OUT & ABOUT
Stepping Outside Your Comfort Zone The 2018 NACS State of the Industry Summit addresses the need for change By Melissa Kress THE CONVENIENCE CHANNEL HAS BEEN FACING CHANGE on
several fronts — technology, the competitive landscape and consumer preferences, to name just a few. But instead of waiting for change to happen, it’s time for convenience store retailers to be the change. “I’ve always thought that if you are not moving forward, or essentially standing still, you are moving backward and that’s not where we want to go as an industry,” Kevin Smartt, chairman of the NACS Research Committee, said during the 2018 NACS State of the Industry Summit (SOI), which took place April 10-12 at the Hyatt Regency O’Hare in Rosemont, Ill. Retailers such as 7-Eleven’s Alan Beach (left) and Sheetz’s Joe Sheetz shared their perspectives on the industry with attendees.
growing demand for food that makes consumers feel good that does not necessarily have to be healthy, explained Hale, who is also a consultant with Nielsen Co., where he previously served as senior vice president, consumer and shopper insights. Convenience store operators need to keep an eye on the retail scene near their stores and ask themselves some questions: How will the closing of nearby stores affect traffic? Who will fill the food void when the restaurant across the street shuts its doors for the last time? Retailers can also find opportunities by taking the idea of mergers and acquisitions and turning it on its head. “It’s a whole new game when it comes to merger-and-acquisition activity,” Hale said, citing Campbell Soup Co.’s acquisition of Snyder’s-Lance Inc. and the merger of Albertsons Cos. and Rite-Aid Corp. “Maybe we need to start thinking about acquiring new businesses that have nothing to do with convenience stores.”
Don’t Be Left Behind With change comes both danger and opportunity, explained Alan Beach of 7-Eleven Inc. There are disruptors to traditional retail — notably, Uber, Amazon and Netflix. They have one thing in common with convenience stores: They provide convenience.
Whether industry players leverage change comes down to the choices they make. “We need to grow and protect our customer base,” he said. “We need to improve, so we have choices to make.”
“It’s been my mission, and the mission of everyone in this room, to provide convenience to our customers, so I consider ourselves disruptors — or changemakers,” said Smartt, also CEO of Kwik Chek Food Stores Inc. based in Texas.
As he pointed out, the consumer and the convenience store shopper are changing dramatically and convenience store retailers need to anticipate those changes and evolve with them.
Becoming a changemaker requires finding opportunities and seizing them.
According to Beach, becoming a better choice for the consumer takes three things and being the best at one of them:
For example, c-store retailers can capture the aging population. Drugstores continue to miss out on trips from this consumer group as more people order 90-day prescriptions, opening the door for the convenience channel, according to Todd Hale, principal of Todd Hale LLC.
• Product assortment;
Another opportunity lies along the perimeter of the store as demand grows for fresh offerings. Hale cautioned, though, against ignoring the center store, which still represents the bulk of in-store sales.
Research by NACS, the Association for Convenience & Fuel Retailing, shows the typical convenience store shopper earns about $50,000. This lower-income consumer household has seen a decrease in discretionary share of wallet and has no discretionary spend. On the other end of the pay scale, high-income households earn more than $100,000, and have seen their income increase $46,000 since 2007 and a 101-percent growth in discretionary spend.
Recognizing the role indulgence plays in consumer demands is also key, he said. While there is a move toward health and wellness, not all claims are working and there’s a
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• Price value; and • The three “Fs” of service: fast, friendly and frictionless.