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Convenience Store News January 2021

W H AT ’ S N E X T I N C O N V E N I E N C E A N D F U E L R E TA I L I N G

STUDY 2021

STEPPING UP YOUR SAFETY & SANITATION GAME

COVID CASTS A SHADOW OVER 2021 FORECAST Pandemic worries haunt c-store retailers and suppliers, affecting the outlook for the new year.

Volume 57, Number 1

JANUARY 2021 CSNEWS.COM


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VIEWPOINT

Hope for the Best; Prepare for the Worst After last year, the industry should be ready for anything in 2021 us anything, it was the necessity of accepting change. The pandemic forced major changes in the operations of convenience retailers, wholesalers and manufacturers. The industry embraced change better than most. While some product categories faltered, others flourished. We saw companies successfully pivot from live conferences and trade shows to online events.

IF 2020 TAUGHT

Hell, I even accepted that Lee Child’s brother Andrew has taken over authorship of his iconic “Jack Reacher” series of novels. If I can swing with that, I can handle anything.

physical info, such as restaurant menus. • Push for EMV compliance intensifies. With the April liability shift date looming, there will be a rush by fuel retailers, particularly smaller operators, to make the transition to chip at the pump. • Transparency. Shoppers want clear evidence of store safety and sanitation measures, and where their food and drinks are coming from. • Focus on workforce technology. The need for seamless integration of store-level and headquarters data and communications is one of the greatest lessons to come out of the pandemic.

As I write this, the first COVID-19 vaccine was administered to a 91-year-old woman in England. There’s finally a light at the end of the tunnel. But, pandemic or no pandemic, change is not going to come to a halt in 2021. In fact, I expect we’ll see an accelerated push for transformation in the year ahead.

• Working from home will continue. Businesses that once felt people needed to be in the office every day to be productive now realize their employees are just as efficient working remotely. This will affect all out-of-home breakfast sales.

I’m not going to bore you with the usual buzzwords of home delivery, curbside pickup, mobile ordering, and the like. Those trends are already becoming mainstream in the world of convenience retailing. Instead, I’ve culled a few predictions from some respected sources that I think will greatly impact retailers:

• Business travel will return to near pre-pandemic levels. There appears to be huge pent-up demand among both retailers and suppliers to get back out into the market, visit stores, network at trade shows, and do all the things that help improve the industry’s ability to serve its customers.

• Accelerated adoption of contactless payments. Use of QR codes will also increase as a touchless method of payment as consumers become more familiar with using QR codes to pay at fuel pumps and for initiating check-ins, picking up orders, and for accessing formerly

Whatever happens in 2021, the past year has taught us to hope for the best, but prepare for the worst. For comments, please contact Don Longo, Editorial Director, at (201) 855-7606 or dlongo@ensembleiq.com.

EDITORIAL EXCELLENCE AWARDS (2013-2021)

EDITORIAL ADVISORY BOARD Brett Atherton Bolla Management

2018 Jesse H. Neal National Business Journalism Award Finalist, Best Editorial Use of Data, June 2017

2013 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2012

2013 Jesse H. Neal National Business Journalism Award Finalist, Best Profile, August 2012

2020 Eddie Award, Folio: magazine Business to Business, Retail, Series of Articles, September 2019 2018 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Website Business to Business, Retail, Full Issue, October 2017 Business to Business, Editorial Use of Data, June 2017

Rick Crawford Green Valley Grocery

2017 Eddie Award, Folio: magazine Winner, Business to Business, Retail, Single/Series of Articles, May 2017 Honorable Mention, Business to Business, Retail, Single/Series of Articles, June 2016

Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired)

2016 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2015 Business to Business, Retail, Single/Series of Articles, August 2015 2016 American Society of Business Press Editors, National Azbee Awards Gold, Best How-To Article, March 2015 Bronze, Best Original Research, June 2015 2016 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best How-To Article, March 2015 Silver, Best Original Research, June 2015

2015 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2014

2013 American Society of Business Press Editors, Midwest Regional Azbee Awards Bronze, Best Editorial/Commentary, July 2012

Jim Hachtel Eby-Brown Co.

2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2013 Business to Business, Retail, Single Article, February 2013

Chris Hartman Rutter’s

2013 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2012

Ray Johnson Speedee Mart

2015 American Society of Business Press Editors, National Azbee Awards Silver, Best Profile (long form), February 2014 2015 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best Special Supplement, November 2014 Silver, Best Profile (long form), February 2014

Laura Aufleger OnCue Express

Joe Lewis ExtraMile Convenience Stores Ruth Ann Lilly GPM Investments Danielle Mattiussi Maverik Inc. Vito Maurici McLane Co. Inc. Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Bill Stein Core-Mark Roy Strasburger StrasGlobal

Jack Lewis GPM Midwest

2020 Trade Association Business Publications Intl. Tabbie Awards Honorable Mention, Best Single Issue, September 2019 2016 Trade Association Business Publications Intl. Tabbie Awards Silver, Front Cover Illustration, June 2015

J ANUARY

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Convenience Store News 3


CONTENTS JAN 21 COVER STORY PAGE 30

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STUDY 2021

72 FEATURES

DEPARTMENTS

COVER STORY

VIEWPOINT

30 COVID Casts a Shadow Over 2021 Forecast Pandemic worries haunt c-store retailers and suppliers, affecting the outlook for the new year. 32 Retailers Wary of More Pitfalls COVID, labor difficulties and declining foot traffic are chief among operator concerns. 40 A Cautious Forecast The majority of c-store operators don’t expect sales to get worse, and even foresee improvement for some product categories. 52 Preparing for Roadblocks Ahead C-store industry suppliers and distributors foresee disruptive factors impacting 2021. 54 Here Today … & Tomorrow The pandemic prompted changes in the convenience channel, many of which are here to stay. FEATURE

56 Prioritizing Safety & Sanitation With customer expectations higher than ever, retailers need to step up their game. 4 Convenience Store News C S N E W S . c o m

3 Hope for the Best; Prepare for the Worst After last year, the industry should be ready for anything in 2021. 8 CSNews Online 20 New Products SMALL OPERATOR

24 Looking at the Glass Half-Full Despite the COVID-19 pandemic and ongoing retailer consolidation, the convenience channel’s small operators are optimistic about 2021. NEW HORIZONS

70 The Shecession Where we are and where we must go.

STORE SPOTLIGHT

72 Elevating the Experience Tri Star Energy unveils a new approach for its Twice Daily/White Bison Coffee integrated locations. INSIDE THE CONSUMER MIND

90 The Rise of the Stay-at-Home Shopper C-store customers are shifting to online grocery sites and delivery services amidst pandemic.

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CONTENTS JAN 21

VO LUME 57 N UMB ER 1

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8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631 (773) 992-4450 Fax: (773) 992-4455 www.csnews.com

BRAND MANAGEMENT Vice President/Group Brand Director Paula Lashinsky (917) 446-4117 plashinsky@ensembleiq.com EDITORIAL Editorial Director (201) 855-7606

INDUSTRY ROUNDUP

CATEGORY MANAGEMENT

10 A Flurry of M&A Activity Closed Out 2020

FOODSERVICE

12 2021 Ushers In New Leadership at Kum & Go

61 The Recipe for a Winning LTO Holiday-focused flavors can be a nostalgic way to incorporate new flavors onto the menu.

12 Fast Facts 14 Retailer Tidbits 14 Eye on Growth 16 Supplier Tidbits

Editor-in-Chief (201) 855-7608

Linda Lisanti llisanti@ensembleiq.com

Senior News Editor (201) 855-7618

Melissa Kress mkress@ensembleiq.com

Associate Editor (201) 855-7619

Angela Hanson ahanson@ensembleiq.com

Associate Managing Editor (201) 855-7604

Danielle Romano dromano@ensembleiq.com

Contributing Editor (303) 741-3377

Renée M. Covino reneek@aol.com

Contributing Editor (201) 280-2614

Tammy Mastroberte tmastroberte@gmail.com

SNACKS

ADVERTISING SALES & BUSINESS

62 Coming Back After a COVID Hit Embracing traffic shifts and better-for-you offerings can help snacks bounce back.

Associate Brand Director & Northeast Sales Manager (508) 385-2524

18 In the Public Eye

64

Don Longo dlongo@ensembleiq.com

Rachel McGaffigan rmcgaffigan@ensembleiq.com

Associate Brand Director & Western Sales Manager (330) 840-9557

Ron Lowy rlowy@ensembleiq.com

Associate Publisher & Midwest Sales Manager Kelly Fischer (773) 992-4464 kfischer@ensembleiq.com

TECHNOLOGY 64 The 2021 Technology Hit List Convenience execs are focusing on initiatives that make sense for both the customer and retailer.

Account Executive & Classified Advertising Terry Kanganis (201) 855-7615 tkanganis@ensembleiq.com Classified Production Manager Mary Beth Medley (856) 809-0050 marybeth@marybethmedley.com EVENTS Executive Vice President, Events & Conferences Ed Several (860) 830-8321 eseveral@ensembleiq.com AUDIENCE List Rental (914) 309-3378

MeritDirect Marie Briganti

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contact@csnews.com

PROJECT MANAGEMENT/PRODUCTION/ART Vice President, Production (877) 687-7321 Creative Director (973) 607-1320

Derek Estey destey@ensembleiq.com Colette Magliaro cmagliaro@ensembleiq.com

Advertising/Production Manager (773) 992-4418

Ed Ward eward@ensembleiq.com

Art Director (973) 607-1321

Lauren DiMeo ldimeo@ensembleiq.com

CORPORATE OFFICERS Chief Executive Officer Jennifer Litterick Chief Financial Officer Jane Volland Chief Innovation Officer Tanner Van Dusen Chief Human Resources Officer Ann Jadown Executive Vice President, Events & Conferences Ed Several Senior Vice President, Content Joe Territo

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CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631. Subscription rates: Subscription rate in the United States: $125 one year; $230 two year; $14 single issue copy; Canada and Mexico: $150 one year; $270 two year; $16 single issue copy; Foreign: $170 one year; $325 two year; $16 single issue copy; Digital One year, digital $87; two year, $161. Periodical postage paid at Chicago, IL 60631, and additional mailing addresses. Copyright 2021 by EnsembleIQ. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or information storage and retrieval system, without permission in writing from the publisher. Reprints, permissions and licensing, please contact Wright’s Media at ensembleiq@wrightsmedia.com or (877) 652-5295. POSTMASTER: send address changes to Convenience Store News, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631.

6 Convenience Store News C S N E W S . c o m


©2021 BuzzBallz, LLC, Carrollton, TX. Please Enjoy Responsibly.

©2021 Southern Champion, Carrollton TX “Enjoy Responsibly.”


CSNEWS ONLINE

TOP VIEWED STORIES

1

VIDEO: GPM Unveils Store Prototype for Its Extensive Remodel Program

The company expects to remodel approximately 360 stores in key locations across the country over the next three to five years. “We have been working on this prototype over the last year and are very excited about the extensive remodel program and the benefits it will bring to our existing customers, as well as new customers who will be drawn in by the fresh new look,” said Arie Kotler, CEO of Arko Holdings Ltd. and GPM.

2

Coalition Petitions for Referendum on California’s Flavored Tobacco Ban

3

Buchanan Energy Deal Will Unlock More M&A Opportunities for Casey’s

4

Casey’s Will Roll Out Its Foodservice Offerings to Bucky’s Convenience Stores

California’s ban on the sale of flavored tobacco products is set to go into effect Jan. 1, but one group is fighting to bring the issue to voters. On Nov. 24, the California Coalition for Fairness submitted more than 1 million signatures from registered voters in a bid to get a veto referendum to overturn the legislation, SB 793, on the November 2022 ballot.

“To say that this is a meaningful opportunity for Casey’s is an understatement. This is the most significant, single strategic transaction in our 52-year history,” President and CEO Darren Rebelez said during a company call held Nov. 9. The acquisition will expand Casey’s presence in key Midwest markets, deliver near-term accretive earnings growth, and create value for its shareholders, team members and customers.

With Casey’s General Stores Inc.’s latest acquisition, more customers in the Midwest will have the opportunity to taste the retailer’s famous pizza. “The mix of prepared food for Bucky’s is about 7 percent vs. our 31 percent, so there is a significant opportunity to add that capability,” Rebelez said. “These are already high-volume stores on the grocery and other merchandise side of the ledger. The prepared food business would be a truly incremental add.”

5

ONLINE EXCLUSIVE

Yesway Opens First Store as Part of Accelerated Real Estate Investment Campaign

The opening of its second Allsup’s Market store marked the initial launch of the campaign. Located at 160 E. 8th St. in Vaughn, N.M., the store measures nearly 5,000 square feet and features 20 fueling positions. It replaces an older 2,400-square-foot Allsup’s store and is the first new store opening since Yesway acquired the Allsup’s chain in November 2019.

EXPERT VIEWPOINT

Is the New C-store Here to Stay? There is no arguing that the COVID-19 pandemic has changed the way consumers shop and how retailers have structured the shopping experience. That’s certainly true for convenience stores, writes Brandon Logsdon, president and general manager of Marketing Cloud Solutions and Fuel Pricing at PDI. Consumers’ habits have dramatically changed this industry, and we wonder if it will ever go back to the way it was before the pandemic. What can we expect will stay in the new normal? 8 Convenience Store News C S N E W S . c o m

ON DEMAND: 2020

Convenience Store News Convenience Foodservice Exchange

Convenience Store News presented the 2020 Convenience Foodservice Exchange, a two-day virtual meeting where c-store foodservice operators and supplier partners collaborated to develop the blueprint for success in foodservice in a post COVID-19 world. This year’s online version of CSNews’ annual summit for exploring food trends, operations, food safety and technology featured a series of quickhitting, 30-minute education sessions; a session from the Culinary Institute of America’s leading consultant on food safety; and a retailer panel featuring foodservice category leaders from three food-forward c-store chains. For more exclusive stories, visit the Special Features section of csnews.com.

MOST VIEWED NEW PRODUCT

Dispoze-a-Bowl The Dispoze-a-Bowl, a disposable alternative to typical glass, wood or corn cob smoking pipes, is designed to ensure a fresh smoke with every toke. The body is made of food-grade ivory board, while the tobacco cup is made of food-grade stainless steel and has a small “carburetor” at the front for managing air flow. Dispoze-a-Bowls come packaged flat and are quick and easy to assemble. Users will get a crisp, clean and flavorful draw every time without ever having to clean a pipe again, according to the maker. Made of 100 percent recyclable materials, the product can be discarded after a single use or multiple uses.

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INDUSTRY ROUNDUP

A Flurry of M&A Activity Closed Out 2020 Murphy USA’s $625-million agreement to acquire QuickChek was one of the highlights (M&A) activity in the convenience channel may have stalled in late winter 2020 and throughout the spring due to the COVID-19 pandemic, but deals slowly ticked up in the third and fourth quarters of the year. In fact, a flurry of M&A activity in December proved that the consolidation trend in the channel is alive and well.

MERGER-AND-ACQUISITION

The transaction grabbing the most attention at the end of 2020 was Murphy USA’s agreement to acquire Whitehouse Station, N.J.-based QuickChek Corp. The $625-million deal will give El Dorado, Ark.-based Murphy USA 157 food-forward convenience stores in New Jersey, New York’s Hudson Valley and Long Island. “In October, we outlined an updated capital allocation strategy and committed to improving our food and beverage offer at existing and future sites,” said Murphy USA President and CEO Andrew Clyde. “This transaction greatly accelerates those efforts and benefits, and is expected to provide reverse synergies across our network, while enhancing future returns on new stores.” News of the Murphy USA-QuickChek combination came on the same day as Waltham, Mass.-based Global Partners LP signed an agreement to purchase the retail fuel and convenience store assets of Consumers Petroleum of Connecticut Inc. This deal includes 27 company-operated gas stations with Wheels-branded con-

10 Convenience Store News C S N E W S . c o m

venience stores in Connecticut, as well as fuel supply agreements for approximately 25 gas stations in Connecticut and New York. Both acquisitions are expected to close in the first half of 2021. GPM Investments LLC also furthered its M&A strategy in late November. The Richmond, Va.-based retailer entered into a non-binding letter of intent to acquire approximately 60 self-operated convenience stores in several Midwest states. Consideration for the transaction is approximately $100 million, plus the value of inventory and cash in stores. In addition to these pending transactions, several companies closed deals they already had on the table. In early December, Auburn, Calif.-based Flyers Energy LLC completed its purchase of the Firebird Fuel brand from a subsidiary of Findlay, Ohio-based Marathon Petroleum Corp. The transaction comprised 47 unattended fueling cardlock stations and 52 additional CFN card-acceptance locations in Colorado, New Mexico, Texas and Arizona. Additionally, La Crosse, Wis.-based Kwik Trip Inc. closed on its acquisition of Madison, Wis.based Stop-N-Go, which operates 36 c-stores in southern Wisconsin and northern Illinois. While Kwik Trip plans to continue operating many of the acquired stores under the existing Stop-N-Go banner, it will remodel and rebrand some of the larger stores as Kwik Trip, or Kwik Star in Illinois. For more M&A news, check out Eye on Growth on page 14.



