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Convenience Store News June 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

THE FUTURE OF FUELING

READY TO

REBOUND DESPITE BEING RAVAGED BY AN UNPRECEDENTED PANDEMIC, THE CONVENIENCE STORE INDUSTRY MAY BE BETTER POSITIONED THAN EVER FOR THE FUTURE. 2021

Volume 57, Number 6

JUNE 2021 CSNEWS.COM

Today, more than 20 million U.S. adult smokers are seeking potentially less harmful alternatives to cigarettes. We are committed to responsibly leading the transition of adult smokers to these alternatives. And to making sure that, even as the tobacco category changes, your retail success continues.

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VIEWPOINT

The Business Case for Diversity & Inclusion Convenience Store News and Altria launch a new platform for discussion, innovation, engagement and action IT’S BEEN A YEAR since George Floyd’s death. The recent conviction of Derek Chauvin has done little to quell the nationwide protests and unrest, which have sparked conversations about race and justice in the workplace and at home.

Convenience store industry companies, many of which have programs in place, are now prioritizing heightened awareness and action around their diversity programs. To facilitate engagement among all stakeholders in the convenience channel around diversity and inclusion (D&I), Convenience Store News is partnering with exclusive underwriter Altria Grouop Inc. to launch an industrywide initiative. This new platform is a multi-touch digital and print program that will focus on the business case for c-store retailers and their supplier partners to place a greater emphasis on diversity and inclusion. The first phase of the program’s rollout has already begun. Modeled after our successful Top Women in Convenience Advisory Board, we’ve started to form a c-store industry Retailer D&I Advisory Board. So far, the board consists of representatives from companies that have exhibited strong diversity among their leadership. Derek Gaskins of Yesway, Elisa Goria of Alimentation Couche-Tard/Circle K, and Treasa Bowers of 7-Eleven are our charter members. Watch for announcements of additional members over the next few months.

The initiative will officially launch June 15 with a special webcast in which I’ll be joined by Gaskins, Jayson Council, a thought-leader on diversity and an associate faculty member at Columbia University’s School of Professional Studies, and Altria’s Danielle Holloway, senior director for industry engagement. We will discuss: • Why is diversity, equity and inclusion (DEI) important in our industry? • How do you maximize DEI? • What’s missing from current best practices? • How important is philanthropy and community activation? • From a futurist standpoint, what’s next? • What do we need to know about DEI that we don’t know? • Where is a good starting point? • How do we self-diagnose? • How can we leverage data? • What are some areas that we can control, micro and macro, to create change? In addition to a series of educational webcasts, the new CSNews D&I platform will include guest columns in our magazine from D&I experts (see page 84), and a virtual networking conference. We believe this new platform will result in real innovation, engagement and action that will improve the convenience store industry. 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

Jack Lewis GPM Midwest

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

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

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CONTENTS JUNE 21

2021 COVER STORY

VOLUME 57 N UMB ER 6

PAGE 38

88 FEATURES

DEPARTMENTS

COVER STORY

VIEWPOINT

38 Ready to Rebound Despite being ravaged by an unprecedented pandemic, the convenience store industry may be better positioned than ever for the future. 62 Navigating the Road to Recovery As more Americans begin to venture out again, c-stores can map out an improved customer journey for them. FEATURE

76 The Future of Fueling Alternative fuels, electric vehicle charging stations and other technologies are changing the face of the forecourt, and c-stores need to start preparing now.

30 4 Convenience Store News C S N E W S . c o m

3 The Business Case for Diversity & Inclusion Convenience Store News and Altria launch a new platform for discussion, innovation, engagement and action. 8 CSNews Online 30 New Products SMALL OPERATOR

34 What Is Your Brand? You are known by the reputation you have earned in running your business.

EXPERT’S VIEW

84 The (DEI) Marathon Continues… The business benefits of diversity and inclusion efforts will vary by company, and culture won’t be achieved overnight. TWIC TALK

86 Ina Strand, Alimentation Couche-Tard Inc. The 2020 TWIC Woman of the Year feels strongly about seeing the glass ceiling come down. STORE SPOTLIGHT

88 A Convenient Concession Experience GetGo Café + Market opens its first-ever arena store, teaming up with the Pittsburgh Penguins. INSIDE THE CONSUMER MIND

106 The CBD Opportunity More than a quarter of c-store shoppers buy CBD products, but not necessarily at c-stores.

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CONTENTS JUNE 21

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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

Don Longo dlongo@ensembleiq.com

Editor-in-Chief (201) 855-7608

Linda Lisanti llisanti@ensembleiq.com

Senior News Editor (201) 855-7618

Melissa Kress mkress@ensembleiq.com

Senior Editor (201) 855-7619

INDUSTRY ROUNDUP

CATEGORY MANAGEMENT

14 Speedway Officially Changes Hands

FOODSERVICE

18 Retailers Fight to Change Debit Card Swipe Fees 22 FDA Turns Its Focus to Menthol & Flavored Cigars 24 Eye on Growth 24 Fast Facts 26 Retailer Tidbits 28 Supplier Tidbits

70 Finding Creativity With Condiments Sauces are a broad landscape that can be endlessly innovated upon. FOODSERVICE

73 The Trust Factor As consumers seek out safety, branded food concepts at c-stores answer the call. TECHNOLOGY 79 Transformative Technologies Rethinking IT needs and embracing emerging trends can bring c-store retailers to the next level.

Angela Hanson ahanson@ensembleiq.com

Managing Editor (201) 855-7604

Danielle Romano dromano@ensembleiq.com

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Renée M. Covino reneek@aol.com

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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

CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

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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.

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Weathering the Storm Convenience store industry insiders weigh in on COVID-19 liability issues In this first of a series of articles exploring how convenience stores are coping with the unique challenges they face in the year ahead, Convenience Store News examines the liability issues of operating during the COVID-19 pandemic. By Debby Garbato

how America does business. Certain mandates, like mask wearing and social distancing, are temporary. But if legislators have their way, rules regarding responsibility for airborne virus transmission, vaccination requirements and other issues could significantly and permanently impact public establishments like convenience stores.

COVID-19 COULD FOREVER CHANGE

A big concern are proposals that would let employees file lawsuits claiming they contracted COVID-19 or other airborne, infectious diseases at work. As of press time, one such bill, the Hero Act, was pending in the New York State legislature. Other states are going in the opposite direction by enacting tenets that would prohibit or limit lawsuits. Some also have pending legislation that would bar employers from mandating vaccinations. In those states, this would refute December 2020 guidance from the U.S. Equal Employment Opportunity Commission (EEOC) saying employers can require most workers to get vaccinated, according to Husch Blackwell, a Kansas City, Mo.-based law firm.

In Los Angeles and other California cities, laws have already been passed requiring retailers to pay workers $5 more per hour in hazard pay for a 90-day period over their base wage. In what is considered a retaliatory move, Kroger closed several area stores. These laws only apply to large-footprint stores. However, these and other legal developments are making the convenience channel increasingly conscious of virus-related responsibilities. “Retail liability concerns have always been a hot topic,” said Alex Baloga, president and CEO of the Pennsylvania Food Merchants Association in Lemoyne. “COVID-19 brought them to the forefront, but a host of factors make this very challenging. Exposure can happen outside the store. You don’t know where people go and if they’re following rules elsewhere. This creates liability concerns you can’t control.” Unlike a slick, wet floor, COVID-19 is not

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SPECIAL REPORT: COPING WITH THE UNIQUE CHALLENGES OF THE YEAR AHEAD

concrete, making the picture murkier. “It’s not like somebody slipped and fell and it’s on camera,” said Ray Johnson, operations manager of Speedee Mart, a chain of c-stores operating in the Las Vegas market. What makes New York’s Hero Act and other new legislative issues particularly disconcerting is that many c-stores have voluntarily offered workers monetary incentives and enacted other mandatory and voluntary measures in the fight against COVID-19. “Serious efforts have been put forth, at substantial cost, to protect consumers and staff as best they can and enforce orders from government entities,” noted Baloga. Jim Calvin, president of the New York Association of Convenience Stores in Albany, believes responsible c-stores should be exempt from punishment. “If you’re negligent and ignored CDC [Centers for Disease Control & Prevention] and state requirements, that’s one thing. But if you’re making a good-faith effort to prevent disease spread, you should be shielded from liability. In the early days of COVID, members scrambled to shift gears. There’s a high compliance level.”

Veto Litigation About 20 states have enacted — or are drafting — legislation restricting workers from suing employers over infectious disease exposure. “We just passed the Best Liabilities Protection Bill,” said Jon Crawford, president of the Wisconsin Petroleum Marketers and Convenience Store Association in Portage. “Basically, so long as businesses are trying, they can’t be sued.” Kentucky passed a similar law in April. In addition to protecting businesses from virus-specific suits, “it includes actions that can arise from COVID,” said Steve McClain, director of public affairs and communications for the Kentucky Retail Federation, based in Frankfort. “If a plexiglass shield falls on someone, the business is protected.” These states’ actions were prompted by a rise in frivolous, “nuisance lawsuits” over many non-coronavirus issues. “It’s a racket,” said Lyle Beckwith, senior vice president of government relations for industry trade association NACS. “There’s numerous examples of attorneys with

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

Many c-store retailers are making a good-faith effort to prevent disease spread.

no intention of going to court. They send letters saying they’ll take you [defendant] to court. But if you pay $5,000, it will go away. It costs more to go to court than to pay $5,000.” NACS was advocating for national liability protection by supporting the proposed Safe to Work Act, introduced last year. It would have protected organizations from legal claims, provided they took responsible measures to mitigate virus spread. The proposal failed. Beckwith blames the Senate’s Democratic majority. “Now, there’s no opportunity for liability protection. Something dramatic must change on Capitol Hill. While some states have passed liability protection laws, it’s a red/blue state issue,” he said. Despite c-stores’ lawsuit concerns, Mason Freeman, partner at Womble Bond Dickinson LLC in Raleigh, N.C., said most COVID-19 retail judgements have failed. “Lawsuits for COVID-19 exposure have had limited success. Frontline retail workers have filed their own class-action lawsuits, claiming employers failed to adequately protect health and safety. We’re likely to see a wave of litigation over the coming months and years as the plaintiff’s bar weighs the likelihood of success. It’s unclear how

SPECIAL SERIES ON FRICTIONLESS ENGAGEMENT

successful claims will be,” he said.

Vaccination Vibes As COVID-19 vaccine availability increases, some businesses have mandated employees be inoculated and have terminated workers who have refused. Under December’s EEOC guidance, this is legal. But many states are considering legislation to prevent employers from mandating vaccinations and protecting employees who refuse, noted Husch Blackwell.

COVID-19 Regulations by State Since the pandemic began, Kansas City law firm Husch Blackwell has been keeping state-by-state tabs on COVID-19 related regulations and proposals. See where your state stands here: huschblackwell.com/ state-by-state-covid-19-guidance.

worked, but it made people feel good,” said Johnson. • With protective gloves hard to come by, Shout & Sack mounted rolls of doggy poop bags on its gas pumps for customers to protect their hands. Inside, it put fountain drink lids in small, individual bags. While this costs $200 weekly, the store became a beverage destination, said Carter. With catering, food is being put in individual containers instead of platters.

As essential workers, c-store employees in most states have been eligible for vaccines since early winter, said Freeman. While CSNews is unaware of any c-stores mandating vaccines, the industry encourages them. “We honor people’s privacy, but we’d like them to get vaccinated,” said David Crawford, president of Green Valley Grocery, a c-store chain based in Henderson, Nev.

Employee benefits and leave plans have seen innovation, too. “We didn’t want people coming to work if they’d been exposed, were high risk, or lived with a high-risk person,” said Anne Hanson, vice president of human resources for Green Valley Grocery. “A small percentage took time off and were treated as individuals.”

Jeff Lenard, vice president of strategic industry initiatives for NACS, cited that 71 percent of the association’s members provide monetary vaccine incentives. Green Valley Grocery offered $50 to employees who were vaccinated by May 30.

Mid-year, Green Valley Grocery also offered open insurance enrollment. “If people had concerns, they could sign up or add dependents,” added Hanson. “This was well received. Usually, you can’t make changes until year-end.”

Single-store owner Chris Carter, founder of Shout & Sack in Vinita, Okla., also offered his workers $50. But aside from himself and his wife, only two employees accepted. Other retailers also report limited interest among their workers.

Labor Obstacles

Hoping to change this attitude among c-store employees and the general public, NACS is backing the Veterans Coalition to Support Vaccines and the COVID-19 Vaccine Education and Equity Project. In March, the latter group with NACS’ participation launched “Count Me In,” a campaign for building confidence in authorized vaccines.

Going Above & Beyond For many c-stores, protecting shoppers and employees against COVID-19 has gone well beyond vaccine incentives and government guidelines and mandates. While extra efforts can incur significant costs, some are simple, frugal and unique: • To combat the hand sanitizer shortage, Marcy, N.Y.-based Cliff’s Local Market secured a “significant amount” of sanitizer from a hard cider manufacturer that temporarily switched gears, said Jeff Carpenter, director of training. • Speedee Mart applied NanoSeptic “skins” to door handles. The peel-and-stick product’s manufacturer says the skins continuously selfclean surfaces, killing viruses. “I don’t know if it

The biggest costs related to COVID-19 have come from enhanced cleaning and sanitizing routines, which require extra labor. With governmental bonuses boosting unemployment benefits, though, many hourly workers make more money staying home. “Turnover is higher, although we fared better than most,” said Carpenter. “Some employers are offering additional money, or taking bodies without experience and training them.” Jon Crawford said he put up a help wanted sign at a store and “didn’t have a single applicant for three weeks.” Corporate positions are another story. “I also put a notice on Indeed for an office position and received 120 applications in a week; 50 percent came from education and health care,” he said, noting that both industries have high COVID-19 related burnout levels. With President Joe Biden calling for a 70 percent vaccination rate by July 4, the “new normal” may soon be old. People are resuming their lives; social distancing, masks and, hopefully, COVID-19 related liability issues will soon be history. “As vaccines become more readily available, [liability] concerns should become less of an issue over the coming year,” said Freeman. “But until there’s no community spread, c-stores need to be concerned with following the latest CDC guidance to minimize legal exposure.” CSN

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INDUSTRY ROUNDUP

Speedway Officially Changes Hands Marathon Petroleum Corp. and 7-Eleven Inc. complete their $21-billion transaction MARATHON PETROLEUM CORP. (MPC)

completed its sale of Enon, Ohio-based Speedway LLC to 7-Eleven Inc. on May 14. The two companies agreed to the $21billion deal in August 2020. With the closing, Irving, Texas-based 7-Eleven took ownership of approximately 3,800 stores in 36 states, bringing its total North American portfolio to approximately 14,000 stores. “We are very excited to welcome Speedway into the 7-Eleven family. Speedway is a great brand and a strong strategic fit for our business that significantly diversifies our presence throughout the North American market, particularly in the Midwest and on the East Coast,” said 7-Eleven President and CEO Joe DePinto. “Together, we have the opportunity to redefine and enhance the customer convenience experience nationwide. This is a groundbreaking moment in our company’s proud history.”

fuel supply agreement for approximately 7.7 billion gallons per year associated with the Speedway business. MPC expects incremental opportunities over time to supply 7-Eleven’s remaining business as existing arrangements mature and as 7-Eleven adds new locations in connection with its announced U.S. and Canada growth strategy. In a statement hours after the closing, two commissioners with the Federal Trade Commission (FTC) said MPC and 7-Eleven’s parent company, Seven & i Holdings Corp., went forward before the commission came to an agreement with the companies. “Seven & i and Marathon’s decision to close under these circumstances is highly unusual, and we are extremely troubled by it,” the statement said. “The parties have closed their transaction at their own risk. The commission will continue to investigate to determine an appropriate path forward to address the anticompetitive harm, and will also continue to work with state attorneys general.”

According to 7-Eleven, this acquisition accelerates its growth trajectory, while also strengthening the company’s financial profile. The addition of Speedway diversifies the convenience retailer’s presence, bringing the brand to 47 of the 50 most populated metro areas in the U.S., as well as expands its company-operated store footprint.

In response, MPC and 7-Eleven issued their own statements saying that they went ahead with the deal’s completion after several waiting periods expired.

In addition to the Speedway c-store network, the transaction included a 15-year

7-Eleven agreed to divest 293 fuel outlets to resolve competitive concerns.

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

“To be clear, 7-Eleven was legally allowed to close on the Speedway transaction today and statements or implications to the contrary are false,” the convenience retailer said.

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INDUSTRY ROUNDUP

Retailers Fight to Change Debit Card Swipe Fees The Federal Reserve has not adjusted its regulations to keep fees proportional as costs have fallen, according to a new lawsuit RETAIL ASSOCIATIONS filed a lawsuit on April 29 seeking to have the Federal Reserve lower its 10-year-old cap on the swipe fees that banks charge to process debit card transactions. The lawsuit states that the agency wrongly applied federal laws, resulting in merchants paying billions of dollars more than Congress intended, while banks’ costs have decreased.

handed a growing windfall at the expense of Main Street stores and consumers.”

“The Fed allowed fees that were much too high in the first place,” stated National Retail Federation (NRF) Chief Administrative Officer and General Counsel Stephanie Martz. NRF is not a party, but Martz is co-counsel in the case. “Since then, banks’ costs have fallen steadily, but the Fed has refused to make adjustments, letting the problem grow even worse. Legislation passed by Congress requires that these fees be kept in proportion to costs to protect merchants and their customers, but the Fed has failed to do that.

According to the lawsuit, the cap is higher than allowed under the 2010 Durbin Amendment, which directed the Federal Reserve to set regulations resulting in debit card swipe fees that were reasonable and proportional to banks’ costs. The Fed exceeded its authority by going beyond costs that Congress stated could be considered in writing its regulations, the suit argues.

“Since the Fed hasn’t acted voluntarily, it’s time for the courts to enforce the law,” she continued. “Retailers are paying twice what they should, and these fees ultimately drive up prices paid by the public. Banks should not be 18 Convenience Store News C S N E W S . c o m

The North Dakota Retail Association and the North Dakota Petroleum Marketers Association jointly filed the lawsuit against the Federal Reserve Board of Governors in the U.S. District Court in Bismarck, N.D.

