Nearly 70% of retailers are hopeful about their business prospects, thanks to the combination of convenience and an enhanced food offer.
ALEXANDRIA, Va. – Low gas prices helped drive sales increases at convenience stores in 2016, and retailers expect those strong sales to carry over into 2017, according to the December 2016 NACS consumer sentiment survey.
More than two in three convenience retailers (68%) say that their fuels sales increased in 2016 and nearly the same percentage (63%) say that foodservice sales increased.
“The continued improvement of the economy and low gas prices gave our customers more confidence to buy inside,” said Aloha Petroleum’s Richard Parry (Honolulu, HI). He said that he expects “better-for-you” items to help continue to drive strong sales in 2017.
Industry-wide, better-for-you items like fruits and vegetables, yogurt, nuts and health bars saw strong sales in 2016: 63% of retailers reported that sales of these items increased in 2016. Only one retailer surveyed said that sales were down in 2016. “Healthier-for-you items are beginning to gain some traction,” said Mike Zielinski with Retail Management Services Inc. (New Lenox, IL).
Retailer confidence about the U.S. economy also surged. A record 79% of retailers say they are optimistic about the U.S. economy—a 26-point jump from last quarter. This surge in retailer optimism mirrors the optimism of their customers. A record 60% of U.S. fuel consumers said they are optimistic about the U.S. economy, according to the NACS survey.
Retailers also are very optimistic about the overall convenience retailing industry. More than three in four convenience retailers (78%) said they are optimistic about the industry’s prospects in the first quarter of 2017, a 7-point jump from three months ago.
New investments in technology related to loyalty programs and enhanced customer experiences are central to the strategy of growing convenience store sales in 2017. Continued technology enhancements surrounding digital advertising, consumer awareness and loyalty are a priority at Casey’s General Stores (Ankeny, IA), according to company representative Terry Handley. Meanwhile, David Oswald of A.H. Jamra Company (Toledo, OH) said they are investing in point-of-sale technology. “Go high tech or go blind,” was the advice from Mohammad Khan with Shahani Inc. (Branford, CT).
Retailers said that new investments in food and beverage equipment are also growing sales. Kwik Trip (La Crosse, WI) saw strong sales from its high-end hot beverage sales with its Franke machines and is investing in new beverage offers to continue the momentum. “We expect explosive growth from our new cold-brew coffee and smoothies in 2017,” said Steve Loehr of Kwik Trip.
Ready-for-you meals will be a big industry trend in 2017, according to Sam Odeh with Power Mart Corp. (Elmhurst, IL). Meanwhile, products produced locally—whether snacks, merchandise or even craft beers—are gaining in popularly, according to Todd Kunkel at Handy Mart (Durand, WI).
Increased investments in their stores may have helped reduce retailer concerns over competition. Overall, 39% of retailers cited competition from other convenience stores as a concern, down from 47% who cited industry competition a year ago. Meanwhile, 33% cited concerns over competition from other channels like drug stores or dollar stores. However, the new Amazon Go concept “could be a game-changer down the road,” said Lisa Dell’Alba with Square One Markets Inc. (Bethlehem, PA).
Retailers are much more concerned over threats to their business that are less in their control. A majority of retailers (55%) said that they are concerned about regulations and legislation that could affect their businesses. And 53% are concerned about labor issues, a sharp increase from the 41% who cited labor as a concern a year ago.
Despite concerns over threats to their businesses, 69% of retailers are optimistic about their own business prospects in the first quarter of 2017, largely because of the combination of convenience and an enhanced food offer.
“More convenience stores are adding foodservice, and our industry is moving to a one-stop shop for local communities,” said Nishant Chudasama with Cadnicks (Orange, CA).
“I truly think food will continue to be the trend in 2017—but it’s going to take ingenuity and creativity to continue to entice people to visit convenience stores for lunch and dinner. We’ll need to continually adapt to reflect trends and customer preferences—whether it's a new burger or a new healthy option,” said Dennis McCartney with Landhope Farms (Kennett Square, PA).
The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their businesses, the industry and the economy as a whole. A total of 81 member companies, representing a cumulative 4,052 stores, participated in the December 2016 survey.
This summer, more than 215 million gallons of wastewater poured into the Floridan Aquifer when a sinkhole opened up at the Mosaic fertilizer plant in Polk County.
