Convenience retailers say that in-store sales grew in 2020, with twice as many reporting an increase in store sales rather than a decrease (59 percent vs. 30 percent, respectively), according to a new NACS survey of U.S. convenience store owners.
Convenience stores, which sell 80 percent of the fuel purchased in the country, experienced a decrease in fuel sales and commuter traffic throughout the pandemic. However, retailers adjusted their in-store offers to focus on take-home meals and grab-and-go meal solutions: 49 percent focused on pre-packaged ready-to-eat meals, 41 percent focused on prepared foodservice meals and 24 percent focused on ready-to-heat take-home meals.
Sales figures from the NACS CSX database confirms this post-pandemic sales trend. From April through November 2020, ready-to-eat meal options saw double-digit increases compared to the same period in 2019.
Retailers also added or extended their offer around more in-demand products, 39 percent focused more on cleaning/toiletry items and 34 percent focused more on grocery items. Due to COVID-19 restrictions limited on-premise consumption of alcohol at other establishments, convenience stores focused more on take-home alcohol offers. Overall, 39 percent of stores put more emphasis on this category with 58 percent adding new items.
While convenience stores added or focused on new offers, they also found some traditional items in short supply. More than 69 percent of stores say it was difficult to find qualified candidates for jobs, 69 percent say that cleaning items/toiletries were in short supply and 59 percent say that the coin shortages this summer affected their stores. In addition, 48 percent say they experienced shortages of alcoholic beverages and 42 percent saw shortages of packaged beverages (bottled water, soda, energy drinks, teas).
“We exist in a small community (Arivaca, Arizona), where the nearest gas and grocery is over 35 miles away. During the pandemic we were able to stay open and (mostly) stocked, and our community was infinitely appreciative of that,” said Damon Goodmanson at II Sonz LLC.
While 83 percent of items traditionally purchased at a convenience store are consumed within the hour, retailers will continue to build up their take-home and meal offers in 2021. Fifty-eight percent say they will emphasize prepared foodservice meals, 51 percent will focus more on prepared ready-to-eat meals like salads and sandwiches and 30 percent will focus more on ready-to-heat meals.
Convenience stores will continue to expand convenient order and payment options, 38 percent will expand their app-based ordering and payments, 32 percent will expand mobile ordering for in-store pickup and 14 percent will offer more ordering options at the pump for in-store pick-up. Meanwhile the NACS Research report, “Last Mile Fulfillment in Convenience Retail,” showed that last mile fulfillment presents an opportunity to expand a store’s sales reac, and retailers are embracing this opportunity.
Retailers say they are more pessimistic than optimistic about shopper foot traffic for Q1 2021, but they are increasingly optimistic about sales in each ensuing quarter. By Q4, retailers say they are more optimistic (67 percent) than pessimistic (6 percent) about how business will be performing, likely due to an expectation that a larger portion of Americans will have received a COVID-19 vaccination by end of year.
In addition to sales, retailers say they will continue or expand their community giving in 2021. Overall, 61 percent say they will have programs to support local schools, 48 percent will support local first responders, 32 percent will focus on wellness programs for the community and 27 percent will support hunger relief programs.
Most of all, convenience stores expect that the feeling of community and the teamwork in stores to continue to resonate in 2021.
“With the shutdown of restaurants and entertainment, people still need to see familiar faces and be able to have some normalcy to their daily lives. Many of our customers continue to come in for that cup of coffee and to be greeted by our employees that they see every day on their way to work. We have received many words of thankfulness for our support of our communities,” said Randy Fuller at Bill L. Dover Co. Inc., which operates 16 Jiffy Markets around Jasper, Texas.
“Our entire c-store staff did a magnificent job in 2020. I am sure that when they joined the company, they did not envision wearing masks and shields eight hours a day and working behind plastic screens as an essential, front-line service to the community during a raging pandemic. Their efforts in serving are shadowed by the health care industry, but are in the reality of human needs, no less important,” said Douglas Dean at South Pacific Petroleum Corp.
Retailers also recognized the efforts of workers at other stores. In April and May, it was common to see retailers rewarding healthcare workers with special offers in recognition of their important work. Landhope Farms, a three-store chain based in Kennett Square, Pennsylvania, took this type of recognition one step further.
“We decided to get in the game as well and offer free coffee to all essential workers – including the people who work at Walmart, Target, local grocery stores and farmers in our area. I truly believe that in addition to the first responders and healthcare professionals, the ‘essential worker’ is the unsung hero of 2020. Our customers appreciated being noticed and recognized for being essential,” said Dennis McCartney, the company’s director of operations.
The NACS Retailer Member Pulse Survey was conducted in December by NACS Research. A total of 71 member companies, representing a cumulative 1,717 stores, participated in the survey. NACS Research conducts quarterly custom research with retailer members to identify key priorities and opportunities across the convenience and fuel retail landscape.