The litigation seeks to have the cap recalculated and regularly adjusted if banks’ costs continue to fall in the future. The Fed has reviewed banks’ costs every two years since 2011, as required by the Durbin Amendment, but has not adjusted its regulations to keep fees proportional as costs have fallen, despite repeated concerns voiced by NRF and other retail groups, according to the suit.

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FDA Turns Its Focus to Menthol & Flavored Cigars The agency says there is “strong evidence” that a menthol ban will help tobacco users quit could soon be saying goodbye to menthol cigarettes and flavored cigars.

THE TOBACCO INDUSTRY

On April 29, the Food and Drug Administration (FDA) announced it is taking steps to ban menthol as a characterizing flavor in cigarettes, and ban all characterizing flavors — including menthol — in cigars within the next year. According to the agency, there is “strong evidence” that a menthol ban will help tobacco users quit. The FDA pointed to studies that show menthol increases the appeal of tobacco and can lead to regular smoking, particularly among youth and young adults. One study suggests that banning menthol cigarettes in the United States would lead an additional 923,000 smokers to quit, including 230,000 African Americans, in the first 13 to 17 months after a ban goes into effect, the agency cited. “These flavor standards would reduce cigarette and cigar initiation and use, reduce health disparities, and promote health equity by addressing a significant and disparate source of harm,” said Mitch Zeller, director of the FDA’s Center for Tobacco Products. “Taken together, these policies will help save lives and improve the public health of our country as we confront the leading cause of preventable disease and death.” If implemented, the FDA’s enforcement of any ban on 22 Convenience Store News C S N E W S . c o m

menthol cigarettes and all flavored cigars would only address manufacturers, distributors, wholesalers, importers and retailers — not consumers who use or possess menthol products. The agency’s focus on flavored tobacco products lags actions by individual municipalities and states. In June 2018, San Francisco voters approved Proposition E, which prohibits tobacco retailers from selling flavored tobacco products. The measure received 100,580 yes votes, compared to 46,452 no votes. State legislators in California tried to expand that ban across the state, and Gov. Gavin Newsom signed legislation into law in August 2020. However, in November, 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, onto the November 2022 ballot. That petition forced California lawmakers to put a statewide flavor ban on hold. Currently, Maine is debating similar legislation and in Connecticut, the General Assembly’s Finance Committee revised legislation to prohibit the sale of flavored electronic cigarettes and vapor products in the state. The original proposal called for a ban on all flavored tobacco products, including menthol cigarettes. Massachusetts was the first state to implement a statewide flavor ban when its law went into effect on June 1, 2020.

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INDUSTRY ROUNDUP 7-Eleven Inc. reached deals with three buyers to sell 293 Speedway convenience stores. The agreements with Anabi Oil, Jacksons Food Stores and CrossAmerica Partners are part of 7-Eleven’s settlement with the Federal Trade Commission.

Eye on Growth

Under a pact with the Federal Trade Commission, Casey’s will divest six stores.

Casey’s General Stores Inc. closed on its acquisition of Buchanan Energy, owner of Bucky’s Convenience Stores, on May 14. The $580-million deal included 94 retail stores and 79 dealer locations.

TravelCenters of America Inc. launched a new business unit, eTA. This unit is dedicated to partnering with the public sector, private companies and customers to deliver sustainable and alternative energy. GPM Investments LLC reached a $1-billion sale/leaseback agreement with

Oak Street Real Estate Capital LLC. GPM will own and operate the related acquired businesses, and Oak Street will own the real estate and lease it to GPM.

Refuel Operating Co. LLC is acquiring Wag-A-Bag LLC. The transaction, which is slated to close in the third quarter of 2021, will add 16 conveniences stores in the greater Austin market to Refuel’s network. Stewart’s Shops Corp. is planning 14 new convenience stores in 2021 to replace older, smaller locations. Its construction agenda also includes a number of remodels and additions. QuikTrip Corp. is building a network of remote travel centers designed for highly trafficked areas of the country. These larger sites feature an expanded QT Kitchens concept, and accommodate more gas pumps and diesel bays.

FAST FACTS

Among the currently employed, two-thirds worked outside the home as of April 2021 — up nearly 70 percent since April 2020. — Nielsen Consumer Sentiment Study

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

Consumer visits to restaurants during the p.m. snack period, which ranges from 3 p.m. to 5 p.m. and 9 p.m. to 5 a.m., increased by 3 percent vs. the same period last year. — The NPD Group

Of those who have tried CBD, 14 percent used it in an ingestible form, 11 percent used it as a topical ointment or cream, and 13 percent tried it in both ingestible and topical forms. — Invisibly Poll

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INDUSTRY ROUNDUP

Retailer Tidbits

Convenience store operators embarked on hiring sprees ahead of the peak summer season. 7-Eleven Inc. and its independent franchise owners held a National Hiring Day on June 3, seeking to bring on as many of 40,000 new employees. Additionally, Circle K is hiring 20,000 new associates, while GPM Investments LLC and Murphy USA Inc. are each looking to add 3,000 associates. Sheetz Inc. raised store employee wages by $2 an hour, its second increase in the past year. Rutter’s increased its starting wage, too, to $14 for all field employees; it is also the second time in the past year the company has increased its starting pay.

The convenience retailer more than doubled its marketing investment in 2021.

7-Eleven Inc. debuted a new tagline, “Take it to Eleven.” The full-funnel integrated campaign embraces an attitude that makes a big deal out of even the smallest of things.

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

Wawa Inc. opened its 50th electric vehicle (EV) charging site across its six-state operating footprint, as it expected to exceed 1 million total EV charging sessions by the end of May. Wawa stores began hosting EV chargers in 2017. Jacksons Food Stores formed a partnership with Instacart to offer sameday delivery to customers in the Treasure Valley market in Idaho. The service will expand to locations in Arizona, Nevada, Oregon, Utah and Washington. TravelCenters of America Inc. completed the sale of 42 standalone restaurant locations primarily branded Quaker Steak & Lube for aggregate proceeds of $5 million. The retailer acquired the standalone restaurant business in 2016. QuikTrip Corp. completed the rollout of QT Kitchens to its Oklahoma convenience stores. The nearly chainwide rollout began back in 2014. Currently, QuikTrip only has two stores that do not have a kitchen.

Contact your local GSK C-Store representative on how to order or email Scott.F.Breisinger@gsk.com

INDUSTRY ROUNDUP

Supplier Tidbits

BIC teamed up with Snoop Dogg and Martha Stewart to launch BIC EZ Reach, a lighter for all lighting occasions. The partnership, which extends into 2022, kicked off with the duo lighting up the digital screen with the release of “Pass It.” Philip Morris USA, a subsidiary of Altria Group Inc., introduced the new IQOS 3 into all current markets. In addition, Marlboro HeatSticks are now available in retail stores statewide across Georgia, Virginia, North Carolina and South Carolina.

Scott McPherson will continue in his role as president and CEO of Core-Mark. Tom Wake will continue as president and CEO of Eby-Brown.

The Performance Food Group Co. (PFG) is acquiring convenience distributor Core-Mark Holding Co. Inc. The transaction will unite Core-Mark and Eby-Brown under Richmond, Va.-based PFG’s Vistar segment. Altria Group Inc. purchased the remaining 20 percent of the on! oral nicotine pouches global business it did not own for approximately $250 million. PDI acquired GasBuddy. Among the changes for the mobile app, consumers can now receive offers funded by CPG companies and enroll in loyalty programs.

Mondeléz International Inc.’s SnackFutures innovation and venture hub selected nine start-ups for its inaugural class of the CoLab, a collaborative program for U.S. based early-stage well-being snack brands. The Hershey Co. was honored by GPM Investments LLC as its first-ever Supplier Partner of the Year. Hershey was recognized for its proactive ideation, category growth recommendations, and program execution.

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816.813.3337 www.forteproducts.com 28 Convenience Store News C S N E W S . c o m

Sanitizing Wipes Dispensers

NEW PRODUCTS

1 2

1. White Claw Hard Seltzer Surge

2. Fruit-tella Soft Gummies

3. Snickers Almond Brownie

4. Frutly Hydrating Juice Waters

Launched in response to consumer demand for a higher alcohol option, White Claw Hard Seltzer Surge arrives in two flavors: Blood Orange and Cranberry. At 8 percent ABV for a 16-ounce can, the new variety is perfect for those consumers looking for a higher alcohol option and the delicious fruit flavor profiles they expect from White Claw, the company said. The brand’s original hard seltzer has a 5 percent ABV for a 12-ounce can. White Claw Hard Seltzer Surge is crafted using a proprietary BrewPure process, resulting in pure, crisp refreshment.

Perfetti Van Melle is expanding its U.S. presence with the introduction of Fruit-Tella Soft Gummies, a better-foryou offering that boasts real fruit puree as the No. 1 ingredient. The FruitTella brand has a 90-year heritage as a leading candy brand in Europe in the non-chocolate category. Fruit-Tella Soft Gummies are available in 3.2-ounce peg bags with a suggested retail price of $1.79 and 5-ounce peg bags for a suggested price of $2.49. The gummies come in two fruit flavor combinations: Mixed Berry (Strawberry & Raspberry), and Peach & Mango. Each package contains a variety of fun and playful character shapes.

Snickers Almond Brownie, the brand’s newest flavor innovation, features a chewy brownie filling mixed with chopped almonds and topped with a layer of caramel, all coated in dark chocolate. The new product will hit shelves nationwide in August in singles (1.26 ounces), share size (2.52 ounces), and sharing standup pouches (6.93 ounces). The new variety joins two existing products in the Snickers brownie lineup: Snickers Peanut Brownie, and Snickers Peanut Brownie Ice Cream.

Frutly is a new brand of hydrating juice waters from PepsiCo Inc. Made with fruit juice, water and the electrolytes magnesium and potassium for taste, the Frutly line provides flavorful hydration at just 60 calories per 16-ounce serving. Initial flavors include Strawberry Kiwi, Fruit Punch, and Apple Grape. Frutly contains no added sugar or artificial sweeteners, and is designed to offer on-the-go hydration to teenagers and other thirsty consumers.

White Claw Hard Seltzer Chicago whiteclaw.com

PepsiCo Inc. Purchase, N.Y. drinkfrutly.com

Mars Inc. Newark, N.J. mars.com

Perfetti Van Melle Erlanger, Ky. perfettivanmelle.com

5. Happy Place CBD Topicals Line Happy Place expands its CBD product assortment with the launch of an extrastrength Topicals line. Targeted at one of consumers’ most common ailments, pain, the line includes four new products made with CBD derived from 100 percent U.S.grown hemp. The Topicals line features a Hydrating Cream, Healing Balm, Muscle & Joint Patch, and Roll-On. Happy Place products are scientifically formulated using technology and rigorous testing procedures to ensure the highest level of safety, performance and consistency. Happy Place St. Paul, Minn. discoverhappyplace.com

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

NEW PRODUCTS

6. Wild Hemp Wraps

7. AHA Sparkling Water New Flavors

8. Kool-Aid Dipping Candy

9. Rebel Hard Coffee Variety Pack

Crown Distributing LLC launched a new range of intensely flavored all-hemp smoking wrappers under the Wild Hemp brand. Available in six flavors — Natural, Sweetz, Puprz, Island Twist, Tropical Buzz, and Limeaide — Wild Hemp Wraps are designed for adult consumers looking for a soft feel, easy-stick, makeyour-own hemp wrapper that will complement enjoyment of their preferred legal smokable hemp flower or traditional non-tobacco smoking herbs, according to the company. After an initial launch in limited markets, the brand is now being offered nationwide. The product is available from Crown Distributing, Global Tobacco LLC, and America Juice Co. LLC.

Just over a year since debuting on U.S. store shelves, the AHA sparkling water brand unveils two new calorie-, sodium- and sweetener-free varieties: Raspberry + Acai, and Mango + Black Tea. The team started with more than 300 flavors and tested 42 pairings before optimizing the recipes for these two top performers. The tropical taste of mango is complemented by a burst of black tea flavor (and 30 milligrams of caffeine), while the refreshing taste of raspberry is brightened by notes of acai. The new flavors are available in 16-ounce individual cans and eight-packs of 12-ounce cans.

Hilco, maker of affordable, fun and unique novelty candy, is teaming up with The Kraft Heinz Co. to offer Kool-Aid Dipping Candy. Described as “delicious and entertaining,” the new product features two types of candy in each pouch: Kool-Aid flavored powdered candy in either Blue Raspberry or Cherry flavor, and edible dextrose candy sticks. Available in peg bags, Kool-Aid Dipping Candy ships as two 12-count displays per case. Each bag has a suggested retail price of $1.49 to $1.99.

Twelve5 Beverage Co. introduces a variety pack of its Rebel Hard Coffee. According to the company, Rebel is the first hard coffee brand to offer a variety pack to consumers. The eightpack features the brand’s hard latte favorites including the Mocha Hard Latte and Vanilla Hard Latte, as well as two new varieties — the Maple Pecan Hard Latte and Salted Caramel Hard Latte. Made with 100 percent Arabica coffee and natural ingredients, with a 5 percent ABV, the Maple Pecan Hard Latte mixes the flavors of sweet maple and buttery pecan, while the Salted Caramel Hard Latte is crafted to deliver the right blend of sweet and salty through a balance of caramel and a touch of salt. The variety pack is available in more than 40 states.

Crown Distributing LLC Dallas wild-hemp.com

Hilco Louisville, Ky. (502) 785-3087 hilcousa.com

The Coca-Cola Co. Atlanta drinkaha.com

Twelve5 Beverage Co. Neenah, Wis. rebelhardcoffee.com

10. The Donut Hole Individually Wrapped Donuts With food safety more important than ever now due to the pandemic, Baker Boy launched a line of individually wrapped donuts under The Donut Hole brand. The line of packaged and fully finished retail-ready donuts features eight varieties, including Baker Boy’s signature Magic Ring Filled Donuts. The flavors are: Chocolate Iced Chocolate & Creme Filled Magic Ring Donuts, White Iced Raspberry Filled Magic Ring Donuts, Apple Filled Magic Ring Donuts, Glazed Donuts, Glazed Old Fashioned Donuts, Maple Iced Long Johns, Cake Donuts, and Blueberry Cake Donuts. The donuts arrive at the operator frozen and ready to thaw and serve. Baker Boy Dickinson, N.D. bakerboy.com 32 Convenience Store News C S N E W S . c o m

C-

What Is Your Brand?

SMALL OPERATOR

RE RES

You are known by the reputation you have earned in running your business

By Roy Strasburger, CEO, StrasGlobal

I GREW UP IN Texas where the legends and myths of cowboys is a reality. We’ve all heard the stories of the open range and the great cattle drives that went from south Texas to the railheads of Kansas. Hundreds of thousands of cattle were moved by walking hundreds of miles before the time of trucks.

but they also needed to be able to rope a steer and tie it up so that it could not move. There were two main reasons for needing these abilities. The first was to inspect the animals in order to take care of any medical or physical problems, and the second was to be able to mark the ownership of the animal.

The way these cattle drives worked was that many ranchers in one area would breed and raise their cows until they were ready to make the trek north. Time and money were spent to make these animals fat and keep them healthy so that the ranchers could get the maximum price when the cattle reached the stockyards.

Throughout the ages, people have been marking their animals to show who owns them in order to claim them. When your property can move on its own legs, it’s important to be able to identify it if it wanders off. The most common way of marking your animal was to apply a burning stick or piece of hot metal to the skin of the animal in order to scar it, leaving an identifiable mark. We know this as “branding.”

One of the things these ranchers discovered was that all of these cows — and there could be thousands of them on one cattle drive — all looked alike. How could you tell the cows that belonged to Mr. Smith from those that belonged to Mrs. Jones? It was important information to know because that is how the ranchers got paid — by the pound for each cow that made it to the market. Rodeos were created to show off the skills that cowboys needed in order to work on the range in Texas. Not only did they have to be good on horseback,

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

By applying a brand, the cowboys and ranchers could easily identify each cow and know who it belonged to. Arguments about who owned the animal (mainly) disappeared. Ranchers were accurately paid for the time and effort put in to raising the animals. And, over time, ranchers became known for the quality of the animals and livestock they raised. If you knew the cow belonged to Joe Miller, you would know what to expect from the animal based upon Mr. Miller’s reputation.

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SMALL OPERATOR

The same thing is true about you and your business. You are known by the reputation you have earned in running your business. Your reputation is how the customer identifies you and how their expectations are set. That reputation is the basis of your brand. So, what is your brand? A brand can be several things, and they all relate to you. Your brand can be the sign on your store. It can be the name that is attached to the products you sell, such as a gasoline brand. But, in my opinion, the most important brand is your personal brand. Too many retailers think their brand is tied to the signage on their store or the name of their products. They think of themselves as the Shell station or the Texaco down the street. They may think of themselves as the Quick Mart or Food Shop sign that is above their door. I would argue that a retailer’s true brand is based on how you operate your business. It is what your customers think about you and the people who work with you. It is how people who come into your store think about the cleanliness of your shop, the friendliness of your staff, and the fairness of your prices. Your brand is how you present yourself, and your business, to the world. You can’t necessarily define a brand by just one characteristic. It is a compilation of how your business is operated, and it may not be good or complimentary. People may think your brand is “cheap prices but a dirty store” or “friendly customer service and higher prices.” The important thing is for you to understand what your brand is, as perceived by your customers, and decide whether that is how you want to be represented. You are the person who ultimately controls your brand and how you are perceived by the public. Don’t forget, it doesn’t matter whether what the customer believes about your brand is true. If they believe something, it is true. Your customer’s perception is your reality. Take a close look at what you are doing and how you are presenting your business to your customers. Do you want to be the cleanest store in the neighborhood? The store with the lowest prices? The store with the freshest food? The store with the friendliest staff? Or all of the above? Whatever it is that you want your brand to be, you have to constantly work to make it true, maintain it, and communicate it. A brand is not built in a day. It is done over time by being consistent in your actions and in your approach to business every time you have a customer interaction.