INDUSTRY ROUNDUP

2021 Ushers In New Leadership at Kum & Go Tanner Krause succeeds his father, Kyle J. Krause, as CEO of the convenience store chain ushered in a changing of the guard at Kum & Go LC as Kyle J. Krause, former chairman and CEO, transitioned out of the chief executive role effective Jan. 1 and was succeeded by his son, former Kum & Go President Tanner Krause.

THE NEW YEAR

Kyle J. Krause remains in his role as CEO of Kum & Go’s parent company Krause Group. The company operates a diverse set of businesses that include convenience retail, logistics, Italian wineries, hospitality, real estate, agriculture, and soccer clubs. In 2004, Kyle J. Krause became owner, president and CEO of Kum & Go, growing it to more than 400 stores in 11 states. Today, Kum & Go employs nearly 5,000 associates and is the fifth largest privately held, companyoperated convenience store chain in the United States. “Serving as Kum & Go CEO these past 17 years has been the privilege of a lifetime,” Kyle J. Krause said. “I grew up in stores working alongside my father, grandfather, and the thousands of associates who gave their all every day to serve our communities. “I am so proud of what we have been able to achieve during my tenure, and I am even more proud to be able to hand the reins to my son, Tanner, and ensure the continuity of leadership that Kum & Go has enjoyed for over 60 years,” he added. As president, Tanner Krause oversaw marketing, operations, human resources, information technology, finance and store development functions. His work experience with the family-run business dates back more than 20 years, when he began working part-time in the stores.

“It’s a tremendous honor to continue the family legacy as the leader of Kum & Go,” Tanner Krause said. “My father is trusting me with a huge responsibility, and I will work every day to make him proud. It’s my turn to carry the torch and I will pour my heart into this opportunity.” Des Moines-based Kum & Go was established in Hampton, Iowa, in 1959.

FAST FACTS

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Just about two-thirds of consumers, or 66 percent, say they keep more snacks stocked at home now than before the coronavirus outbreak. — Frito-Lay U.S. Snack Index

12 Convenience Store News C S N E W S . c o m

Approximately 80 percent of delivery customers would not have otherwise visited the same store in-person to make a purchase had home delivery not been available. — Vroom Delivery

The second wave of the COVID-19 pandemic did not bring the same boost to convenience stores that the first wave did: For the four weeks ended Nov. 29, c-store dollar sales edged lower to +2.4 percent vs. +3.6 percent for the four weeks ended Nov. 1. — PDI & NACS Monthly Report


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INDUSTRY ROUNDUP

Retailer Tidbits

7-Eleven Inc. opened the doors to its first Laredo Taco Co. restaurant in Florida. The Inverness location is the first of more than 15 restaurants planned for the state.

All proceeds from sales at this store will be reinvested by the Urban League to promote equity and empowerment.

Thorntons LLC is partnering with the Louisville Urban League for its first nonprofit community store at the Northon Healthcare Sports and Learning Center in the West End neighborhood of Louisville, Ky. Love’s Travel Stops & Country Stores launched the Love’s Free Drink Club for its four-wheel customers. Every 10th drink is free, and the free drink redemption never expires.

Eye on Growth

Smoker Friendly is expanding its commitment to the CBD category and will sell the full line of Solari CBD products in all its 160 stores in the U.S. The decision follows increased demand for CBD products. GetGo Cafe + Market laid out an electric vehicle charging station strategy that will include a mix of Tesla and proprietary stations. The retailer opened its first Tesla Supercharger Station at a GetGo store in Washington, Pa. RaceTrac Petroleum Inc. renewed its distribution services relationship with McLane Co. Inc. with a new multi-year agreement. The companies’ relationship dates back to 1996. EG America signed a five-year services agreement with Loomis US for SafePoint cash automation solutions. The smart safe solution will roll out to its c-stores across the United States over the next 12 months.

Love’s Travel Stops & Country Stores opened its first two Bojangles restaurants inside locations in Marion, Ill., and Blytheville, Ark. They are the first of a planned 40 restaurants to open under a 2019 pact. TravelCenters of America Inc. signed 23 new franchise agreements since the beginning of 2019. Four began operating in 2019, 10 opened in 2020, and the company expects nine more franchises will open by the end of 2021. United Refining Co. of Pennsylvania took ownership of the retail and ExxonMobilbranded fuel distribution business assets of Acorn Markets Inc. and Putnam Co. The c-stores are being rebranded to the Kwik Fill banner.

Jay Petroleum Inc., owner of the PakA-Sak c-store chain, acquired a majority of Ottawa Oil Co.’s assets. The deal included fuel transportation, dealer sites, consignment sites and 22 c-stores. Parkland USA made two M&A deals in early December. The company is acquiring the retail and commercial fuel business of Story Distributing Co., as well as the assets of Carter Oil Co. Inc. and its affiliates.

Murphy USA plans to add 50 new stores to its network each year.

Murphy USA opened its 1,500th location in mid-December. The 2,800-squarefoot Murphy Express store in Mesquite, Texas, marked the company’s 47th store opening in 2020. 14 Convenience Store News C S N E W S . c o m

7-Eleven Inc. opened its newest Evolution Store in the Lake Highlands area of northeast Dallas in November. This is the second Evolution Store in Dallas and fifth in the United States.


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INDUSTRY ROUNDUP

Supplier Tidbits

McLane Co. Inc. is integrating Koupon’s digital promotion platform into its Consumer Loyalty Program. The partnership will give retailers access to coupon offers from consumer packaged goods companies. Applied Data Corp. completed a growth recapitalization transaction with Prairie Capital. The investment will enable ADC to accelerate growth and deliver on innovations within its product suite.

The company is continuing to support growth of the Wonderful Pistachios brand with “The Next Big Thing” campaign.

North American sales of Wonderful Pistachios surpassed the $1 billion mark. It is the first Wonderful Co. brand to reach this milestone. Caliper is now available at the point-ofsale in more than 600 Circle K locations

16 Convenience Store News C S N E W S . c o m

across Texas. The CBD brand is currently in more than 1,000 retail locations nationwide. MasonWays launched a Green Initiative that offers plastic credits for returned units, which it recycles into raw material to be molded. The program reduces the cost of products purchased by retailers.

RangeMe is partnering with the Army & Air Force Exchange Service to drive product selection and value. Through RangeMe, the Exchange will have access to more than 200,000 suppliers. Utz Brands acquired Truco Enterprises — maker of tortilla chips, salsa and queso sold under the On The Border brand — from Insignia Capital Group for $480 million. The deal closed in December.



INDUSTRY ROUNDUP

In the Public Eye Alimentation Couche-Tard Inc., Laval, Quebec Alimentation Couche-Tard Inc., the parent company of Circle K, reported same-store merchandise revenues increased by 4.4 percent in the United States, 8.6 percent in Europe and 11.4 percent in Canada during the second quarter of its 2021 fiscal year, compared to the same quarter last year. Nicotine, packaged and alcoholic beverages, and grocery performed well across all of Couche-Tard’s business units. The company reported net earnings attributable to shareholders of $757 million; adjusted net earnings for the quarter were approximately $735 million — a 32-percent increase from the prior year. For the first half of fiscal 2021, net earnings were $1.5 billion, compared to $1.1 billion for the first half of fiscal 2020, up 37.3 percent.

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Casey’s General Stores Inc., Ankeny, Iowa Casey’s General Stores Inc. continued to experience a favorable fuel margin environment in its latest reported quarter. Fuel gross profit for the second quarter of its 2021 fiscal year was up 45 percent vs. the prior year, with a fuel margin of 35.3 cents per gallon. Same-store gallons were down 8.6 percent from the same period a year ago as a result of continued disruption from the COVID-19 pandemic, although Casey’s did see sequential improvement from the first quarter of fiscal 2021. Inside the store, Casey’s samestore inside sales were up 3.5 percent for the three-month period, with an average margin of 41 percent. Inside gross profit increased by 2.8 percent.



NEW PRODUCTS

2 1 4 3

1. Tic Tac Big Berry Adventure

2. Dole FreshTakes Salad Bowls

3. Citrus Curbside Pickup Platform

Tic Tac’s newest innovation features a mash-up of rich raspberry and juicy blueberry flavors that come together with a playful shake. Big Berry Adventure, the newest addition to Tic Tac’s Adventure line, was created to inspire fun and adventurous moments for consumers, according to the company. Big Berry Adventure is available in 1-ounce and 3.4-ounce packs.

The Dole FreshTakes Salad Bowls line is being enhanced with three new varieties and new proprietary packaging that allows salad lovers to mix their Dole fresh lettuces, toppings and dressings in the same bowl without spilling. The new FreshTakes SKUs include the Chicken Club BLT Salad Bowl, the Backyard BBQ Salad with Chicken Salad Bowl, and the Avocado Ranch Salad with Chicken Salad Bowl. With a suggested retail price of $3.99, each bowl features an ecofriendly, clear-construction design that showcases the fresh greens and premium ingredients inside, and is paired with a full-size fork.

Citrus introduces a curbside pickup solution that enables store owners to provide their customers with a completely automated and contact-free curbside pickup experience. The system uses geolocation services along with vehicle information customers provide at signup. Customers press the “On My Way” button when they are ready to pick up their order, which alerts the retailer to their estimated time of arrival, along with their vehicle description. The merchant knows exactly when the customer will arrive, so there’s no need to text, call or set a pickup time; the package can be delivered as they pull up.

Ferrero Parsippany, N.J. tictacusa.com/en

Dole Food Co. Inc. Charlotte, N.C. dole.com

Citrus New York heycitrus.com/merchant

5. Manifesto Individually Wrapped Cookies & Bars Manifesto individually wrapped cookies and bars are designed to provide one-of-akind wholesome decadence with convenience, rooted in better-for-you ingredients and comforting flavors. Made with only pure cane sugar, cage-free eggs and sustainably grown chocolates, the Manifesto line includes seven individually wrapped desserts: Salted Caramel Crunch Manifesto Cookie; Sandy’s Amazing Chocolate Chunk Manifesto Cookie; Zoe’s Crush Manifesto Cookie (certified gluten free); Toffee Crunch Manifesto Blondie; Peruvian Chocolate Manifesto Brownie; Honduran Chocolate Manifesto Brownie (certified gluten free); and Chewy Marshmallow Manifesto Bar (certified gluten free). Sweet Street Reading, Pa. sweetstreet.com 20 Convenience Store News C S N E W S . c o m

4. Custom Graphic Hand Sanitizer Dispenser Stand Shows To Go Backdrops introduces a custom-printed backdrop and hand sanitizer product aimed at helping businesses remain CDC- and pandemic-compliant, while also helping keep the public safe from the spread of pathogens. Its new Custom Graphic Hand Sanitizer Dispenser Stand is a professional sanitizing station that is attractive, streamlined and functional. The stand is large offering great visibility (up to 6 feet high, and in multiple widths) and is designed to get noticed with 360-degree branding. Each stand is portable and can be easily set up in five minutes. Shows To Go Backdrops Rochester, Mich. showbackdrops.com

5



NEW PRODUCTS

8

6

7 9

6. Combos Cheddar Cheese Bacon The Combos brand of stuffed snacks introduces a new variety: Cheddar Cheese Bacon. Available nationwide in medium 6.3-ounce peg bags, Combos Cheddar Cheese Bacon baked pretzel snacks combine two enduring flavors to create even greater taste satisfaction. According to the maker, the product is a winning combination, delivering the second-highest appeal in the Combos portfolio. Mars Wrigley U.S. Newark, N.J. mars.com/made-by-mars/ mars-wrigley

7. Snyder’s of Hanover Milk Chocolate Covered Pretzel Rounds Designed to satisfy every taste bud with a delicious crunch, Snyder’s of Hanover Milk Chocolate Covered Pretzel Rounds feature light and crispy pretzels coated in a sweet outer layer of creamy milk chocolate. The round shape makes for a “perfectly poppable” snack, according to the company. Made with wholesome ingredients, the oven-baked snacks come packaged in a 5-ounce bag for a suggested retail price of $3.49. Snyder’s of Hanover Hanover, Pa. snydersofhanover.com

8. Arctic Apple Slices Okanagan Specialty Fruits is bringing its Arctic apple slices to the convenience store market. Arctic apples use the apple’s own genes to turn off the enzyme responsible for making apples turn brown when cut or bruised. The result is a longer shelf life and an apple that tastes and looks better, which means less food waste from harvest to consumption. The fresh apples slices are available in two sizes and two varieties: Arctic Golden (sweet) and Arctic Granny (tart) in 10-ounce and 5-ounce bags. Okanagan Specialty Fruits Summerland, British Columbia arcticapples.com

10. IQ Fits Anywhere Solution Car Wash New from D&S, the IQ Fits Anywhere Solution is a compact version of the company’s signature IQ In Bay Automatic Equipment, and is designed to enable convenience store owners with older car washes and small bay dimensions to upgrade without additional construction. D&S employed a dual energy chain and revised support structure to enable the IQ Fits Anywhere Solution to fit in both narrow bays (13 feet, 4 inches) and short bays (27 feet, 6 inches). D&S Car Wash Equipment Co. High Ridge, Mo. dscarwash.com

22 Convenience Store News C S N E W S . c o m

10

9. Legal Leaf Botanical Herbal Extract Legal Lean’s latest brand spinoff is Legal Leaf Botanical Herbal Extract. The kratom extract syrup is designed to uplift and enhance people’s moods in their everyday lives. Targeted toward health and fitness-minded customers, the product can provide a positive, uplifting, recharged feeling during the day, an added energy boost, or even be used as a social lubricant, according to the maker. Legal Lean Casselberry, Fla. legalleanstore.com


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SMALL OPERATOR

Looking at the Glass Half-Full Despite the COVID-19 pandemic and ongoing retailer consolidation, the convenience channel’s small operators are optimistic about 2021 By Danielle Romano of the most unique years in history, the convenience store industry’s small operators (those operating 20 stores or less) have a glass-half-full perspective on 2021.

AFTER FACING ONE

Company View of U.S. Economic Conditions in 2021 VERY/SLIGHTLY POSITIVE

Despite having a less favorable view on the economy, more large operators (83 percent) forecast an increase in their average dollar sales per store in 2021, compared to 69 percent of small operators. The small operator number is down from 74.2 percent who forecasted an increase in the 2020 study. That said, a smaller percentage of small operators predict their sales will decrease in 2021 (14 percent) compared to last year (16.1 percent). When asked to rate their optimism about their specific business on a scale of one to five — where 1 represents “Terrible, wake me up when it’s over” and 5 represents “It’s going to be our best year ever!” — the majority of small operators (86 percent) chose a rating of 3 or 4. Eleven percent put their optimism rating at a 5, while just 3 percent put it at a 1. Perhaps the best indicator for their on-the-fence feelings about the coming year is the fact that only 34 percent of small operators say they plan to increase

24 Convenience Store News C S N E W S . c o m

VERY/SLIGHTLY NEGATIVE

54%

Despite the unprecedented economic pressures brought on by the global coronavirus pandemic and continued consolidation in the industry — which has seen some of the channel’s biggest chains get even bigger by picking up smaller players — the small operators surveyed for the 2021 Convenience Store News Forecast Study are optimistic overall about their business prospects. More than half (54 percent) view the U.S. economy in a positive light. This is a dip from 77.3 percent in 2020; however, the outlook among small operators is more favorable than that of c-store chain operators (those with 21 stores or more), where only 33 percent report a sunny disposition on the economy. Meanwhile, 29 percent of small operators hold a negative economic outlook, and the other 17 percent have a neutral view.

NEUTRAL

33% 25%

17%

42%

29% Small Operators

Large Operators

Overall Outlook for Business in 2021 Terrible, wake me when it’s over 1

Small Operators

It’s going to be our best year ever! 3

3%

4

57%

29% 3

Large Operators

25%

Expectations for Average Sales Per Store in 2021

14%

17%

Decrease

Stay the same

17%

Large Operators

Small Operators

69%

83%

Increase

Average % Expected Increase = 14% Average % Expected Decrease = 18%

Increase

Average % Expected Increase = 11%

Expectations for Cross-Channel Competition in 2021

11% Stay the same

57%

Increase

Small Operators

43% Stay the same

Large Operators

89%

Increase

Source: 2021 Convenience Store News Forecast Study

11% 4

75%

Stay the same

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SMALL OPERATOR

Anticipated Impact of Issues on Sales & Profitability in 2021 (% of Small Operators identifying as “Biggest Impact” and in Top 3) 49%

COVID-19 pandemic

80% 40%

14%

Labor turnover and hiring Declining foot traffic 3% Motor fuel prices

40% 31%

9%

29%

14%

New leadership in White House

26%

Changing expectations of “convenience” 3% Tobacco/e-cig regulations 3%

20%

Rise in e-commerce 3%

11% 9%

Demographic changes 3% Emerging technologies

6%

Brick-and-mortar competition

6%

E-commerce competition

3%

Industry consolidation

3%

their store count this year vs. 92 percent of large operators. On the upside, no respondents indicate plans to decrease their total store count, which is consistent with the 2020 Forecast Study.

