C-store Retailers Wary of More Pitfalls in 2021

NATIONAL REPORT — Despite the arrival of a vaccine, the COVID-19 pandemic still ranks high on the minds of convenience channel retailers, with nearly half (47 percent) expecting it to have the biggest impact on their sales and profitability in 2021, according to the results of the 2021 Convenience Store News Forecast Study. More than three-quarters of the retailers surveyed rank COVID among their top three issues for the coming year.

COVID-19 will continue to exert a negative influence on the industry “because of the fear that has been instilled into the public by the political weaponization of the pandemic,” said one retailer. “Consumers are scared to go out to the store,” added another. “Fewer are driving to work. That means less fuel sales and less convenience sales,” noted another.

The pandemic exacerbated the already-worrisome decline in foot traffic at brick-and-mortar stores. While a majority of c-store retailers (55 percent) expect their in-store foot traffic to increase in 2021, this is a drop of 13 points compared to last year. One in three retailers (34 percent) are expecting more of the same in 2021 in regard to foot-traffic levels.

Labor turnover and hiring difficulties is another top issue that retailers anticipate having a significant impact on sales and profitability in the coming months. It is the No. 2 ranked issue behind COVID, with 13 percent expecting labor challenges to have the biggest impact on their business. Thirty-eight percent rank this among their top three issues.

“We are finding it hard to hire employees because of federally supplemented unemployment benefits, which make it easy for them to sit at home,” one retailer remarked.

Another leading concern among operators for 2021 is the new leadership at the White House, cited as the biggest predicted impact by 11 percent of retailers. Thirty-two percent listed worries about the Biden presidency among their top three issues.

“There is not a lot of consumer confidence in the new leadership by consumers in my area,” one retailer remarked. Meanwhile, others expressed concern over increased taxes and regulation on businesses under the Biden Administration.

New Initiatives to Boost Business

C-store operators have implemented, and are currently considering implementing, several enhanced convenience services to improve foot traffic in the year ahead. The top services now offered are mobile pay in-store (64 percent offer it), mobile pay at the pump (43 percent), curbside pickup (36 percent), third-party delivery (21 percent), and drive-thru (19 percent).

When it comes to the enhanced convenience services operators plan to implement in the near future, the ability for customers to order in-store items at the pump ranks No. 1 — named by 30 percent of retailers. That is followed by contactless shopping via an app (named by 26 percent) and mobile pay at the pump (named by 23 percent).

While 21 percent of operators currently offer third-party delivery to consumers’ homes, another 19 percent said they are planning to do so. Only 15 percent of retailers now offer their own in-house delivery service, although 19 percent are planning to do so, indicating a significant interest in figuring out how to handle delivery without using a third party.

As part of this year’s Forecast Study, retailers also were asked to list some of the initiatives they plan to implement in 2021 to increase sales and profitability. Among their answers:

• Additional technology for safe and frictionless transactions;
• Touchless payment throughout the store;
• Expand delivery and build curbside pickup program;
• Better marketing to the traveling public;
• Improve back-office reporting to better understand customers;
• Raise prices and limit the number of monthly promotions;
• Look at electric vehicle chargers;
• Run more promotional products, which we have not done in the past;
• Use Facebook for advertising;
• Support our schools and other community projects;
• Increase our prepared foods category selection and quality; and
• Upgrade point-of sale for better data and tracking, making the most of EMV upgrades.