The C-store Industry's Small Operators Have a Glass-Half-Full Perspective on 2021

NATIONAL REPORT — Despite the unprecedented economic pressures brought on by the global coronavirus pandemic and continued consolidation in the convenience channel — which has seen some of the industry’s biggest chains get even bigger by picking up smaller players — the c-store industry’s small operators (those operating 20 stores or less) have a glass-half-full perspective on 2021.

Nearly 70 percent of the small operators surveyed for the 2021 Convenience Store News Forecast Study project an increase in their average dollar sales per store this year. That number is down slightly from 74.2 percent who forecasted an increase in the 2020 study. However, a smaller percentage of small operators this year predict their sales will decrease (14 percent) compared to last year (16.1 percent).

When asked to rate their optimism about their specific business on a scale of one to five — where 1 represents “Terrible, wake me up when it’s over” and 5 represents “It’s going to be our best year ever!” — the majority of small operators (86 percent) chose a rating of 3 or 4. Eleven percent put their optimism rating at a 5, while just 3 percent put it at a 1.

One area in particular that is of concern to small operators is the expectation that cross-channel competition will increase in the year ahead, cited by 57 percent of respondents in the 2021 study. While online grocers, Amazon and mainstream grocery stores are of greater concern to large operators, dollar stores pose more of a threat to small operators (cited by 66 percent).

When it comes to what other factors will impact their sales and profitability in 2021, the convenience store industry’s small and large operators share some common concerns. Not surprisingly, the COVID-19 pandemic ranks No. 1 among both groups, although small operators are more apprehensive about the coronavirus’ impact on their sales and profitability than their larger counterparts (80 percent vs. 67 percent, respectively). Other shared concerns are declining foot traffic, and labor turnover and hiring.

With COVID-19 changing consumers’ expectations of “convenience,” small operators are trying to keep pace with the larger c-store chains when it comes to offering enhanced convenience services. More than half of the small operators surveyed (60 percent) currently offer mobile payment in-store and 34 percent offer mobile payment at the pump. An additional 23 percent plan to add mobile pay at the pump this year, with 9 percent planning to add it in-store.

Curbside pickup also ranks high on the list of enhanced convenience services currently offered by small operators: 34 percent currently make this service available to their customers, and another 9 percent say they plan to add curbside pickup in 2021.

Other top initiatives planned by small operators for the new year include adding delivery via a third-party service (26 percent), adding at-pump ordering for in-store items (26 percent), and adding contactless checkout using a mobile app (20 percent).