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Under the Influence of Demographics

5/15/2015

Speakers at this year’s NACS State of the Industry Summit focused on several topics of keen interest to convenience store retailers. The national economy. Drivers of fuel demand. Health and wellness. Managing people. The payments landscape. Channel blurring and energy pricing.

But the key message across most of the speaker programs was how the nation’s changing demographics will impact business. Aging baby boomers, digitally-connected millennials and a larger multicultural population will have a profound effect on c-stores.

Most agreed the industry is well-positioned — with a few tweaks — to benefit from these demographic changes. In particular, the rise of the multicultural population and millennials have created more consumers who are predisposed to shop at c-stores more so than the older baby boomer generation.

In a speech entitled “Disruptive Demographics,” Dr. James H. Johnson, a professor at the University of North Carolina, Chapel Hill, listed six “disruptions” with major business implications:

  1. The South Rises Again. The South is the fastest-growing region of the United States. Led by four states — Texas, Florida, Georgia and North Carolina — the southern region of the U.S. has accounted for half of the total population growth in the nation since 1970.
  2. The Browning of America. Ninety-two percent of the net population growth from 2000 to 2010 was non-white; 55.5 percent was Hispanic.
  3. Marrying Out Is In. Marrying someone of a different ethnic or racial group is a growing trend. Since 1980, inter-marriages have increased from 6.7 percent to 14.7 percent of all newly married couples. The biggest share is among Hispanic-White (41 percent), followed by Asian-White (15 percent).
  4. The Silver Tsunami. “Every day for the next several years, 8,000 more baby boomers will turn 65,” said Johnson, adding that elder care will become a huge concern. “It’s a $40-billion-a-year problem in terms of lost productivity,” he noted.
  5. The End of Man? Women are about to surpass men as a numerical majority in the workplace. The inability of males to keep up with females in education is particularly troublesome. “We can’t have stable communities when there is such an imbalance,” said Johnson.
  6. Cooling Water from Grandma’s Well, and Grandpa’s Too. Not only are more millennials moving in with their parents for financial reasons, but there is also an increase in children living with their grandparents.

Businesses should not put all their eggs in the millennial generation basket, Dr. Johnson concluded.

Of course, millennials are not to be overlooked. Clint McKinney, group director, Category Advisory Services, for The Coca-Cola Co., advised retailers to “think like a millennial.” This involves providing easy, ready-to-go meals and snacks; catering to their impulsive shopping behavior; offering “on-trend” and “on-budget” products; and creating a digital relationship and experiences that millennials will want to share with others.

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