Turning Negatives Into Positives One area in particular that is of concern to small operators is the expectation that cross-channel competition will increase in the year ahead, cited by 57 percent of respondents in the 2021 study. While online grocers, Amazon and mainstream grocery stores are of greater concern to large operators, dollar stores pose more of a threat to small operators (cited by 66 percent). When it comes to what other factors will impact their sales and profitability in 2021, the convenience store industry’s small and large operators share some common concerns. Not surprisingly, the COVID-19 pandemic ranks No. 1 among both groups, although small operators are more apprehensive about the coronavirus’ impact on their sales and profitability than their larger counterparts (80 percent vs. 67 percent, respectively). Other shared concerns are declining foot traffic, and labor turnover and hiring. With COVID-19 changing consumers’ expectations of “convenience,” small operators are trying to keep pace with the larger c-store chains when it comes to offering enhanced convenience services.

26 Convenience Store News C S N E W S . c o m

RANKED BIGGEST IMPACT RANKED IN TOP 3

Biggest Cross-Channel Competitive Threats SMALL OPERATORS LARGE OPERATORS

Dollar

50% 31%

Online grocery sites

67%

26%

Amazon/Amazon Fresh

31%

Grocery

26%

QSR

20%

Mass

Drug

9% 8%

Fast casual

6% 8%

Source: 2021 Convenience Store News Forecast Study

66%

67% 50% 42%


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SMALL OPERATOR

Enhanced Convenience Services Offered by Small Operators 9%

Currently offer

Plan to add

23% 9% 60%

17% 34%

Mobile pay in-store

Mobile pay at pump

34% Curbside pickup

17%

17%

17%

Drive-thru

In-house delivery

20% 11% Contactless using app

26% 14%

14%

11% Contactless using AI/ sensors

9%

26%

9%

Third-party delivery

Contactless using kiosk

6% At-pump order for in-store items

Enhanced Convenience Services Offered by Large Operators Currently offer

17%

25% 33%

75%

67%

Mobile pay at pump

Curbside pickup

42% 25%

58% 42%

Mobile pay in-store

Plan to add

Drive-thru

25% In-house delivery

42% 25% Contactless using app

25%

8% 17% Contactless using AI/ sensors

25%

8% Third-party delivery

Contactless using kiosk

At-pump order for in-store items

34% 9% Currently make this service available to their customers

Plan to add it in 2021

More than half of the small operators surveyed (60 percent) currently offer mobile payment in-store and 34 percent offer mobile payment at the pump. An additional 23 percent plan to add mobile pay at the pump this year, with 9 percent planning to add it in-store. Curbside pickup also ranks high on the list of enhanced convenience services currently offered by small operators: 34 percent currently make this service available to their customers, and another 9 percent say they plan to add curbside pickup in 2021. Other top initiatives planned by small operators for the new year include adding delivery via a third-party service (26 percent), adding at-pump ordering for in-store items (26 percent), and adding contactless checkout using a mobile app (20 percent). CSN 28 Convenience Store News C S N E W S . c o m


BRAND ON MOVE


COVER STORY

A Convenience Store News Staff Report

STUDY 2021

30 Convenience Store News C S N E W S . c o m


COVID CASTS A SHADOW OVER 2021 FORECAST Pandemic worries haunt c-store retailers and suppliers, affecting the outlook for the new year A YEAR AGO,

convenience store retailers and their supplier and distributor partners were mostly upbeat about business prospects for 2020, although they were a bit less enthusiastic than they were the previous year at that time. If only they could have foreseen the gargantuan business disruption caused by the COVID-19 pandemic, which hit hard in the United States around the beginning of March. It’s fair to say that 2020 didn’t live up to the forecasts of either c-store industry retailers or suppliers. Despite this, close to half of retailers (49 percent) and more than half of suppliers/distributors (54 percent) have a positive outlook on U.S. economic conditions for 2021, although the COVID19 pandemic has undoubtedly affected respondents as both retailers and suppliers reported big jumps in negative perceptions (19 to 25 points) compared to one year ago, according to the findings of the 2021 Convenience Store News Forecast Study. Among retailers, 32 percent have a very/slightly negative opinion about economic conditions for 2021, a 25-point jump from a year ago. Suppliers are only slightly less pessimistic as 28 percent hold a very/slightly negative opinion, an increase of 19 points. When it comes to their own business, most retailers appear to be on the fence regarding their overall business outlook for 2021, albeit considerably less

optimistic than they were one year ago. Meanwhile, more than half of suppliers/distributors (57 percent) are leaning positive, but this too has dropped compared to last year (by 18 points). When asked to choose a rating on a scale of one to five, with 5 signifying that 2021 would be “our best year ever” and 1 signifying that it would be “terrible, wake me when it’s over,” only 9 percent of retailers said a 5, while 2 percent said a 1. On the supplier side, 17 percent gave a rating of 5, while 6 percent gave a rating of 1. Both retailers and suppliers/distributors said the continuing coronavirus pandemic is the factor that will have the biggest impact on their business in the coming year. “COVID and the effect it has had and will continue to have on customer counts” will have the biggest impact on sales and profitability, according to one retailer respondent, who added: “Getting customers back into the store when we normalize will be a huge challenge.” The 19th annual Forecast Study includes both a Retailer Forecast and Supplier Forecast, based on the results of a survey fielded in November 2020. Retailer participants were asked to predict their 2021 sales per store for a variety of product categories, as well as share their opinions on overall business, economic and consumer trends. Suppliers/distributors were similarly asked to make predictions for their particular product categories. Both sets of participants were also given the opportunity to identify the critical issues they expect to affect their business in 2021, and share their thoughts on how they plan to increase sales and profitability and grow their companies in the year ahead. Read on to discover more about how the c-store industry views business prospects for 2021. CSN

J ANUARY

20 21

Convenience Store News 31


RETAILER FORECAST

Retailers Wary of More Pitfalls

COVID, labor difficulties and declining foot traffic are chief among operator concerns By Don Longo MOST CONVENIENCE STORE retailers appear to be on the fence regarding their overall business outlook for 2021 and are considerably less optimistic than they were one year ago, according to the results of the 2021 Convenience Store News Forecast Study.

Asked to choose a rating on a scale of one to five, with 5 signifying that 2021 would be “our best year ever” and 1 signifying it would be “terrible, wake me when it’s over,” only 9 percent of the retailers surveyed chose a 5, while 2 percent of respondents chose a 1. The majority of retailers — 62 percent — gave the upcoming year a noncommittal rating of 3. Retailers are evenly split over their expectations to increase store count amid such uncertain market conditions. Forty-nine percent said they will add stores in 2021, but that figure is 29 percentage points lower than it was last year. Conversely, 51 percent of retailers said their store count will remain the same, a 29-point increase from what they said a year ago. No retailers indicated plans to decrease total store count, consistent with the 2020 Forecast Study. Among those who plan to increase their store count, growth will come from a combination of organic unit growth (39 percent) and acquisitions (22 percent), while 39 percent indicated they will utilize a combination of organic growth and acquisitions. The pandemic exacerbated the alreadyworrisome decline in foot traffic at brickand-mortar stores. While a majority of c-store retailers (55 percent) expect their in-store foot traffic to increase in 2021, this is a drop of 13 points compared to last year. One in three retailers (34 percent) are expecting more of the same in 2021 in regard to foot-traffic levels. Despite the arrival of a vaccine, the COVID-19 pandemic still ranks high on the minds of convenience channel retailers, with nearly half (47 percent) expecting it to have the biggest impact on their sales and profitability in 2021. More than three-quarters of the retailers surveyed rank COVID among their top three issues for the coming year. 32 Convenience Store News C S N E W S . c o m

Overall Outlook for Business in 2021 Terrible, wake me when it's over 1

It's going to be our best year ever!

2% (+2 pts)

3

4

5

62%

28%

9%

(+32 pts)

(-26 pts)

(-5 pts)

Total Retailers 2

3

4

5

6%

38%

40%

17%

(+2 pts)

(+17 pts)

(-4 pts)

(-14 pts)

Total Suppliers/Wholesalers Expectations for Average Sales Per Store in 2021

Expectations for Average Profits Per Store in 2021

11% Decrease

17% Stay the same

Stay the same Total Retailers

72% Increase

19%

26%

Decrease Total Retailers

55% Increase

Average % Expected Increase = 13%

Average % Expected Increase = 12%

Average % Expected Decrease = 18%

Average % Expected Decrease = 9%

COVID-19 will continue to exert a negative influence on the industry “because of the fear that has been instilled into the public by the political weaponization of the pandemic,” said one retailer. “Consumers are scared to go out to the store,” added another. “Fewer are driving to work. That means less fuel sales and less convenience sales,” noted another. Labor turnover and hiring difficulties is another top issue that retailers anticipate having a significant impact on sales and profitability in the coming months. It is the No. 2 ranked issue behind COVID, with 13 percent expecting labor challenges to have the biggest impact on their business. Thirty-eight percent rank this among their top three issues. Another leading concern among operators for 2021 is the new leadership coming to the White House, cited as the biggest predicted impact by 11 percent of retailers. Thirty-two percent listed worries about the Biden presidency among their top three issues. “There is not a lot of consumer confidence in the new leadership by consumers in my area,” one retailer remarked. Meanwhile, others expressed concern over increased taxes and regulation on


STUDY 2021

Anticipated Impact of Issues on Sales & Profitability in 2021 (% of Total Retailers identifying as "Biggest Impact" and in Top 3) RANKED BIGGEST IMPACT RANKED IN TOP 3

77%

47%

COVID-19 pandemic

38%

13%

Labor turnover and hiring

38%

9%

Declining foot traffic

32%

11%

New leadership in White House

28%

9%

Motor fuel prices Changing expectations of "convenience"

4%

Tobacco/e-cig regulations

2%

Rise in e-commerce

2%

Demographic changes

2%

E-commerce competition

2%

(1st last year)

28%

(2nd last year)

19% 11% 9% 6%

Emerging technologies

6%

Brick-and-mortar competition

6%

Industry consolidation

(3rd last year)

2%

businesses under the Biden Administration. Last year’s No. 2 issue was the “changing expectations of convenience.” This year, that topic was ranked No. 1 by only 4 percent of retailers and 28 percent have it in their top three. Last year's No. 1 issue was motor fuel prices. The prospect of continued lower fuel prices could actually have the biggest positive impact on retailer profits in 2021. “With lower prices, more people will be out and about, thus increasing all sales in the store,” one retailer surmised. C-store operators have implemented, and are currently considering implementing, several enhanced convenience services to improve

Expectations for In-Store Foot Traffic in 2021 WILL INCREASE

55%

34%

11%

(-13 pts)

(+17 pts)

(-4 pts)

63%

29%

9%

Small Operators 33%

50%

17%

Large Operators

Approach for Increasing Store Count in 2021

STAY THE SAME

49%

51%

(-29 pts)

(+29 pts)

39% Both

Total Retailers 34%

(+2 pts)

66%

Small Operators 92% Large Operators

WILL DECREASE

Total Retailers

Expectations for Store Count in 2021 INCREASE STORE COUNT

STAY THE SAME

8%

39% Organic Growth

22% Acquisitions (-18 pts)

(+16 pts) J ANUARY

20 21

Convenience Store News

33


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RETAILER FORECAST

Enhanced Convenience Services Offered by Total Retailers 11%

Currently offer

(-12 pts)

Plan to add

23% (-4 pts)

15% 64%

19%

(+15 pts)

43% (-4 pts)

19% (-3 pts)

36%

21%

19% (+5 pts)

Mobile pay in-store

Mobile pay at pump

Curbside pickup

Third-party delivery

foot traffic in the year ahead. The top services now offered are mobile pay in-store (64 percent offer it), mobile pay at the pump (43 percent), curbside pickup (36 percent), third-party delivery (21 percent), and drive-thru (19 percent). When it comes to the enhanced convenience services operators plan to implement in the near future, the ability for customers to order in-store items at the pump ranks No. 1 — named by 30 percent of retailers. That is followed by contactless shopping via an app (named by 26 percent) and mobile pay at the pump (named by 23 percent). As part of this year’s Forecast Study, retailers also were asked to list some of the initiatives they plan to implement in 2021 to increase sales and profitability. Among their answers: • Touchless payment throughout the store; • Expand delivery and build curbside pickup program; • Better marketing to the traveling public; • Improve back-office reporting to better understand customers; • Look at electric vehicle chargers; • Run more promotional products, which we have not done in the past; • Use Facebook for advertising; • Support our schools and other community projects; • Increase our prepared foods category selection and quality; and • Upgrade point-of sale for better data and tracking, making the most of EMV upgrades.

Sales & Unit Growth Predictions for 2021 Roughly three in four convenience retailers (72 percent) forecast that their total per-

36 Convenience Store News C S N E W S . c o m

Drive-thru

19% 15% In-house delivery

30%

26% 15% Contactless using app

13%

17%

11%

9%

Contactless using kiosk

Contactless using AI/ sensors

(-2 pts)

4% (-1 pt) At-pump order for in-store items

The State of Cross-Channel Competition

A majority of convenience channel retailers (65 percent) and suppliers/distributors (57 percent) expect cross-channel competition against the c-store industry to increase in 2021. However, when compared to last year, the percentage of those expecting it to stay the same saw the biggest gain year over year (up 12-15 points). Retailers and suppliers differ somewhat in which channel they feel presents the largest threat. For retailers, the leading threat is dollar stores (cited by 62 percent), while for the supplier community, online grocery (46 percent) and Amazon (41 percent) pose the greatest risks. When comparing the industry’s small operators (1-20 stores) vs. large operators (21-plus stores), there are indications that online grocery, Amazon and traditional grocery are of greater concern to large operators, while dollar stores are more of a threat to small operators.

store sales will grow in 2021, with an average increase of 13 percent projected. A year ago, 80 percent of retailers expected to grow their per-store sales in 2020. While only 11 percent expect their sales to decline in 2021, the average drop projected is a whopping 18 percent. A year ago, only 9 percent were bracing for a sales decline. For 2021, retailers are expecting their largest sales and unit volume increases to come from: • Packaged beverages (55 percent predict an increase); • Prepared foods (45 percent); • Motor fuels (38 percent); • Salty snacks (36 percent); and • Candy (32 percent). The biggest sales and unit volume decreases are forecasted for: • Cigarettes (23 percent predict a decline); • Prepared foods (19 percent); • Other tobacco products (13 percent); • Health & beauty aids (13 percent); and • Non-edible grocery (13 percent). CSN


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Americans love to snack throughout the day, and that is more popular today than it has ever been. They also expect quality, convenience, variety, and sustainability, all at a good value. Those worlds come together with internationallyinspired packaged baked goods (croissants & cake bars) — aiming to evoke a European café — with the ease, variety, and price that c-store shoppers and retailers are seeking. CSN NEWS spoke with Carolyn S. Hood, Senior Vice President of Sales at 7Days-EPTA America LLC, the North American subsidiary of the 30+ year global food veteran, Chipita International.

CSN NEWS: How would you describe consumer demand for premium bakery snacks in the retail convenience market? CAROLYN HOOD: Consumers are looking for tasty, permissible indulgences throughout the day — especially convenient morning and afternoon snacks. Increasingly, they are seeking high-quality treats that fit their growing cravings, shrinking budgets, and busier-than-ever schedules. CSN NEWS: How do 7Days products align with those preferences? CH: Packaged baked goods from 7Days, which are made from high quality ingredients — GMO-free with no added colors or taste enhancers — are a perfect fit for today’s c-store shoppers for a variety of reasons. For one, croissants are the most popular pastry in the world and 7Days has been and continues to be the best-selling croissant globally. In the U.S. market, our soft and sweet-filled croissants are now available in nearly half of the 150,000 c-stores at an average retail price of $1.70. This year, we are the #1 fastest growing manufacturer in the $2.5B sweet baked goods category — in percentage and absolute dollar growth. What I think is amazing about our succes this year is that it underscores how resilient our grab-and-go croissants have been in the face of significant pandemicrelated industry challenges. CSN NEWS: What are some of your newest products and what trends and opportunities do those items reflect? CH: 7Days recently launched two new product lines in the U.S. market, each of

which are designed specifically for the c-store channel. Mini Croissant Pouches — available in 3 flavors: Chocolate, Vanilla and Cherry Vanilla — were first introduced in March 2020 at 7-Eleven stores nationwide. Two of those flavors are already in the top 15 new items across the sweet baked goods category as well as adjacent categories (snack bars, cookies and toaster pastries), according to recent IRI data. Cake Bars are the latest offering from 7Days, introduced in October 2020 and also at 7-Eleven stores nationwide. Our Cake Bars have a uniquely soft, light bite, come in 2 flavors: Chocolate or Mixed Berry filling, and are topped with a drizzle of chocolate. As with all 7Days items, they are made from quality, sustainablysourced, GMO-Free ingredients and are an incredible value.

