Leaning Into the Rules of the Road to Win in Convenience

DALLAS — Convenience stores are synonymous with summer travel across the United States. So, it seems appropriate that McLane Co. Inc. would wrap up its 2023 McLane Engage national tradeshow with closing keynoter Chet Garner presenting the rules of the road.

As host and star of the PBS travel documentary show "Daytripper," Garner is familiar with the rules — and they not only apply to travel, but also to everyday life and business, he said. According to the Texas native, eight rules to remember are:

1. It's about the journey, not the destination.
2. Sometimes the right road isn't paved.
3. Passion is your best fuel.
4. The road is long, bring snacks.
5. The fastest route is not always the best route.
6. Wrong turns are only wrong if you let them be.
7. The people are more important than the road.
8. We are all storytellers, some of us just don't know it.

"We are all ambassadors for the places from where we come. We just have to lean into it," Garner said, adding that convenience stores are ambassadors for their communities.

The State of the C-store Consumer

Those eight tips are key for convenience store operators and their partners in the supply chain to keep in mind as the channel's consumers continue to face headwinds brought on by economic uncertainty.

Is the United States heading toward a recession? According to Nik Modi, analyst with RBC Capital, it doesn't matter what a recession is — it's just a technical term. What matters, he said during a session entitled "State of the Union: The Economy, the Consumer, and the Convenience Channel," is how the consumer feels.

[Read more: McLane Trade Show Engages Convenience Channel]

"It just means that we have two straight quarters of GDP [gross domestic product] decline. That's all it is. It doesn't really get to how consumers are feeling and some of the concerns they might have for the future that might impact spending patterns," Modi said, citing that inflation is having a delayed effect on consumer thinking and behavior.

For example, retailers are starting to see consumers trade down across all income classes, not just the lower and middle classes. "Even at McDonald's, people are opting not to buy a side of fries. I don't know if it can get any worse than that," Modi added.

"This is not just about a lower-ranking-income consumer anymore. We're starting to see things trickle out to the broader population," he pointed out. "Sorry to say folks, and I know it's probably not the message you want, but I do think it's going to get worse."

What does this mean for the convenience channel? According to Modi, it's all about value, which can take several forms like promotions and private label products. Tradedowns also take several forms, including package size, delayed purchases, switching retailers to find lower price points and buy now, pay later options.

To meet the consumer shift toward value, he advised c-store retailers to exploit the relative value, but be purposeful. For example, consumers can buy a 12-pack of beverages and still get a good relative value, yet retailers and manufacturers need to convey that value. "Are you signaling it on your packaging? Are you signaling it in merchandising displays on the front of the window? Are you exploiting relative value? What does it offer within the store vs. what comes outside of the store?" he posed.

Modi also recommended that convenience channel players think about how they can become part of the at-home occasion, especially if unemployment ticks up and people go out less. "What can you do so you don't fall victim to people spending more time at home and not in your store?" he asked, suggesting ideas like "movie night" bundles with snacks and beverages.

"I think when you think about relative value, you think about what's going on with the economy. There's a lot of opportunity for the channel to really be involved in some of these dynamics, but we have to communicate them in the right way so it's part of the consumer's thinking and thought process," he said.

The McLane Engage convention took place Aug. 29-31 at the Hilton Anatole in Dallas. The newly imagined tradeshow experience featured booths from more than 160 exhibitors, as well as a new products showcase. The event also provided the opportunity to build meaningful connections with industry powerhouses and learn from notable experts at a series of educational sessions. 

Temple, Texas-based McLane Co. is one of the largest supply chain services companies in the United States. Through McLane Grocery and McLane Foodservice, it operates more than 80 distribution centers and one of the nation's largest private truck fleets, and provides alcoholic beverage distribution through its subsidiary, Empire Distributors.

McLane is a wholly owned unit of Berkshire Hathaway Inc.