The important thing is for you to understand what your brand is, as perceived by your customers, and decide whether that is how you want to be represented. Your brand has to be the starting point for everything you do. You have to begin each day knowing the message and the image you want to convey. You have to end each day reviewing what you did and deciding whether it was consistent with your brand. Every action — customer service, employee training, the products you order for the store, when you turn the lights on — has to be based on, and guided by, your brand. Maintaining your customer brand is a daily ongoing project. Every day, you have to live your brand and promote it. It’s the message you send to your community, to your customers, to your staff, and to yourself. Without a brand, all retailers are the same. Customers can’t tell the difference between one store and another — just like those cowboys who couldn’t tell the cows apart. Your brand is how you and your business are identified by your customer. Stand out from the herd. CSN

Roy Strasburger is CEO of StrasGlobal, a privately held retail consulting, operations and management provider serving the small-format retail industry nationwide. StrasGlobal operates retail locations for companies that don’t have the desire, expertise or infrastructure to operate them. Learn more at strasglobal.com. Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News. 36 Convenience Store News C S N E W S . c o m

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COVER STORY

READY TO

REBOUND BY DON LONGO & ANGELA HANSON

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

2021

Despite being ravaged by an unprecedented pandemic, the convenience store industry may be better positioned than ever for the future

TALK ABOUT RESILIENCE. Despite a pandemic that closed thousands of retail businesses across the United States, the convenience store industry was able to actually grow inside-the-store sales by 3.3 percent last year. That’s even better than the 2.6 percent in-store sales increase that the c-store industry generated in 2019. Of course, fuel sales cratered in 2020 due to the shutdowns enacted nationwide to slow down the spread of the COVID-19 virus. Because fuel revenue dropped almost 30 percent last year, total industry sales fell by nearly 18 percent, according to the 46th annual Convenience Store News Industry Report. Fuel volume was down nearly 20 percent to 123.3 billion gallons as Americans stayed home from work, school and play in record numbers during the health crisis. Last year’s record-high $243.1 billion in inside sales was driven by double-digit sales growth in beer/malt beverages, wine and liquor, edible and non-edible groceries. In a major departure from a decades’ long trend — but understandable given the impact of COVID-19 safety measures on fresh food and dispensed beverages — foodservice sales declined nearly 10 percent in 2020. Last year was the fourth in a row that motor fuel volume declined in the convenience channel — and what a fall it was! As consumers worked from home and limited their outside activities, c-stores sold 19.8 percent fewer gallons of fuel than they did in 2019. That unprecedented drop was predicted in last year’s CSNews Industry Report. The 30 percent decline in motor fuel revenue swung the industry’s sales mix even more heavily toward in-store sales. Merchandise comprised 45.6 percent of total industry sales in 2020, an increase from 36.3 percent in 2019. Even with this swing, however, motor fuel still accounts for the majority of total industry sales at 54.4 percent. The gross profit dollar mix between fuel and inside sales remained about the same in 2020: 59.4 percent for in-store vs. 40.6 percent for fuel. Total industry gross profit rose 1.8 percent to $115 billion, up from 2019’s record high of $113 billion. On the bottom line, total industry pretax profits rose 2.1 percent to a record $10.8 billion last year, while pretax profits per store were up 2.9 percent to $71,928 per unit. With the nation poised to emerge from the devastating pandemic this summer, a reinvigorated foodservice category, combined with the COVID-19-inspired new programs that debuted or gained traction in the past year, could propel the convenience store industry to one of its best years in 2021. It will be interesting to watch how new initiatives like mobile ordering, contactless checkout, curbside pickup and home delivery fare in the year ahead. As of press time, the mood of the nation’s convenience retailers appeared to be optimistic that business was returning to normal. Many expect a big summer, especially as families take road-trip vacations. Oil prices have also started to rise a bit, which should increase fuel revenues.

THE 2020 NUMBERS The number of convenience stores in the U.S. shrunk for the third consecutive year. Retailers operated 150,274 stores on average last year, a reduction of 2,446 stores from 2019. Single-store owners took the brunt of the decline, losing 2,912 units, dropping to a

J UNE

20 21

Convenience Store News 39

COVER STORY

2021

Total Convenience Store Sales (in billions)

•

Total

2016

•

$616.4 7.3% $432.0 10.7% $229.4 1.6%

$390.4 $225.4 2.1%

$616.3 9.1% 13.6%

$564.9 $343.7 -11.3% $221.2 3.8%

•

In-Store

$648.8 -1.9% $413.5 -4.3% $235.3 2.6%

2019

2017

Motor Fuels

$532.9 -17.9% $289.8 -29.9% $243.1 3.3%

2020

2018

•

Store Growth Analysis Total Store Count

2020

•

Chains

Single Stores

150,274

38.6% 61.4% 152,720

2019

37.7% 62.3% 153,237 37.7%

2018

62.3% 154,958 37.0%

2017

63.0% -6.3%

total of 92,196 stores. Chain retailers increased their count by 466 units, bringing their total up to 58,078 stores. In terms of the mix between chain-operated stores and single-store owners, chains now comprise 38.6 percent of the industry as single stores dropped to an all-time low of 61.4 percent.

Operational Data Direct-store operating expenses rose 10.6 percent, almost twice the pace of the previous year as retailers spent more money on cleaning and sanitizing procedures, installing plexiglass barriers at their checkout counters, and many paid extra to store-level associates for so-called “hero pay.” Spending on wages increased 11.2 percent, up from the 7.2 percent rise of the year before. Employee wages increased to a record-high $393,949 per store. Health insurance costs also spiked, rising 7.1 percent to $34,600 per unit. Spending on workers’ compensation rose 7.6 percent to $15,602 per store. Credit card fees rose 3.5 percent to $91,666 per store.

154,535 2016

36.9% 63.1%

Motor Fuel Volume 2020

2019

123.3

153.7

2018

2017

2016

GALLONS (billions)

154.1

154.3

154.7

% CHANGE

-19.8%

-0.3%

-0.1%

GALLONS (billions)

-0.3%

GALLONS (billions)

2.2%

average in-store transaction rose 19.5 percent to $10.78. On the fuel side, though, the average purchase declined to $27.05 per transaction, down 15 percent, as average gallons per transaction dropped 12.7 percent to 8.9 gallons.

Motor Fuels The $289.8 billion of fuel sold last year in the convenience channel fell significantly below the $413.5 billion sold in 2019 and the $432 billion sold in 2018.

Store-level employee turnover increased to 151 percent, up from 136 percent in 2019. Store manager turnover also rose — 42 percent vs. 35 percent the previous year.

Fuel sales should bounce back in 2021, but long-term prospects for growth are uncertain given the current political push to eliminate internal combustion engine vehicles in favor of electric-powered vehicles.

The pandemic had a huge impact on store traffic, as illustrated by the 11.4 percent decline in in-store transactions and the 20.3 percent drop in motor fuel transactions last year. Retailers averaged 2,888 in-store transactions and 1,828 motor fuel transactions per week in 2020.

In volume, motor fuel gallons sold in 2020 totaled just 123.3 billion, compared to 153.7 billion gallons sold the previous year. Fuel gross margin increased to 28.1 cents per gallon, as the average sales price per gallon on a weighted average for all grades and diesel was $2.35, down from $2.69 in 2019.

Conversely, average baskets rose last year as consumers spent more per transaction at convenience stores. The

According to the Energy Information Administration, the national average retail regular gasoline price was $2.89

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

COVER STORY

2021

Gross Profit Dollar Mix

Industry Sales Mix

IN-STORE

45.6%

36.3%

34.7%

MOTOR FUELS

54.4%

63.7%

60.2%

MOTOR FUELS

40.6%

2018

2020

Industry Gross Profit 2019 $ BILLIONS

2018 $ BILLIONS

In-Store

$68.08

$68.05

$64.08

Motor Fuels

$46.55

$45.00

$42.63

TOTAL

$114.63

$113.05

$106.71

TOTAL INDUSTRY PRETAX PROFIT (in billions)

MOTOR FUELS

39.8%

40.0%

2019

2018

$1,619,031 4.2%

2020

% CHANGE

PRETAX PROFIT PER STORE

% CHANGE

2020

$10.80

2.1%

$71,928

2.9%

2019

$10.58

7.8%

$69,894

8.6%

2018

$9.81

5.9%

$64,371

6.6%

2017

$9.26

1.8%

$60,410

2.6%

2016

$9.10

-1.9%

$58,886

-3.9%

In-Store Sales per Store

$1,554,276 3.2%

2019

$1,505,376 2.2%

2018

$1,473,386 1.5%

2017

$1,451,682

2016

3.2%

•

Total

•

Total merchandise sales were up 6 percent in 2020, while foodservice sales (prepared food and dispensed beverages) declined by 9.9 percent. Sales per store of merchandise and foodservice combined were up 4.2 percent to a record high of $1,619,031.

$35.9

•

The cigarettes category, No. 1 in merchandise sales share, increased its percentage of total in-store sales to $243.1 3.3% 27.43 percent as this category performed well during the pandemic. On a per-store basis, cigarette sales increased $207.2 6.0% by 4.3 percent.

Merchandise

2020

per gallon on May 3, 2021 — $1.101 over a year ago. The national average retail diesel fuel price was $3.142 per gallon, or $0.743 over a year ago.

Overall In-Store Sales

Total Merchandise & Foodservice Sales (in billions)

2018

IN-STORE

60.0%

Pretax Profits

2020 $ BILLIONS

2019

IN-STORE

59.4%

65.3%

2019

2020

IN-STORE

Foodservice

-9.9%

$235.3 2.6% $195.5 2.1% $39.8 5.2% $229.4 1.6% $191.5 1.4% $37.9 2.4%

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

Foodservice managed to remain No. 2 in share, but fell to 14.75 percent of in-store sales, down from 16.92 percent in 2019. On a per-store basis, foodservice sales declined by 9.2 percent. At 13 percent of in-store sales, packaged beverages was still the second-largest category inside the store, increasing its share slightly from 12.92 percent the year before. Packaged beverage sales increased 4.7 percent on a per-store basis last year. Beer/malt beverages had a stellar year last year, with sales increasing 14.9 percent per store and its total share of inside sales rising to 10.15 percent, up from 9.2 percent in 2019.

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COVER STORY

2021

sales gains last year included edible grocery (up 10.5 percent year over year), wine and liquor (up 32 percent), non-edible grocery (up 15.1 percent), and ice cream and frozen novelties (up 18.2 percent).

Despite increased regulation and a bounce-back in combustible cigarette sales, the other tobacco products (OTP) category saw its sales grow by 9.2 percent per store last year, making it the fifth largest in-store category with an 8.12 percent share of sales.

Tobacco

Other categories that experienced strong per-store

The cigarettes category reversed two years of sales declines by rising 4.3 percent to $444,034 in average sales per

In-Store Sales by Category PERCENT OF IN-STORE SALES

AVERAGE SALES PER STORE

TOTAL INDUSTRY SALES (IN MILLIONS)

2020

2019

2020

% change

2020

% change

27.43%

27.38%

$444,034

4.3%

$66,672

3.5%

Packaged beverages

13.0%

12.92%

$210,410

4.7%

$31,593

3.9%

Beer/malt beverages

10.15%

9.20%

$164,256

14.9%

$24,663

14.0%

Other tobacco products

8.12%

7.74%

$131,401

9.2%

$19,730

8.3%

Edible grocery

5.14%

4.85%

$83,217

10.5%

$12,495

9.6%

General merchandise

3.53%

3.52%

$57,096

4.3%

$8,573

3.5%

Candy

3.12%

3.17%

$50,549

2.5%

$7,590

1.7%

Salty snacks

2.67%

2.87%

$43,150

-3.3%

$6,479

-4.1%

Wine & liquor

1.97%

1.55%

$31,875

32.0%

$4,786

30.9%

Non-edible grocery

1.79%

1.62%

$28,911

15.1%

$4,341

14.2%

Fluid milk products

1.36%

1.34%

$22,071

6.0%

$3,314

5.1%

Alternative snacks

1.10%

1.11%

$17,735

3.1%

$2,663

2.3%

Ice cream & frozen novelties

0.96%

0.85%

$15,584

18.2%

$2,340

17.3%

Health & beauty care

0.67%

$10,823

4.2%

$1,625

3.4%

Ice

0.58%

0.50%

$9,391

21.5%

$1,410

20.6%

Packaged sweet snacks

0.27%

0.28%

$4,349

0.1%

$653

-0.8%

Publications

0.21%

0.31%

$3,470

-28.1%

$521

-28.8%

All other merchandise

3.20%

3.21%

$51,865

4.0%

$7,787

3.2%

MERCHANDISE SUBTOTAL

85.25%

83.08%

$1,380,187

6.9%

$207,234

6.0%

(prepared on-site or off-site)

10.65%

11.78%

$172,437

-5.8%

$25,891

-6.6%

Hot dispensed beverages

2.38%

3.24%

$38,473

-23.7%

$5,777

-24.3%

Cold dispensed beverages

1.20%

1.31%

$19,375

-4.9%

$2,909

-5.7%

Frozen dispensed beverages

0.53%

0.58%

$8,559

-5.4%

$1,285

-6.2%

FOODSERVICE SUBTOTAL

14.75%

16.92%

$238,844

-9.2%

$35,862

-9.9%

100.00%

$1,619,031

4.2%

$243,096

3.3%

MERCHANDISE Cigarettes

FOODSERVICE Prepared food

TOTAL IN-STORE

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

Quench Consumer Thirst for A new form-factor is poised to drive the CBD category in c-stores. CBD Drinks are making a splash in the market. One brand, Forth™ CBD, is leading the charge and bringing new shoppers to c-store aisles with CBD-Infused Juice Drinks.

CONSIDER THE CONSUMER CBD drink buyers hit the sweet spot for retailers.

ANTICIPATE THE UPSURGE With the market size for CBD drinks expanding rapidly, c-stores have plenty of tasty new revenue.

2025 2024

220

$208.4M

$186.5M

200 180

2023

160

2022

100

$82.0M

63%

2021

60 40

2018

$2.6M

2019

$17.1M

2020

$18.8M

More than half have an income above

$75k

$131.9M

140 120

8 in 10 are between 24 and 44 years old

$32.8M

use CBD products daily

Nearly

2/3

SAVOR THE SALES POTENTIAL

state that “taste” is a key purchase factor

Forth™ CBD-Infused Juice Drinks are delivering more than flavor … • Showing strong proﬁt margins • #1 selling form-factor in the CBD category* • Backed by a 100% Guarantee

• High-quality, lab-tested beverages • Contain 10mg full-spectrum hemp derived CBD per serving • Now available in two invigorating fruit ﬂavors

Get what adult consumers want.

UNDERAGE SALE PROHIBITED All data applies to Convenience and Gas channel only. *Sourced from Test Chain Sales May 2021. All other data sourced from Brightﬁeld Group.

COVER STORY

2021

Direct-Store Operating Expenses (dollars per store)

2020

2019

% CHANGE

Wages

$393,949

$354,271 11.2%

Payroll taxes

$17,563

$17,151

2.4%

Workers’ compensation

$15,602

$14,500

7.6%

Health insurance

$34,600

$432,306

7.1%

Other benefits

$5,951

$5,717

4.1%

Labor subtotal

$467,665

$423,944

10.3%

Credit card fees

$91,666

$88,566

3.5%

All other direct-store operating expenses

$201,875

$175,696

14.9%

TOTAL

$761,206

$688,206 10.6%

Five-Year Trend: Wages (dollars per store)

$393,949 2020

store in 2020. Total industry sales of cigarettes also saw improvement, increasing 3.5 percent. Unlike in 2019, when only one segment of the category saw positive growth, in 2020 just one segment declined, with branded discount cigarettes dropping 1 percent in average sales per store. The segments with the strongest growth were imports (up 19.8 percent), subgeneric/private label (up 16.6 percent) and fourth tier (up 14.4 percent).

$354,271 2019

$330,584 2018

$311,284 2017

$285,320 2016

Transactions

2020

% CHANGE

Sales of premium cigarettes rose by a more modest 4.7 percent, but this segment still far outpaces all other cigarette types in dollar sales, at an average of $365,755 per store. This is a noticeable uptick from 2019, when average premium sales were flat.

In-store transactions per week

2,888

Motor fuel transactions per week

1,828

-11.4% As a percentage of in-store sales, cigarettes held steady -20.3% in 2020, increasing less than a percentage point to 27.43

Average in-store transaction Average motor fuel transaction

$10.78 19.5% a small one, as it marks the first time in five years that its $27.05 -15.0% share of in-store sales has not declined.

Average gallons per transaction

8.9 -12.7% Total unit volume for cigarettes fell 2.8 percent in 2020,

percent. This is another turnaround for the category, albeit

continuing a five-year downward trend, but slowing from 2019 when total unit volume dropped by 5.5 percent.

C-store Square Footage

2020

2019

Sales area

2,530

2,425

Non-sales area

820

Total store size

3,350

Total property size

29,975

800 3,225

Meanwhile, the OTP category continued to perform fairly well last year, although 2020 sustained the trend of slowing growth for this category. Average OTP sales per store increased 9.2 percent to $131,401, while total industry sales saw a slightly smaller increase of 8.3 percent. Smokeless tobacco remained the top product segment

27,900 within OTP last year at $57,522 in average sales per store. It continued a multi-year streak of increasing growth at 10.3 percent, up from 7.3 percent growth in 2019 and 2.8 percent growth in 2018.

Employee Turnover 2019

Papers (up 13.8 percent) and cigars (up 11.7 percent) saw

2020

Store associates

151% 136% the strongest sales growth. However, e-cigarettes remained

Store managers

42% 35% an increase of 6.2 percent. Pipe/cigarette tobacco was the

No. 2 in OTP share at $43,104 in average sales per store, only OTP segment to see a sales decline in 2020.

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

COVER STORY

2021

Motor Fuel Sales & Margins

2020

2019

2018

$289.8 $413.5 $432.0

Dollar sales (in billions) Gallons sold (in billions)

123.3

153.7

154.1

Gross margin cents per gallon

28.1

26.6

25.5

Average sales price per gallon* $2.35 $2.69 $2.80. *Weighted average, all grades and diesel

Retail Gasoline Prices (per gallon)

2.35

2.80

2.69

2020

2019

-12.6

2018

-3.9

% CHANGE

10.7

% CHANGE

2.53

2.25

12.4

-12.5

2017

2016

% CHANGE

Five-Year Trend: Motor Fuels 2020

2019

2018

2017

2016

Dollar sales (in billions)

$289.8

$413.5

$432.0

$390.4

$343.7

Gallons sold (in billions)

123.3

153.7

154.1

154.3

154.7

80.9% 2020

79.9% 2019

79.6% 2018

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

Total OTP unit volume increased 5.3 percent, jumping from 0.8 percent in 2019.