CSN NEWS: Finally, how is your brand making real inroads in the U.S. market and fueling growth for c-stores? CH: According to recent IRI data, 7Days is now ranked #8 in dollar sales among U.S. sweet baked goods manufacturers and is the fastest-growing player in the category. We might still be relatively new to the U.S. market, but strong consumer interest in high quality convenient snacks is the reason behind our rapid expansion and a foundation for future growth. Source: IRI US Convenience, Data Thru 10/4/20

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CATEGORY FORECAST

A Cautious Forecast

The majority of c-store operators don't expect sales to get worse, and even foresee improvement for some product categories By Angela Hanson upended business for virtually all retail industries, so 2021 is likely to be a period of recovery as vaccines are distributed and consumers are more willing and able to patronize brick-andmortar stores and restaurants.

THE COVID-19 PANDEMIC

For convenience store operators, this is reflected in cautious optimism. This year, the retailers participating in the Convenience Store News Forecast Study are more likely to expect sales to stay the same in most product categories compared to 2020. Among those a bit more optimistic, operators are not surprisingly expecting sales and unit volume increases to come from categories particularly hard hit in 2020 by the pandemic, such as packaged beverages (where 55 percent predict an increase), prepared foods (45 percent), motor fuels (38 percent), salty snacks (36 percent), and candy (32 percent).

Category Forecast: Motor Fuels

32%

Don't sell

38%

Stay the same

Increase Average $ Sales Expected Increase = 15% Average $ Sales Expected Decrease = 7% Average Gallons Expected Increase = 13% Average Gallons Expected Decrease = 10%

Category Forecast: Cigarettes

11%

23%

Here are the individual category forecasts for 2021, according to retailers:

Stay the same

Don't know

Decrease

9% Total Retailers

MOTOR FUELS

40 Convenience Store News C S N E W S . c o m

17% Total Retailers

40%

COVID-related travel restrictions and changes to consumers’ daily traffic patterns are among the biggest factors anticipated to have an effect on the motor fuels category in 2021, according

Don't know

Decrease

Conversely, a lower percentage of retailers expect sales and unit volume increases to come from categories that benefitted from the pandemic, such as cigarettes (only 17 percent predict an increase for 2021), non-edible grocery (17 percent), and health and beauty care (26 percent).

The pandemic massively disrupted consumers' typical travel patterns in 2020, and retailers are prepared for further impacts on work and travel plans in 2021. However, of those respondents that sell motor fuels (17 percent do not), only 8 percent expect a decrease in average sales and gallons per store this year, vs. 46 percent who expect an increase and 38 percent who expect status quo. Large operators, all of whom sell motor fuels, are more likely to expect increased sales than small operators (1-20 stores), 23 percent of whom do not sell motor fuels.

6%

6%

Don't sell

17% Increase Average $ Sales Expected Increase = 9% Average $ Sales Expected Decrease = 6% Average Unit Volume Expected Increase = 7% Average Unit Volume Expected Decrease = 6%

to retailers. Electric vehicles are also expected to make an impact. Although some operators foresee the increased acceptance of remote work affecting commuter traffic, there is overall optimism as recovery from the pandemic proceeds. "With vaccinations coming out next year, we are hoping people will take to the roads again and travel," one retailer remarked.

CIGARETTES C-store operators have mixed feelings toward the cigarettes category heading in 2021. A majority of retailers (57 percent) expect average dollar sales and unit volume per store to either increase or stay the same, compared to 23 percent who expect sales to


STUDY 2021

decrease. However, this apparent optimism is tempered by the fact that just 17 percent believe sales will rise, with 40 percent saying they expect sales to stay the same. Small operators are more pessimistic, as only 14 percent expect their cigarette sales to increase and 29 percent expect sales to decrease. Among large operators, 25 percent expect cigarette sales to increase and 8 percent expect to see sales decline. Opinion on whether it is likely that average dollar sales will move one way while unit volume moves in the opposite direction is similarly split based on chain size. Sixty percent of all operators consider this extremely/very likely (33 percent) or somewhat likely (27 percent). But when comparing large operators to small operators, 60 percent of small operators say the same, while just 40 percent of large operators consider it extremely/very likely or somewhat likely. Most retailers expect to hold steady on both the number of cigarette SKUs they offer and the linear square footage they devote to the category. Large operators, though, are more likely than small operators to anticipate decreasing both in 2021. Price increases, competing non-cigarette tobacco products and further changes in consumer habits as the COVID-19 pandemic evolves are among the factors expected to have the biggest impact on cigarettes in 2021. Although a minority of retailers have negative expectations for the months to come, some see harder times ahead for the category in the long run. "[There is] pressure that is becoming more intense all the time for everyone to give up smoking. The price of these products is getting so high that even the most dedicated smokers are having to give thought to how they are going to afford/continue smoking," said one retailer. "Rules and regulations at all levels of government are also playing a major role on these products."

OTHER TOBACCO PRODUCTS There is considerably more enthusiasm over the future of other tobacco products (OTP). Thirty-six percent of all retailers expect average dollar sales and unit volume per store to increase, while 30 percent expect sales to stay the same. Just 13 percent expect OTP sales to decline in 2021. Among both small and large operators, the largest percentage of retailers expects OTP

Category Forecast: Other Tobacco Products

13%

13%

Don't know

Decrease

9% Total Retailers

Don't sell

30%

36%

Stay the same

Increase Average $ Sales Expected Increase = 8% Average $ Sales Expected Decrease = 9% Average Unit Volume Expected Increase = 9% Average Unit Volume Expected Decrease = 9%

Category Forecast: Prepared Food

2%

19%

Don't know

Decrease

13% Don't sell

Total Retailers

21%

45%

Stay the same

Increase Average $ Sales Expected Increase = 18% Average $ Sales Expected Decrease = 10% Average Unit Volume Expected Increase = 18% Average Unit Volume Expected Decrease = 11%

sales to increase this year. However, half of large operators expect OTP sales to rise, compared to 31 percent of small operators. Nine percent of all operators say they don’t sell OTP. The number of stocked OTP SKUs is largely expected to stay the same in 2021, with 61 percent planning to hold steady, a 21-point increase from last year. More than two-thirds of retailers (67 percent) also expect no change to OTP's linear square footage, up 19 points year over year. Similar to cigarettes, factors expected to have the biggest impact on OTP sales this year include price increases, the pandemic and regulatory issues, with one retailer pointing to the "brighter and brighter" spotlight being shined on illegal sales of OTP to minors. "The prices continue to rise on tobacco products and more and more consumers are turning to other products to eventually quit tobacco use altogether," said another retailer. Added another: "It is not the trends that will increase our sales and J ANUARY

20 21

Convenience Store News

41


12/28/20 5:34 PM


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CATEGORY FORECAST

units, it will be better aligning our linear footage to better mirror the increases we are experiencing, such as vapor and smokeless."

PREPARED FOOD The foodservice category remains one of the most important to c-store operators today, but expectations for prepared food in 2021 are much lower than one year ago when more than 95 percent of retailers predicted sales would rise in 2020. Instead, the COVID-19 pandemic upended expectations and operations throughout the country last year. Consequently, just 45 percent of all retailers expect their average dollar sales and unit volume per store of prepared food to increase this year, while 21 percent expect sales to stay the same and 19 percent are bracing for sales to decline. Large operators, which include many of the industry's major foodservice players, are significantly more likely to hold a negative outlook than small operators. A third of large operators (33 percent) predict that their prepared food sales will decrease in 2021, compared to 14 percent of small operators. Accordingly, c-stores are scaling back their foodservice expansion plans. The percentage of retailers who intend to increase prepared food SKUs fell from 76.1 percent a year ago to 39 percent this year. The percentage of retailers who plan to expand the linear square footage they devote to the category also fell from 63 percent last year to 22 percent this year.

Category Forecast: Dispensed Beverages

2%

11%

Don't know

Decrease

9% Total Retailers

49%

Don't sell

30%

Stay the same

Increase Average $ Sales Expected Increase = 17% Average $ Sales Expected Decrease = 25% Average Unit Volume Expected Increase = 17% Average Unit Volume Expected Decrease = 25%

Category Forecast: Packaged Beverages

6%

4%

Don't know

Decrease

4% Total Retailers

30%

Don't sell

55% Increase

Stay the same

Average $ Sales Expected Increase = 11% Average $ Sales Expected Decrease = 4% Average Unit Volume Expected Increase = 10% Average Unit Volume Expected Decrease = 6%

easy it is to do this and will continue doing it." COVID-19 is by far the factor that c-stores expect to have the biggest impact on prepared food — with some seeing the pandemic as having a positive effect on the category and others seeing it as having a negative effect. Take-home meals, food delivery and drive-thrus have seen increased adoption, which is expected to continue this year. Numerous retailers feel that the pandemic has increased overall trust in convenience foodservice as c-stores have remained open and emerged as viable away-from-home options when restaurants were forced to close. "More and more people are buying these products. I feel the virus has had an influence on this, and people will continue purchases once the virus is brought under control," said one retailer. "They see how 44 Convenience Store News C S N E W S . c o m

Others expect the category to benefit from practical changes as the nation begins to recover. "As customer counts increase and customers go back to work, they will need to eat away from home more often. The customer will be shopping price and looking for speed of service," another operator pointed out.

DISPENSED BEVERAGES Heavily affected by the pandemic in 2020, the dispensed beverages category — which includes hot, cold and frozen drinks — is not inspiring widespread optimism among retailers for the new year. Only 30 percent expect average dollar sales and unit volume per store to increase, while just under half (49 percent) expect sales to stay the same, and 11 percent expect a decrease. As with prepared food, small operators are more optimistic about dispensed beverage sales this year. Just 6 percent expect sales to decrease, compared to 25 percent of large operators. More than two-thirds of all retailers (67 percent) expect their


STUDY 2021

number of dispensed beverage SKUs to stay the same in 2021, marking no change from 2020. Seventy-nine percent expect no change to the category’s linear square footage, up 10 points from a year ago. Lack of foot traffic and safety precautions that shut down the self-service areas in convenience stores are among the issues expected to have the biggest impact on dispensed beverages going into 2021. However, some retailers have identified unexpected bright spots.

Category Forecast: Beer & Malt Beverages

Retailers' expectations for the packaged beverages category this year are lower than they were headed into 2020, but still slightly ahead of 2019. Fifty-five percent of operators expect their average dollar sales and unit volume per store to increase this year, while 30 percent expect sales to stay the same and just 4 percent expect sales to decline. Large operators are more bullish on this category than small operators. More than two-thirds of large operators (67 percent) expect their packaged beverage sales to increase in 2021, compared to just over half of small operators (51 percent). Overall, most retailers (60 percent) expect to maintain their current level of packaged beverage SKUs, while 36 percent plan to expand their number of SKUs. Large operators are more likely to report plans to expand SKUs than small operators (46 percent vs. 32 percent, respectively). In terms of linear square footage, 76 percent of all retailers anticipate no change. Struggles in the dispensed beverages category have been offset somewhat by a boost in packaged beverages, according to some retailers, due to their continuous availability and the safety concerns around fountain drinks. But whether this continues long term remains to be seen. "Packaged beverage sales are artificially inflated due to pandemic take-home demand," said one retailer. Some report that while multipacks saw a boost over the summer, consumers have begun to return to grocery stores for bulk buys, while singles sales have held steady.

Decrease

Don't sell

4% Total Retailers

Don't know

28%

28%

Stay the same

Increase Average $ Sales Expected Increase = 9% Average $ Sales Expected Decrease = 6% Average Unit Volume Expected Increase = 8% Average Unit Volume Expected Decrease = 7%

"The work-from-home crowd has reduced our coffee sales, but kids have picked up some of the activity in frozen sales being out of school," noted one retailer.

PACKAGED BEVERAGES

9%

32%

Category Forecast: Candy

6%

4%

Don't know

Decrease

2% Total Retailers

Don't sell

55%

32%

Stay the same

Increase Average $ Sales Expected Increase = 13% Average $ Sales Expected Decrease = 8% Average Unit Volume Expected Increase = 12% Average Unit Volume Expected Decrease = 9%

Always a category that sees a lot of new product innovation, retailers cite healthier products, performance-based energy drinks and flavor innovation as top trends for 2021.

BEER & MALT BEVERAGES Although a number of c-store operators reported anecdotally that beer and malt beverage sales rose during the pandemic as consumers sought replacements for away-from-home alcohol consumption, this category is another where retailers are split on their predictions for 2021. Among those respondents who sell beer and malt beverages in their stores (32 percent do not), roughly four in 10 predict that their average dollar sales and unit volume per store will increase this year, while 41 percent expect sales to stay the same and 13 percent project a decrease. Large operators are more likely to expect sales growth (60 percent) than small operators (32 percent). In terms of category SKUs, the majority of all retailers (63 percent) expect to maintain the same number of SKUs as last year, a 12-point increase from a year ago. The percentage of retailers planning to add SKUs also dropped by 9 points this year to 38 percent. Large operators, though, are more open to adding SKUs than small operators (50 percent vs. 32 percent, respectively). Linear square footage J ANUARY

20 21

Convenience Store News

45



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Convenience Store News: For years now, c-stores have seen the introduction of various alternative tobacco products. Industry data indicates that these alternatives still only represent approximately 5% of retail sales in the nicotine/tobacco category. Why haven’t more adult smokers switched? Setti Coscarella: A 2018 study in the US showed that almost 60% of smokers have tried e-cigarettes. But we see that few have converted and many have returned to traditional cigarettes, so nicotine alone cannot be the only reason adult smokers use cigarettes. If you talk to an adult smoker (I have personally talked to thousands), they will tell you that the cigarettes they enjoy most are the ones that they don’t need to have — that cigarette they have with their morning coffee, after a nice lunch, having a drink with friends, or the one they have stealing a few minutes for themselves after putting the kids to bed. They associate smoking with an experience that e-cigarettes and nicotine alternatives simply can’t replicate, as the behavior change required to use these products is vastly dissimilar to the one they are accustomed to with smoking a cigarette. CSN: So what exactly is a Beyond Tobacco™ cigarette? SC: We’ve developed Beyond Tobacco™ cigarettes with one purpose in mind: to make it as easy as possible for an adult smoker to switch away from traditional cigarettes so that the choice to continue smoking is one that is free from nicotine dependency. To accomplish this, we started with a product format that smokers prefer: a paper cigarette with a familiar filter and user experience. In order

to keep our product nicotine-free, we’ve replaced the tobacco with a hemp material that has been thoroughly prepared using our patent-pending process that removes the taste and smell typically associated with hemp-based products. CSN: How will TAAT™ become a more successful alternative — one that traditional tobacco smokers can stick with long term? SC: For adult smokers it is important they know that, while we say our cigarettes are “Beyond Tobacco™,” we made sure that they taste like a tobacco cigarette. From the packaging and price to the user experience and where you buy your cigarettes — switching to TAAT™ should be very easy for adult smokers. Progress and innovation doesn’t mean you have to change everything! CSN: For tobacco retailers looking for new products in 2021, how will they know if TAAT™ cigarettes are the right fit for their store? SC: History has demonstrated that continued growth in the convenience channel is fueled by new and innovative products. With adult tobacco consumers — who are clearly open to trying alternatives, and who continue to make up such a large portion of the customer base for many stores — it is important to ensure you have relevant offers for them. Knowing this, TAAT™ is providing ample support to retailers with significant marketing investment, point-ofsale material, an introductory consumer offer and industry-leading margins for our retail partners.

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CATEGORY FORECAST

Category Forecast: Salty Snacks for the category will remain the same for most retailers. When it comes to trends, operators expect the hard seltzer boom to continue throughout 2021. Increased retailer attention on locally made beers is also expected to have an impact on the category. Additionally, ready-to-drink cocktails are showing promise.

