Convenience Stores Are Poised to Play a Leading Role in Economic Recovery
NATIONAL REPORT — This year is turning out to be like no other. As the COVID-19 pandemic keeps its grip on the United States, many are looking for a return to normalcy.
In his keynote presentation at the Conexxus 2020 Annual Education and Strategy Conference, Gene Marks, owner and operator of Marks Group PC, said in his 25 years of running a business, he has never seen such an unprecedented amount of uncertainty. Mix in an election — the entire U.S. House of Representatives, one-third of the U.S. Senate and the U.S. presidency — and you end up with a lot of question marks.
Still, retail businesses have a responsibility to their customers, their suppliers and their employees to make the right decisions. To that end, data and metrics are helpful in determining investments and making hiring plans around them.
"As a business owner, you have to know these things, so you can make your plans going forward," Marks said, explaining that some of the key metrics he follows are restaurant reservations through OpenTable's State of the Industry index, travel passenger numbers through the Transportation Security Administration, purchasing decisions through the Institute of Supply Management, and the metrics of the National Federation of Independent Business' Small Business Index.
"You have to have your index, your metric — a good three, four or five ones," Marks said, noting that he follows seven. "You have to know as an owner of a business where the economy is going, so you can time your investments and hiring."
On the Front Lines
When and how the U.S. economic recovery happens remains up in the air. But when it does happen, convenience stores will be on the front lines, according to Lori Stillman, vice president of research for industry trade association NACS.
"I personally believe the convenience landscape is uniquely positioned in the midst of the pandemic to lead in the economic recovery of retail," Stillman said in her presentation at the Conexxus virtual event, which took place Aug. 11-13.
Although no one is sure if it will be a U-shaped recovery or a V-shaped recovery, there are a few things the c-store industry does know, she said. For starters, there are very few retail channels, if any, that have the potential to more deeply seed the loyalty of its shoppers than the convenience channel, according to Stillman.
"When you start to stack up the strategic advantage of our industry, you start to see a pretty impressive list that is pretty difficult to beat," she pointed out.
Among the items on this list are:
- Half of the U.S. population is in a convenience store daily;
- With almost 160,000 locations, the channel is where consumers need it to be;
- The size of the format drives a streamlined assortment;
- C-stores lead with strong offers in many categories; and
- C-stores are "woven into the fabric" of their communities, driving consumer loyalty.
"When I think about the outlook for our industry, despite the incredibly challenging times we find ourselves in, I see nothing but excitement and opportunity ahead," Stillman said.
Looking at the challenges currently facing the industry, COVID-19 has fundamentally changed consumer behavior and the pandemic is reshaping the channel's future, she noted. Over the past five months, c-store operators have learned that loyalty matters, dayparts are evolving, consumers are demanding contactless payment options, and the channel needs to think beyond fuel — to name just a few.
Several headwinds also carried over from last year and will not go away when the pandemic challenges subside, said Stillman. They include swipe fees, labor, forecourt conversion, technology upgrades, ecommerce, and tobacco sales and profits.
Heading into 2021, she believes the channel should focus, and execute well, on:
- The future of payments;
- Shopper loyalty and engagement;
- Store design and layout;
- Assortment; and
"All of this can help us not just survive, but really thrive, in whatever the new or now normal is going to be," Stillman said.
Based in Alexandria, Va., Conexxus is a nonprofit, member-driven technology organization dedicated to the development and implementation of standards, technologies innovation and advocacy for the convenience store and retail fueling market.