Foodservice As predicted in the 2020 CSNews Industry Report, the foodservice category suffered a significant blow from the COVID-19 pandemic. Sales declined in all segments of the category, resulting in average foodservice sales per store falling 9.2 percent to $238,844. Hot dispensed beverages saw the greatest decline due to factors such as a steep drop in morning commuters and shutdowns of self-service coffee in many regions of the country. Average sales per store in this segment fell 23.7 percent, while total industry sales fell 24.3 percent. Per-store sales also saw significant drops in prepared food (down 5.8 percent), frozen dispensed beverages (down 5.4 percent) and cold dispensed beverages (down 4.9 percent), leaving no part of the foodservice category untouched by the pandemic and its effect on consumer habits. Total industry sales for foodservice fell 9.9 percent, a steep decline from the 5.2 percent growth posted in 2019, and the first instance of a sales decline in the last five years.

Price includes dollars per gallon for all grades, all formulations

Stores Selling Motor Fuels

As a share of in-store sales, the OTP category last year continued its steady upward march to reach 8.12 percent, its highest figure in the past five years.

Foodservice’s share of in-store sales also fell in 2020 after several years of incremental growth, going from 16.92 percent in 2019 to 14.75 percent in 2020.

Packaged Beverages Sales in the packaged beverages category were a mixed bag in 2020, with some segments seeing slower growth, while others performed better than they have in recent years. The category as a whole saw average sales per store increase 4.7 percent to $210,410, down slightly from a 5 percent increase in 2019. Sports drinks posted the highest growth last year at 11.3 percent, enough for the segment to overtake bottled water as the No. 3 packaged beverage option at c-stores. Energy drinks rose 6.3 percent in average sales per store, down from 11.2 percent growth the previous year but enough to keep it as the top seller ahead of No. 2 carbonated soft drinks (CSDs). For its part, the CSD segment did see a 4.8 percent increase in average sales per store last year, a notable jump from 1.2 percent growth the previous year. CSD sales may have been bolstered by the pandemic as many retailers shut down their fountain beverage dispensers. Bottled water and ready-to-drink iced tea were the only segments in the category to see their average sales per store decline, falling 4.2 percent and 1.6 percent, respectively.

HF_CSN_FullPg-8x10.75in_June2021_PRINT.pdf

5/14/21

1:32 PM

COVER STORY

2021

Five-Year Trend: Cigarettes

Category Analysis:

2020

2019

2018

2017

2016

Percent change in total sales

3.5%

-1.5%

-2.9%

1.1%

1.4%

Percent change in total unit volume

-2.8%

-5.5%

-3.4%

-3.2%

-1.0%

Share of in-store sales

27.43%

27.38%

28.50%

29.82%

30.11%

Cigarettes AVERAGE SALES PER STORE

INDUSTRY TOTAL (IN MILLIONS)

2020

% change

2020

% change

Premium

$365,755

4.7%

$54,918

3.9%

Branded discount

$59,705

-1.0%

$8,965

-1.8%

Subgeneric/ private label

$17,370

16.6%

$2,608

15.6%

Fourth tier

$1,180

14.4%

$177

13.5%

Imports

$24

19.8%

19.9%

TOTAL

$444,034

4.3%

$66,672

3.5%

While the cold vault may have benefited from consumers turning to sealed, packaged beverages during the pandemic, it still saw a slight decrease in total unit volume (down 0.7 percent). Total industry sales were up 3.9 percent, marking a slight slowdown after two years of accelerated growth. The category’s share of in-store sales rose less than one point to 13 percent.

Beer & Malt Beverages Beer and malt beverages saw tremendous category growth as average sales per store increased 14.9 percent last year to $164,256. This was a significant spike from 1.7 percent growth in 2019 and 1.4 percent growth in 2018, validating experts’ projections that beer/malt beverages would be among the best-performing categories during the pandemic.

Category Analysis: Other Tobacco Products AVERAGE SALES PER STORE

INDUSTRY TOTAL (IN MILLIONS)

2020

% change

2020

% change

Smokeless

$57,522

10.3%

$8,637

9.4%

Electronic cigarettes

$43,104

6.2%

$6,472

5.4%

Cigars

$28,538

11.7%

$4,285

10.8%

Papers

$1,698

13.8%

$255

12.8%

Pipe/cigarette tobacco

$539

-2.9%

$81

-3.8%

TOTAL

$131,401

9.2%

$19,730

8.3%

Segment wise, the most significant growth was seen in flavored malt beverages, which rose an incredible 60.1 percent in average sales per store. Super premium beer also had a banner year, with average sales per store jumping 24.4 percent. And per-store sales of non-alcoholic beer jumped 55.1 percent, although this segment remains the smallest in terms of dollar sales. Premium beer, the largest segment, saw average sales per store increase 6.6 percent, a turnaround from the No. 1 segment’s 2.2 percent decline in 2019. Malt liquor was the only segment to post a decline in 2020, with average sales per store falling 2.6 percent. A 14-percent jump in total industry sales easily marked a five-year high for the category; the previous high was 4.3 percent growth in 2016. Total industry sales grew just 1 percent in 2019. Unit volume was likewise up, reaching 5.4 percent growth. The category’s share of in-store sales cracked the 10-percent mark — 10.15 percent — after four years of hovering slightly beneath it.

Five-Year Trend: Other Tobacco Products

The percentage of c-stores that sell beer and malt beverages held steady at 75.2 percent. Among these stores, average sales per store rose to $218,425 in 2020.

2020

2019

2018

2017

2016

Percent change in total sales

8.3%

16.1%

23.5%

11.4%

9.0%

Percent change in total unit volume

5.3%

0.8%

5.5%

9.0%

6.8%

Beer and malt beverages as a percentage of in-store sales at these locations increased to 13.49 percent.

Share of in-store sales

8.12%

7.74%

6.84%

5.62%

5.16%

Candy

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

Growth in candy sales slowed last year after a solid 2019, likely due to lower foot traffic resulting in fewer impulse

COVER STORY

2021

Category Analysis:

Foodservice

Packaged Beverages AVERAGE SALES PER STORE

INDUSTRY TOTAL (IN MILLIONS)

AVERAGE SALES PER STORE

INDUSTRY TOTAL (IN MILLIONS)

2020

% change

2020

% change

Prepared food (prepared on-site or off-site)

$172,437

-5.8%

$25,891

-6.6%

Energy drinks

$66,021

6.3%

$9,913

5.4%

Hot dispensed beverages

$38,473

-23.7%

$5,777

-24.3%

Carbonated soft drinks

$55,751

4.8%

$8,371

3.9%

Cold dispensed beverages

$19,375

-4.9%

$2,909

-5.7%

Sports drinks

$21,971

11.3%

$3,299

10.4%

Frozen dispensed beverages

$8,559

-5.4%

$1,285

-6.2%

Bottled water

$20,293

-4.2%

$3,047

-5.0%

TOTAL

$238,844

-9.2%

$35,862

-9.9%

Juice/juice drinks

$13,833

5.5%

$2,077

4.6%

Iced tea (ready-to-drink)

$9,897

-1.6%

$1,486

-2.5%

Enhanced water

$9,630

3.0%

$1,446

2.2%

All other packaged beverages

$13,014

7.5%

$1,954

6.7%

TOTAL

$210,410

4.7%

$31,593

3.9%

2020

% change

2020

% change

Five-Year Trend: Foodservice 2020

2019

2018

2017

2016

Percent change in total sales

-9.9%

5.2%

2.4%

3.6%

6.6%

Share of in-store sales

14.75%

16.92%

16.5%

16.38%

16.14%

Five-Year Trend: Packaged Beverages 2020

2019

2018

2017

2016

Percent change in total sales

3.9%

4.3%

3.2%

0.2%

4.2%

INDUSTRY TOTAL (IN MILLIONS)

Percent change in total unit volume

-0.7%

-0.3%

0.9%

-2.2%

1.0%

Share of in-store sales

13.0%

12.92%

12.71%

12.50%

12.74%

Category Analysis: Beer/Malt Beverages AVERAGE SALES PER STORE 2020

% change

2020

% change

Premium

$65,488

6.6%

$9,833

5.8%

Imported

$33,733

18.0%

$5,065

17.1%

Flavored malt

$20,067

60.1%

$3,013

58.8%

Super premium

$12,967

24.4%

$1,947

23.4%

Budget

$11,182

1.2%

$1,679

0.4%

Popular

$10,263

7.7%

$1,541

6.8%

Microbrews/craft

$8,172

16.4%

$1,227

15.4%

Malt liquor

$2,271

-2.6%

$341

-3.4%

Non-alcoholic

$113

55.1%

$17

54.5%

TOTAL

$164,256

14.9%

$24,663

14.0%

Five-Year Trend: Beer/Malt Beverages 2020

2019

2018

2017

2016

Percent change in total sales

14.0%

1.0%

0.8%

0.5%

4.3%

Percent change in total unit volume

5.4%

0.2%

1.7%

3.0%

Share of in-store sales

10.15%

9.20%

9.34%

9.41%

9.56%

STORES SELLING BEER 2020

Percent of stores selling beer Percent of in-store sales

75.2% 10.2%

2019

2018

75.1% 9.20%

75.1% 9.34%

For stores selling beer: Average sales per store $218,425 $190,358 Percent of in-store sales 13.49% 12.20%

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

$187,226 12.40%

COVER STORY

2021

Category Analysis:

Candy

Salty Snacks AVERAGE SALES PER STORE

AVERAGE SALES PER STORE

INDUSTRY TOTAL (IN MILLIONS)

2020

% change

Potato chips

$10,729

-3.3%

$1,611

-4.2%

6.2%

Tortilla/corn chips

$8,238

-1.5%

$1,237

-2.3%

$887

-21.1%

Nuts/seeds

$4,755

-11.0%

$714

-11.7%

-0.8%

$864

-1.5%

Puffed cheese

$4,476

-1.7%

$672

-2.4%

$2,198

13.5%

$330

12.6%

Mixed

$2,184

-5.3%

$328

-6.1%

Candy rolls, mints, drops

$2,011

-15.9%

$302

-16.7%

Crackers

$1,812

-4.1%

$272

-4.8%

TOTAL

$50,549

1.7%

Pretzels

$1,718

0.0%

$258

-0.6%

Popcorn (ready-to-eat)

$1,792

2.0%

$269

1.2%

Other salty snacks

$7,446

-2.2%

$1,118

-2.9%

TOTAL

$43,150

-3.3%

$6,479

-4.1%

2020

% change

2020

% change

Bagged/repackaged peg candy

$21,525

10.6%

$3,232

9.7%

Chocolate bars/packs

$13,154

7.1%

$1,975

Gum

$5,907

-20.4%

Novelties/seasonal

$5,754

Non-chocolate bars/packs

2.5%

$7,590

Five-Year Trend: Candy 2020

2019

2018

2017

2016

Percent change in total sales

1.7%

4.0%

0.1%

1.6%

2.8%

Percent change in total unit volume

-5.7%

-3.2%

-1.8%

-2.0%

-1.9%

Share of in-store sales

3.12%

3.17%

3.13%

3.17%

3.19%

Alternative Snacks AVERAGE SALES PER STORE

2020

2019

2018

2017

2016

-4.1%

3.6%

2.9%

4.5%

4.4%

Percent change in total unit volume

-10.5%

-1.1%

-0.5%

-1.9%

1.1%

Share of in-store sales

2.67%

2.87%

2.85%

2.81%

2.74%

INDUSTRY TOTAL (IN MILLIONS)

2020

% change

2020

% change

Meat snacks

$11,988

11.7%

$1,800

10.8%

Health/energy bars

$3,849

-15.1%

$578

-15.7%

Granola/yogurt bars

$1,372

4.3%

$206

3.5%

Other alternative snacks

$526

-15.3%

TOTAL

$17,735

3.1%

$79 $2,663

-16.0% 2.3%

Five-Year Trend: Alternative Snacks 2020

2019

2018

2017

2016

Percent change in total sales

2.3%

2.8%

1.8%

1.4%

6.0%

Percent change in total unit volume

-4.8%

-1.2%

-0.1%

-1.8%

3.8%

Share of in-store sales

1.10%

1.11%

1.10%

purchases. Average sales per store of candy increased 2.5 percent to $50,549, down from 4.7 percent growth the previous year. Looking at the various segments, per-store sales increased for non-chocolate bars/packs (up 13.5 percent), bagged/repackaged peg candy (up 10.6 percent) and chocolate bars/packs (up 7.1 percent), with growth for all of these segments coming in ahead of 2019. Conversely, per-store sales declined significantly for candy rolls/mints/drops (down 15.9 percent) and gum (down 20.4 percent), possibly as a side effect of widespread mask usage cutting down on the need for breath fresheners. Total industry sales of candy last year rose 1.7 percent, a notable slowdown from the category’s 4 percent total industry growth in 2019, but still stronger than 2018 and 2017. Candy’s share of in-store sales remained steady at 3.12 percent vs. 3.17 percent the prior year. Total candy unit volume fell 5.7 percent. While this

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

% change

Five-Year Trend: Salty Snacks Percent change in total sales

Category Analysis:

2020

R E W PO

R E P P O H S T L N I E A M T E E G R MAN

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COVER STORY

2021

Category Analysis:

Edible Grocery

Non-Edible Grocery AVERAGE SALES PER STORE

AVERAGE SALES PER STORE

INDUSTRY TOTAL (IN MILLIONS)

2020

% change

2020

% change

Paper, plastic, foil products

$10,669

16.0%

$1,602

15.1%

8.9%

Household care

$7,219

25.9%

$1,084

24.8%

$1,235

18.8%

Pet care

$6,454

6.7%

$969

5.8%

10.1%

$1,076

9.2%

Laundry care

$3,563

8.8%

$535

7.9%

$3,443

0.0%

$517

-0.7%

Dish care

$926

18.8%

$139

18.0%

Packaged coffee, tea

$2,604

12.5%

$391

11.5%

Other non-edible grocery

$80

11.1%

$12

10.7%

Other edible grocery

$20,160

19.4%

$3,027

18.5%

TOTAL

$28,911

15.1%

$4,341

14.2%

TOTAL

$83,217

10.5%

$12,495

9.6%

2020

% change

2020

% change

Other dairy/deli products

$31,795

4.7%

$4,774

3.8%

Frozen foods

$9,824

9.8%

$1,475

Condiments

$8,225

19.8%

Packaged bread

$7,166

Breakfast cereal

Five-Year Trend: Non-Edible Grocery

Five-Year Trend: Edible Grocery

2020

2019

2018

2017

2016

Percent change in total sales

14.2%

3.8%

-2.4%

-0.8%

-0.6%

0.4%

Percent change in total unit volume

5.6%

1.2%

-3.7%

-4.2%

-1.9%

4.98%

Share of in-store sales

1.79%

1.62%

1.60%

1.66%

1.58%

2020

2019

2018

2017

2016

Percent change in total sales

9.6%

3.9%

-1.1%

-0.6%

1.3%

Percent change in total unit volume

5.2%

1.3%

-1.7%

Share of in-store sales

5.14%

4.85%

4.78%

4.88%

continued a five-year trend of declines, last year’s unit volume decrease was the largest during that time period.

Snacks Salty snack sales were another casualty of the coronavirus pandemic, with average sales per store dropping 3.3 percent to $43,150, a reversal of the 4.2 percent increase seen in 2019. Nearly all of the category’s segments saw per-store sales fall, with the biggest drops occurring in nuts/seeds (down 11 percent), mixed snacks (down 5.3 percent) and crackers (down 4.1 percent). Potato chips, still the category leader, experienced a sales decline of 3.3 percent. Only ready-to-eat popcorn posted growth last year, with sales per store increasing 2 percent. Total industry sales of salty snacks declined 4.1 percent, marking the first time in the past five years that this category’s sales fell in the convenience channel. Total unit volume also fell 10.5 percent. This continued a five-year negative trend, but with a dramatically larger drop. Alternative snacks performed better, with average sales per store rising 3.1 percent to $17,735, just a slight drop from the 3.5 percent growth that occurred in 2019. Segment performance was mixed. Per-store sales

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

increased for meat snacks (up 11.7 percent) and granola/ yogurt bars (up 4.3 percent), whereas health/energy bars and other alternative snacks both saw year-over-year sales declines of more than 15 percent. Last year was particularly strong for meat snacks as the segment significantly increased its average sales growth, more than doubling 2019’s growth rate of 5.2 percent. Meat snacks remain the top alternative-snack product in actual dollars. Total industry sales for alternative snacks rose 2.3 percent, marking the fourth straight year of increasing growth industrywide and the third highest since 2016. Despite this, total unit volume for alternative snacks declined by 4.8 percent. In terms of in-store sales share, salty snacks’ 2020 share dropped less than a point, to 2.67 percent, while alternative snacks saw virtually no change, holding at 1.1 percent.

Edible Grocery Likely benefitting from consumers looking to make faster stock-up trips rather than long visits to grocery stores during the height of the pandemic, the edible grocery category at convenience stores experienced strong growth in 2020. Average sales per store rose 10.5 percent to $83,217.

