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11/17/2021

Keeping the Grocery Category Relevant at C-stores

This once-overlooked section of the business profited from pandemic shopping shifts.

NATIONAL REPORT — At the height of the pandemic, convenience store grocery shopping became all the rage as consumers caught on to the benefits of no lines, reduced human contact, speedy shopping, and in-stock shelves.

It was a time when “convenience stores became less about energy drinks and bags of chips on the go and more about getting the day-to-day essentials,” said Anders McGillis, principal at Ontario, Canada-based Jackman Reinvents, a customer engagement firm that helps organizations reinvent their customer experiences.

It was also a time when consumers everywhere rallied around supporting local. “The early stages of the pandemic exposed weaknesses in supply chains, alerting people to the value of being able to access goods in their local communities,” McGillis told Convenience Store News. “Faced with empty shelves at big-box stores, people turned to alternatives, both in terms of products and stores, to find what they needed.”

According to research firm NCSolutions, in mid-May of this year (around when the Centers for Disease Control and Prevention lifted indoor mask guidelines) through mid-July, dollar sales for edible grocery collectively across channels were 3.4 percent higher compared to the same period in 2019, while sales for non-edible grocery across channels were 2.6 percent higher compared to 2019 levels.

While Americans have gotten more comfortable traveling and gathering, overall grocery spend is still elevated compared to 2019 levels, indicating that consumers are continuing to spend more time at home, and that includes preparing meals at home, according to Linda Dupree, CEO of NCSolutions.

Retention Strategies

Convenience stores that increased their grocery sales during the pandemic have a new challenge as the nation tries to get back to normal: retention of these shoppers.

McGillis said his firm has seen “significant change” in the c-store space, with existing players going beyond the basics. He praised some players for elevating their assortment by adding organic, gourmet and fresh items.

“Adding quality food products that consumers want can turn a convenience store into a grocery destination and part of their routine,” he said.

Rather than arranging the c-store based on product type, he challenges c-stores to group products based on shopper mindsets. “In the same way many grocery stores are set up, consider carving out a dedicated space for health-forward or wellness products, or those that serve a specific diet or nutrition,” McGillis advised.

Unique store design can be a powerful draw, too. Mark Landini, creative director at Landini Associates, which recently worked with Batavia, Ill.-based Aldi (operator of supermarkets in 37 states) to launch the first Aldi Corner Store, noted that design has the power to make consumers smile and feel good about where they are shopping.

“A supermarket used to be two words: an adjective describing a noun. Delivery and operational systems have compromised this and now it’s become unpersonal and somewhat absent of any joy,” he said. “We believe this can be challenged with design in the convenience channel.”

Along with store design and layout, c-stores can remain relevant to grocery shoppers beyond the pandemic by paying attention to which product trends are resonating in the edible and non-edible grocery categories.

Convenience stores can stay ahead of grocery trends by understanding the dietary, environmental and social attributes within their current product assortment, as well as their customers' ever-changing need states, according to Hannah Polk, RD Solutions consultant at Label Insight, a NielsenIQ company.  

Polk identified some food and beverage trends relevant to the c-store space that are growing significantly in search volume vs. the previous six months: natural, electrolytes, low-calorie, pre-made, adaptogenic, sport, green ingredients, dairy-free, weight loss, and vegan.

In non-edible grocery, consumers are shifting toward cleaner and more sustainable products, Polk said. Within the personal care space, growing attributes include plastic-free, aluminum-free, reef safe, para-phenylenediamine (PPD) free, and ultra-sensitive. Within the household cleaners space, niche attributes that are growing fast include “naturally derived” and “contains essential oils.”