'New Normal' Explored at NACS State of the Industry Summit

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'New Normal' Explored at NACS State of the Industry Summit

By Angela Hanson & Don Longo, Convenience Store News - 04/22/2020

NATIONAL REPORT — NACS adapted to the challenges presented by the COVID-19 pandemic by turning its annual State of the Industry (SOI) Summit into a virtual experience. The event, originally scheduled to take place April 7-9 in Rosemont, Ill., shifted to a series of recorded presentations and discussions available on demand as of April 14.

More than 1,300 attendees participated in the virtual summit, according to the association. While attendees missed out on the traditional face-to-face networking associated with SOI, they were treated to 10 informative education sessions on topics such as analyzing 2019 industry performance, trends and economic forces; as well as forward-looking topics such as how COVID-19 is changing consumer shopping behavior in ways that could shape long-term buying patterns.

"Good morning, good evening, good afternoon, good night, whatever time you're watching this," Andy Jones, CEO of Sprint Food Stores Inc., NACS Research Committee chairman and host of the event, said as he greeted online attendees in his opening remarks. 

Jones noted that although the novel coronavirus has had drastic effects on the world, the convenience store industry is no stranger to thriving in times of chaos.

"The storm may be uncharted waters for us, but we can only look to our storied past to know that out of COVID-19, our industry will stand tall with communities to bring forward the services, support and much-needed friendly smiles so desperately needed by all," he said.

Overcoming the Uncertainty

The SOI sessions included an examination of the "new normal" the convenience and fuel retailing industry is now presented with, and what it will mean in the days to come.

Wide-ranging uncertainty is a major factor, according to panelist Nick Ruffner, public relations manager for c-store chain Sheetz Inc. No one knows how long the stay-at-home orders will last, when people's perceptions about the safety of crowds will shift, or if they'll ever go back to what we used to think of as normal.

Adhering to a brand's values and staying community-connected, however, will help to create safe environments in the present, while preparing to welcome people back in the future.

"I can't say the word 'authentic' enough," said Stephanie Sikorski, vice president of marketing for NACS and executive director of the NACS Foundation, stressing that people crave information. "It's OK to say you don't have the answers just yet, but they need to know you're working on it."

The foodservice category is particularly in flux according to Thomas H. Talbert, vice president of culinary marketing at CSSI, Marketing + Culinary.

"The now of today is different than the now of a month ago," Talbert said. "We do think that the landscape for restaurants will be very changed several months from now."

In the meantime, c-stores are becoming a preferred location for some consumers who perceive grocery store visits as potentially more dangerous due to the longer average visit time. Finding certain items in stock is also an issue among shoppers.

Some c-store industry trends that were already happening are seeing an acceleration as a result of the pandemic, presenters noted. This includes the usage of mobile apps for ordering, reliance on delivery, and the popularity of prepared-food takeout.

Additionally, "effortless convenience” — facilitated by technology such as scan-and-go payment options, apps that provide personalized experiences, and innovations in delivery — is likely to grow.

At the same time, consumers crave connections. For c-stores, connection enablers include frontline friendliness, personal communications, loyalty programs, secret menus, and local touches on the menu.

In the current day, many consumers are living a much different life marked by severely restricted shopping trips, limited online fulfillment, and rising concerns about price as limited stock availability is affecting pricing in some cases. As a result, consumers have shifted their shopping habits from more frequent trips to larger baskets, noted Caitlyn Battaglia, associate client director at Nielsen.

Recent data shows that cigarettes and beer have seen continual growth during the restricted living phase, while other tobacco products and candy are seeing moderate success. Larger package sizes and premium products are experiencing more growth, too.

C-stores may also find success these days in center-store categories due to shortages in other retail channels. Such relevant products include paper/plastic/foil products, dish and laundry care, eggs, and butter/margarine.

Battaglia recommends retailers adapt, but also keep an eye on the future and the eventual recovery phase. Communication with customers is vital, she said. People will eventually return to their daily routines yet operate with a new consciousness about health.

As far as 2019 performance is concerned, NACS reported that total industry sales declined 1 percent, largely due to a 4.7 percent decrease in the price of fuel. In-store sales increased 4.4 percent.

Overall, convenience store sales in 2019 accounted for 3.1 percent of the total U.S. gross domestic product of $21.4 trillion.