Convenience stores suppliers saw their sales in the channel grow in 2020, with nearly twice as many reporting an increase than a decrease (50 percent vs. 28 percent, respectively), according to the results in a new NACS survey of supplier members.
The NACS supplier member survey results mirror what NACS retailer members reported in a similar survey in January, with 59 percent of retailers reporting a sales increase compared to 30 percent who saw sales decline in-store only.
More significantly, NACS supplier members say they are increasing their emphasis on the convenience channel in 2021: 63 percent said they will boost their investment in the channel – including 18 percent who will significantly increase their investment – compared to 10 percent who say they will decrease their convenience retail investment. And, they said that product innovation will be their top investment in the channel, ahead of growing their sales forces and advertising, among others.
Suppliers credit forming new relationships with retailers as the primary driver for growing 2020 sales (57 percent), followed by increasing the number of SKUs in the channel (32 percent) and increasing the quantity of existing SKUs in the channel (24 percent). Suppliers also said that they will continue these efforts in 2021: 62 percent will seek to form new relationships with retailers, 29 percent will add more SKUs in the channel and 25 percent will increase the number of existing SKUs.
“Our industry continues to find success in very challenging times because our supplier partners truly are partners, and our close working relationships – and alignment on strategies and attitudes – are important, and we together redefine how we provide convenience to customers every single day,” said NACS Chairman Kevin Smartt, CEO and president of Kwik Chek Food Stores.
“The challenges and change that we and our convenience retailer partners have experienced over the past year have been seismic. What hasn’t changed is our collective commitment to each other and the consumers we both serve,” said Rick Brindle, chairman of the NACS Supplier Board and VP of industry development for Mondelez International.
Suppliers also noted the top issues for the convenience retail industry to address, led by keeping up with shopper preferences (55 percent), introducing new products (49 percent) and meeting demand for pickup or delivery (38 percent). Foodservice offering (45 percent) and food safety (33 percent) were also top priorities expressed by suppliers.
Suppliers are more optimistic than pessimistic about their sales in the convenience retailing channel for Q1 2021, and their optimism grows significantly for the ensuing three quarters, peaking at 83 percent of suppliers expressing optimism about Q4 sales, compared to only 5 percent who are pessimistic. This optimism for their prospects in the convenience channel even exceeds retailer optimism, with 67 percent of retailers expressing optimism for Q4, compared to 7 percent who are pessimistic.
The NACS Supplier Member Pulse Survey was fielded Jan. 27-Feb. 5 by NACS Research and complements six-plus years of Retailer Pulse Surveys. A total of 109 companies participated. NACS Research conducts custom research with retailer and supplier members, consumers and shoppers to identify key priorities and opportunities across the convenience and fuel retail landscape.