Also this summer, Hurricane Hermine flushed tens of millions of gallons of raw and partially treated sewage into Tampa Bay.
Governor Rick Scott swung into action with an emergency rule forcing polluters to notify the public within 24 hours of a major spill. But last week an administrative law judge sided with business groups and said Scott had no legal authority to act.
Republican Representative Kathleen Peters of South Pasadena says she’s working on legislation to fix that.
“Because that’s the goal and I know that’s the governor’s goal to ensure that there’s transparency and that the citizens have the opportunity to protect themselves if they need to.”
The heavy hitter of the Tallahassee lobby corps, Associated Industries of Florida, the National Federation of Independent Businesses, and the Florida Retail Federation, fought to kill the emergency rule. They argued it would force convenience store owners to call a press conference every time a customer overfilled a gas tank.
Peters says she’s still working on thresholds for triggering public notice, and what the warning should say. But she thinks boil water notices are a good model.
“It’s amazing how when a water main breaks the media is reporting on that so quickly. And it seems to be quite seamless. And so can’t we get the same kind of system on a spill if it’s a health issue so that we can get the word out quickly.”
NFIB Florida executive director Bill Herrle said small business owners had a lot of concerns about the emergency rule. A diesel mechanic, Herrle says, isn’t always going to be the best interpreter of toxic thresholds.
Florida Retail Federation spokesman James Miller agrees, saying business owners would much rather notify regulators and leave the public relations to someone else. “We feel that DEP, they’re the experts in this kind of situation. And they’re the ones that know the appropriate media to call and they’re the ones that have the best examples of getting this information out to the locals in an area.”
However, Miller and Herrle insist they’re not opposed to the legislation. Herrle says he’s eager to help sponsors craft the language.
Legislative process as resulting in better public policy than just letting a state agency have a go at it.”
And that’s what worries Clean Water Network activist Linda Young the most. She’s afraid business interests will water down the legislation until it’s practically meaningless. A “may” instead of a “shall,” could make all the difference in the world, Young says.
“If this legislation is going to be meaningful, if it’s going to be protective and it’s going to accomplish what the public would like to have in place, there’s going to have to be very, very close scrutiny of every word.”
Governor Scott can be expected to do just that with every bill that crosses his desk. read more
A new whitepaper discusses how the health of consumers is driving retail.
As consumers strive to live more healthful lifestyles, their purchasing behaviors are changing rapidly, driving every buying decision. More than ever, consumers want—and expect—retailers and manufacturers to assist them on their health and wellness journey inside the store.
“As consumers around the globe search for better, healthier and smarter solutions that fit their lifestyle, the motivation for brands and stores to meet these needs means modeling an experience they cannot achieve with e-com,” said Global Market Development Center (GMDC) President and CEO Patrick Spear, in a press release.
Within the $3.4 trillion global wellness market: $1 trillion annually is spent on beauty and anti-aging; $574 billion is spent on healthy eating, nutrition and weight loss; and $433 billion is spent on preventative and personalized health.
The macro-level trends driving the enormous spending are happening so rapidly. Consumers are taking back the power to decide and are immersing themselves in knowledge and facts through technology and shared learning from friends and family.
GMDC’s whitepaper, “Next Practices: The Health & Wellness Consumer, Helping Trading Partners Shape the Future…Today,” showcases the trends shaping the new consumer-driven health and wellness movement:
It’s clear that health and wellness are fueling all purchasing decisions—shoppers expect retailers and manufacturers to offer a holistic, healthful experience that inspires them and speaks to their aspirations—from the entrance to the checkout line. “Health and wellness is a foundational element in everyone’s daily lives,” said Mark Mechelse, GMDC’s director of research, industry insights and communications. “For consumers to change behavior, they must have the motive, means and messages to do so. That is the essence of opportunity for collaboration between trading partners.”http://www.nacsonline.com/Media/Daily/Pages/ND1221166.aspx?utm_content=NACS%20Daily%20122116:%20newsarticle6%20(Consumers%20Hold%20Retailers%20Accountable%20for%20Their%20He)&utm_source=NACS%20Daily&utm_campaign=NACS%20Daily%20122116&utm_medium=email&utm_term=552364#.WFrX_LGZNE5
WESTPORT, Conn. — Foodservice will take center stage for convenience stores in 2017, predicts King-Casey, a retail consulting and design firm for the c-store industry.
