On Shaky Ground
During the National Retail Federation's (NRF) recent 2024 "State of Retail & the Consumer" discussion on the health of the American consumer and the retail industry, NRF Chief Economist Jack Kleinhenz said: "The economy is primarily supported by consumers who have shown much greater resilience than expected, and it's hard to be bearish on the consumer. The question for 2024 ultimately is: Will consumer spending maintain its resilience?"
Consumers appear to have a favorable outlook, which should support their willingness to spend. Yet, many are feeling a pinch from tighter credit and inflation, NRF noted while announcing its forecast that U.S. retail sales this year will increase between 2.5% and 3.5%.
The latest meeting of Convenience Store News' Editorial Advisory Board likewise included a conversation about the health of the c-store shopper. Board members reported that they are seeing a slowdown in foot traffic, which they believe is related to macroeconomic conditions. Additionally, among the customers who are coming into their stores, more shoppers are trading down and more shoppers are paying for their purchases with credit — both signs that things are getting tighter. "I don't think it's reached a tipping point yet," one board member remarked.
In this climate, it is imperative that convenience store retailers offer consumers the products they want at the prices they're willing to pay in the manner they want to shop.
The findings of our 15th annual Realities of the Aisle Study revealed that the percentage of shoppers who say they visit a c-store at least once a week declined 4 points compared to a year ago. The percentage who say they visit the same convenience brand each trip also dropped 7 points year over year, while the percentage who say they shop at the same c-store all the time fell 10 points. This also coincides with a rise in shoppers citing more basic factors such as affordable prices and in-stock products as their top requirements for a positive experience.
In this climate, it is also imperative that convenience store retailers focus on improving their forecourt-to-store conversion rate, getting the most out of every person who comes to their site. Check out our April issue feature for advice on how to draw motorists inside.
Only 32% of the c-store shoppers surveyed for our Realities of the Aisle Study said they always or almost always purchase in-store items when stopping for fuel. That means nearly seven in 10 do not. Develop a strategic plan today to seize this significant opportunity.
