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C-store Strategies to Win Against Small Formats


Walmart and its mega stores are known for selling everything from baby powder to BB guns. However, the Walmart Supercenter's size has become a weakness, with foot traffic continuing to slow. The retail giant’s sales have hit a plateau as consumer preferences shift toward smaller-quantity purchases and more frequent trips. Additionally, an increase in competition utilizing smaller footprints, such as Dollar General and Dollar Tree, have forced Walmart back to the strategic drawing board. 

Following up on its line of 40,000-square-foot Neighborhood Markets designed to directly compete with grocery stores, Walmart is exploring opening express stores nationwide to compete with the smaller retailers and convenience stores. Currently in its pilot phase, the Walmart to Go or Walmart Express store is reminiscent of a Wawa store, with a sandwich counter and do-it-yourself milkshake station.

The new locations are 10,000-square-foot buildings, one-15th the size of a traditional Walmart Superstore. Walmart CEO Doug McMillon stated the company's intent openly this past year: "Customers' shopping habits are changing more rapidly than ever before. We must be more nimble and flexible as we operate our business to adapt to these changes."

Though Walmart as the largest retailer in the country is feeling the slowdown the most, the other retail giants (most notably, Target) have also launched smaller format stores to explore this market.

Only time will tell if their shift into smaller stores will reverse the decline of sales at their mega stores. However, their expansion shouldn’t sound alarms with independent retailers just yet.  Here are some strategies convenience stores can use to stay competitive:

Know Your Customer

The convenience market is splitting into three core market segments: price, convenience and specialty.

Price customers are more willing to travel longer distances in order to save money, so utilizing price bundling and buy-one, get-one style promotions can be an effective tool to keep them coming back.

Convenience customers are less sensitive to price and more willing to spend in order to save the time and gas they would have otherwise used to get to a value store. For these customers, keeping detailed sales logs and ensuring you amply stock the most popular items will allow them to rely on your store for that convenience and keep them as repeat business.

Specialty customers often seek out niche stores and products, such as specific health and wellness products or brands with particular characteristics (organic or non-GMO). If your customers frequently ask for or purchase these kinds of goods, keeping a good selection in stock can serve as a competitive edge for your store.

Regardless of which customer or combination of customers you serve, knowing and understanding them is important and worthwhile. 

Focus on Customer Service

Convenience stores offer more than a location down the street, they offer the familiarity of the clerk knowing exactly what you want when you walk in. Going out of your way to greet customers, learn the names of your regular customers and engage with them in genuine and meaningful ways pays dividends in creating a memorable, positive shopping experience. 

First With Hot, New Trends

Large corporate chains like Walmart and Target come with a lot of bureaucratic red tape when it comes to choosing which products to carry. Independent convenience stores can take advantage of this and get hot, new trending products on shelves quickly. This allows them to reap the benefit of offering products corporate chains don't carry.

More Diverse Products

Convenience stores can offer a more diversified product selection. This allows convenience stores to stay in front of current trends, offering more non-traditional products such as electronic cigarettes, adult products and novelties.

With the ability to offer better customer service, trending products and a more diversified selection, convenience stores will keep growing and remain competitive with the larger retailers coming into the smaller-store industry.

Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News

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