strong levels of planned expansion, with 7-Eleven looking to grow significantly in the long term and Quik Trip planning a significant regional expansion,” **
M&A activity has increased significantly recently. In one of the most significant deals, 7-Eleven Inc acquired Marathon Petroleum Corp.’s Speedway network, growing their chain by 3800 stores. In fact, M&A activity has been so furious that chains are looking for other ways to grow by buying independent stores and expanding into new regions with new construction. Companies looking to expand into markets that allow them to take advantage of their already established distribution network.
Expansion into underserved markets is a priority for some including Kum & G and QuikTrip both of which will be opening stores in the Denver area. Demographic changes have made the Southeast highly desirable. People have been moving from the Midwest and Northeast making the Carolinas, Florida, Georgia, and Texas grow significantly. In South Carolina, 7- Eleven has opened three new stores and has acquired 20 more from Speedway.
Supply Chain & Worker Challenges
Convenience stores like many businesses have been significantly affected by supply chain backlogs and employee issues. The supply chain is still a problem but relief is slowly working its way through the system.
A lack of employees and current employees calling in sick has forced many stores to not only offer more pay but more flexibility in scheduling and other types of benefits. Building stronger relationships with employees can be key to retaining good employees.
Many stores are investing more time into interviewing and onboarding new employees. It is much more costly to have a high turnover rate than to invest a bit more at the beginning and be sure that a strong positive relationship is established.
Silver Lining
Ironically the pandemic has turned out to be a boost for the c-store business. Because restaurants and stores were closed or operating at significantly reduced capacity, it brought in many people who were new to convenience stores. The new customers were looking for a somewhat different mix of products and retailers responded by offering more fresh and healthy eating options.
Expectations for growth in the coming year are high in the convenience store industry. It is thought that the newly expanded consumer base and the implementation of new technologies will continue to attract current customers and continue to bring new customers in.
* https://www.cspdailynews.com/company-news/c-store-retailers-suppliers-see-strong-sales-2021
** https://foodinstitute.com/focus/convenience-store-growth-poised-to-continue-amid-pandemic/
Recent Comments