CANDY The good news for the candy business is that very few c-store operators expect a downturn in the category for 2021; just 4 percent predict their average dollar sales and unit volume per store will decrease. That said, the majority of retailers don't expect the category to grow either; 55 percent expect sales to stay the same. Just 32 percent expect an increase. More small operators than large operators expect sales growth (37 percent vs. 17 percent, respectively). A significant majority of c-store operators plan to maintain the status quo in the number of candy SKUs they offer and the linear square footage they devote to the category. Eighty-three percent of all retailers expect their number of SKUs to stay the same, up 14 points from one year ago, and 89 percent expect no change in square footage, up 16 points year over year. The need for small indulgences has helped the candy category throughout the COVID19 pandemic. As one retailer put it, "treats are affordable comforts." Some operators report a boost in sales of bagged candy and chocolate candy, helped by the addition of larger package sizes. On the other side of the equation, gum and mint sales have faltered for many retailers due to the use of masks making these products redundant for many people; however, an eventual end to habitual masking is anticipated to help in the long run. For 2021, retailers foresee a continued lack of office commuters, a rise in healthy eating practices, and competition from dollar stores having a negative category impact. "This is a category of sales that has had its ups and downs with the constant price increases caused by the cost of ingredients to produce these items," said one retailer. “They are passed down the line to everyone and finally the customer. I feel many individuals consider this a luxury item and not something they have to have." 48 Convenience Store News C S N E W S . c o m

9%

2%

Don't know

Decrease

2% Total Retailers

51%

Don't sell

36%

Stay the same

Increase Average $ Sales Expected Increase = 11% Average $ Sales Expected Decrease = 7% Average Unit Volume Expected Increase = 11% Average Unit Volume Expected Decrease = 7%

Category Forecast: Alternative Snacks

13%

6%

Don't know

Decrease

11% Total Retailers

47% Stay the same

Don't sell

23% Increase Average $ Sales Expected Increase = 10% Average $ Sales Expected Decrease = 3% Average Unit Volume Expected Increase = 11% Average Unit Volume Expected Decrease = 4%

SNACKS Similar to the candy category, few retailers expect to see things get worse in the salty snacks business this year, although opinions vary on whether the category will grow. Just 2 percent of all retailers expect their average dollar sales and unit volume per store to decrease, while 51 percent expect sales to stay the same and 36 percent expect an increase. Large operators have a more positive outlook on the category than small operators: 42 percent of large operators believe sales will increase, compared to 34 percent of small operators. Consistent with last year, seven in 10 retailers expect no change in the number of salty snack SKUs they offer. This year, 87 percent also expect the linear square footage they dedicate to the category to stay the same, up 11 points year over year. For many retailers, more of the same is good news. "As in-home activities continue, this category will stay strong," one retailer commented. Along with a rising trend toward larger take-home package sizes driven by the pandemic, retailers also report growing demand for healthier products, although they say consumers are still turning to


STUDY 2021

the less-than-healthy comfort food snacks that are their favorites. "Even with the cost of ingredients in the production of these products, people love their salty snacks with their beers, etc. Seems to be a major way they try and combat the problems caused by the virus for them," another operator noted. Shifting to the alternative snacks category, fewer retailers predict growth in this segment compared to salty snacks. Whereas 36 percent of operators expect an increase in salty snacks, just 23 percent predict that their average dollar sales and unit volume per store for alternative snacks will increase in 2021. The largest percentage of retailers expect sales to stay the same (47 percent). Small and large operators vary significantly in their expectations around alternative snacks: 67 percent of large operators expect sales to stay the same, while 8 percent expect an increase; 40 percent of small operators expect level sales, while 29 percent expect an increase. Compared to a year ago, retailers’ plans for both the number of SKUs offered and the square footage devoted to alternative snacks have shifted significantly. Seventyone percent of all retailers plan to offer the same number of SKUs, up 24 points, while just 17 percent expect to increase SKUs, down 27 points. Similarly, nearly eight in 10 retailers (79 percent) say square footage for this category will stay the same, up 33 points, while only 12 percent expect to add space, down 34 points from a year ago. One stumbling block for this category is price, which can stop customers from splurging on an impulse buy. "Alternative snacks are more expensive than traditional snacks. Customers won't have much extra money to spend on these items," said one retailer. Some bright spots that may help the segment in 2021, cited by operators, include increased demand for healthy and organic items, product innovation, and new brands.

EDIBLE GROCERY Changing consumer shopping habits have resulted in a change in expectations for the future of edible grocery at c-stores. While 28 percent of retailers expect average dollar sales and unit volume per store to increase in 2021, just 6 percent expect sales to decrease, marking a significant drop from the 27 percent that expected sales to drop in 2020.

Category Forecast: Edible Grocery

6%

15%

Decrease

Don't know

13%

Total Retailers

Don't sell

38% Stay the same

28% Increase Average $ Sales Expected Increase = 11% Average $ Sales Expected Decrease = 16% Average Unit Volume Expected Increase = 11% Average Unit Volume Expected Decrease = 14%

Category Forecast: Non-Edible Grocery

6%

13%

Don't know

Decrease

17% Total Retailers

Don't sell

47%

17%

Stay the same

Increase Average $ Sales Expected Increase = 15% Average $ Sales Expected Decrease = 7% Average Unit Volume Expected Increase = 16% Average Unit Volume Expected Decrease = 8%

When comparing large operators to small operators, the larger players are much more likely to say their edible grocery sales will stay the same (58 percent vs. 31 percent, respectively). The pandemic has made the biggest difference in edible grocery sales, retailers report. "As long as COVID is around, customers will still try to minimize stops and purchase bread, cereal, etc., while getting gas," said one retailer. "Our stores are going back to our roots. Customers are using c stores for fill-in items between grocery store trips," added another retailer. At the same time, operators are aware that recovery from the pandemic and consumers’ return to in-person grocery shopping and restaurant visits will temper growth for the category in 2021. Competition from online grocery and dollar stores are also factors. Perhaps that is why the majority of retailers plan no change in the number of edible grocery SKUs they offer (73 percent), nor the linear square footage they dedicate to the category (78 percent). Among those operators who are planning to expand their edible grocery J ANUARY

20 21

Convenience Store News

49


CATEGORY FORECAST

offering in 2021, slightly more plan to increase SKUs rather than square footage.

NON-EDIBLE GROCERY Nearly as many c-store retailers expect the non-edible grocery category to perform better in 2021 as those who expect it to perform worse: 17 percent predict their average dollar sales and unit volume per store will increase, while 13 percent expect sales to decrease. A little less than half of c-store retailers (47 percent) expect non-edible grocery sales to stay the same. Large operators are more likely than small operators to have this outlook (58 percent vs. 43 percent, respectively). The remaining large operators are perfectly split on whether sales will increase or decrease (17 percent for each). More than four out of five retailers (82 percent) expect their number of SKUs and linear square footage dedicated to nonedible grocery to stay the same this year, while 13 percent expect both to decrease and 5 percent expect both to increase. Challenges for this category, according to retailers, include dollar store competition and supply chain issues due to the pandemic. However, the pandemic is also prompting more consumers to visit c-stores for fill-in items as they seek faster trips than they can make at grocery stores. "Similar to edible grocery, as long as COVID is around, customers will try to minimize stops. Toilet paper, cereal, gas, milk all at once," one retailer remarked.

HEALTH & BEAUTY CARE C-store operators also have mixed opinions on the health and beauty care (HBC) category this year. Forty percent expect average dollar sales and unit volume per store to stay the same, while 26 percent expect an increase and 13 percent expect a decrease. Predictions vary considerably based on company size. Half of large operators expect sales to increase, compared to just 17 percent of small operators. Meanwhile, far more small operators expect HBC sales to stay the same (49 percent vs. 17 percent, respectively). Given their bullishness on the category, it’s not surprising that large operators are more likely to have plans to grow HBC in 2021, with 36 percent expecting to increase their number of SKUs (vs. 3 percent of small operators) and 27 percent expecting to add square footage (vs. 3 percent of small operators). 50 Convenience Store News C S N E W S . c o m

STUDY 2021

Category Forecast: Health & Beauty Care

9%

13%

Don't know

13%

Decrease Total Retailers

40%

Don't sell

26%

Stay the same

Increase Average $ Sales Expected Increase = 11% Average $ Sales Expected Decrease = 6% Average Unit Volume Expected Increase = 10% Average Unit Volume Expected Decrease = 6%

Category Forecast: General Merchandise

11%

6%

Don't know

6%

Decrease Total Retailers

51%

Don't sell

26%

Stay the same

Increase Average $ Sales Expected Increase = 15% Average $ Sales Expected Decrease = 11% Average Unit Volume Expected Increase = 14% Average Unit Volume Expected Decrease = 11%

Some retailers believe the continued popularity of COVID-related products, such as sanitizer and personal protective equipment, will lead to an HBC sales bump this year. "Consumers are more health and safety conscious," said one retailer. "Spiked sales projected in sanitizing goods."

GENERAL MERCHANDISE A majority of c-store retailers forecast that general merchandise sales in 2021 will remain consistent to 2020. Fifty-one percent expect average dollar sales and unit volume per store to stay the same, while 26 percent expect an increase and 6 percent expect a decrease. Large operators are more likely than small operators to forecast an increase (33 percent vs. 23 percent, respectively.) More large operators than small operators are also planning to expand the general merchandise category in the new year. Thirty-six percent of large operators plan to increase their number of SKUs (compared to 18 percent of small operators), and 27 percent plan to increase the square footage they dedicate to general merchandise (compared to 18 percent of small operators). Retailers say changes in foot traffic due to the pandemic will continue to affect general merchandise sales. A number of operators indicated that they plan to add more seasonal items to try to help boost sales in the category. CSN


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SUPPLIER FORECAST

Preparing for Roadblocks Ahead C-store industry suppliers and distributors foresee disruptive factors impacting 2021 By Danielle Romano a year can make. The nation’s convenience store industry suppliers, distributors and brokers are heading into 2021 with a darker outlook than this time last year, citing negative influences such as the COVID-19 pandemic, accelerated competition from e-commerce, retailer consolidation, and increased government regulation.

OH, WHAT A DIFFERENCE

Only 54 percent of convenience channel suppliers say they have a positive view on the U.S. economy for the year ahead, compared to 79 percent of last year’s respondents in the Convenience Store News Forecast Study. Those with a negative economic view more than tripled to 28 percent this year vs. just 9 percent in 2020. Eighteen percent have a neutral view. The supplier community’s less-than-savory outlook on the economy likewise extends to their disposition on their respective product categories. This year’s Forecast Study findings show that slightly more than half (54 percent) believe 2021 will be a good year for their category, a 31-point drop compared to one year ago when 85 percent felt positive about their category. There is a clearing in the clouds, however. Suppliers are more bullish about the convenience channel than any of the other retail channels they serve. Specifically, 71 percent rate business conditions in the convenience channel positively, placing it ahead of grocery at 62 percent, mass merchandisers at 47 percent, dollar stores at 46 percent, and drugstores at 43 percent.

Top-of-Mind Concerns Like the c-store retailers they serve, the supplier community ranks COVID-19 as the foremost factor that will impact their sales and profitability over the next 12 months. As one study participant commented, the global pandemic “affects travel and transaction counts in the convenience industry, which is the lion’s share of our P&L.” Another noted: “It impacts manufacturing capabilities and the ability to bring enough product to the market.” Suppliers are also wary about the acceleration of e-commerce that’s been fueled by the pandemic, with nearly a quarter citing

52 Convenience Store News C S N E W S . c o m

Overall Outlook for Product Category in 2021 VERY/SLIGHTLY NEGATIVE

NEUTRAL

VERY/SLIGHTLY POSITIVE

28%

18%

54%

(+20 pts)

(+11 pts)

(-31 pts)

Current Conditions in Retail Channels Company Works With VERY/SLIGHTLY POSITIVE

NEUTRAL

71%

Convenience Grocery

VERY/SLIGHTLY NEGATIVE

62%

10%

19%

28%

10%

Mass

47%

41%

12%

Dollar

46%

47%

7%

Drug

43%

49%

9%

Expectations for Cross-Channel Competition in 2021

35%

65% Increase

Total Retailers

Stay the same

57% Total Suppliers/ Wholesalers

40% Stay the same

Increase

4% Decrease

it as a hindrance to their sales and profitability in 2021. “E-commerce is pulling foot traffic out of the brick-and-mortar stores and impacting impulse sales and what consumers are buying,” one supplier stated. Another added: “Habits have changed during the pandemic and many of them will stick. More dollars are heading online.” Other roadblocks that convenience channel suppliers and distributors anticipate in the new year are the cost of raw materials (cited by 24 percent as in their top three), retailer consolidation (22 percent), a decline in consumer spending (22 percent), and rising labor costs (15 percent).


STUDY 2021

Biggest Cross-Channel Competitive Threats TOTAL RETAILERS TOTAL SUPPLIERS/WHOLESALERS

Dollar

Respondents also said they’re keeping an eye on how new leadership in the White House will impact regulation, particularly in the tobacco category. “It is expected the new administration will go after the tobacco industry with increased regulation and taxes,” one supplier pointed out. Cross-channel competition is on suppliers’ radar for 2021 as well. Fifty-seven percent forecast that cross-channel competition against the convenience channel will increase this year, while a mere 4 percent expect it to decrease. Forty percent expect it to stay the same year over year. The biggest cross-channel threats to convenience stores, according to suppliers, are online grocery (46 percent), Amazon/ Amazon Fresh (41 percent), dollar stores (39 percent), quick-service restaurants (32 percent), grocery stores (30 percent), mass merchandisers (18 percent), drugstores (13 percent), and fast-casual restaurants (11 percent).

A Few Bright Spots

39% 40% 46%

Online grocery sites

36%

Amazon/Amazon Fresh

Grocery

36% 30%

QSR

30% 32%

Fast casual

9% 13% 6% 11%

Anticipated Impact of Issues on Sales & Profitability in 2021 (% of Suppliers/Wholesalers identifying as "Biggest Impact" and in Top 3) RANKED BIGGEST IMPACT RANKED IN TOP 3

Despite many reservations, the c-store industry’s supplier community is enthusiCOVID-19 pandemic astic about some 2021 business prospects. 38% When asked to list their top three reasons for optimism in the coming year, the arrival Consumer spending growth 9% 37% of COVID-19 vaccines, pent-up shopper demand, new product development and 25% New product development in category 6% emerging technologies (particularly electric vehicles and contactless payment) fre24% E-commerce 9% quently appeared in the remarks provided. “Our new product has the potential to disrupt the industry and addresses health and wellness, which is a top consumer concern,” one supplier told CSNews. Another remarked: “With shopper development, convenience has opportunities to present itself as a solution center and a meal center to additional consumers than typical commuters.” And another particularly optimistic respondent concluded: “Once we turn the corner on the pandemic, the bump will be a doozy! Our business has invested heavily in supporting takeaway dining, which will continue to grow. The only way is up!” CSN

41%

15% 18%

Mass

Drug

62%

Raw materials cost

6%

24%

Retailer consolidation

7%

22%

New leadership in White House

6%

Consumer spending decline

65%

22%

2% 22%

Retailer unit expansion

7%

Increasing regulation 6% Rising labor costs Emerging technologies

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18% 18%

15% 4% 10%

20 21

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TREND FORECAST

Here Today … & Tomorrow

The pandemic prompted changes in the convenience channel, many of which are here to stay By Melissa Kress Convenience Store News looks into its crystal ball — with a lot of help from market research reports across the retailing space — to identify a few trends that convenience store operators should keep an eye on for the coming 12 months.

AS EACH NEW YEAR STARTS,

However, if 2020 taught us anything, it's that you can only expect the unexpected. So this year, we’re doing something a little different. As the novel coronavirus hit the United States, consumer demands shifted and convenience retailers learned to pivot. From the decrease in gas buying trips to the rise of contactless payments, here we present seven trends that were born from the pandemic but are here to stay — at least for now.

1

Hands Off

Since the start of the pandemic, 53 percent of today's shoppers have used a mobile contactless payment option for the first time, according to a survey by Inmar Intelligence. Indicative of a larger trend toward all cashless payments, this is further underscored by the company's finding that the majority of shoppers have been avoiding paying with cash in general since the pandemic struck in mid-March. Contactless payment is so important to some shoppers that nearly one-third of survey respondents said they will avoid a retailer that does not offer the option, in favor of one that does. Love's Travel Stops & Country Stores became the latest convenience industry player to expand its contactless payment options when it added tap-and-go credit cards, mobile phone payment options, and Mobile Pay via the Love's Connect app in November.

