New Report Outlines How C-stores Can Grow Better-for-You Sales
ALEXANDRIA, Va. — Convenience stores are poised to capitalize on the growing trend of consumers seeking healthy, more convenient products, according to a new Hudson Institute report commissioned by NACS, the Association for Convenience & Fuel Retailing.
"Consumers' desire for convenience is a growing trend and a notable convenience store opportunity," according to Health & Wellness Trends and Strategies for the Convenience Store Sector, written by Hank Cardello, senior fellow and director of the Hudson Institute's Obesity Solutions Initiative, and Steve French, managing partner and co-owner of the Natural Marketing Institute (NMI).
In order to grow sales, U.S. c-store operators should look beyond simply meeting the needs of their traditional customers and embrace the growing customer segment that is demanding more and more better-for-you items that can be conveniently purchased, the report highlighted.
Overall sales at c-stores, including motor fuels, reached $698 billion in 2014, which is roughly equal to restaurant sales ($709 billion) and more than supermarket sales ($638 billion). C-store shoppers are consuming more healthy food items, including fruits, vegetables and healthy snacks, compared to a year ago, and three-quarters of c-store customers say they are eating healthier than they used to.
The number of c-store shoppers interested in healthy foods that can be eaten on the go has also risen from 59 percent to 66 percent over the past seven years, and healthier snacking has become the norm.
The report advises c-store operators to focus on two primary consumer segments to grow sales: continuing to serve the traditional core consumer segment of "Eat, Drink & Be Merrys," and the growing segment characterized as "Fence Sitters." The latter group represents 38 percent of c-store shoppers who typically spend more but are often unsure where they can find convenient, better-for-you options. Thirty-four percent of Fence Sitters say there are "no convenient locations nearby" to purchase healthy food, and 41 percent say "it is not convenient or easy to find" better-for-you products.
Easy-to-access prepared foods in particular present an opportunity for c-stores with foodservice programs to capitalize on this customer's desire to eat healthier more often. Foodservice sales make up 19 percent of the industry's $213.5 billion in in-store sales, according to NACS.
"Convenience stores have an opportunity to bridge this gap and own convenient foodservice — especially breakfast — when nutrition is considered most important, and Fence Sitters are currently eating healthier options during this meal occasion in particular," the report states.
Education also presents a considerable opportunity to grow sales, both by communicating the availability of better-for-you products and by highlighting how better-for-you "tastes great and is quick to prepare or can be eaten on the go."
"By focusing on products and messaging that meet the need for healthier products — on-the-go, breakfast and kid-targeted convenience — convenience stores can drive significant, new growth in this emerging category," the report concludes.
The report's insights were based on the proprietary Health & Wellness Trends Database managed by NMI, which has analyzed and compiled more than 80,000 consumer surveys since 2001.
The full 10-page report is available to download here.