COVER STORY

2021

Category Analysis:

General Merchandise

Health & Beauty Care AVERAGE SALES PER STORE

AVERAGE SALES PER STORE

INDUSTRY TOTAL (IN MILLIONS)

2020

% change

Liquid vitamins, supplements, energy shots

$2,777

-10.8%

$417

-11.4%

-5.2%

Vitamins, supplements

$1,685

16.2%

$253

15.4%

$1,084

26.0%

Cold, cough remedies

$1,499

27.4%

$225

26.6%

0.0%

$977

-0.8%

Analgesics

$1,425

-4.3%

$214

-5.2%

$5,994

15.7%

$900

14.8%

Grooming aids

$999

56.4%

$150

54.9%

School & office supplies

$2,391

8.6%

$359

7.7%

Family planning

$533

3.7%

$80

2.2%

All other general merchandise

$946

-4.7%

$142

-5.8%

Skin care, lotions, external care

$493

7.4%

$74

7.1%

TOTAL

$57,096

4.3%

$8,573

3.5%

Stomach remedies

$486

-15.3%

$73

-15.4%

Other health & beauty care

$926

-4.3%

$139

-5.5%

TOTAL

$10,823

4.2%

$1,625

3.4%

2020

% change

2020

% change

Smoking accessories

$26,553

0.8%

$3,987

0.0%

Hardware, tools, housewares

$7,486

-4.4%

$1,124

Seasonal

$7,219

27.0%

Telecommunications hardware

$6,507

Batteries

Five-Year Trend: General Merchandise 2020

2019

2018

2017

2016

Percent change in total sales

3.5%

-2.1%

4.6%

12.9%

Percent change in total unit volume

-2.4%

-5.2%

-3.3%

-6.4%

4.4%

Share of in-store sales

3.53%

3.52%

3.69%

3.62%

3.53%

2020

% change

Five-Year Trend: Health & Beauty Care 2020

2019

2018

2017

2016

Percent change in total sales

3.4%

0.6%

-1.9%

1.6%

0.9%

Percent change in total unit volume

-3.2%

-1.7%

-2.4%

-3.2%

-2.9%

Share of in-store sales

0.67%

0.68%

0.70%

0.71%

All segments within the category saw increased sales with the exception of breakfast cereal, which was flat for the year. The segments with the strongest per-store sales growth included condiments (up 19.8 percent), other edible grocery (up 19.4 percent), packaged coffee/ tea (up 12.5 percent) and packaged bread (up 10.1 percent.) Other dairy and deli products saw the lowest growth at 4.7 percent, but generated the most dollars within the category.

25.9 percent in average sales per store, as consumers spent more time at home during the pandemic, resulting in more frequent cleaning and disinfecting. This put the segment second highest in dollar sales. Paper/plastic/foil products, which increased 16 percent, remained the top moneymaker in the category.

Total industry sales of edible grocery rose 9.6 percent, marking the second straight year of positive growth and more than doubling its 3.9 percent increase of 2019. Total unit volume also rose 5.2 percent, up from 1.3 percent growth in each of the two prior years.

Total industry sales for non-edible grocery rose 14.2 percent, far outpacing the 3.8 percent growth that occurred in 2019 and marking the second straight year of positive category growth. Total unit volume increased 5.6 percent, up from 1.2 percent growth the previous year.

Edible grocery’s share of in-store sales increased to 5.14 percent from 4.85 percent in 2019.

As a share of in-store sales, non-edible grocery rose less than a point to 1.79 percent.

Non-Edible Grocery

General Merchandise

Similar to its counterpart, the non-edible grocery category also likely benefited from the pandemic last year, particularly with panic-buying clearing out grocery store shelves. Average sales per store of non-edible grocery increased 15.1 percent to $28,911.

General merchandise sales in the convenience channel increased 4.3 percent last year, reaching $57,096 in average sales per store.

Household care products saw significant growth, jumping

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

Smoking accessories was the largest segment in this category by a significant margin, although sales were up just less than 1 percent on a per-store basis.

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Meanwhile, seasonal items and batteries performed very well, up 27 percent and 15.7 percent, respectively. School and office supplies also saw an 8.6 percent bump up in per-store sales, likely reflecting the need to purchase more of such items while working and learning from home. Total industry sales of general merchandise grew 3.5 percent, marking the first time since 2017 that the category’s c-store sales have grown. Total unit volume fell 2.4 percent, declining for the fourth straight year but slowing down from a 5.2 percent drop in 2019. General merchandise last year represented 3.53 percent of in-store sales, approximately the same percentage as in the previous year.

Health & Beauty Care Another c-store category to benefit from pandemic-driven changes in consumer shopping habits was health and beauty care (HBC). Last year, average sales per store of HBC were up 4.2 percent, averaging $10,823. That compared to 1.3 percent category growth in 2019. The grooming aids segment, which is small in actual dollar sales, saw the largest growth, increasing 56.4 percent in average sales per store year over year. Cough/cold remedies also spiked 27.4 percent in average sales per store, a likely effect of the pandemic, and overtook analgesics as the third-largest segment. The No. 2 segment — vitamins/ supplements — posted a 16.2 percent increase in average sales per store, while the largest segment within the category — liquid vitamins, supplements and energy shots — experienced a 10.8 percent decline. Total industry sales of HBC rose 3.4 percent in 2020, up from 0.6 percent growth the previous year and marking the highest growth in the last five years. Conversely, unit volume declined 3.2 percent, tying with 2017 for the greatest decline in the last five years. The category’s share of in-store sales held steady at 0.67 percent. CSN

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

2021

2021 REPORT CARD AT A GLANCE TOTAL SALES: The unprecedented nature of the COVID-19 pandemic and the nationwide shutdowns that took place make it impossible to judge the 17.9 percent sales decline fairly. Just imagine how badly the decline would have been if c-stores were not deemed an essential business and able to stay in operation throughout the pandemic. IN-STORE SALES: Sales inside the store, despite the challenges brought on by the pandemic, achieved their best percentage growth last year since 2016. FUEL BUSINESS: This is another measure that’s hard to grade considering the near-complete nationwide lockdown. Fuel revenue and gallons both declined sharply, but are expected to rebound somewhat in 2021. STORE COUNT: The total number of convenience stores in the United States declined for the third year in a row, with single stores completely accounting for the decline. Chain retailers added stores, preventing this from being an even lower grade. PROFITS: That the industry recorded marginal increases in both gross profit (up 1.8 percent) and pretax profits (up 2.1 percent) is surprising given the circumstances. FOODSERVICE SALES: Foodservice sales cratered during the height of the pandemic, dropping by 9.9 percent overall for the year. But again, because of the pandemic, this is yet another measure that’s hard to grade.

METHODOLOGY The 46th annual Convenience Store News Industry Report features data from a variety of sources in order to provide a complete picture of the financial health of the convenience store industry. Store census data was provided by Nielsen/TDLinx, which maintains a national count of c-store locations based on NACS’ definition of a convenience store. Sales data for most categories was provided by The Nielsen Co. from its Convenience Track retail measurement service, which is based on UPC sales and other methods that are counted through the use of point-of-sale scan data, as well as from data captured via electronic invoice and sales audits. Additionally, non-UPC coded merchandise results, including prepared food and hot, cold and frozen dispensed beverages, were provided by a retailer survey conducted by Convenience Store News, which also provided data on profits. Government sources include the Census Bureau of Labor Statistics, Department of Energy, and Federal Tax Administration.

COVER STORY

NAVIGATING THE ROAD TO RECOVERY

As more Americans begin to venture out again, c-stores can map out an improved customer journey for them By Renée M. Covino

AS MORE STATES AND local municipalities loosen restrictions, consumers are starting to step out again, and convenience stores have a great opportunity to attract them back. But things have changed since the masses shopped brick-and-mortar stores. And even though some consumers never abandoned their local convenience store during the height of the pandemic, they, too, are evolving alongside those trying to establish what a post-COVID shopping experience should deliver. So, what is recovery going to look like for the convenience channel — and how can it adapt to customers most effectively? Industry experts have many ideas regarding changed consumer wants/ needs, both at the pump and inside the store. Here are some of those visions, as told recently to Convenience Store News:

Consumers Want Safe When customers first return to stores, safety will be top of mind, according to Stefan Read, senior vice president of strategic advisory and strategy practice lead at Jackman, a “reinvention” company that has worked with such retailers as Duane Reade, Walgreens, US Foods, and Lululemon. “It will be important for retailers to communicate their safety efforts and provide the necessary protocols, such as sanitizer stations and contactless payment options, as a way to reassure customers,” Read said. The desire for clean and contactless

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

stores will likely remain even after safety guidelines are no longer needed, echoed Samuel Mueller, CEO and co-founder of Scandit, a provider of barcode scanning, text recognition and object recognition solutions. C-stores should think about “making safety part of their branding,” and walking through their own stores to check out safety through the eyes of the shopper, which can provide insights such as recognizing narrow aisle locations where customers may feel uncomfortable walking too close to others, added Mark Delaney, retail industry principal at Zebra Technologies, an enterprise technology company. A structured way for retailers to know how many customers they have, their conversion rate, peak traffic times, if customers are wearing masks, if they are appropriately spaced, and how much room is available is through people flow management software, explained Nick Delyani, director of retail, North America for Xovis, which recently launched an integrated software as a service (SaaS) solution called FLOW. Utilizing such software is a way for retailers to keep employees and customers safer in these times, he said.

Consumers Want Connection After spending so much time in their homes, customers will be looking for connection with others more so than ever. “Retailers should be thinking about how to leverage their space to engage with customers differently to fulfill this need, rather than acting just as a place to transact,” Read suggested.

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With the surge of online sales comes “a lack of true connection with customers,” added Toni Thompson, president of retail solutions for integrated communications company RR Donnelley. “Retailers have to recognize that customers are excited to get back to shopping; they have to capitalize on this excitement and the desire for socialization, creating in-person experiences that leave customers feeling a connection and knowing that the retailer really gets them,” she explained.

to see a huge uptick in usage, he predicts.

Still, caution needs to be part of the connection equation. C-stores need to train their employees on how to interact with customers as the impact of the pandemic declines, noted Spencer Ware, managing director and retail practice leader at Conway MacKenzie, part of Riveron, a national business advisory firm. This means keeping a distance from consumers unless invited closer. “A negative interaction can quickly create a highly vocal and negative critic, much more than in pre-pandemic times,” he said.

Scan & Go apps and mobile websites can also help retailers seamlessly verify the age of a shopper in the case of age-restricted products, such as alcohol and tobacco.

Consumers Want Fast(er) With so many consumers shopping online during the pandemic and experiencing superspeedy delivery times, fast and easy checkout is now a must in the retail world. “Customer expectations have shifted such that they now expect even faster checkout and fulfillment of orders,” stated Carlos Castelán, managing director of The Navio Group in Minneapolis, a retail and consumer goods business consulting firm. The way he sees it, c-store operators should be considering how to enable even more convenience for customers via streamlined checkout; a buy online, pick up in-store (BOPIS) option; new payment options via phone; and local delivery. “Reducing friction throughout the shopping journey to decrease and remove any wait times for customers should be a key focus for convenience stores,” Castelán said. People have always had a strong dislike for waiting in checkout lines, but this has become even more so during the pandemic, said Scandit’s Mueller. As a result, technology that helps to speed things along, such as mobile Scan & Go and contactless payments, will continue

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

“While c-stores already prioritize speed and convenience, customers now expect a higher standard,” Mueller said. “Retailers need to be willing to invest in technology, processes and flexible options that will provide the modern shopper the safe and frictionless shopping experience they are looking for. Customers have new standards, and they will want to retain some of the benefits of the e-commerce experience when back in-store, such as the ability to seamlessly access ratings or allergy information.”

“Reducing friction throughout the shopping journey to decrease and remove any wait times for customers should be a key focus for convenience stores.” — Carlos Castelán, The Navio Group

Consumers Want Hybrid Options The pandemic proved that consumer adoption of e-commerce isn’t going away, and that includes online shopping, BOPIS, same-day delivery, and more. Today, consumers expect retailers to offer a hybrid of both in-person and online shopping, driven by fast delivery (or at least pickup) options and mobile apps. “To handle both channels and track supply and demand, retailers must ensure they have data-driven technology at both the front- and back-ends of the supply chain,” Joe Scioscia, vice president of sales at VAI, an ERP (enterprise resource planning) solution provider, told CSNews. “Especially because of higher consumer expectations, having full visibility of your inventory via a BI (business intelligence) dashboard or ERP solution is crucial for modern retailers, including c-stores.” Retailers that can successfully combine these worlds, bringing digital touchpoints to the in-store shopping experience, will be able to establish long-term relationships with customers and set themselves apart, Scioscia noted. And ideally, the hybrid factor would extend to the pumps, too. “Technology such as mobile pay at the pump and the ability to order something in-store while pumping gas can also be a key differentiator for fuel customers,” said Jeff Hoover, data insights strategist

COVER STORY

for Paytronix Systems Inc., a provider of advanced digital guest experience platforms to c-stores. Mobile/touchless options are becoming more of the expectation, particularly so with younger consumers, he added. Small and independent retailers are also not excluded from hybrid programs thanks to new technology options geared toward the specific needs of these businesses. One such option is Mobile Food Menu, an online and mobile ordering solution created specifically for independent c-stores. The program gives the c-store operator immediate tools to increase consumer interaction and boost purchasing from the pump to the store; it also has delivery capabilities, according to company CEO Nick Karapetian. As an example of what can be achieved, he highlighted a c-store operator in Los Angeles with six locations that recently started using the Mobile Food Menu online ordering platform. “They started a digital ad campaign with Coca-Cola brands and in two months, increased their online sales from zero to $20,000 a month,” he relayed. “Their monthly ad budget is $1,200 and their online sales are all incremental to their walk-in business. Mobile Food Menu manages the ad

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

campaigns as well, so we see the results in real-time.”

Consumers Want Local Understanding the local market is crucial to attracting customers back, according to Zebra Technologies’ Delaney, who pointed out that loyalties to many large retailers have frayed during the pandemic due to stocking issues. C-stores have an opportunity to retain customers by continuing to offer them local items and foods they became attached to during the pandemic. Local loyalty has increased since COVID, echoed Sam Amrani, founder and CEO of Olvin, an AI-powered solution focused on predicting consumer behavior. “Consumers are staying local more, and the network effect of c-stores in local neighborhoods has become even more centralized,” he pointed out. “C-stores should be looking at what other local retailers their shoppers visit in the neighborhood and link up with them to create cross-promotions that will drive customers to both.” Campaigns that focus on giving back to the local area are ones that create respect and trust, noted Chris McArdle, chief revenue officer for Smartly.io, a social advertising automation company. He highlighted 7-Eleven Inc.’s recent partnership with The Ammersion Group in Dallas to identify local artists to create neighborhood-specific murals on interior and exterior walls of 7-Eleven stores. “Brands [showing] their customers a dedication to uplifting each community they have a presence in is a tried-and-true technique that will always attract an audience. In this case with 7-Eleven, it’s not just about

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COVER STORY

getting back to shopping, but engaging personally with shoppers as this happens,” McArdle said.

Consumers Want Better Loyalty Offerings Loyalty programs in the convenience channel have traditionally focused on rewarding consumers with future discounts on fuel, food or beverages. But with the introduction of e-commerce and delivery within the channel, retailers must now utilize loyalty programs to differentiate themselves in the marketplace, “grounding their program in their unique and core service offerings, such as quick-service meal solutions, unique products outside of food and beverage, or differentiated private brand items,” said Jean Ryan, senior director of brand strategy and design for Stamford, Conn.-based private-brand consultancy Daymon. “Promotional marketing of the loyalty program should be built into the retailer’s broader integrated marketing strategy, ensuring that awareness occurs across multiple digital tactics inclusive of mobile, app, website, email and social media platforms with consistent, creative messaging and offers,” Ryan explained. Continuity is crucial, added Diana Medina, director of e-commerce solutions at Inmar Intelligence, a data and tech-enabled services company. “If you’re transforming digitally and have disconnected experiences between e-commerce, in-store, digital coupon galleries, loyalty programs and media, today’s shoppers won’t stick around. They are engaging across multiple touchpoints, but expect one consistent experience,” she said. Best-in-class loyalty programs give the most loyal members “sneak peeks” at new limited-time offers, or develop a tiered points system that rewards incremental visits or app downloads, noted Sarah O’Grady, vice president of brand marketing at Vericast, a marketing solutions company. “But stores looking to establish loyalty programs must be aware that offering free products won’t be enough to inspire action,” she cautioned. “Promotions will remain a key driver for loyal, lapsed

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

and new consumer activation, with true loyalty being earned through quality offers and a seamless shopping experience.”

Consumers Want a New Level of Personalization With more choices than ever, consumers are looking for offerings that cater to their individual needs. Email marketing is one of the most cost-effective and powerful tools for personalizing offers and driving retention, according to Nick Maglosky, vice president of strategy for Constant Contact, which helps small businesses build their brands online. By establishing a consistent line of communication — especially one that can personalize offers — smaller c-stores can increase retention in today’s market, he said. One of the byproducts of the COVID-19 pandemic is that shoppers care less about the transactional side of shopping now and more about their desire to be understood as a unique individual. Because they so value that personal connection with a retailer, John Nash, chief strategy officer at Redpoint Global, a software provider for customer data and engagement, cited that the company’s surveys show that customers today are willing to provide more data to receive a more personalized experience. However, as customers share more data in exchange for a more personalized experience, data privacy, which is already top of mind for consumers, will continue to be a priority. “A deep understanding of a customer must then include honoring preferences for how their data is collected, shared and used,” emphasized Nash.

