Where C-stores Stack Up Among Food Shopping Channels

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Where C-stores Stack Up Among Food Shopping Channels

By Tammy Mastroberte, Convenience Store News - 03/28/2016

NATIONAL REPORT — Competition for customers and channel blurring between convenience stores, supermarkets, drugstores and dollar stores remains a challenge. When it comes to capturing consumers, there are areas where c-stores are hitting the mark, but there are also ways they can improve their position, particularly in the grocery sector.

Researcher The Hartman Group recently examined food shopping behavior across nine channels, including grocery, club, convenience, and online shopping. The findings of its Food Shopping in America report showed that smaller-format channels such as dollar, convenience and drug are not “serious contenders in the food grocery sector” and the majority of traffic in these channels is still primarily driven by non-food occasions, David Wright, senior manager of marketing at The Hartman Group, told Convenience Store News.

The two areas where the dollar, convenience and drug channels are capturing their fair share, however, is “indulgent items” including snacks, sweets, soft drinks and bottled water; and “specialty categories,” such as energy/protein food and beverages, and nutritional supplements.

“Since consumers continue to struggle with money and time constraints, retailers that are the ‘most convenient’ and have the ‘best prices’ are more attractive than ever before,” Wright explained. “Convenience, in particular, is a key determinant of store traffic, whereas price continues to be an important factor in food and beverage purchase decisions.”

Compared to traditional grocery channel shoppers, convenience channel shoppers tend to be younger, more ethnically diverse, from slightly less-affluent households and online shoppers, the research found. Additionally, the convenience channel tends to attract millennials and men.

Since millennials represent such a large segment for the c-store market, Wright recommends social media and e-commerce as ways to connect with and engage them.

And since snacks and grab-and-go foods are a segment c-stores excel in, he said improving the assortment can increase basket size and attract busy customers.

Room for Improvement

As for the key areas where convenience stores can improve to better compete with other grocery-sector channels, Wright pointed to:

  • Increasing food assortment;
  • Better pricing; and
  • Higher-quality offerings.

“Although food and beverage shoppers tend to visit c-stores four times a month — mainly because it is conveniently located — only 18 percent visit this channel primary for food or beverage shopping in a month,” Wright cited. “Most [c-store] shoppers are buying indulgent items, such as snacks and sweets, for immediate consumption.”

In regards to customer advocacy, The Hartman Group’s findings revealed the highest scores in the specialty/natural, club and online channels. In fact, the c-store and dollar channels have the lowest customer advocacy scores, according to Wright.

“Specialty/natural and club, in particular, outperform as trusted channels that engage shoppers with high quality, unique assortment and an enhanced shopping experience that fuel impulse buys,” Wright noted.

“Retailers that are able to deliver an enhanced shopping experience while demonstrating compelling value will be more successful in attracting and retaining today’s food and beverage shoppers in the long run,” he concluded.