September 27, 2018

Fresh Expectations: The Evolution of Convenience Stores

Written by Ed Wogan | Connected Facility, Food Safety

There are now over 154,000 convenience stores in the US – the only brick and mortar format that continues to expand, despite the fact that omnichannel lines between conventional retail and online experiences are continuing to blur.

 

What is driving the steady evolution of retailers who sell fuel with food as an afterthought, to food retailers who happen to sell fuel? The answer lies with the proactive ones, the ones who are building brands through operational excellence that will sustain them through this evolution, who have figured out how to give the people what they want. This encompasses many things – fresh foods that deliver a ‘better for you’ promise, cold brew specialty coffees and beverages, a variety of fresh grab-and-go products, a produce offering, and in some instances; organics, comfortable seating areas, gaming, or a loyalty and rewards program. Savvy retailers are eliminating blockades, creating appeal, and making it everything more convenient.

 

The opportunity exists for convenience store retailers along with their brand and service partners to raise the bar and focus on the customer experience, which in turn drives trip frequency, purchase value, dwell time, and loyalty.

 

Sounds simple, right?

 

Transforming Convenience Store Expectations

Millenials, in particular, are looking for relationships with retailers who are community-minded, employee centric, committed to sustainability, and align with their respective values. According to Kevin Coupe’s Morning News Beat:

 

“A 2018 report from EuroMonitor says convenience stores are changing their image to appeal to a more health-conscious generation, stocking up on gluten-free, grass-fed, and organic products. While portability and grab-and-go convenience remain critical, millennial dietary habits stand to revolutionize a channel that has been anything but health-conscious in the past.”

 

This may be a fractional segment of the customer base, but it speaks volumes about the need for diversity in variety, quality, and choice, as well as a commitment to innovation.

 

Grab-and-go products, or any fresh food product, continues to become an even more critical foundational component. According to the National Association of Convenience Stores (NACS), food service accounted for 68.9% of convenience store Sales in 2017, up a full percentage point over the prior year. Additionally, average store sales grew year over year and subsequently delivered healthy gross profit margins, also showing a strong one percent uptick. (Source: CSX).

  

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 Food service accounts for a significant portion of convenience store sales

 

September is National Food Safety Month – founded in 1994 to heighten awareness around food safety, and to reinforce safe handling techniques and practices. According to NACS and the Center for Disease Control (CDC), ’Each year, 48 million illnesses can be traced to foodborne pathogens, 128,000 hospitalizations in the US directly related to foodborne illness occur, and 3,000 deaths in the US as a result. One in six Americans gets sick from eating contaminated food every year.’

 

How do you determine the financial impact of a foodborne illness outbreak?  Watch our webinar to find out how a food safety incident impacts brand value.

 

What does that mean for an industry that is historically volume driven and committed to controlling expenses? It speaks to the need for effective standard operating procedures in the area of food safety, equipment monitoring, product temperature monitoring, and the creation of a connected supply chain. 

 

Can any of us afford to be unprotected?

 

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