Consumers Want Retailers With Values Throughout the pandemic, consumers shifted from a focus on value to values — meaning they are looking beyond just price and quality when making purchase decisions. “Consumers have become aware of social injustices and are more apt to hold organizations accountable. When shopping, consumers will be looking for brands that hold similar values to them, and it will be important for retailers to be purpose-driven,” Read said, adding that it will also be important for retailers to relay their values to consumers through messaging. There’s increasing emphasis on identifying and connecting with a retail brand’s corporate values, Vericast’s O’Grady agrees. “Today’s consumers will give loyalty to the brands that communicate what their brand stands for.” Vericast’s 2021 Consumer Intel Report revealed that 52 percent will buy from/shop at companies whose values match their own. CSN

GPM’s Pandemic Lessons

The retailer shares what it’s learned and how it’s attracting customers back For one U.S. convenience store chain, meeting the changing needs of customers during the COVID-19 pandemic has been like a fast-paced dance. “[The pandemic] kept us on our toes, fielding challenges we never experienced before,” Michael Bloom, executive vice president and chief merchandising and marketing officer at GPM Investments LLC, a wholly owned subsidiary of Arko Corp., told Convenience Store News. “We learned a lot as a retailer and were able to adapt and respond quickly in a very unique environment.” Early on, the Richmond, Va.-based retailer sourced suppliers from different countries to provide hand sanitizer, masks, gloves and liquid soap to help keep its customers and employees safe. COVID-related adaptations evolved from there, resulting in permanent merchandising and marketing changes that are still continuously being monitored, tweaked and refined. Bloom shared the followed lessons learned and ways GPM is attracting customers back: • Go big on pack sizes. Over the past year, GPM has seen shoppers make fewer trips and stock up on larger sizes of basics and consumable items. • Increase prepacked fresh and frozen food. This lesson happened for GPM simultaneously with a slowdown in in-store food items that were not packaged. To meet this prepacked demand, the chain is adding freezers and graband-go coolers to approximately 585 and 650 stores, respectively, according to Bloom. Also, a packaged value chicken sandwich was added to 150 stores. • Revise your dispensed beverage assortment. Now that the dispensed beverages area is back in business, flavors are being tweaked and retested

in a space that is receiving “extra cleaning,” he noted. • Offer more home-office-geared snacks. “We found that the purchase of gum and mints is down because fewer people are working in office environments and attending in-person meetings,” relayed Bloom. “We have seen the tradeoff of breath mints for items like chocolate, gummy items and beef jerky for homeoffice use.” • Play up loyalty programs. GPM has discovered that loyalty programs play an even more important role now since the start of the pandemic. It relaunched its fas Rewards program in late 2020 and expanded it to all stores this May. The program offers customers up to 4 percent in loyalty points, and personalized offers. “Since the relaunch, we’ve seen nearly 100,000 new enrolled members who have taken advantage of our new rewards on both fuel and inside merchandise,” he reported. • Provide contactless payments. Since the beginning of the pandemic, GPM has made contactless payments, such as Apple Pay, available in its stores. GPM was founded in 2003 with 169 stores and has grown through acquisitions to roughly 2,950 locations, comprised of approximately 1,350 company-operated stores and 1,600 dealer sites to which it supplies fuel in 33 states and Washington, D.C.

J UNE

20 21

Convenience Store News

FOODSERVICE F

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

Finding Creativity With Condiments Sauces are a broad landscape that can be endlessly innovated upon LET’S BE HONEST

— condiments can make or break a dish.

Flavorful sauces add brightness, spice and richness to an everyday meal. The sauce category has changed dramatically over the years as global flavors like sriracha and gochujang have transcended categories and elevated ubiquitous condiments like ketchup, mayo and barbecue sauce. Ketchup is loved by 78 percent of the total U.S., according to Datassential’s FLAVOR database. Like many of the other classic condiments, it can take on innovative flavors, premium ingredients, regional brands, and clean-label ingredients. Sauces are a broad landscape that can be endlessly innovated upon by incorporating lesser-known spices, global influences, daypart trends, and more.

hearts of Americans. In the past four years, it has grown by 39 percent on menus as operators incorporate it into traditional Japanese fare like okonomiyaki, karaage or sandos. Over the past four years, chili oil has also grown by 42 percent on menus, and has been captured on the Adoption stage of the MAC (Menu Adoption Cycle), according to Datassential’s MenuTrends Infinite database. While exact recipes for chili oil can vary, it typically consists of some type of oil infused with chili peppers. This is a multipurpose condiment that can be used in dishes such as egg scrambles, sandwiches and pizza. In fact, it has grown 8 percent in the past four years on pizza menus. Independent pizza operator Paulie Gee’s offers its Vegan Daniela Spinaci Pizza with a topping of mild Aleppo pepper chili oil.

Heat Seekers Spice preference varies from person to person. In 2018, Datassential’s Condiments, Sauces & Dressings Keynote mentioned that “men have a higher affinity for spicy flavors while women favor savory.” In the same keynote, it was shown that consumers typically skew toward moderate heat spice levels, so finding that balance is extremely important for operators. Harissa, a North African chili paste made from chiles, garlic, olive oil, citrus and warming spices, is currently found on less than 1 percent of menus, but has experienced an uptick in menu mentions over the past four years. Harissa is a versatile condiment that is often used to complement grilled meat, fish or vegetables. Similarly, hot honey has a low menu penetration, but has grown by 176 percent over the past four years. Just like regular honey, it can be used to top anything — sweet or savory. Operators have even included it as a condiment on dishes like pizza, fried chicken sandwiches, and wings.

Asian Influence It might not be surprising that 7 percent of U.S. consumers hate mayo, according to Datassential’s FLAVOR database, but in Japan, consumers are decidedly in favor of it. Not only does Japan love mayonnaise, but it also has a museum dedicated to the beloved Kewpie brand. The iconic mayo with a red baby on the bottle has been a staple in Japanese culture, and has won the

Sauces are a broad landscape that can be endlessly innovated upon by incorporating lesserknown spices, global influences, daypart trends, and more. Blurred Dayparts Mashups aren’t a new idea, and breakfast is the perfect daypart to switch it up — there are only so many ways to make eggs interesting. Operators are using flavors like chimichurri to add a layer of complexity to breakfast. Chimichurri, originating from Argentina, is a blend of fresh herbs, garlic, olive oil, vinegar and chili flakes, all blended to create a bright green sauce. Over the past four years, chimichurri has grown by 89 percent on breakfast menus, according to Datassential’s MenuTrends Infinite database. Operators have included it in carne asada (steak) and eggs, breakfast burritos, and eggs benedict. CSN

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.

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

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Photo credit: Krispy Krunchy Foods LLC Facebook page

The Trust Factor As consumers seek out safety, branded food concepts at c-stores answer the call By Renée M. Covino THE COVID-19 PANDEMIC has had widespread effects on consumers’ consumption habits. Among them, Americans have gravitated toward well-established brands to feel more assured in the safety of the foods and beverages they’re consuming, and they’ve turned to comfort foods to find enjoyment and a bit of relief from the stress and uncertainty of the pandemic.

Both of these shifts have benefitted convenience store operators who have chosen to go the branded route for their foodservice offerings, rather than the proprietary route. Branded food concepts bring brand recognition, familiar flavors and consumer confidence to convenience stores, allowing them to compete with the other foodservice players in their area, including standalone quick-service restaurants (QSRs), according to Kathy Johnson, senior vice president of franchise service for Godfather’s Pizza, an Omaha, Neb.-based restaurant chain that has been operating in the c-store market for more than 35 years. Godfather's Pizza offers two distinct programs to the convenience channel: Godfather’s Pizza Express, which includes a wide product mix covering all dayparts; and Godfather’s Pizza TO GO, a program created to reach smaller convenience operations with a manageable menu, flexible equipment needs, and minimal training requirements and labor needs. “We continue to open new locations on a consistent basis, even over this past year,” Johnson said, noting that the pizza industry weathered the pandemic better than most QSRs. “Pizza

sales were very strong in most of our franchised c-stores, outperforming other food concepts. Customers viewed our packaged pizza and sides as safe and convenient.” A similar story can be found with Krispy Krunchy Chicken, a convenience store-based QSR concept with more than 2,600 retail locations in 47 states. Allison Shapiro Dandry, spokesperson for the Alexandria, La.-based company, told Convenience Store News that Krispy Krunchy’s business in c-stores has “grown considerably” since the onset of COVID. “Very early on, we supported our stores to stay open as a means to gain foodservice business when other traditional restaurant/foodservice establishments were closed,” she said. “COVID accelerated acceptance of c-stores as a viable foodservice alternative, and that trend will continue to grow.” Slightly more than half of c-store shoppers currently make a practice of purchasing prepared foods in the channel — 52 percent say they have done so within the past month, according to the findings of the 2021 Convenience Store News Realities of the Aisle Study, an annual benchmark study of U.S. c-store shoppers. Among these consumers, the average number of prepared food purchases they make at c-stores in a month is 2.7, down from 5 times in 2020. Millennial shoppers (aged 24-39) are particularly fond of convenience foodservice. More than two-thirds of millennials (67 percent) report buying c-store food in the past month. Millennials also make a higher number of prepared food purchases monthly at c-stores (4.7). Interestingly, when shoppers overall were asked where they would have purchased prepared foods if they had

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Convenience Store News

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FOODSERVICE

not done so at a c-store, 57 percent said a fast-food restaurant and 11 percent said a fast-casual restaurant (Freshii, Panera, Chipotle, etc.).

flexibility. Retailers can decide how to execute the program — whether they want to do a complete in-line conversion, a kiosk package, a countertop package, or use their own equipment.

Driving Traffic Through Innovation Innovation in the c-store industry has been extraordinary over the past year or so, driven by the challenges of the pandemic. And branded food concepts have been no exception.

While full Naughty Chile Taqueria locations have the complete menu and can make tacos, burritos, quesadillas and nachos, the brand saw a need among convenience retailers who don’t have this concept to “get a lot of grab-and-go burritos out onto the hot glide,” President Jane Hartgrove told CSNews. So, the brand recently expanded its menu to include Quickies — burrito mixes that a retailer can thaw, scoop and roll.

The convenience channel “pushes restaurant concepts to see outside the box,” according to Johnson of Godfather’s Pizza. “This is reflected in menu options, packaging, marketing and décor. It is a partnership that has unlimited potential,” she explained.

“It’s the easiest Mexican foodservice ever, and we even offer the burrito labels,” Hartgrove said. “For retailers that have space, time and labor limitations, the Quickies Burrito Mixes give them a foodservice program that makes it look like they have their own commissary.”

Godfather’s Pizza aims to keep its menu current by continually analyzing market trends and visiting with franchisees who are on the front lines every day. Its new crust options — Thin Crust and MozzaLoaded Crust — are an example of keeping in touch with consumer demands, Johnson noted. The brand also introduced Cinnamon Churro Bites as a low-labor dessert option for all dayparts that holds well in a warming chute. This year, quarterly promotions are designed to introduce new “interactive” pizzas targeted specifically to the c-store customer, and present limited-time offers that are comfort-based pizzas, according to Dave Gartlan, vice president of franchise development for Godfather’s Pizza. The first quarter of 2021 saw the introduction of the Angry Pepperoni Pizza, followed by the launch of the Patty Melt Pizza in the second quarter. At Krispy Krunchy Chicken, the brand recently launched a comprehensive new breakfast program, which not only introduces four new items, but also includes a menuboard, marketing and promotions, and training and sales support. The new breakfast program was intentionally unveiled at this time when morning commuters are increasing. “We continue to innovate in the foodservice category to stay ahead of growth trends in the channel,” relayed Dandry. “This is a unique and innovative way to capitalize on the growing trend toward breakfast in c-stores, with a full program that quickly transforms our locations into breakfast destinations.” Denver-based Naughty Chile Taqueria, a licensed Mexican food concept scalable to any-size convenience store, boasts

Marketing Boosts Along with keeping their menus fresh, c-store retailers also look to their branded foodservice partners for marketing support that will drive more foot traffic to their locations. Recognizing that consumers like “the story and the theater and the history” behind branded foodservice programs in c-stores, Naughty Chile provides its retailers with Mexican-American artwork and holiday-themed promotions. Additionally, flyers and specials can be populated with specific store information and printed at the store or a nearby copy center. “Everything we offer to market the business is easy for c-stores to implement,” Hartgrove stated. Godfather’s Pizza promotes all store openings via digital and social media, advertises inside and outside the stores, and works with the Chamber of Commerce in each area, Johnson said. Sweepstakes to win “Free Pizza for a Year” are also a proven traffic driver. These days, marketing support also means helping retailers capture digital orders. Krispy Krunchy Chicken is cultivating a delivery app partnership to increase dinner business. Dandry said the company sees the trend toward delivery apps tied to the foodservice business at c-stores continuing to evolve and grow. Godfather’s Gartlan says customer demand has resulted in three “must-haves” since the start of the pandemic: delivery, online ordering, and curbside pickup. On April 1, it released a new online ordering app so that customers can order from their mobile phones. Godfather’s has also partnered with DoorDash Drive to provide “last mile” delivery to customers. This service is integrated with its online ordering platform to make it easy for the operator to request a Dasher for their location. Curbside pickup is also integrated into Godfather’s online ordering platform. Once the operator enables this functionality, the customer can simply check that option, fill in their information, and their order will be delivered to them car-side. “By adding digital ordering, operators are enjoying significantly higher check averages and realizing a bump in their dinner dayparts where large pie sales excel,” said Gartlan. CSN J UNE

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FEATURE

THE FUTURE OF FUELING

Alternative fuels, electric vehicle charging stations and other technologies are changing the face of the forecourt, and c-stores need to start preparing now By Tammy Mastroberte

convenience stores is in a constant state of change these days, whether it’s upgrading for EMV, offering alternative fuels, adding electric vehicle (EV) charging stations, or paying for fuel through in-car technology. But how quickly are the alternative fuel and electric vehicle changes happening, and what should c-stores be doing now to prepare for the future?

THE FORECOURT AT

“I think electrification is likely to be the only real impact to c-store business and in a high electrification case, c-store operators need to position themselves for a non-fuelcentric business,” said Alan Cerwick, CEO of VP Racing Fuels, a San Antonio, Texasbased company that provides branded fuel programs to the convenience channel. “With that being said, there’s likely time for owners to figure it out.” In February 2021, both General Motors and Ford Motor Co. announced plans to move toward electric vehicles, although Ford was talking primarily about its vehicles in Europe. General Motors said by 2040, it plans to have 100 percent of its portfolio fully electric, and Bloomberg is forecasting that by 2040, 60 percent of vehicles will be electric. President Joe Biden has announced that he will be heavily investing in the electric vehicle market to the tune of $174 billion. 76 Convenience Store News C S N E W S . c o m

“Even if they are correct, and I don’t think they are, that is still less than one-third of vehicles, which means two-thirds will still be combustion engine fuel,” John Eichberger, executive director of the Fuels Institute, a non-advocacy research organization dedicated to studying transportation energy based in Alexandria, Va., said about the Bloomberg prediction. Some advocates think EV is the only environmental solution and are pushing for mandates, specifically in California where they are trying to push a ban on combustion sales by 2035, he explained. However, while EVs will have a huge role in the future, Eichberger believes it will be less than people think, and that there will be combustion engine liquid fuel in the market for decades to come. Looking at the current average life of a car — estimated to be about 12 years and on the high side, 15 — and looking at the percentage of electric cars to be sold this year — around 1.98 percent, and likely around 2 percent next year — the reality is that the change won’t be as dramatic as represented by the news and car company announcements, Cerwick echoed. “While I believe electrification will be slower than touted, it will inevitably continue and likely over the years, put downward pressure on the c-store industry,” he said. “In the end, hybrids make the most long-term sense as a transition period, and traditional fueled transportation is likely to remain for the foreseeable future. That, however, doesn’t mean c-store operators shouldn’t begin thinking about how to transition their business.”

Right now, operators need to look at “future-proofing” their sites. So, for new builds or construction, plans should include a power panel that can handle electric vehicle charging and parking spaces for the chargers, but also capability for alternative fuels that will likely grow more quickly than electric, according to Eichberger.

in September 2020 to achieve the first RNG production from dairy farms in Kern County, Calif. Meanwhile, BP entered a new partnership with Clean Energy Fuels Corp. to develop, own and operate new RNG projects at dairies and other agriculture facilities.

“There is a resurgence of interest in RNG because it hits environmental concerns people have,” Eichberger explained. “A couple of years ago, “We are decades away from EV being the end solution to reducing carbon, so we need UPS struck a deal with Clean Energy to purchase to reduce carbon in the liquid fuel space,” he tons of RNG because it satisfies low-carbon fuel standards, and it’s a great fuel for fleets because said. “If operators are changing equipment, the infrastructure to fuel them is pretty easy.” make sure it’s rated for biofuels, ethanol and other low-carbon alternatives because Additionally, oil companies must meet their renewthat is going to be more popular. Having able volume applications, which is why they are equipment to handle ethanol blends like blending E10 and biodiesel, and there have been E15, E20 or B20 will be important.” several converting refineries for renewable diesel, the Fuels Institute executive shared. The credits are Embracing Alternative Fuels available to them right now as there is a blenders Alternative fuels, including ethanol blends, tax credit of $1 a gallon, he noted. biodiesel renewable natural gas (RNG) and compressed natural gas (CNG), continue “There is a lot of incentive for them to make to grow — and oil and fueling companies these conversions, and they need to look at what continue to research and invest in these products they need to bring to market to stay lower-carbon options as well. viable,” Eichberger said. In March 2021, BP Products North America At the same time, ethanol blends are seeing a lot and Chevron formed and expanded joint ventures around RNG, respectively. Chevron of growth on the forecourt right now. In 2020, the number of retail sites selling E15 grew by 10 expanded its joint venture with Brightmark percent, bringing E15 to more than 2,300 stations LLC to produce and market dairy biomethacross 30 states, according to Growth Energy, a ane, an RNG, after it teamed up with California Bioenergy LLC and local dairy farmers trade association working to advance pro-biofuel policies and expand customer access to higher blends of ethanol.

The Top 10 Electric Vehicle Friendly States While electric vehicles only represent 2 percent of the overall car market, adoption is projected to increase in the future. And there are some states that are more electric vehicle friendly right now, so convenience retailers operating stores in those markets should be preparing. According to the American Council of Energy-Efficient Economy’s first State Transportation Electrification Scorecard, released in February 2021, the top 10 electric vehicle friendly states are: 1. California

6. Washington

2. New York

7. Vermont

3. District of Columbia

8. Colorado

4. Maryland

9. Oregon

5. Massachusetts

10. New Jersey

Convenience store retailers including Casey's General Stores Inc., Cumberland Farms, Family Express Corp., Holiday Stationstores, Kum & Go LC, Kwik Trip Inc., Minnoco, Murphy USA, Protec Fuel, QuikTrip Corp., RaceTrac Petroleum Inc., Royal Farms, Rutter's, Sheetz Inc. and Thorntons offer E15 on their forecourts, which is known as Unleaded at the pump. “The number of stores selling E15 has grown and will probably accelerate, and most vehicles on the market today are approved for E15,” said Eichberger. “I see ethanol blends growing, as pretty much all fuel has 10 percent ethanol and E15 is growing already with less hurdles to get it, including compatible and certified equipment.” There is also more opportunity around E15 now because up until this year, it could not be sold in the summer months; it is now approved for year-round availability. As of press time, the Fuels Institute was analyzing the results of a recent study looking at sales data for stores offering E15. By the end of a 12-month period, it was outselling higher octane blends. At VP Racing Fuels, the company only participates in non-pressurized liquid fuels and out of the 80 J UNE

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FEATURE

fuels the company offers, it has one streetlegal fuel, which is VP101. The company does have a number of ethanol fuels, as well as several formulas that utilize bio-butanol. Looking further down the road, the company is exploring synthetic fuels, which can utilize renewable energy, sequestered CO2 and hydrogen to synthesize hydrocarbons.