2

Hit the Curb

According to NACS Research, 21 percent of convenience retailers added curbside pickup since COVID-19 began to spread across the U.S. Among the adopters are Casey's General Stores Inc., Wawa Inc. and Cumberland Farms. It appears consumers are enjoying the convenience: Rakuten Ready found that

54 Convenience Store News C S N E W S . c o m

the number of grocery-specific click-and-collect orders has grown 57 percent since the start of 2020, and more than 82 percent of consumers have used order for pickup from restaurants, grocery stores and other retailers in the past six months. With much of the country experiencing a second wave of the virus, and mass vaccine availability still months away, expect curbside pick up to, well, pick up. But be sure to not make your customers wait; according to Rakuten Ready, customers who wait less than 2 minutes to pick up their order are four times more likely to repeat-purchase.

3

At the Touch of Your Fingers

Mobile ordering goes hand in hand with curbside pickup, so it is certain to tick up in popularity as well in 2021. Zebra Technologies' annual Global Shopper Study found that 72 percent of shoppers used mobile ordering, and 82 percent of those are highly likely to continue using it. Millennials and Gen Xers are the primary users, but it might surprise some to learn that nearly half of Boomers (47 percent) are adopting this technology, too. Proof of its continued future potential lies in the numbers. According to supplier partner Paytronix, Gen Z — currently aged nine to 22 — was on track to make up 40 percent of all U.S. consumers in 2020 and more than five in 10 members of Gen Z use their smartphone five or more hours each day.

4

A Return to the Kitchen Table

For some consumers, dining out is a treat, a way to celebrate a special occasion, or a reward for a long workweek. For others, it is the norm. But that all changed in 2020 as government restrictions shuttered the majority of indoor dining in the U.S. — and became a driving force behind shifting eating patterns. For several years, 80 percent of meals in the U.S. have been sourced from home, compared to 20 percent sourced from restaurants and other foodservice outlets. During the pandemic, that gap has widened to as much as 87 percent of meals sourced from home, according to The NPD Group. With more people staying home, the “new normal” is likely to become the normal for many in 2021 and beyond. Sure, some consumers will be itching to visit their favorite restaurants this year but, for most, the return of the family dinner around the kitchen table is comforting in this time of uncertainty.

5

Health & Safety Never Go Out of Style

As Americans wait for COVID-19 vaccines to become widely available, most expect retailers to continue taking precautions when it comes to shopper safety. In a survey of more than 14,000 consumers, Shopkick found that they want to see continued efforts around the availability of disinfectants (67 percent), plexiglass barriers at checkout (57 percent), employees wearing protective face coverings (52 percent), 6-feet social distancing markers (52 percent), and other shoppers wearing protective face coverings (50 percent). In terms of personal pre-


STUDY 2021

Consumers will expect retailers to continue taking precautions when it comes to shopper safety. cautions, a higher percentage of Boomers (75 percent), Gen Xers (71 percent) and millennials (70 percent) indicate that they will continue taking personal precautions like wearing a mask and bringing disinfectants to the store beyond the pandemic, compared to Gen Zers (61 percent).

6

Running Low on Gas

Employees are heading into 2021 still working from home,

with some not expected to return to their offices until midyear at best, and students across the country continue to attend school either fully remote or on a hybrid schedule. These shifts have had a noticeable impact on retail fuel sales — an impact that will continue until workplaces are fully reopened and school moves from the family room back into the classroom. According to NACS, nearly three in four convenience retailers reported that their fuel sales were down over the third quarter. Furthermore, c-store retailers are not optimistic that fuel sales will rebound quickly. There is some good news, however. As Americans flee the cities for the suburbs, car buying has ticked up, leading to a smaller decline in transactions at the pump, GasBuddy reported this fall.

7

At Your Doorstep

Whether launching their own platform or partnering with a third-party provider, countless convenience store operators began to offer delivery in 2020. Stay-at-home directives drove the need, and the convenience will keep it going. As Onfleet noted, there is no turning back now when it comes to delivery. The last-mile delivery management software company predicts the consolidation of delivery players, and that restaurant and food delivery options will become more diverse. In addition, subscription delivery models will become more popular, and delivery will embrace the future with drones and self-driving cars. Though not on Main Street just yet, autonomous delivery vehicles are just around the corner. Robot delivery firm Nuro is the first to operate fully autonomous delivery vehicles in three states — Arizona, California and Texas — and it secured additional funding to the tune of $500 million in November. CSN

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FEATURE

Prioritizing Safety & Sanitation With customer expectations higher than ever, retailers need to step up their game By Tammy Mastroberte

have always been important to customers in the convenience store space — whether it’s a well-lit parking lot for nighttime fuelers or a clean restroom when stopping inside. However, since the COVID-19 pandemic hit in March 2020, and as it continues to be an issue throughout the United States, concerns about safety and sanitation are more important than ever before to both c-store customers and employees.

SAFETY AND SANITATION

“We are seeing some COVID fatigue now in a new wave of research, and there are people being lax in a lot of the requirements,” said Nick Mercurio, executive vice president and service line head at Ipsos, a global market research company based in Paris, with offices in Seattle. “As cases continue to increase again, it will be even more important for brands to double down on their requirements and take actions for safety and sanitation.” According to its Consumer Health and Safety Index study, there are actions and protocols that can and should be put into place for stores to send the message to customers that it is taking safety and sanitation seriously, and is actively working to keep the store, its customers and its employees safe — especially when there is foodservice involved. “We saw in our research that there are higher

56 Convenience Store News C S N E W S . c o m

expectations from consumers if you are in the foodservice space,” Mercurio said. “In addition to masks, employees should have gloves and change gloves between each order, and there should be plexiglass up and hand sanitizer available. This becomes even more important because people can see you touching and handling food.” In fact, before the pandemic, food safety was actually toward the bottom of the list for what consumers looked at when making the decision to eat or shop somewhere. But toward the middle of the pandemic, it rose to the top, noted Chirag H. Bhatt, president of CHB Food Safety Consulting, based in Houston, Texas. “Right now, 50 percent of people are looking at food safety to decide whether they will go into a location or not, so promoting what you are doing to ensure this on social media, and having signs explaining it when they enter the store are some things c-stores can do,” he noted. “Not everyone will stop and read them, but the people who are concerned will, and if they see employees disinfecting the food area or their hands before handling food, that will help.” Additionally, while employees handling food are required to go through a food safety and sanitation training to gain credentials before they handle food, Bhatt recommends having them get



FEATURE

recertified once per year since the training is online and cost effective.

Necessary Protocols With the COVID-19 pandemic waging on, everyone expects to see c-store employees wearing masks, and some type of social distancing signage at the entrance and throughout the store — especially at checkout, said Mercurio. They also expect plexiglass at checkout and sanitizing wipes to be made available, especially if there are carts or baskets in the store. “Things that specifically drive trust are hand sanitizer at the store entrance and the checkout area, and having employees wiping down high-traffic areas with disinfectant,” he explained, citing the company’s study where mystery shoppers went to a variety of retail locations, including c-stores.

“Brands have to perform actions that are highly visible, so customers actually see them doing it.” — Nick Mercurio, Ipsos

The first wave of research was conducted in May and June 2020 when mystery shoppers visited major gas brands such as Chevron, Shell and BP. Then, in August and September, they went to specific convenience store brands, including 7-Eleven, Wawa, RaceTrac, Circle K, Kwik Trip and QuikTrip. The research also included grocery stores, big-box stores, financial services, and food and beverage. Of the five segments studied, c-stores ranked at the bottom of the list when it came to health and safety standards and consumer trust. Grocery was at the top of the list, specifically the Whole Foods, Trader Joe’s, ShopRite and Costco chains. During the mystery shoppers’ visits to c-stores, only 27 percent of locations had hand sanitizer inside the entrance and only 25 percent had it at the checkout — even though this is the No 1 driver of customer trust, according to the research. Mercurio said c-store employees should

58 Convenience Store News C S N E W S . c o m

also be wiping off payment terminals after each transaction, along with the counter space. For those selling gasoline, employees should routinely go out to the pumps and wipe them down so that customers can see them doing it. “Brands have to perform actions that are highly visible, so customers actually see them doing it,” he explained. “Some brands may be saying they do a deep cleaning of the store every night, but I would recommend spending money on staff during the day so that when people come in, they see you cleaning the store.” In fact, the study found that observing staff wiping down high-traffic areas is the No. 2 driver of consumer trust, but only 25 percent of the mystery shops observed this happening. In addition to trust, there are other factors that drive return visits when it comes to safety and sanitation. An important one is a contactless entrance with some type of automatic door. “I’ve seen people do this with foot openers that are quick and easy to install,” Mercurio said. Another factor driving return visits is clean restrooms with a visible, up-to-date cleaning schedule posted for customers to see. “If they see the restroom is clean, that is good. But if you have a schedule posted and they can see the last time it has been cleaned, that is a visible cue that you are taking health and sanitation seriously,” he added. In the study, only 21 percent of c-stores had a visible cleaning schedule, which shows it is an opportunity to differentiate. The mystery shops also found that only 83 percent of the c-stores visited had employees properly wearing masks in-store — the No. 4 driver for return visits. On the flip side, some of the highlights among brands that scored well in the research included employees not only wearing masks properly, but also wearing masks that were consistent (whether branded for the store or not). This offers a psychological cue to shoppers and increases overall confidence in the brand, Mercurio explained. “It can be any type of mask. McDonald’s has employees with blue surgical masks and gloves and it was consistent across the stores. They did very well in the report,” he said. “On the other hand, Apple had a nice mask made up with an Apple logo, but also allowed employees to wear anything they wanted, so it didn’t appear as consistent. Stores don’t have to spend a lot of money on branding, but have people be consistent and wear them properly in the store.” Another important area to look at in terms of protocols is having an employee illness and reporting policy, which the Food and Drug Administration has required since 2009, although many companies have not added this to their policies, according to Bhatt.


An easy way to approach this, he advised, is using technology where employees must answer questions before they clock in, such as: Do you have a fever? Has anyone in your household been diagnosed with COVID-19? If any of these questions are answered “yes,” then an alert would immediately go to the manager’s cell phone. “It goes back to corporate culture and how it is aligned with food safety, and if they have written plans and strategies, as well as how empowered your employees are and how transparent you are with them,” Bhatt said. “Offer them sick leave or sick days if they need it, so they don’t feel like they have to work if they are sick and should not be working.”

Ensuring Compliance C-stores need to have clear protocols in place around safety and sanitation, and communicate them to every location rather than leaving it up to individual operators, according to the experts. They also need to ensure and measure compliance at the store level across their chains. “You can’t manage what you don’t measure. Some brands do their own mystery shopping to ensure compliance and reward those who are doing it right, which is good,” Mercurio pointed out. The recent pandemic has highlighted the importance of this, leading some to turn to workforce management systems not just for employee scheduling and

“Offer [your employees] sick leave or sick days if they need it, so they don’t feel like they have to work if they are sick and should not be working.” — Chirag H. Bhatt, CHB Food Safety Consulting

communication, but also to ensure and measure compliance of protocols across a chain. Today’s technologies allow operators to communicate a new procedure or protocol, offer training, and then ask for photos to ensure compliance, said Will Eadie, chief revenue officer at Workjam, based in Cincinnati, Ohio. “If there is a new policy to have plexiglass at the cash register, you can not only communicate this through a workforce management system, but you can also send a two-minute video explaining why it’s a new protocol, and then a 5-minute training to get certified in how to unpack it from the box and install it,” he said. “Then, you can have each store upload a picture to show it’s been done.” Overall, safety and sanitation are more important now than ever before and as customers take it more seriously, c-store operators need to do the same. Research shows 62 percent of shoppers say that if a brand is not taking health and safety seriously, they would stop doing business with them, according to Mercurio. “It’s also important to note that 25 percent of customers said they would be willing to pay more for brands that are doing health and safety right,” he said. CSN

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FOODSERVICE F

FOOD I NSIGHT P O W E R E D B Y DATA S S E N T I A L

The Recipe for a Winning LTO Holiday-focused flavors can be a nostalgic way to incorporate new flavors onto the menu limited-time offer (LTO) goes beyond trendy dishes and flavors. According to Datassential’s Menu Development Keynote, “77 percent of consumers will occasionally order LTOs or daily specials when available when dining out.”

CRAFTING A WINNING

LTOs need to encompass who the operator truly is at the core, and this is where we look toward independents to guide the trends. Independents are 82 percent more likely to occasionally feature an LTO/daily special than chain operators. With many independents struggling to keep their doors open during the duration of the COVID-19 pandemic, engaging with customers in your community is more important than ever.

Holiday Trends Holiday-focused flavors like pumpkin spice in the fall, eggnog in the winter, and watermelon in the summer can be a nostalgic way to incorporate new flavors onto the menu. While beverages tend to lead in flavor innovation, QuikTrip Corp. recently introduced the Pumpkin Pretzel, in which a warm soft pretzel was stuffed with a pumpkin filling and then dusted with a blend of cinnamon and sugar. According to Datassential’s SCORES LTO tracker, the Pumpkin Pretzel ranked high among consumers for key metrics like uniqueness and draw.

Make It an Event Sports-focused events like the Super Bowl and March Madness also have an impact for limited-time offers, with many bringing an explosion of shareable dishes like wings, pizza and nachos. According to Datassential’s FLAVOR database, 46 percent of people love chicken wings, making it the perfect vessel for menu innovation. While buffalo wings may be top of mind for many operators, thinking beyond the traditional and incorporating bold on-trend flavors like Nashville hot, gochujang and piri piri can transform this well-known dish into something new.

Time to Start Fresh Barbecue is not only protein focused with ubiquitous dishes like hot dogs and ribs, but fresh, seasonal produce also can make an appearance on the grill. A sauce can make a large impact on a simplistic barbecue dish such as fresh, grilled corn or peach relish and spicy ketchup with chipotle or hot honey. Complex flavors can be achieved on the grill beyond the expected, such as grilled lime, lemon and whole garlic cloves for unique sauces and marinades. CSN

OPERATOR: QuikTrip Corp. DATE: September 2020 PRICE: $1.59 ITEM TYPE: Returning Item DESCRIPTION: A warm, soft pretzel topped with a sweet cinnamon and sugar blend and stuffed with a pumpkin filling.

31

41%

definitely or probably would buy

unbranded PI

55

36

69

versus other c-stores’ items

versus other breakfast pastry

versus other items from QuikTrip

88

52%

definitely or probably would buy

branded PI

--

--

88

versus other c-stores’ items

versus other breakfast pastry

versus other items from QuikTrip

98

58%

extremely or very unique

uniqueness

98

96

95

versus other c-stores’ items

versus other breakfast pastry

versus other items from QuikTrip

90

24%

would order the item all the time

frequency

91

96

85

versus other c-stores’ items

versus other breakfast pastry

versus other items from QuikTrip

90

50%

would visit somewhere just for this item

draw

97

97

95

versus other c-stores’ items

versus other breakfast pastry

versus other items from QuikTrip

91

63%

excellent or good value for the dollar

value

78

76

73

versus other c-stores’ items

versus other breakfast pastry

versus other items from QuikTrip

Datassential, a Chicago-based food and beverage industry research and consulting firm, brings clients real-world insights on flavor trends, foodservice and consumer packaged goods, globally. Learn more at datassential.com.

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SNACKS

Coming Back After a COVID Hit Embracing traffic shifts and better-for-you offerings can help snacks bounce back By Renée M. Covino IT WAS THE PERFECT STORM. The pandemic hit, unemployment went up, traveling to work went down, gas purchases went down, in-store foot traffic went down, online shopping for household goods went up — all seriously injuring impulse shopping in convenience stores, and particularly affecting the candy and snacks categories.

The 2020 Convenience Store News Midyear Report Card showed that for the first six months of the year, not a single segment within the salty snacks category had a dollar sales or volume increase. The total category was down almost 8 percent in dollars and more than 13 percent in units. The most adversely affected subcategories were nuts/seeds (down 15.8 percent in dollars), mixed snacks (down 8.4 percent in dollars), crackers and potato chips (both down 7.8 percent). Puffed cheese (down just 2 percent) experienced the lowest percentage decline in sales dollars. Welcoming a new year, convenience store retailers and suppliers are now devising how to revive the snacks business. Industry

experts say the first step will be recognizing the new patterns in store traffic and adjusting merchandise and marketing accordingly. Convenience stores were generally focused on being part of “the old consumer journey,” like the morning commute or the local office lunch break, said Ethan Chernofsky, vice president of marketing at Placer.ai, which tracks retail foot traffic. The company’s data shows that c-store retail visits bottomed out in April, but brands like QuikTrip and Wawa experienced their best-trafficked month of 2020 in October (as of press time). The pandemic proved to many career professionals that greater levels of flexibility in terms of when they go to the office could improve their quality of life without hurting their productivity, Chernofsky observed. He believes this will lead to levels of weekday shopping staying higher than pre-pandemic. “The key in the coming months for the c-store sector will come in finding new ways to make themselves a core part of the new consumer routine and to emphasize their value; something of critical importance during a period of extended economic uncertainty,” he advised. C-stores have a powerful opportunity to innovate and create new expectations for consumers, according to Chernofsky. He offered up the idea of introducing a meal kit-style concept, but doing it “c-store style” with matching snacks. He said this could be a bold idea and one that would get traffic levels up, along with impulse purchases.

