Winds of Change Still Blowin’
“The televised news images of depositors standing outside their shuttered bank in Pasadena this summer was a nightmarish reminder of an earlier era when this country’s financial underpinnings shattered.”
— Convenience Store News, Cover Story, October 2008
My cover story for the October 2008 issue of Convenience Store News went on to describe how the nation was reeling from high energy costs, real wage stagnation, the real estate bust, a weakened currency, the mortgage financing crisis, shrinking employment and rising inflation.
Well-known gasoline retailers around the country were going out of business. Others were dealing with the negative impact of $5-per-gallon gasoline. On top of that, the industry was bracing for the arrival of a new small-format competitor from across the Atlantic — Britain’s Tesco Fresh & Easy stores. Entitled “The Winds of Change,” the article went on to interview top minds in the convenience store industry about the changes that were occurring in both the nation and the convenience store industry.
Today, the c-store business is much healthier than it was a decade ago. The robust economy (household income is at an all-time high; unemployment is at historic lows) and lower fuel prices have helped. But many retailers also have embraced the changes predicted by such astute industry leaders as 7-Eleven’s Joe DePinto, Douglass Distributing’s Bill Douglass and others, who predicted that a “real transformation” is taking place.
Many of the changes we forecasted in 2008 occurred or are still going strong. Retailers are selling more private label goods, incorporating more products tailored to their local market and sourced locally, improving their foodservice menus, making acquisitions, and finding other payment methods to reduce debit and credit card transaction fees.
Now, a different type of wind is blowing through the industry. To be sure, there are clouds on the horizon. Gas prices are creeping up, finding and keeping good employees is getting harder, and labor and other operating expenses are rising. New competitors continue to emerge, such as dollar stores selling cigarettes and fresh food, supermarkets upping their game in foodservice with “grocerant” concepts, and new small-format concepts from Walmart and Amazon.
To meet the challenges of the next decade, retailers will focus mainly on technology solutions, such as:
- Last mile delivery: getting the product to the customers’ homes;
- Frictionless shopping: cashierless stores and making the shopping experience easier;
- Smart loyalty and rewards programs: they’ll know what you want, before you want it.
A fundamental transformation occurred 10 years ago. I have a feeling another one is in the offing