CHICAGO – The convenience
store channel continues to be a destination for immediate consumption and impulse purchasing.
However, the channel is undergoing a bit of a metamorphosis these days.
Competition is heating up as convenience stores are pitted against other
channels, particularly dollar and drug channels, for share of spending. In
addition, two major sources of revenue and trip behavior for convenience
stores — gasoline and cigarettes — are facing their own challenges with high
prices, increased taxes and, for cigarettes, changes in consumers’ lifestyles.
Today, there are more than
149,000 convenience stores in operation. About two-thirds of those stores are
independently owned, and the remaining are chain store operations, according to
Information Resources Inc.’s (IRI) latest Times
& Trends report “Convenience Stores: Keep the Core; Appeal to More."
“Despite new innovations,
the convenience channel faces several challenges,” said Kelley Vacca, principal
for client insights at IRI, in a press release. “Many convenience stores sell
gasoline, so sales are somewhat tied to gas prices. Even though these prices
have been stable during the last year, they are still high and impacting
shoppers’ wallets, particularly those of young shoppers, which are a key target
for convenience store marketers. In addition, convenience store sales are
concentrated in a relatively small number of categories, with three of the top
six categories tobacco related.”
While convenience stores
of the past had a rather homogeneous look and feel, today’s stores are much
more varied. Furthermore, some convenience store owners are replacing long
aisles with kiosks, experimenting with larger footprints and adding
“good-for-you” products next to the candy bars. Shoppers have rewarded
convenience store management for these innovations. When compared to grocery
and drug stores, convenience stores were the only channel that enjoyed both
dollar and unit sales growth in 2012.
“To be successful in
today’s marketplace, convenience stores need to keep the core and invest to
develop value offerings across key categories, particularly in markets where
tax increases threaten to impact tobacco users’ wallets,” said Susan Viamari,
editor of Times & Trends at IRI.
“They also need to utilize outdoor advertising as an in-store visit hook by
emphasizing value, particularly during periods of high/rising gas prices. To
keep the momentum going, convenience stores simply need to appeal to more. A
great first step in this appeal is to develop a comprehensive health and
wellness strategy targeted to the needs and wants of core shoppers.”