Healthy & Planned Eating As more consumers reenter the world — and convenience stores — they will likely be driven by the pandemic to focus more heavily on a better-for-you diet and lifestyle with more planned eating than ever before, category experts predict. Across all channels, including online, the pandemic brought about heightened interest in comfort foods and shelf-stable items, such as chips, pretzels and snack nuts, according to Mike Stern, senior vice president of Irvine, Calif.-based Advantage Solutions, which works with retailers to drive growth, profitability and loyalty. “The evolution in snacking may continue with these trends in the short term, but ultimately we believe consumers will return to a wider variety of snack options, particularly healthy snacks,” Stern said. “Postrecession will see a rise in premium, innovative items.” Before the pandemic, the industry experienced knowledgeable consumers making decisions about their nutrition, food

62 Convenience Store News C S N E W S . c o m


“The key in the coming months for the c-store sector will come in finding new ways to make themselves a core part of the new consumer routine and to emphasize their value.” — Ethan Chernofsky, Placer.ai

and transparency. As Americans come out of the pandemic, many will continue to explore a more intimate relationship with food, ultimately becoming more foodfocused than they were previously, noted Mark Singleton, vice president of sales and marketing at Southern Recipe Small Batch, a maker of pork rind snacks. Singleton added that the expectation is consumers will want to enjoy themselves in more food adventures. “We’ll see a real exuberance in snacking and in the kitchen,” he said.

What’s Trending It seems shoppers are not afraid of snacks with fat anymore, thanks to industry data showing the importance that healthy fats play in a well-balanced diet. “With the prevalence of this information, consumers now understand fat can keep them fuller, longer,” said Singleton. “The feeling of satiety plays a big role in their acceptance of healthy fats in their everyday diets.”

He and other industry experts see two factors continuing to drive consumer interest in fats and oils: the popularity of intermittent fasting and the rise of plant-based diets. “Intermittent fasting will inspire increased demand for healthy fats as they provide the satiety they’re looking for. Secondly, we believe the rise of plant-based will encourage more shoppers to look to different seed and nut oils, like flaxseed and pumpkin seed, as exciting alternatives,” Singleton explained. Nuts and seeds have risen in popularity because they provide a wide variety of health benefits, including protein, vitamins and minerals, Stern observed. They can fit into multiple eating occasions throughout the day as well. What’s also trending now in snacks is enhanced packaging that clearly communicates a product’s better-for-you attributes. Key callouts include non-GMO, organic, GF (gluten free) and protein content; these are resonating well with consumers in these times.

Invigorating Impulse Spending The category experts offered up some final tips for reviving the snacks business: • Offer a variety of value snack items that appeal to cash-strapped consumers during these difficult economic times; • Get some snacks off the shelf and onto a standalone display to engage customers and drive trial; • In-aisle, think about color and packaging placements that will excite; • Remember that pairings and buy-one-get-one offers consistently drive purchases; • Use cross-merchandising of impulse snacks coupled with bundle-and-save programs to drive value and nudge customers to purchase; • Invest in digital platforms, such as retailer-specific mobile apps and contactless purchasing solutions, that provide customers new ways to purchase even small items like single snacks; and • Incorporate snack items into loyalty programs. CSN

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TECHNOLOGY

The 2021 Technology Hit List Convenience execs are focusing on initiatives that make sense for both the customer and retailer By Melissa Kress THE GLOBAL COVID-19 health crisis may have stymied some business and economic growth in 2020 as evidenced by the slowdown of mergerand-acquisition activity for the majority of the year. However, it did not stall the retail technology evolution. In fact, it had the opposite effect, and there are no signs that the momentum is going to stop in 2021.

"We are still thinking about innovation. COVID, the crisis, the pandemic and some of the pressures we faced on demand in our industry have not slowed our enthusiasm for innovation in technology and trying new things. We are full steam ahead over here at GetGo," said Rug Phatak, chief of staff and senior director of marketing for GetGo Café + Market, the convenience store arm of Pittsburgh-based Giant Eagle Inc. "Has COVID dampened our innovative spirit? Absolutely not. If anything, we are doubling down." Similar to what other convenience retailers experienced, the pandemic led GetGo customers to step up their adoption of new technologies and therefore, led the c-store retailer to accelerate some initiatives like mobile ordering and curbside pickup. "Those are things we already had in the pipeline before the pandemic — and we're glad we did — but we've certainly seen adoption rise as folks wanted to be safe and have less contact with people," Phatak noted. In 2021, GetGo will continue to focus on solutions that will not only improve the customer experience, but also give the retailer greater capabilities — whether that is reducing labor or improving in-stock positions.

64 Convenience Store News C S N E W S . c o m

Good for the Customer, Good for the Retailer Several GetGo initiatives are already in the works, one being digital cooler door screens. GetGo teamed up with Chicago-based Cooler Screens about a year ago and has been piloting its technology in five stores for the past three months. The solution takes a traditional cold vault door and replaces it with a digital screen that features pricing and a planogram. When a customer walks by the cooler door, a marketing message, like a video, takes over and when the customer gets closer to the door, the message turns off and a cooler planogram appears. The customer can explore the door, see what they want, view the prices, and see the current promotions available, Phatak explained. "For the customer, cooler screens create a vibrant, dynamic and rich media experience. Customers can clearly see items they are looking for and there are no worries about labels being turned one way or bottles tilting," he said. For the retailer, cooler screens allow for improved capabilities and improved data. "The digital media content allows us to partner with vendors to create content and promotions. It opens the door for monetization opportunities," Phatak noted. "It also helps us with dynamic price changes and dynamic content changes. Going digital helps make price changes across the portfolio." The cooler screens also have a camera facing into the cold vault, so GetGo has been able to start gathering data on out-of-stock positions. "It allows us to root out issues — whether it is


DSD or our own warehouse — to improve the in-stock position and ultimately drive more sales, making sure that the product the customer wants is there and available," he added. Also in-store, GetGo is partnering with Grabango to pilot its contactless and frictionless technology, similar to Amazon Go, at one Pittsburgh store. "It really gets customers in and out fast and reduces their interaction with the team members," Phatak pointed out. For retailers, the system has cameras that are watching the shelf, so it helps the c-store operator with better in-stock positions and advances theftintervention efforts.

GetGo is utilizing technology that takes a traditional cold vault door and replaces it with a digital screen that features pricing and a planogram.

pandemic pushed back the deadline by six months to mid-April 2021, but it is fast approaching.

"We are just starting baby steps with this; we launched in September. It's very new technology and we are working with the Grabango team on the technology and, more importantly, on operations to figure out how it works best for us and the c-store industry," said Phatak. "It's emerging technology we are really excited about. We are anxious to see what we learn and how we can scale.�

"That was the plan throughout the year, to keep that initiative going. To get the hardware upgrades done where they needed to get done and to get the software rolled out where it could be rolled out," said Little General Stores' Director of Technology Chris Rose. "We were trying to get ahead of that as much as we could, and that piece will continue in 2021. We want that to be behind us as fast as possible. Although that date has moved around, it's not going to disappear."

Pumping Up Technology

The pandemic also accelerated Little General's plan to offer delivery from its stores.

Accelerated adoption of new technologies is happening on the forecourt, too. For instance, GetGo is rolling out Invenco pumps across its store network to offer customers a media experience during the four or five minutes it takes to fuel up their vehicle. The new pumps also feature touchscreens, and allow for future capabilities such as ordering fresh food at the pump for pickup in the store or delivery to the pump. Additionally, the new equipment helps GetGo comply with the outdoor EMV compliance deadline.

Delivering Convenience

The chain decided to partner with DoorDash for two key reasons: the third-party delivery platform covers a greater rollout area, and the platform offers an option to order online and pick up at the store. "[Delivery] became a big priority for 2020 and will likely continue in 2021 as we roll it out to the rest of the locations that we can," Rose said, noting that Little General currently offers delivery from approximately 20 percent of its stores — or 20 to 25 locations. At the end of the rollout, the DoorDash pact will include close to 40 to 50 stores, depending on driver availability.

"For the retailer, it gives us the opportunity to partner with our vendors to leverage dynamic content. It also unlocks touchless payment, so as part of the Invenco pumps, we will be installing nearfield readers. As you can imagine, because of the pandemic, this is a key feature customers are looking for at the pump," Phatak said.

Although the retailer does not have any data to show if a DoorDash customer is a new Little General customer, the company is seeing about 20 percent to 25 percent repeat customer business through the delivery platform.

At Little General Stores, a convenience store chain based in Beckley, W. Va., many of its big technology projects hit a speed bump when the coronavirus began to spread across the U.S. Going into 2020, the retailer planned to focus on EMV upgrades at the pump to bring its forecourts into compliance before the October 2020 liability-shift deadline. The

Gaining insights into what the consumer wants in terms of home delivery and curbside pickup is a focus for Alimentation Couche-Tard Inc. as well, as the company is evaluating these models for further deployment, according to President and CEO Brian Hannasch.

"You are almost gaining some instant loyalty," Rose said. "If you said you would get a loyal customer from one out of every four who walked through the door, I think most people would sign up."

During the Laval, Quebec-based retailer's second-quarter fiscal 2021 earnings call on Nov. 25, Hannasch reported that the company recently expanded its home delivery

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By By Chris Chris McAlary, McAlary, Founder Founder & & CEO CEO of of Coin Coin Cloud Cloud

T

he he C-store C-store industry industry saw saw some some setbacks setbacks over over the the past past year. year. Foot Foot traffic traffic has has dropped dropped by by more more than than 50%, 50%, food food purchases purchases took took aa dive, dive, gas gas revenue revenue tanked, tanked, and and employees employees are are panicking panicking about about their their health health and and safety safety when when dealing dealing with with customers customers face-to-face. face-to-face.

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Many Many major major C-store C-store chains, chains, including including 7-Eleven 7-Eleven and and Circle Circle K, K, are are already already on on board. board. A A good good deal deal of of mom-and-pop mom-and-pop stores stores and and small small independent independent chains chains are are also also reaping reaping the the rewards rewards of of having having aa Coin Coin Cloud Cloud DCM. DCM. Why Why let let your your competitors competitors be be the the ones ones to to benefit benefit from from building building ongoing ongoing relationships relationships with with these these consumers consumers instead instead of of you? you?

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By By Chris Chris McAlary, McAlary, Founder Founder & & CEO CEO of of Coin Coin Cloud Cloud

T

he he C-store C-store industry industry saw saw some some setbacks setbacks over over the the past past year. year. Foot Foot traffic traffic has has dropped dropped by by more more than than 50%, 50%, food food purchases purchases took took aa dive, dive, gas gas revenue revenue tanked, tanked, and and employees employees are are panicking panicking about about their their health health and and safety safety when when dealing dealing with with customers customers face-to-face. face-to-face.

II have have aa solution solution that that you you might might not not have have heard heard of of before before … … but but rest rest assured, assured, it’s it’s aa proven proven model model in in convenience convenience stores stores and and gas gas stations. stations. We We already already have have over over 1,400 1,400 C-store C-store partners, partners, and and you you can can be be the the next next to to cash cash in in on on the the future future of of finance. finance. Coin Coin Cloud Cloud is is aa Digital Digital Currency Currency Machine Machine (DCM) (DCM) company company that that provides provides the the easiest easiest way way for for consumers consumers to to use use cash cash to to enter enter (and (and exit) exit) the the digital digital economy. economy. IfIf you you put put one one of of our our machines machines in in your your store, store, you you will will attract attract hundreds hundreds of of new new customers customers every every month. month. You You do do this this by by empowering empowering customers customers to to buy buy and and sell sell digital digital currency currency with with cash, cash, providing providing them them easy easy access access for for investing, investing, online online transactions transactions and and sending sending money money to to family family overseas. overseas. Economic Economic conditions conditions have have forced forced people people to to find find alternative alternative methods methods for for managing managing their their finances. finances. Throughout Throughout 2020, 2020, adoption adoption of of digital digital currency currency soared soared to to all-time all-time highs highs as as some some of of the the world’s world’s biggest biggest companies companies — — including including PayPal, PayPal, Square, Square, Visa, Visa, Robinhood Robinhood and and Facebook Facebook — — and and every every major major government government scrambled scrambled to to get get ininvolved. volved. There There are are now now hundreds hundreds of of millions millions of of devices devices enabled enabled for for digital digital currency. currency. Digital Digital currency currency can can be be used used to to exchange exchange and and store store value, value, similar similar to to gold gold or or money. money. ItIt empowers empowers anyone anyone to to complete complete transactions transactions anywhere anywhere in in the the world, world, instantly. instantly. The The most most popular popular is is Bitcoin, Bitcoin, but but they they also also include include other other blockchain-based blockchain-based systems systems like like Ethereum, Ethereum, as as well well as as gaming gaming currencies, currencies, stablecoins stablecoins and and digital digital tokens. tokens. This This new new technology technology allows allows anyone anyone to to manage manage and and control control their their money money without without relying relying on on traditional traditional banking banking institutions. institutions.

What What we we offer offer is is aa highly-profitable, highly-profitable, no-cost, no-cost, turnkey turnkey system system with with absolutely absolutely zero zero work work from from you. you. •• •• •• ••

Zero Zero Labor: Labor: We We deliver, deliver, install, install, set set up, up, maintain maintain and and service service the the machine machine for for you. you. Customer Customer service: service: 77 days days aa week, week, we we support support your your customers customers by by phone, phone, email email or or chat. chat. Marketing: Marketing: We We list list your your store store on on Google, Google, Apple Apple Maps, Maps, Facebook Facebook and and more, more, providing providing top top search search results results and and positioning positioning your your location location as as aa featured featured destination. destination. Licensing Licensing and and regulation: regulation: Our Our industry-leading industry-leading compliance compliance team team takes takes care care of of all all the the legal legal requirements, requirements, including including registration registration and and licensing. licensing.

All All you you have have to to provide provide is is aa 1.9 1.9 foot foot square square of of retail retail floor floor space space and and aa power power outlet. outlet. You You get get paid paid for for your your space, space, and and never never have have to to lift lift aa finger. finger. And And you you reap reap many many additional additional rewards: rewards: •• •• •• ••

Increased Increased foot foot traffic: traffic: New New customers customers looking looking for for digital digital currency currency services services see see your your listing listing on on Google Google and and your your positioning positioning as as aa featured featured destination. destination. Repeat Repeat foot foot traffic: traffic: Customers Customers who who want want to to buy buy more more digital digital currency, currency, or or cash cash out out what what they they own, own, come come to to you you over over and and over over as as the the only only provider provider of of these these services. services. Increased Increased revenue: revenue: Customers Customers purchase purchase other other goods goods and and services services while while at at your your store, store, spending spending more more on on average average than than other other clientele. clientele. Payment Payment for for your your floor floor space: space: We We pay pay you you monthly monthly for for the the privilege privilege of of using using your your little little square square of of space. space. It’s It’s the the highest highest revenue revenue per per square square foot foot in in retail. retail.

Many Many major major C-store C-store chains, chains, including including 7-Eleven 7-Eleven and and Circle Circle K, K, are are already already on on board. board. A A good good deal deal of of mom-and-pop mom-and-pop stores stores and and small small independent independent chains chains are are also also reaping reaping the the rewards rewards of of having having aa Coin Coin Cloud Cloud DCM. DCM. Why Why let let your your competitors competitors be be the the ones ones to to benefit benefit from from building building ongoing ongoing relationships relationships with with these these consumers consumers instead instead of of you? you?

Give Give our our Business Business Development Development team team aa call call at at 833-413-1511, 833-413-1511, or or email email us us at at Partners@CoinCloudDCM.com Partners@CoinCloudDCM.com to to find find out out how how to to get get aa Coin Coin Cloud Cloud DCM DCM installed installed in in your your store(s). store(s).


