“These are the foundation blocks that they can build on as competition rises and channel lines blur,” Nielsen said. “To execute, convenience stores need to get the product mix right (evolving when needed), emphasize health and wellness, and think beyond R-T-E (ready-to-eat).”
Speed has become an essential service element in the quick-service restaurant industry and convenience stores will need to follow suit if they want to compete, Nielsen said. The research firm noted that it will be imperative for convenience stores to ensure customers looking for a quick meal can get in and out quickly.
“Positioning the deli at the front of the store, possibly with separate check-outs, will be big customer pleasers,” Nielsen said. “For a slightly elevated experience, retailers can enhance their offerings by offering restaurant-style seating and broadening their menus for in-store service.”
Staying innovative is another key for convenience stores. This includes focused marketing across digital platforms and developing personalized offers and rewards that are individualized.
“Brands and companies can never afford to get too comfortable and complacent in their positions,” Nielsen said. “Competition can crop up at any time — and in many ways, on any device. Staying in touch with consumer preferences and needs is, and will always be the way to stay ahead of the pack — even for those currently at the front of it.”
According to Nielsen Homescan data, total US retail trips fell to 15.8 billion in 2016 from 17.6 billion in 2012. In the convenience/gas channel, the average number of trips made by Americans fell to 11 in 2016 from 14 in 2015. On the positive side, Nielsen data show consumers are making up for fewer trips with larger purchases. In 2016, convenience store sales eclipsed $140 billion, up 11.5 percent from $125.9 billion in 2012, Nielsen said.
“The growth in subcategories like R-T-E meals and enhanced water align with broader consumer health and wellness trends,” Nielsen said. “R-T-E options are also amplified by deli sales, which grew 8.3 percent to $1.2 billion last year, while fresh produce sales slipped about half a per cent to $425 million. Overall, recent sales trends magnify the degree to which consumers seek fast, economical and increasingly healthy options from their convenience stores. That said, convenience stores are also more likely to attract people for meal-time trips rather than ‘fill-in’ and ‘routine shopping’ ventures. And that means being well stocked is now a consumer expectation rather than a desire.”