C-stores Can Uncover Potential in Expanded, New Categories

CHICAGO -- Despite having an average of 500 SKUs on their shelves, convenience store operators still rely on a few key categories such as motor fuels, cigarettes and foodservice. However, opportunities are out there for retailers who want to push their stores ahead of the competition.

In today's "Times & Trends: Convenience Stores. Keep the Core; Appeal to More" webinar hosted by Information Resources Inc. (IRI), Susan Viamari, editor of Times & Trends at IRI, noted that the more than 149,000 convenience stores in the United States have been experiencing "very healthy growth" over the past few years.

Still, c-stores are facing increased competition from other channels -- notably drug and dollar stores -- that resemble c-stores in size and product mix. In fact, in ZIP codes where convenience stores face drug and dollar store competitors, same-store sales growth for c-stores is less than 1 percent, she said.

Even with this channel blurring, there are opportunities for c-store retailers to maintain -- if not accelerate -- their growth trend. There is even room to grow existing key categories like tobacco and foodservice, said Viamari.

Cigarettes remain a top driver for c-stores, but as smoking rates continue to decline, more tobacco users are looking for alternatives to the traditional cigarette. This is opening up opportunities for other tobacco products including smokeless tobacco and electronic cigarettes.

Foodservice is also important to c-stores. "Consumers are looking for ways to fuel without slowing down," Viamari said. "If they can fuel their cars at the same time they are fueling their bodies, even better."

To expand within the foodservice category, c-store operators should consider customizable foodservice offerings, selections from local suppliers, and mixing up their options. For example, while one-third of consumers indicate that they are interested in fast-food sandwiches and coffeehouse offerings, just as many are interested in hamburgers and pizza offerings, according to Viamari.

"As foodservice evolves, it is important for convenience store marketers to stay in lock-step with the opportunity," she added.

Beyond the core categories, health and wellness products present "a real opportunity" for convenience retailers. On average, the assortment found in c-stores is higher in calories, cholesterol and fat, Viamari noted. To capture the health and wellness trend, c-store retailers need to develop a consumer-centric, 360-degree program that takes into account the health perspectives of their core customers.

Stepping outside the store, c-store retailers can also find opportunities in outdoor advertising -- like pumptoppers, window signage and property displays.

"There is a unique opportunity to expand advertising efforts beyond the four walls of the store," Viamari said.

The webinar was part of Chicago-based IRI's Best Practices webinar series.