• Alimentation Couche-Tard Inc.: The parent company of Circle K convenience stores is planning to install EV charging stations in North America, after rolling them out in Europe. The Canada-based retailer intends to begin in its Quebec and California markets, with a combination of Circle K branded chargers and partner charging solutions.

“Ethanol is an easy-to-handle fuel and has a fairly long history of use in the gasoline pool,” Cerwick explained. “I believe its use will continue well into the future. In fact, E15 could become more widely adopted. But E85 in consumer application has effectively died. Ethanol could also bridge the octane shortage that seems to be growing.”

• Love’s Travel Stops & Country Stores: Last year, the Oklahoma City-based chain added EV charging stations to three of its locations in California, expanding the state’s portion of the nearly 4,000-mile West Coast Electric Highway, which seeks to provide charging stations every 25 to 50 miles.

More and more manufacturers and vendors are creating technology to handle alternative fuels, including dispensers and other equipment that works with ethanol blends, CNG, biofuels and more. Dover Fueling Solutions, which has been providing technology for alternative fuels for years, offers the industry’s first blending technology that enables multiple ethanol blends from a common hose, according to Scott Negley, senior director of product management at Dover. The company also offers dispensers UL-listed for E25 and B20 as standard. “[At the forecourt], we’ve seen greater variations of fuel offerings, with various additives to help drive greater fuel margins with premium grades, and increased use of biodiesel and ethanol blends such as E15,” Negley observed. “We will continue to invest in alternative energy solutions across our global regions, engaging with potential partners and growing our portfolio of renewable energy models. For example, we’re expanding our line of multi-hose, enhanced blenders to offer retailers more choices of higher ethanol and biodiesel products.”

Going Electric Although mainstream adoption of electric vehicles is not coming any time soon, according to industry insiders, many c-store chains are adding EV charging stations to their stores now, especially in markets like California where electric vehicles are more popular. Among the retailers in this category are: • Wawa Inc.: The Pennsylvania-based chain reported reaching an EV milestone, installing its 50th charging site across its six-state operating footprint in May 2021. The retailer anticipated exceeding 1 million total charging sessions by the end of May. 78 Convenience Store News C S N E W S . c o m

• Arko Corp.: The parent company of GPM Investments LLC is partnering with Chakratec, an Israel-based developer of EV charging technology, to ready its stores for electric vehicle adoption. A preliminary pilot is slated to take place in 2022, followed by extensive deployment of fast charging points throughout North America by 2030. “Not all markets will adopt at the same pace,” noted Eichberger. “California has a zero-emission mandate, and they are much more aggressive with rollouts, and the majority of electric cars have sold there. But there are 10 states that follow as well, so operators need to look at the regulations that affect their markets.” When going electric, it is also important for c-store operators to increase their focus on foodservice and other products and services to make their stores a destination outside of fuel. EV drivers will have other options to charge their vehicles outside of c-stores, unlike with traditional gasoline and alternative fuels. “C-store operators holding on to the belief that electric car owners in metropolitan areas will maintain their fueling habits by charging up at a c-store haven’t completely thought it through,” cautioned Cerwick. ‘People will refuel at home, work or shopping outlets — somewhere they are already parked. It will not be a special stop unless they are on some kind of road trip, in which case travel centers get the stop regardless of fuel type.” Right now, there is still development needed not only in battery technology for faster charging, but also in the infrastructure and grid to support critical mass, according to Matt Tormollen, vice president of solutions at Dover Fueling Solutions. “Even if the auto industry completely switched to EVs overnight, it would take nearly 20 years to replace the existing vehicle fleet,” he said. “We need to thoughtfully prepare for a transition, while keeping in mind liquid fuels will be with us for many years to come.” CSN

TECHNOLOGY

Transformative Technologies Rethinking IT needs and embracing emerging trends can bring c-store retailers to the next level By Melissa Kress CONVENIENCE STORE RETAILERS need to know two things to be successful: what they sell and whom they sell it to. Sounds simple, right? But not so fast; it may be a case of “easier said than done.”

Technology that taps into this information can transform the way a retailer does business. “I think identifying previously anonymous customers, with permission, leveraging a check-in strategy — as frictionless as feasible — that gives customers an understandably fair exchange of value is super exciting,” said Jeremie Myhren, chief information officer for Road Ranger LLC, a Schaumburg, Ill.-based chain of travel centers, truck stops and convenience stores primarily in the Midwest. “Rewards programs are great and have a very important place in our quiver, but in 2021, they aren't the only way for customer identification any longer. Traditional rewards leave a large slice of our patrons nameless to us,” he continued. “Leveraging sensors and other such technologies, we can segment and provide additional value and a more relevant experience to that important part of our audience.” For Mike Wilson, chief operating officer at Omaha, Neb.-based Cubby's — which operates 36 convenience stores in Iowa, Nebraska and South Dakota — software that allows c-store operators to see real-time movement of SKUs and how categories are trending is some of the

most exciting. The most successful chains have “terrific insight into what they sell,” he noted. “Gone are the days of guessing what might sell. You can pull up a category today and see how specific flavors are doing; even see how locations affect those tastes,” Wilson explained.

Moving Forward With AI With numerous SKUs, plus the countless number of consumers moving through a convenience store on any given day, retailers run the risk of missing sales opportunities and overlooking small inefficiencies — which can really add up, according to Matthew McAlister, vice president of marketing and business development at CB4. The New York-based machine learning and artificial intelligence (AI) company has its roots in the AI Lab at Tel Aviv University. When it first made the jump from research project to business, CB4 started in the convenience channel. One of the major influences in that decision was the fact that CB4 technology does not require any in-store hardware. It uses simple point-ofsale data that every retailer already has on hand. But it's more than that, McAlister pointed out. “An in-demand item left in the stockroom or an inventory discrepancy that lasts even a few days has a surprisingly large impact on a store's bottom revenue and on the customer experience,” he said. “We started in the demanding

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Convenience Store News 79

ON-DEMAND GRAB ‘N GO LABELS FOR CONVENIENCE STORES BOHA! can help you deliver freshly prepared foods and eliminate the management of dozens of expensive and potentially outdated pre-printed labels.

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Convenience Store News: How does BOHA! by TransAct help convenience stores respond to industry changes? Ray Walsh: An increasing amount of

column and longer length labels. 3. Two printers in one station allow you to print grab ‘n go and date code labels from a single device. 4. Removable printers let you easily swap and service the printers at the location, giving your food service operation 100% up-time.

convenience store revenue, profit, and customer loyalty is coming from new and innovative fresh food offerings — prepared in-store. Operators like Huck’s have shared that they’d like to be known as “restaurants that sell gas.” We provide mobile-first technology solutions that make managing these fresh food offerings much easier and more profitable, with minimal-to-no training required in-store.

CSN: What is BOHA! Labeling? RW: BOHA! Labeling is our labeling application. It’s

CSN: Can BOHA! help convenience stores manage the new responsibilities associated with a fresh food service program? RW: Yes, BOHA! helps convenience stores in four

1. Integration with ESHA’s Genesis nutritional database — Genesis is used by many c-stores to manage recipe and nutritional information. This integration allows our customers to make updates on one single database, and the information flows to BOHA! seamlessly.

key areas: 1. On-Demand Grab ‘N Go labeling — If you are still using pre-printed labels, this is a quick return on investment. 2. Food Safety and HACCP Logs — Digitizing these paper forms speeds up the temperature-taking process and provides detailed reporting to keep your customers safe and health inspectors happy. 3. Food Production and Inventory Management — Food waste is a major challenge for c-stores. With BOHA! Food Production and Inventory Management, we can provide production schedules and ensure DC write-offs are minimized. 4. Task Management — Store audits and daily task lists can all be digitized with advanced reporting, alerts and escalations.

CSN: What’s unique about your BOHA! Workstation? RW: The BOHA! Workstation was designed specifically for on-demand grab ‘n go and date code label printing. There is nothing like this on the market today. Some key features make it the best solution for businesses: 1. A charging base for iPads lets you charge up to three devices. 2. Crisp, clear 300 DPI printing is critical for dual-

TransAct_Advertorial.indd 1

native to iOS, which gives our customers the best app experience and allows the solution to work offline. Key features include:

2. Multi-menu functionality — For c-stores that have more than one concept, or have their own concept plus franchised concepts, switching between menus becomes simple. It makes prep and grab ‘n go labeling a breeze. 3. Adding pictures — This can help identify any menu item. 4. Batch Printing — Customers can print batches of labels very quickly for food prep and food production. 5. Multi-language menus —English, Spanish and French are offered out of the box, and almost any other language can be added.

CSN: How do customers manage BOHA!? RW: BOHA! is managed through our BOHA! Control Center, a web portal that allows users to make changes to pricing, build out new menus, create custom label designs, and view reports and analytics. As our customers adopt more solutions, having one central location to manage all updates and changes is critical. The BOHA! Control Center really simplifies the day-to-day management of our solutions.

To learn more about how the BOHA! suite of apps can improve your store operations, visit www.transact-tech.com/csn

5/25/21 1:54 PM

TECHNOLOGY

convenience store space because we had very high confidence that we could move the needle for convenience retailers significantly with clear gains to revenue. That proved to be true, which is why we keep growing in the c-store space, even as we expand to other retail verticals.” Since entering the channel, CB4 has formed partnerships with many leading industry players, including Kum & Go, QuickChek, Circle K, Quick Mart, Wilson's, Dash In, Plaid Pantry, and Wallis Cos. According to McAlister, the use of AI is growing. As competition has increased and the bar for implementation has decreased, many c-store chains are moving to AI-based solutions to better serve their customers and to find that crucial measure of differentiation. They're using AI, he added, to answer questions like: Does my store offer a selection of merchandise that's attuned to current customer preferences? Are we creating a better customer experience through best-in-class product availability? Are our store associates spending time in the places that offer the highest ROI and customer impact? With pandemic-driven changes like working from home, less committing and evolving preferences, convenience retailers know they need to stay on top of emerging trends and fluctuating demand. They are looking to AI solutions for help, he said. Among those retailers is Klamath Falls, Ore.-based FastBreak Convenience Stores. “Our convenience stores seemed liked they were far behind when it comes to technology. Around 2015, I saw everything that was out there and knew we had to get onboard to keep up with the future,” recalled Jeff Chase, director of convenience store operations for the chain of approximately 30 stores. FastBreak first came across CB4 at the NACS Show about four years ago, but as a small chain — roughly 20 stores at the time — the retailer wasn't ready for the platform. Fast forward to mid-2020 and Chase was ready to find a solution to measure what was happening within FastBreak's stores. The retailer began rolling out CB4 to its network in April 2021. While Chase acknowledges there are

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“C-stores want to make store IT management seamless, reliable and always on 24/7, while driving down cost. — Nick East, Zynstra some wrinkles that still need to be smoothed out, he said the platform offers an easy task-based solution for FastBreak's store managers. “It helps the managers look at their product sets all the time. Once a week, they are doing the tasks, but hopefully their eyes are open to things like stockouts. It will take it beyond recommendations and create a mindset. That's what I am really hoping for,” Chase said. “In the Pacific Northwest, there are not a lot of chains. There are some big ones — GPM [Investments LLC], Plaid Pantry — but there are a lot of mom-and-pop stores and no one really took advantage of the technology that is out there. We are trying to,” he continued. “We are trying to get ahead of the game. I feel like the customer service the tech companies provide is going to take us to a better level and make us more competitive with some of the major chains.” Road Ranger also signed on with CB4, a move driven by the company's desire to improve both its employee and customer experiences, according to Myhren. “The people that make up the Road Ranger workforce are our most valuable asset. It sounds cliché, but that doesn't make it any less true. Providing a positive customer experience centered around convenience is our most important deliverable. Naturally, one of our top priorities then is to enable the fantastic people of Road Ranger to spend as much time ensuring we deliver on our customer promise of convenience,” he said.

Employing technologies and tools like AI, and specifically CB4, supplements Road Ranger's team members and frees them up to spend more time with the customers. “As well, AI doesn't rest and has no cognitive biases,” Myhren said. “We're very open to employing AI, MI [machine learning] and other such technologies to free up our people and give them additional powers and abilities, and we're constantly on the hunt for other areas in which such technologies can help.”

On the Horizon McAlister sees AI as having nearly limitless use cases in convenience stores, from inventory management and replenishment, to enhanced loyalty programs, to pricing. “In our view, the most important applications will be those that help the ultimate end user — the customer — have a better experience with the brand by ensuring that the right product is in the right place and at the right time,” he said. As the bar for implementation lowers, more retailers will adopt AI, he predicts. “In that way, I think it will be less 'revolutionary' and more of a democratized resource. We will see AI ubiquitously across all store chains of all sizes, in everything that they do to serve their customers,” McAlister explained. “I am sure that over the next five or 10 years, we'll all be shocked at the multitude of ways the technology is applied to stores. We're looking forward to building a few of those solutions ourselves.” Aside from AI, a big change in retail technology is happening now around the infrastructure at the “edge,” across the whole store combining kitchen, fuel, store, loyalty and more, according to Zynstra, a provider of “intelligent infrastructure” for retail. “C-stores want to make store IT management seamless, reliable and always on 24/7, while driving down cost. This software-defined approach can only be achieved by understanding the customerfacing applications in the store and the infrastructure that supports the application experience. Technologies need to deliver the right outcomes for the retailer and their guests,” said Nick East, CEO and co-founder of U.K.-based Zynstra, an NCR company.

“Gone are the days of regularly sending store technicians out to resolve downtime issues caused by store IT equipment. Whether it's automation of patches and updates across devices in the stores, or the need to test and deploy new applications quickly, it all comes down to having an agile infrastructure deployed at the ‘edge,’” East said. He acknowledged that retailers will always be nervous about investing in technology that may soon be out of date. “This is where the flexibility of edge technology comes into play,” he noted. “It gives businesses the opportunity to adapt their existing technology infrastructure, whatever stage of the digital transformation journey they are on.”

Rethinking Technology Wilson believes smaller operators like Cubby's can benefit from embracing emerging tech trends. “It is possible that small companies like ours can compete against the larger chains when they break out of the old-school mold and spend money on tech,” said Wilson, who was previously director of operations at Chapel Hill, N.C.-based Cruizers Convenience Stores. By looking at IT needs in a new light, c-store retailers can transform their operations. “AI, ML, IoT, frictionless are the buzzwords of the past few years and I think with good reason. These technologies and paradigms are true advances in the world of computing and customer experience, and we should leverage them where it makes sense,” Myhren said. Studying and understanding how the c-store industry at large is leveraging such things, and applying that in the stores and in operations wherever it makes sense, is key to rethinking IT needs, according to the Road Ranger executive. “Going forward, and getting into crystal ball territory, AR/VR [augmented reality and virtual reality] and bridging the physical world with the digital world are areas to watch,” he pointed out. “I'm not talking about in a Matrix-style sci-fi scenario, but with upcoming consumer products and platforms — particularly from Microsoft and Apple that are rumored to launch in the next few years — I think some of these devices and platforms may cause some rapid advances in how commerce takes place, and we should be ready to understand their impact on our stores and how we can continue that all-important customer promise of convenience, leveraging them.” Also in the world of commerce, Myhren is watching emerging digital currencies. “Your guess is as good as mine as to how this will evolve and what role it will play in commerce in the future, but I do suspect at this stage, it will have a role and we need to keep our eye on it and be ready to evolve as the desires and needs of our consumers do,” he said. CSN

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EXPERT'S VIEW

The (DEI) Marathon Continues… The business benefits of diversity and inclusion efforts will vary by company, and culture won’t be achieved overnight By Jayson Council, Columbia University School of Professional Studies A QUESTION I OFTEN get asked is: When it comes to creating a culture of belonging, how do I start or where to begin? In response, you already have begun by acknowledging the problem. Far too long, companies have remained oppositional or denied the need for change. Industries at large understand now they cannot afford to squander opportunities to do right through implementing effective DEI (diversity, equity, inclusion) practices. As Maya Angelou once said, “Do the best you can until you know better. Then when you know better, do better.”

Understanding DEI work is not new, but it has become the hot subject matter with the recent heightened awareness from the nation’s racial reckoning. Diversity practices began because of the civil rights movement, to give voice to the nation’s historically marginalized communities that were rapidly growing in force. For context, think of DEI like this: diversity focuses on people of varying backgrounds; inclusion ensures those people are fully valued and not merely a quota number; equity allows those people to receive the same benefits with different, but fair, treatment. In combination, DEI ensures there are checks and balances in the workplace regarding belonging. Recently, I began to utilize an alternative framework to (easily) conceptualize DEI. Look at it from a place of D.I.E. (diversity, inclusion, equity) and replace each letter with three Rs: Representation – Respect – Repair. This simple substitute of terms profoundly provides the opportunity to understand and engage with DEI beyond the limitations of our background status to cover all personal experiences. It allows all ranges of the inclusion spectrum to march forth at once. Initiating a DEI program is not a sprint, but a marathon. It will require strategic planning and training to remain impactful throughout, both on the macro and micro levels of the company. Many company participants will begin the race with you, all with the intention of getting to the end in a respectable time. Yet, entering the race without proper preparation will lead to a disastrous result that will ultimately affect your company’s social and financial standings. It is also important to understand a program should be sustainable. Initiatives cannot be simply transactional, reflected by numerical quotas or data points. This critical work will influence and change mindsets, behaviors and performance. Communication and transparency will be of utmost significance to maintain engagement and encouragement throughout the entire company. As Edgar Villanueva, author of Decolonizing Wealth, so eloquently stated, “Everyone has the potential to lead, and leadership is about listening and being attuned to everyone else. It’s about flexibility. It’s about humility. It’s about trust.”