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pacts with DoorDash and Uber Eats, and is working with third-party delivery provider Favor in Texas. "We now have approximately 1,200 sites offering home delivery and we've tripled the number of transactions since the beginning of the pandemic," he said. "We're moving from pilot phase of a limited number of stores in a region to testing entire markets, particularly in our Northern Tier, Florida and Texas business units." According to recent research, convenience stores have the opportunity to attract new customers to their brand by adding delivery to their menu of services. In a poll conducted by Vroom Delivery, 80.6 percent of delivery customers indicated that they would not have otherwise visited the same store in-person to make a purchase had home delivery not been available. Slightly more than a quarter said they instead would have ordered online from a competitor, 13 percent would have driven to a competitor's store, and 53 percent would not have purchased anything at all. Of the 19.4 percent of customers who would have driven to the same store to pick up the order had delivery not been available, the average delivery transaction size was nearly $45 — notably larger than the average in-store transaction of less than $9, according to Vroom. Couche-Tard has seen these findings play out in its own experience. "Our partnership [with] these third-party providers is bringing new and different customers to the brand, and we're seeing their [platforms] gain traction as a latenight destination for the home delivery customer," Hannasch said. "We're committed to taking the friction out of the shopping experience and providing an offer to our customers anywhere and anytime that's most convenient for them." Along with delivery, the parent company of Circle K is investing in solutions to meet the increasing consumer demand for contactless payments. Case in point, according to Hannasch, the company is piloting click-and-collect in its Grand Canyon business unit. "We know there will be a continued desire for touchless payments. We're investing in those areas, testing customer adoption," he said. "We're also looking at other ways to service a customer, remove friction inside the store, and into forecourts we talked about."

GetGo is partnering with Grabango to pilot its contactless and frictionless technology, similar to Amazon Go, at one Pittsburgh store.

Tech Makes 'Cents' In a positive sign that c-store retailers are investing to meet current and future challenges, nearly three-quarters of the retailer respondents in the 2020 Convenience Store News Technology Study said they were going to end up spending more on technology and automation in 2020 than they did in 2019; that was up from 57 percent who said the same in the 2019 study. For the new year, Little General's technology budget will be on par with its 2020 spending. "I'm in a unique position because we get a pretty significant tech budget and midway through the year, if there is something we want to do but it is over budget, we put a business case behind it and can get it going," Rose said, crediting the leadership team at Little General for seeing the value of what technology can do for the business. While customer-facing initiatives will continue to get a lot of attention in 2021, Little General is also "keeping its eyes and ears open for anything that is going to help streamline operations and make our people's jobs easier," the technology director explained. "We look at that several times a year. We plan reviews with different vendors," he said. "We work with PDI and we will consult with them to see if there is anything we are not doing today that can make people's jobs easier. We really try to push forward with that aspect." Little General "may not always pull the trigger" on every project, but if it can make the employees' jobs easier, the company wants to explore all options, according to Rose. "That's something our owners have challenged us to do since the day I started," he said, acknowledging that the more time employees can be assisting customers, the better. When it comes to his wish list, Rose would like to bring scan-and-go technology to Little General's network. As much as the world has shifted to online and mobile app purchasing, scan-and-go technology could elevate the in-store experience, he believes. "We've been pushing it, to get scan-and-go technology that will work hand in hand with our loyalty program," he said, explaining that it would be a bring-your-own device solution that could be pushed out without the high cost of Amazon Go's technology. "That's definitely one thing I would like to see implemented sooner rather than later." CSN

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NEW HORIZONS

The Shecession Where we are and where we must go been christened — 2020 is the year of the “Shecession.”

IT’S OFFICIALLY

By Sarah Alter President & CEO Network of Executive Women

COVID-19 has upended lives around the world, but the evidence continues to show the economic downturn has disproportionately affected women. As children are forced to stay home from school and loved ones are in need of care, women are leaving or considering leaving the workforce at an alarming rate. According to the study, Women in the Workplace, one in four women are thinking about reducing their job responsibilities or quitting work altogether. What does that look like in numbers? In September, as the second wave of the pandemic intensified, 1.1 million workers left the workforce and a shocking 865,000 of those were women. That’s 79 percent.

The Shecession for Women of Color These numbers grow bleaker when looking at the impact of the recession on women of color. In October, the unemployment rate for Black women older than 20 was 9.3 percent. Compared to the unemployment rate of white women that month (5.4

percent), which was actually lower than that of white men (6.2 percent), the Shecession is clearly hitting women of color hardest. According to a National Women’s Law Center report released in October, “more than half of Latinas (57.1 percent) and Black, non-Hispanic women (53.6 percent) reported a loss of income since March, compared to 41 percent of white, nonHispanic men and 40.4 percent of white, non-Hispanic women.”

What Can We Do? Some aspects of the current situation feel out of our control — but while we may not be able to help develop a vaccine, we can push for key changes that will better support women during this incredibly difficult time. We must do better for women in 2021 to help them stay in the workforce, and to help women who have left it to come back. Employers must support their employees with work policies that allow them to keep their careers while caring for their children. That doesn’t just mean more flexibility in setting work hours, or kindness and compassion when the kids show up on Zoom, though those changes are important. It means concrete policy change for the long haul. According to the Women in the Workplace study, “less than a third of companies have adjusted their performance review criteria to account for the challenges created by the pandemic, and only about half have updated employees on their plans for performance reviews or their productivity expectations during COVID-19.” Expecting employees to turn in optimal productivity in this impossible year is a losing game for both employers and employees. Whether they are caring for children, caring for loved ones or simply caring for themselves, an undue burden has shifted to women during the pandemic. More pressure and more stress forces women out of the workforce, leaving businesses short on skilled workers — and working women out of a job.

70 Convenience Store News C S N E W S . c o m


We must do better for women in 2021 to help them stay in the workforce, and to help women who have left it to come back. Systemwide Change The answer is systemic, too. We need to ensure this kind of disproportionate disenfranchising of women never happens again. That means, at the most basic level, working toward a more equitable society where men and women share equal responsibilities and expectations for housework and childcare. But that also means more opportunities for women in fields where remote work is not an impossibility. The lower the pay for a job, the more overrepresented women are as employees. Closing this gap is key to closing the wage gap for all women, and that work must continue against the setbacks that will surely come out of this tragic time. Investing in diversity and inclusion (D&I) within organizations is one step in the right direction. Supporting women-led businesses, supporting the leadership development of women throughout their career journeys, and ensuring your organization is following D&I best practices will all help move the needle.

Convenience Store News is pleased to continue this series of educational columns by the Network of Executive Women (NEW), coinciding with the annual CSNews Top Women in Convenience awards given out each fall. Fifty-two female managers, executives and directors who work in the convenience store industry were honored in our 2020 program. In addition to being a presentation sponsor for the Top Women in Convenience program, NEW and CSNews have partnered to develop this series of columns directed at helping corporate leaders drive more inclusive company cultures. 2021 SPONSORS Founding & Presenting Sponsor:

Platinum Sponsor:

Gold Sponsors:

If the Shecession is to be combated, and we are not to lose years of hardfought, precious progress for women’s equality, we must be intentional. We must look very carefully at the decisions we make over the next year, and we must commit to supporting women — or risk losing them. CSN Sarah Alter is president and CEO of the Network of Executive Women, a learning and leadership community representing 13,000 members in 22 regional groups in the United States and Canada. Learn more at newonline.org. Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.

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STORE SPOTLIGHT

Elevating the Experience Tri Star Energy unveils a new approach for its Twice Daily/White Bison Coffee integrated locations By Danielle Romano

At a Glance Twice Daily/ White Bison Coffee Size: 4,800 square feet Locations: 8064 Horton Highway, Arrington, Tenn.; 522 Waldron Road, La Vergne, Tenn. Unique features: An updated, more cohesive store design integrating Twice Daily and White Bison Coffee; a Twice Daily menu comprised of freshly prepared hot sandwiches and an elevated cold grab-and-go offer; White Bison Coffee’s slightly more premium café menu featuring pour-over coffee, hot teas, fresh pastries, an extensive breakfast sandwich line, salads and snack boxes; a drive-thru on the White Bison Coffee side of the building; hosts to guide customers through the foodservice experience

STEP ASIDE, STARBUCKS. With the opening of its latest two Twice Daily/White Bison Coffee integrated locations, Nashville, Tenn.-based Tri Star Energy is proving convenience store retailers can establish themselves as foodservice destinations by offering high-quality food, beverages and convenience to become a true one-stop shopping experience.

Clocking in at 4,800 square feet, the latest Twice Daily/White Bison Coffee locations are in Arrington and La Vergne, Tenn. Combining the convenience and quality of a Twice Daily c-store with White Bison Coffee’s artisan coffee beverages and fresh, handcrafted café menu, the sites showcase Tri Star Energy’s newest store design and extended menu offers, and bring the total number of integrated Twice Daily/White Bison Coffee locations to 12. “Our new store design is a commitment to our guests as we continue to provide quality convenience with updated technology,” said Steve Hostetter, CEO of Tri Star Energy, owner of Twice Daily and White Bison Coffee. “Our new integrated stores [are] the first Twice Daily and White Bison Coffee locations in Arrington and La Vergne, making them the first communities to experience our new look.

72 Convenience Store News C S N E W S . c o m

We look forward to bringing our new design to additional markets in the near future.”

Brewing Up Innovation The concept for White Bison Coffee started about five years ago driven by a need and desire for Tri Star Energy to increase food and beverage sales at its Twice Daily stores. The chain has 61 locations across middle Tennessee and northern Alabama. Despite offering a robust coffee program with a condiment bar, and releasing fresh, new menu items, the company wasn’t tracking to its food and beverage sales goals. In fact, the operator would see customers drive onto its parking lot, fill their tanks and then drive across the street to Starbucks, noted Dawn Boulanger, vice president of marketing at Tri Star Energy, So, the aim became to offer a one-stop shop for quality fuel, food, and coffee and handcrafted beverages created by baristas. Tri Star conceptualized this one-stop shop, dubbed “Twice Daily 2.0,” and solidified a partnership with a coffee vendor out of the Indianapolis market


who owns his own retail stores as well as a roaster, and who travels the world to buy high-quality coffee beans and teas. “Collaboratively, me and the CEO decided we wanted to focus primarily on the coffee aspect,” Boulanger told Convenience Store News. “As we were engaged in conversations with our coffee partner, we realized the coffee program should have its own identity. Working with an architect and outside design firm from Indianapolis, the White Bison Coffee brand was born.” Initial plans for the integrated Twice Daily and White Bison Coffee locations were to take an existing space, build the coffee shop into the left-hand side of the store, place the checkout counter in the center of the store, and insert Twice Daily into the right-hand side of the store. From November 2017 to August 2018, 10 Twice Daily stores were built this way with White Bison Coffee integrated into them.

The integrated locations combine the convenience and quality of a Twice Daily c-store with White Bison Coffee’s artisan beverages and fresh, handcrafted café menu.

This store layout posed some challenges, however. Store associates felt divided, not knowing who they worked for: Twice Daily or White Bison Coffee. While Twice Daily and White Bison Coffee were intended to have separate identities, the company didn’t intend for them to be that different, Boulanger said. So, the company went back to the drawing board. “Now, when guests walk into the store, the layout flows better and is more cohesive, while making White Bison Coffee more prominent. It kind of smacks you in the face,” she said. “It’s a nice balance between the two and is a warm and welcoming look vs. a lot of c-stores today that go for a modern industrial look where there is a lot of stainless steel and bright lights.” The company also decided to place a window between the Twice Daily kitchen line and the White Bison Coffee line, adding an element to the perception of fresh food preparation. “The interior look and feel more strongly supports that we’re focused on foodservice and we’re a legitimate foodservice player,” Boulanger noted, adding that the company is now meeting its goal of increasing food and beverage sales.

New Look, New Offers The White Bison Coffee menu is slightly more premium than Twice Daily’s menu. The meticulously curated café menu features a range of beverages from pour-over coffee and nitro cold brew to fine hot teas. Guests can also enjoy fresh pastries and an extensive breakfast sandwich line. The newest stores feature such elevated fare as sausage, egg & cheddar ciabatta; ham, egg & Swiss avocado pretzel; and avocado bagel breakfast sandwiches. For lunch, White Bison offers salads and snack boxes as on-the-go offers, but its food menu is driven primarily around the breakfast daypart. Conversely, Twice Daily’s menu has been primarily driven by a freshly prepared hot sandwich line, as well as an elevated cold grab-and-go

offer. Typically, freshly prepared hot food ended by the afternoon. However, with the new store design, food hours have been extended. Now, snack-type items are featured across the afternoon hours such as pretzels, a slider line, potato boats, pizza and spicy buffalo boneless wings — which have quickly risen to a top-selling menu item, according to Boulanger. And to complement the Twice Daily menu, more condiments have been added to reinforce the perception of freshness. Committed to the concept of one-stop shopping, White Bison Coffee is built with a drive-thru that is used exclusively for the coffee shop’s menu items. The company has decided that if a drive-thru is not doable at a location, then that site will stand solely as a Twice Daily convenience store without White Bison Coffee. Additional amenities available at the new Twice Daily/ White Bison Coffee locations are: • The Twice Daily Rewards loyalty program, which offers Twice Daily and White Bison Coffee food and beverage promotions; • New technology integration, including upgraded kitchen systems and headsets; J ANUARY

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STORE SPOTLIGHT

• Outdoor seating under pergolas located on the White Bison Coffee side of the building; • Community seating and high-speed internet offered inside; • As a restaurant-type feature, hosts guide customers through the retailer’s foodservice experience and are available to assist guests in finding items. This is a differentiator in customer service for Twice Daily from other c-stores, Boulanger pointed out.

Previously, the retailer ended freshly prepared hot food by the afternoon. However, with the new store design, food hours have been extended.

Full Steam Ahead Tri Star Energy intends to continue tweaking the look of its stores. When the company did the original Twice Daily/ White Bison Coffee integration, it toned down its color palette for Twice Daily because it was heavy with primary colors, and opted instead for more jewel tones to create a warm feeling. Then, as more integrated stores started opening, the company went back and redid all the in-store graphics and equipment graphics at legacy Twice Daily stores.

“The plan is full steam ahead. Elevating the Twice Daily brand is the focus,” Boulanger told CSNews. “The company has done a lot of proprietary research that validates the decisions the company has made so far.”

Tri Star also plans to build more Twice Daily/White Bison Coffee integrated locations. The company is currently focusing on Alabama as an area for growth. Its second integrated location in the Yellowhammer State opened the week of Nov. 16.

Founded in 2000, Tri Star Energy owns and operates Twice Daily and Sudden Service convenience stores and supplies fuel to wholesale channels in 14 states. The company also owns White Bison Coffee, which operates 14 locations, including two standalone sites. CSN

74 Convenience Store News C S N E W S . c o m


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ATM’s

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ADINDEX Add Systems....................... 34–35

Liggett Vector Brands...... 21

Altria Group Distr............... 2

Living Essentials................. 15

BIC USA Inc......................... 9

Mars Wrigley

Boston Beer......................... 92

Confectionery..................... Front Cover

Buzzballz LLC..................... 7

National Confectioners

Cash Cloud.......................... 56–57

Association.......................... 51

Calico Brands...................... 16

Perfetti Van Melle USA..... 42–43

CB Distributors Inc............ 11

Premier Manufacturing..... 19

Chester’s International..... 29

Prince Castle, Inc............... 57

EPTA America..................... 38–39

Swedish Match North America LLC............ 5, 23

Forte Products.................... 18 GlaxoSmithKline Consumer Health Care...... 37

Swisher Intern. Inc............. 13 Taat........................................ 46-47

Hunt Brothers Pizza LLC.. 27

The Hershey Company..... 17

J&J Snack Foods Corp...... 25

Universal Merchants.......... Outsert

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INSIDE THE CONSUMER MIND

The Rise of the Stay-at-Home Shopper C-store customers are shifting to online grocery sites and delivery services amidst pandemic As health officials hammer home that the safest place to be during the coronavirus pandemic is inside your own house with your own family, new research from Convenience Store News finds that a significant number of convenience store customers are heeding this advice and becoming stayat-home shoppers. A majority say they are frequenting brick-and-mortar convenience stores less today than before the pandemic. Instead, to get the goods they need, many are shifting to online grocery sites and delivery services. More specifically, the research shows:

FOUR IN 10

convenience store shoppers say they are using online grocery stores/sites (i.e., Amazon Fresh, Peapod, Instacart, etc.) more now than before the pandemic.

Only 28%

52

SAY THEY DO NOT SHOP THESE SITES AT ALL.

%

More than half of c-store shoppers (52%) are shopping at convenience stores less now than pre-pandemic.

When asked why, about a quarter (24%) indicated that they are choosing to shop at online stores/sites instead. MEN WERE MORE LIKELY THAN WOMEN TO CITE THIS AS A REASON:

26%

22%

Generationally, Gen X c-store shoppers were the most likely to cite this.

56

34% Gen X (ages 38-53) 27% Millennials (ages 27-37)

%

of c-store shoppers have increased their usage of delivery services during the pandemic.

14% Baby Boomers (ages 54-72) 12% Gen Z (ages 18-21)

THE TOP DELIVERY SERVICES BEING USED “REGULARLY” ARE: 1. Amazon/Amazon Fresh 2. Local independent restaurant 3. Local grocery store 4. Online grocery site (i.e., Instacart) 5. DoorDash WHERE AVAILABLE, 12% of shoppers say they’re regularly using local convenience store delivery and 24% say they’re occasionally using it.

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