ALPHARETTA, Ga. — With price sensitivity on the rise, the fight to optimize both fuel prices and volume among competitors has heated up for fuel retailers.
Consumers are feeling the heat, too, with 45 percent indicating that they are buying less to make up for these increases, according to the September 2021 C-store Shopper Trends Report from PDI, powered by PDI Insights Cloud data.
This month's installment of the insights report examines the impact of price sensitivity and offers tips for convenience and fuel retailers to use to offset the margin erosion that price discounts can often cause.
Even though basket spend continues to be at +24 percent compared to pre-pandemic levels, the report notes a persistent decrease compared to previous months. This might be an early sign that shoppers are reacting to the rising prices due to inflationary pressures, and are watching their spend, according to PDI.
In fact, a recent survey of 3,200 GasBuddy app users revealed that the vast majority of consumers have changed their behavior in response to price increases.
To offset this, PDI advises convenience retailers to leverage their loyalty program's data to push relevant, personalized offers to customers to incentivize consumption. Additionally, when gas prices are high, operators should consider offering fuel discounts for in-store purchases, the report advised.
With August loyalty fuel gallons increasing by approximately 12 percent year over year, loyalty continues to be a heavy driver of traffic to the pump. By running cents-off promotions, operators can drive overall volume at the pump and maximize foot traffic in-store.
According to PDI, the non-alcoholic packaged beverages category continues to be a go-to option, performing well with a nearly 6-percent gain in August dollar sales compared to 2020. This confirms a long-lasting, clear preference over cold dispensed beverages, which show no signs of immediate recovery.
However, a significant uptick in hot dispensed beverages over the last year mirrors the changes many retailers have implemented in this category to upgrade their offerings.
Overall, dispensed beverages are trailing as they have been for some time — a clear signal that last year's behavior change is here to stay, at least for now, PDI pointed out.
The firm suggests c-store retailers look for similar trends in their stores and adjust shelf and counter space accordingly, and keep in mind that packaged and hot beverages are great for bundles with the salty snacks and candy categories, respectfully.
PDI's monthly C-store Shopper Trends Report combines consumer buying data from 5,500 mid- to large-sized convenience retailers across all key U.S. geographic locations. Alpharetta-based Professional Datasolutions Inc. (PDI) helps convenience retailers and petroleum wholesalers thrive through digital transformation and enterprise software.