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NEW CHALLENGES ARE EMERGING FOR CONVENIENCE STORES

Convenience stores are frequently, and correctly, identified as one of the trade channels that commands a sizable proportion of consumers' food spending, therefore directing revenue away from supermarkets.What's less well known is that the convenience sector may not be as robust as it seems, and it is coming under challenges that may oblige it to change in ways that will redound to the benefit of

Convenience stores are frequently, and correctly, identified as one of the trade channels that commands a sizable proportion of consumers' food spending, therefore directing revenue away from supermarkets.

What's less well known is that the convenience sector may not be as robust as it seems, and it is coming under challenges that may oblige it to change in ways that will redound to the benefit of supermarkets. Let's take a closer look at what's going on here, using the results of a couple of industry studies issued lately.

According to a study issued by Retail Forward, sales at convenience stores have been growing at the rate of more than 12% for each of the past five years. That's impressive on its face, but less so when examined more closely. It develops that 78% of sales growth is attributable to fuel and tobacco alone. Indeed, just 24% of fuel purchasers buy store merchandise at all.

Moreover, the study posits that those two product categories will come under siege, particularly fuel. That's because non-convenience fuel alternatives are increasingly numerous, and because fewer oil companies are expected to remain involved in operating retail stores. Meanwhile, tobacco sales are likely to sink.

As those categories atrophy, convenience operators will be obliged to take action, possibly by redirecting their food offer toward a wider array of products that offer simple or no preparation. We'll see how agile the sector is in accommodating to changing consumer demands.

The other study shows how the convenience sector stacks up against other channels of trade in terms of shopper demographics. According to the "Consumer Opinion of the National Brand CPG Industry" report commissioned by Grocery Manufacturers of America, it's a narrow band of shoppers that favor convenience. Some 44% of shoppers surveyed said they shop convenience once in a while. Just 14% cited the sector as playing a big shopping role. Shoppers are most likely to be single parents, 18-to-29 years old with household incomes of $30,000 or less. This, too, implies that the channel is under challenge.

Not so supermarkets, which were cited by 97% of shoppers as being a choice once in a while, and by 81% as playing a big role in their shopping. The supermarket shopper is most likely to be a stay-at-home mom living in the Northeast. Supermarkets command a vast swath of the shopping universe. The geographical metric is probably reflective of the prominence of supercenters in the South. Look: With respect to discount stores and supercenters, the study finds that 79% of shoppers patronize them once in a while; 49% cited them as having a big role. Shoppers of those formats are most likely to be single parents, 18-to-29 years old and living in the South.

Finally, the same study offers encouraging news to the supermarket sector, as compared to convenience, when it comes to shoppers' favorite foods. Some 13% of shoppers cited beef as a favorite food. Some 11% cited poultry, pasta and vegetables as favorites. Other favorite foods, in descending order of preference, were: seafood, pizza, ethnic, fruit, salad and chocolate. A variety of favorites, then, are far more readily available at supermarkets than at convenience stores.