As I lie here following surgery to repair a torn Achilles tendon, my mind doesn't stray very far from the leg pain I feel every four to six hours. Which then gets me thinking about a subject raised at a recent Convenience Store News Editorial Advisory Board meeting: What are the pain points convenience store retailers will face in 2023?
At least I have some prescription drugs to deal with my pain, but I wonder how retailers will deal with these pain points in the year ahead:
Consumers trading down. "It's the economy, stupid," as James Carville said during Bill Clinton's successful 1992 presidential campaign. That phrase is even more relevant today. Many consumers are hurting. Not all, but certainly the blue-collar consumers that make up the core of the convenience store customer base. Retailers are seeing customers purchasing more generic and private label products, especially in cigarettes.
Unfavorable policies. Government regulation, or over-regulation, touches everything from energy policy to nicotine flavor bans to credit card transaction fees. Anti-petroleum policies that raise fuel prices take money out of consumers' pockets that they would normally spend in the store. "Credit card transaction fees are my largest single store operating expense," outgoing NACS Chairman Jared Scheeler said at last month's convention. 'Nuff said.
Rising crime. Some retailers can't keep their stores' doors open overnight — not because of lack of labor as was the case a year ago, but because of rampant robberies. It's not worth jeopardizing the safety of an employee in most cases, so brazen criminals are making life hell for many c-store retailers. Among the many recent shortfalls of government, the lack of support for law enforcement is one of the most glaring.
The continued labor challenge. Most retailers have gotten past the worst of the labor shortage, or at least have learned how to operate with fewer hands on deck. Turnover is still huge, though. One popular solution — giving new employees a bonus for staying a certain amount of time — hasn't worked for all retailers. Many say the program only works until the date at which the employee qualifies for the stay bonus, and then they leave.
Increased inflation and stagnation. As the Fed continues to raise interest rates to combat raging inflation, stagflation is becoming a real threat. Stagflation is persistent high inflation combined with high unemployment and stagnant demand in a country's economy.
Supply chain shortages. This is another pain point that is not as acute as it was a year ago, yet still lingers for a large variety of needed products, from store fixtures to foodservice ingredients. The best wholesalers are the ones that are honest with their retail customers about expected product delays and that can offer substitute items for missing product.
The new year may bring even more pain points for convenience store retailers to overcome. The prescription, in my view, is to concentrate on providing more value to your customers. Make it worth it to them to spend their time and money with your brand.