C-store Retailers & Distributors Face Similar Challenges

LAS VEGAS — Convenience store operators face new challenges every day, but some challenges are not exclusive to the retailer side of the supply chain.

The Convenience Distribution Association (CDA), the trade organization working on behalf of convenience products distributors in the United States, brought together c-store industry executives to discuss the day-to-day obstacles of the convenience channel during the association's Convenience Distribution Marketplace event, held in Las Vegas last week.

"We are all just part of a supply chain, delivering and satisfying consumers," said Richard Oneslager, owner of Balmar Management Group LLC, which has eight c-stores in the Denver area.

Panel moderator Ieva Grimm, president of Pittsburgh-based business improvement firm Synerge, said she began working in the channel in 2000 and has observed the face of the industry "clearly changing." She compared a convenience store operator's mind to "a whirlwind," filled with issues like gas prices, equipment and out-of-stocks.

"Regardless if you have one store or 50 stores, you live in it and it can be painful," Grimm said. "It's personal. It's what we've chosen to spend our lives at."

To be successful, c-store retailers need to stay on top of increased competition, regulatory pressures — which ultimately lead to increased operating costs — and customer expectations.

However, the same can be said for the distribution side of the supply chain. During the executive panel discussion on retailer-wholesaler relationships, distributors participating from the audience indicated that competition from other distributors and increased operating costs are key factors impacting their business today.

Part of satisfying today's consumer means having more fresh offerings in the stores, according to Oneslager, who noted "fresh food is a huge piece of our business." He noted, however, that traditional wholesalers and suppliers still "need to figure out how to handle that part." Those who are doing foodservice well are making a big commitment and investment. 

"You can't just dip your foot in it," Oneslager said.

As a small operator with smaller sites, Lisa Dell Alba, president and CEO of Square One Markets, said doing foodservice right requires her chain to think outside the box.

For example, Square One Markets operates nine stores in northeastern Pennsylvania and launched a pilot test this past fall of Six O'Clock Scramble Fresh & Fast Family Dinner Kits. These all-in-one kits are designed to provide healthy options while eliminating the traditional downsides to meal-delivery kits: cost, packaging waste, and the need to order them in advance.

The pilot lasted about eight weeks. According to Dell Alba, the chain is studying the results of the program, which ran into a distribution issue. She is thinking about testing it again.

Sometimes, she said, "we need to look outside our channel and our traditional partners." 

Along with the increasing importance of supplying fresh foods, Oneslager noted that distributors are being challenged by the c-store industry's heavy merger and acquisition activity of late. Describing a barbell effect, Oneslager said distributors have single-store operators and fragmentation on one side vs. bigger retailers and consolidation on the other.

"I think this trend will continue," he said.

It can be frustrating at times when distributors build excitement behind new products, but then do not follow through, leaving operators waiting sometimes weeks to restock items, according to Iris Yost, owner of four 7-Eleven locations in Las Vegas. Still, she said she does consider her distributors as partners in the business. 

"I could not do or be who I am without distributors at all levels," Yost added.