C-stores Get Creative to Grow General Merchandise Sales
NATIONAL REPORT — The general merchandise category is in need of a reinvigoration.
General merchandise was one of the few categories not to benefit from rising prices in 2023, with total industry dollar sales falling 1% after three years of growth. Total unit volume declined 5%, continuing a multiyear streak and marking the largest volume drop since 2019, according to the 2024 Convenience Store News Industry Report.
While tobacco, beverages, candy and snacks are the categories most commonly associated with being purchase drivers at convenience stores and travel centers, industry experts say the general merchandise category is anything but general and the key to its success at convenience stores lies in retailers creating strategies that capitalize on the category's differentiation.
"Too often convenience and travel center retailers use a one-size-fits-all approach for their general merchandise assortment. While general merchandise sales might be smaller than other categories, it's important to determine a subset of traits that can be used to segment stores," said Polly Flinn, founder and principal of Flinnstone Strategies, a Chicago-based business and retail strategy consulting firm. "Sales lift impact will be immediate when general merchandise shopping occasion traits sync up with what customers need."
Putting customers' needs first, 7-Eleven Inc. approaches the general merchandise category by examining which segments shoppers are looking for and what brands they like.
To understand customer purchase and behavior data, the Irving, Texas-based retailer with a network of more than 13,000 c-stores in the United States and Canada uses a variety of resources. The multipronged approach includes syndicated data, trade shows and its proprietary, state-of-the-art analytics platform C-Shopper. 7-Eleven evaluates what's trending and reviews its assortment on a regular basis, according to Julie Trapp-Clark, senior product director.
"We aim to surprise and delight our customers. So, we aim to be in stock with our top items, and we differentiate our private brands with value and quality. We want the shopper to think, 'I wasn't expecting to find this in a convenience store,'" she told Convenience Store News.
A General Guide
Kristen Thaler, category manager at Temple, Texas-based distributor McLane Co. Inc., offered some pointers on how to get the most out of general merchandise:
- Place cross-merchandise products throughout the store to drive impulse sales and create space on the shelf for seasonal and innovation items.
- Leverage the need for innovative and on-trend foodservice offerings to help bring customers into the store. "Offer top-selling categories with both private label and branded offerings to drive category growth," she recommends.
- Drive store traffic with digital rewards programs and promotional offers.
7-Eleven also offers one-of-a-kind collections of unique apparel and accessories on 7Collection, the retailer's online merchandise shop. Past collections have included fairway fashions that blend the brand's flair with golf culture, and festive holiday apparel complete with ugly sweaters.
Going Beyond the Basics
The general merchandise category is made up of products largely used for necessity, encompassing an eclectic mix of segments such as automotive products, batteries, hardware/housewares, sunglasses, toys and apparel. But that doesn't mean a convenience retailer or travel center operator can't be creative in their approach to general merchandise.
"Too often, general merchandise is a forgotten category and retailers deploy a 'set and forget' approach," explained Flinn, who previously held marketing and operations C-suite roles at bp and GetGo. "Relevant and fun general merchandise growth strategies can lead to increased margin and basket sizes, and play an integral role as being a destination driver for their customers."
To maximize the category's potential, c-stores must expand beyond selling the basics, according to Kristen Thaler, category manager at Temple, Texas-based distributor McLane Co. Inc. This could include offering unique, niche items not carried by other convenience store operators. "There are some travel stops that have a display area dedicated to iPhone merchandise, for example," she pointed out.
When crafting a general merchandise set, Thaler suggests convenience retailers keep the saying "value is a virtue" in mind. "Value doesn't always mean least expensive in the eye of the consumer," she emphasized.
The Private Label Proposition
As supply chain issues have subsided and purchasing sensitivity has increased, consumers have been trading down to lower-priced products, buying smaller pack sizes and shifting to private label. As such, private label growth is essential for convenience retailers and travel center operators to grow sales and maintain margin, Flinn noted.
"Convenience retailer and travel center proprietary brands have much value to consumers," she said. "Retailers should have the courage to extend them to all categories in their stores, including the general merchandise categories."
Store brands reached all-time highs in both unit and dollar market share during the first six months of 2024. Unit market share was 22.9% and dollar market share was 20.4% as of June 16, according to new Circana sales data provided exclusively to the Private Label Manufacturers Association (PLMA).
Looking specifically at the 10 product departments that Circana tracks for PLMA, the general merchandise category posted a private label dollar sales gain of 2.2% for the 52 weeks ended June 16 vs. the year-ago period.
Several leading c-store and travel center chains either have in place or are ramping up strategic plans to boost their assortment of private label products. Retailers such as 7-Eleven, Lake Jackson, Texas-based Buc-ee's and Oklahoma City-based Love's Travel Stops are optimizing the opportunity to develop proprietary products that will further enhance brand loyalty, and so are distributors like McLane with its Consumer Value Products private label line, which offers a wide array of general merchandise products.
"We look at the full approach of private brands, beyond candy and chips. We aim to bring value to the entire store. For 7-Eleven, we plan to be even more aggressive around launching and testing new categories of private brands," Trapp-Clark expressed. "The customer is moving so fast; we need to be nimble and react quickly. We want to maximize private brands. Not only do they bring a perception of value, but they're cool now. And we want to lead the way."
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