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The next step is to engage with leadership. Effective and sustainable practices will require the support of leadership. While they do not need to be experts in the subject matter, they should be informed and confident to take action to correct injustices within their organization. If possible, they should lead by example with calls for training, resource allocation, and utilizing subject matter experts or external support to develop such initiatives further. After all, DEI is an investment for the company. Two key organizational benefits of having a robust DEI program are: •Dynamic Talent Pools: Recruitment and retention of a talent pool is the bedrock of any company. Intentionality around DEI efforts will help to create authentic and meaningful early impressions of your company, as well as pave the way to reset company culture with a new populace who embrace and expect a fair and equitable work environment. When we discuss marginalized or excluded populations, the focus is heavily on creating entry or breaking barriers to unfair systems. Yet, retention is also critical. Too often, there are not enough opportunities to support and advance marginalized employees. •Enhanced Social Footprint: A DEI program significantly improves company image and reputation. Spearheading change as a solution to a long-denied problem relates your brand as based on fairness, innovation, emotional intelligence, engagement and forwardthinking. Being able to authentically stand behind a different, but improved, set of principles and practices results in a show of community to your employees and your customers. Intentionality is also key as data is

gathered from employees’ stories and experiences. This can occur through establishing focused committees or learning communities, tasked to initiate difficult conversations around how to improve company culture. A well-structured guided discourse can establish a secure foundation, opening lines of communication, transparency and fairness among the employees. Experiences can differentiate a person from another; however, company staff can bond and work better through a shared collaborative training where everyone’s input matters. Let’s be clear, the evaluations of your current company climate may be surprising to learn and hear. Nevertheless, you must remain engaged and committed, and above all, listen. Listen to colleagues, team members and customers about their experiences. We have learned biases are inherent in all of us and it takes effort to recognize and counter such embedded actions. This is the perfect time to acknowledge harmful truths and commit to change. In today’s culture, it is not enough to be non-racist; you must strive to be anti-racist. That will take inclination and decisive action. It is important to realize DEI work can help to address the glaring deficiencies and blind spots within a company, and then help to balance (and sustain) an inclusive work culture. To understand the benefits of DEI further, think of the curb cut effect. It is a theory that focuses on targeted universalism, or that by doing right for one group benefits many groups. The curb cut is a cut or ramp in an elevated curb allowing easier passage between the street and sidewalk, and originally implemented to make streets accessible to accommodate the physical limitations suffered by some of our disabled populations. Yet, we all utilize the ramp in different forms — by riding bicycles, pulling luggage, pushing carts or moving large items to a car. An idea to help one group can be a benefit to everyone. We should look at DEI similarly.

Another great resource designed by the Equity Institute focuses on the concept of “Awake to Woke to Work.” This framework is easy to understand because it “calls out” that we are all engaging with DEI from different positions of employment, backgrounds and experiences, but collectively we aim to work together. With this known, the groundwork for an inclusive workplace can begin. Keep in mind results and/or benefits of DEI initiatives will vary by company and its actions. There is no formulaic timeline as DEI is unique to the company culture and its employees. The earlier a decision is made to improve culture and implement well-planned strategies, the earlier results will begin to appear. Part of the process in engaging in DEI is also to establish target goals. Do note that targets stemming from conventional metrics will be ineffective as they may still be utilizing the same biases that need to change. DEI practices utilize both quantitative and qualitative analyses that will require nimble, innovative and creative methods. It is ideal to find ways that will curate a personalized experience to your company; that will have a broad “curb cut” impact. Now that we know DEI is a marathon and not a sprint, let’s just acknowledge how grueling training for a marathon can be. We know that strategic mental and physical preparation is essential for success. Understanding each runner has a unique style of training based on their experiences to date only adds another layer to the race. However, no matter how long they trained, where they are from or how they identify, all runners start from the same spot. This neutralizer allows for a fair race. Starting from the same place is huge. It allows all runners to know that no matter what, we are all here with the same goal, and that goal is to do our best to finish the race. Diversity, equity and inclusion is the marathon, and WE are the runners. CSN

Jayson Council has spent the past 20 years working to strengthen the nonprofit social and educational sector through strategic development, board recruitment, relationship building, fundraising and, above all, the power of opportunity. He has held administrative and teaching roles at Columbia University, Rutgers University, University of Pittsburgh, and Carnegie Mellon University.

Convenience Store News is partnering with exclusive underwriter Altria Group Inc. to launch a new industrywide initiative around diversity and inclusion. This column is part of a new platform designed to be a multi-touch digital and print program that will focus on the business case for c-store retailers and their supplier partners to place a greater emphasis on diversity and inclusion.

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TWIC TALK

Ina Strand, Alimentation Couche-Tard Inc. The 2020 TWIC Woman of the Year feels strongly about seeing the glass ceiling come down By Linda Lisanti

NOW IN ITS EIGHTH YEAR, the

Convenience Store News Top Women in Convenience (TWIC) awards program has recognized more than 300 of the best and brightest women making a positive impact on not only the companies they work for, but also the entire convenience retail channel. TWIC is the only program that recognizes exceptional female leaders, rising stars and mentors among retailer, supplier and distributor firms in the convenience store industry, from the C-suite to the store level to the independent entrepreneur. In TWIC Talk, our quarterly Q&A series, we interview a past TWIC winner about what it’s like to be a female leader in the convenience store industry today — the opportunities, the challenges — and get their words of wisdom for up-andcomers seeking to blaze their own trail. This month’s TWIC Talk subject is Ina Strand, chief people officer at

Alimentation Couche-Tard Inc./Circle K (ACT). Starting her career as an engineer and management consultant, Strand joined Couche-Tard when the company acquired Statoil, her former employer, in June 2012. She is currently one of two women serving on the retailer’s Executive Committee, and was instrumental in the development and introduction of the new global Circle K brand. In 2020, Strand was one of the five women celebrated by TWIC as Women of the Year. CSNews: How would you describe the current state of affairs for gender equality in the convenience store industry? How does this compare to 10 years ago? In my nearly two decades in the industry, I’ve seen significant progress on gender equality. I come from Norway, and there is no doubt that Europe is well ahead of North America on gender parity. When I moved to the U.S. about four years ago, it was a big change to realize that my role as a female executive cannot be taken for granted. As CHRO [chief human resources officer], I took on a gender diversity challenge from the CEO and board, and we have since made significant progress by establishing the ACT Women’s Council and improving our metrics on representation.

THE 2021 CONVENIENCE STORE NEWS TOP WOMEN IN CONVENIENCE PROGRAM IS SPONSORED BY: Founding & Presenting Sponsor

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My industry observation would be that retail is better than many other industries in which I have worked, including as a management consultant and engineer. This is likely due to the diversity of the customers we serve and our employee base. At Circle K, we used to say, “Come as you are,” to our customers and many of our team members tell me they have felt welcomed that way, too. There is clearly still a journey ahead of us, but I am proud of the progress we are making at Couche-Tard/Circle K and in the industry as a whole. CSNews: What is the most positive change you have personally witnessed? Let’s start with ACT’s Women’s Council, which I started two years ago to create winning conditions for women in the organization. With 62 percent of our workforce female, we recognized the need to create a representational group within the organization that supports the professional development of our female workforce and provides opportunities to help advance their careers and strengthen our business to better serve our customers. Looking back not even 10, but four years ago, we had zero women in the executive leadership ranks. Today, I’m proud to say we have five, including myself, in the Executive Leadership Team — representing 35 percent of that group. This is a major achievement and recognizes our CEO’s and board of directors’ commitment to gender equality across the organization. We did not stop with forming the Women’s Council. As the Executive Advisory Team leader for diversity and inclusion (D&I), I pledged to be an ally to push the company forward on this journey. Following the racial tensions across the globe in the summer of 2020, myself and our CEO Brian Hannasch committed to the entire organization that we would listen, learn, and take meaningful action to have our leadership better reflect our diverse customers and store team member base. Since then, we have created many diverse

business resource groups, including for race, religion, disabilities and sexual orientation. We have also promoted educational opportunities for minority team members, held D&I townhalls across the network, and sponsored venues for leadership to hear directly from our diverse workforce. CSNews: Along your career path, did you personally experience gender bias or inequality? If so, how did you overcome? Over the years, I believe most women in the workforce have experienced some type of bias. Since I became the first women in the leadership of Statoil Retail Norway at age 28, I have countless stories of being mistaken for being others’ administrative assistant or reporting to one of the men in the room. Yet, I have been so fortunate to be surrounded by good men — one of them once saying when asked if I was his admin: “No, she is not my admin, she is my deputy CEO and you should be careful, she will be part of the Corporate Executive Team one day, and make you and me seem very insignificant.” I don’t know if I could have made it without such support, and that is my goal today; to be that ally for others faced with bias or inequality. CSNews: What barriers to advancement do you see still existing in the c-store industry? When I accepted the award last year as Woman of the Year, I said in my speech that I hope this award is made from a piece of the glass ceiling — that invisible barrier to advancement that women continue to face. I feel strongly about seeing that glass ceiling coming down. It is up to me and other female leaders in our industry to sponsor other women, share our knowledge, and foster diverse perspectives. We need to encourage each other to speak up and find our confidence. We have also seen women struggle during the pandemic: unemployment is on the rise, and more women than men are leaving their jobs to care for family members. It is important that as a woman leader, I don’t let the scourge of COVID-19 distract me from the need to support our female workforce, and continually push for ways to make it easier for women to do their job and have avenues for success and fulfillment. CSNews: What is your advice for other industry women looking to rise to higher ranks? My No. 1 career advice, regardless of gender, is: Pick your boss carefully! CSN

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STORE SPOTLIGHT

A Convenient Concession Experience GetGo Café + Market opens its first-ever arena store, teaming up with the Pittsburgh Penguins By Danielle Romano

At a Glance GetGo Café + Market Size: 2,800 square feet Location: PPG Paints Arena, Pittsburgh Unique features: The first GetGo Café + Market inside an arena; fresh made-toorder and grab-and-go items, including signature burgers, chicken sandwiches, subs and craveworthy appetizers; a variety of soda, bottled water, beer and spiked seltzer options

AS TWO ICONIC Pittsburgh brands, Giant Eagle Inc. — the parent company of GetGo Café + Market convenience stores — and the Pittsburgh Penguins have been partners for many years. When the National Hockey League (NHL) team began thinking about reimagining the concession experience inside its PPG Paints Arena, exploring the idea of adding GetGo’s culinary-driven fresh food menu and convenient experience seemed a natural fit.

think of a better opportunity to bring fan favorites right to the fans!”

After 18 months of collaboration, GetGo opened its first-ever arena store. The GetGo Café + Market location inside PPG Paints Arena debuted on April 21, giving Penguins fans access to fresh made-toorder and grab-and-go items to fuel their cheers throughout the game.

“The Penguins team was amazing to work with; they have the same approach to innovation, and focus on an outstanding customer experience as we do at GetGo,” the retailer’s Chief of Staff Rug Phatek told Convenience Store News. “Our design and culinary teams worked closely with the Penguins team to replicate both the visual and culinary experience of a GetGo inside PPG Arena.”

“We have been partners and friends with the Pittsburgh Penguins for a number of years and we’re thrilled to bring together two iconic Pittsburgh brands to open our newest, one-of-a-kind GetGo experience in PPG Paints Arena,” Giant Eagle President and CEO Laura Karet said. “We provide high-quality, fresh, flavor-packed food and beverages. Convenience should never mean compromise and we couldn’t

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Located behind Section 116 on the FedEx Level of the arena, the 2,800-squarefoot store spans the combined spaces of three former concession stands. The store employs about a dozen employees, with a full kitchen and culinary staff ready to accommodate the hundreds of fans expected to come through the store on game days.

The fare available at the arena store includes many of GetGo’s signature items. Among them: • The retailer’s famous buffalo tenders; • Signature burgers, chicken sandwiches, and subs like the Buffaloaded

“Our design and culinary teams worked closely with the Penguins team to replicate both the visual and culinary experience of a GetGo inside PPG Arena.” — Rug Phatek, GetGo Café + Market

The 2,800-square-foot store spans the combined spaces of three former concession stands.

Buffalo Chicken Sub and Philly Cheesesteak sub; and • Crave-worthy appetizers, such as mozzarella sticks, mac & cheese wedges, tots, and buffalo cauliflower. Sippable fare available includes a variety of soda, bottled water, beer, and spiked seltzers.

Arena-Sized Benefits GetGo and the Penguins celebrated the opening of the arena store with a COVID-friendly launch party that was attended by executives of the Penguins and GetGo, as well as 30 Penguins and GetGo fans. The event also marked the debut of new GetGo mascot, Lil Tot. “GetGo has become a pillar in the Pittsburgh community, and we are proud to partner with them to bring our vision of a one-stop shop to life at PPG Paints Arena,” said Penguins President and CEO David Morehouse. “It has been our goal to make guest experiences as safe and efficient as possible as fans return. GetGo brings a convenient experience with quality products that Pittsburgh fans already know and love.”

The c-store chain’s partnership with the Penguins will extend beyond the new store in PPG Paints Arena, too. As the official Convenience Store of the Pittsburgh Penguins, GetGo will be featured on the NHL team’s social media, mobile app, in-game media, and Penguins Radio during games. Additionally, Penguins players and Iceburgh, the team mascot, will make appearances at GetGo grand openings and during special events. Fans in the arena can win a free appetizer if the Penguins score a goal within the first five minutes of a game thanks to the kickoff of a new program, GetGo Great Start. “Pittsburgh and western Pennsylvania are passionate about the Penguins and love great food. We’re thrilled to be able to combine the two in our new location and look forward to an amazing partnership,” said Karet. GetGo operates 266 locations throughout western Pennsylvania, Ohio, northern West Virginia, Maryland and Indiana. CSN

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HOT PRODUCTS SPECIAL ADVERTISING SECTION

ATM’s

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Beef Jerky

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General Merchandise

Kiosk Pre- Paid Services

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Car Wash Services

Ice Machine Services

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General Merchandise

Gourmet Pet Treats

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Legal Lean Syrup

General Merchandise

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Equipment/Supplies

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ADINDEX 101 North Wine........................... 19 Altria Group Distribution......... 2 Anheuser-Busch LLC................. 9 BIC USA Inc................................. 5 Buzzballz LLC............................. 47 Calico Brands.............................. 26 CB Distributors Inc.................... 23 Charlotte’s Web......................... 31 Convenience Distribution Assoc..................... 67

Imageworks Display & Marketing Group........................ 107 Inline Plastics Corp.................... 25 Invenco......................................... 37 J&J Snack Foods Corp.............. 57 JTM Foods................................... 65 Krispy Krunchy Chicken........... 41 Liggett Vector Brands.............. 51 Living Essentials LLC................ 7 Mars Wrigley Confectionery... 15

E-Alternative Solutions............ 45

McLane Company...................... Back Cover

DMF Bait Company................... 59

Premier Manufacturing............. 20–21

Essentia Water .......................... 53

Reynolds American Trade Marketing......................... 10–13

Forte Products............................ 28 Frazil............................................. 1

Swedish Match North Amer. LLC........................ 33

Geloso Beverage Group LLC... 61

Swisher International Inc......... 16–17, 35

GlaxoSmithKline Consumer Health Care.................................. 27

The Hershey Company............. 55

Godfather’s Pizza....................... 71 Goya Foods Inc.......................... 29 Hemp Fusion, Inc....................... 49

Wholesale Refrigeration

Transact Technologies Inc....... 80–81 Universal Merchants.................. Outsert Uno’s Foods................................ 43

8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631 Phone 773-992-4450 Fax 773-992-4455 www.ensembleiq.com

Hunt Brothers Pizza LLC.......... 63 J UNE

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INSIDE THE CONSUMER MIND

The CBD Opportunity More than a quarter of c-store shoppers buy CBD products, but not necessarily at c-stores Like many product categories, the CBD category took some hits as a result of the COVID-19 pandemic, but several industry insiders believe it’s only a matter of time before CBD regains its rapid momentum. According to the findings of the 2021 Convenience Store News Realities of the Aisle Study, which surveyed 1,500-plus consumers who shop a c-store at least once a month, 28 percent of respondents said they purchased CBD products in the past month, but only 13 percent purchased them at a c-store — a gap that signals opportunity for convenience channel retailers. Other interesting CBD-related findings from the study include:

% of Shoppers Purchasing CBD Products in Past Month

13%

17%

72%

Purchased CBD products at a convenience store

Purchased CBD products at a different store type

Did not purchase CBD products

Overall, CBD product purchasing is currently highest among millennials, followed by Gen Z.

Year over year, the percentage of shoppers who purchase CBD products at convenience stores dropped 12 points — from 25% in 2020 to 13% in 2021.

Types of CBD Products Purchased in Past Month

Reasons Did Not Purchase CBD Products in Past Month

C-store shoppers who purchase CBD reach

Among c-store shoppers who do not purchase

for gummies more than any other product type.

CBD, their top reasons why are a lack of appeal, limited familiarity, and discomfort with the idea

Gummies

36%

Chocolate

29%

Vape oil

23%

Concentrated oil

23%

Baked goods

22%

Topicals (e.g., creams, lotions, etc.)

22%

Beverage

21%

Candy — non-gummies

21%

Vape cartridge

20%

Beauty care

18%

Tincture

17%

Pill

16%

Other

of using CBD. No CBD products appeal to me

30%

I’m not familiar with CBD

23%

I’m not comfortable using CBD

20%

Price too high

16%

Concerned about side effects

13%

I’m not sure what type of product to buy

12%

Concerned CBD products don’t work

11%

I want to consult a physician/expert first

10%

Have questions about legality

Other

I’m not sure where to buy

Have enough CBD products at home

A small segment of non-purchasers — 26% — indicate some likelihood that they will purchase CBD products in the next six months. 106 Convenience Store News CSNEWS.com

TECHNOLOGY THAT GIVES INDEPENDENTS A COMPETITIVE ADVANTAGE McLane understands that independent operators need innovative, reliable technology that saves them time and money. That’s why we’ve created a number of hardware and software solutions they can count on. From our smart handheld device that can execute everything from ordering, receiving, and physical inventory, to our Mobile Virtual Trade Show (VTS) application that allows independents to view new items, promotions, and deals on their smartphones, McLane helps our independent customers ﬁnd the right technology solutions for their needs. To learn more, visit mclaneco.com/independent © 2021 McLane Company, Inc. All rights reserved.

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