"Innovative c-stores — such as Sheetz and American Natural — have led the way in improving their food and foodservice offerings," said King-Casey principal Tom Cook. "Now the rest of the industry has noticed, with the result that foodservice will be the primary area of focus for c-stores looking to build their brands and bottom lines."
According to Cook, c-stores will place a concentration on providing prepared foods, made-to-order sandwiches, fresh ingredients, healthy options, quality baked goods and barista-style coffee, espresso and tea beverages.
Although foodservice offerings will play a significant role in 2017, c-stores will also have a competitive edge over quick-service restaurants (QSRs) and fast-casual restaurants as they continue to revamp their interior atmospheres to make them more inviting and improve the customer experience, the principal said.
"This will change attitudes and behaviors over time, as customers spend more time in the stores talking, working and lingering over their food and beverages," Cooked noted. "The historical lines of distinction between c-stores and QSRs and fast-casual restaurants will continue to blur."
Supermarkets will also feel the heat of competition from c-stores, as consumers begin to see more c-stores without gas pumps with non-fuel locations. This will be especially true of urban areas were millennials — the heaviest users of c-stores — are concentrated.
Other King-Casey C-store predictions include:
Demographic shifts: With significant improvements in foodservice offerings, store design and environments, customer demographics will change. More women, with and without children, will visit more often. Smart operators will differentiate their brands by adapting their offerings to the unique needs of this customer segment.
Exterior appearance: Innovative c-store brands will increase drive-up and drive-by appeal with new, contemporary designs that incorporate large amounts of glass and windows that enable consumers to see the interior environment and store experience.
Drive-thru growth: Currently, Sheetz, Wawa, Parker’s and a handful of other c-store brands offer drive-thru service. "We see dramatic growth in this area as savvy brands realize that drive-thrus offer the best way to meet the customer demand for convenience, as well as a way to differentiate themselves and generate incremental foodservice sales," Cook noted.
Giving consumers the quick options they want
Snacking continues to be a popular meal-period option, and with more than three-quarters of convenience store customers visiting to buy snacks, it is crucial that retailers get it right. So what are your customers looking for? According to Technomic’s 2016 Snacking Occasion Consumer Trend Report, more than half of consumers say portability is key.
Portability is influenced by size, shape, packaging and ease of purchase. According to NACS, 83% of goods purchased at c-stores are consumed within an hour and an impressive 60% are eaten immediately. What’s more, the top five dessert snacks are all packaged and portable, including cookies, ice cream, brownies, frozen treats and cupcakes, according to Technomic data.
So why not give your customers the kind of quick options they want? Here are some tips to keep in mind:
Capitalize on All-Day Breakfast
Portable, packaged breakfast pastries make great grab-and-go snacks throughout the day. Portable baked goods appeal to consumers looking for small, easy-to-eat indulgences. Consider offering items such as Danishes, muffins, cinnamon rolls and bear claws near the register for quick convenience.
Go for Bundles
With more c-stores amping up their coffee programs, packaged snacks (especially premium baked goods) make the perfect complement. Market coffee-and-a-snack deals for all customers, or offer them as a loyalty reward. Some 57% of younger consumers say the availability of breakfast combo meals influences their decision to visit a foodservice establishment, according to Technomic data. Similarly, be sure to merchandise bakery snacks by the coffee bar to increase bundled purchases.
Cater to Hispanics
As the Hispanic population grows, so does the purchasing power of this important consumer group. As this demographic is comprised of heavy c-store users, Hispanic consumers are a big opportunity for c-stores. Offer a selection of packaged authentic Mexican pastries, as Hispanic consumers over-index on c-store bakery items. In fact, while 77% of all c-store foodservice patrons buy bakery items once a month or more, that number jumps to 87% for Hispanics, according to Technomic data.
Consumers are receptive to bold, spicy flavors. Fill the roller grill with flavor-packed global snacks like egg rolls, spicy bread sticks and more. Consider offering an easily accessible line of flavor-packed condiments for hotdogs and other grab-and-go handhelds.
Drink It Up
With more female c-store customers seeking healthy, portable snacks, expect to see a jump in drinkable yogurt sales and other protein-packed drinks. Brands such as Chobani, Dannon and Yoplait all have no-spoon-needed yogurt drinks on the market.
Consumers continue to seek out indulgent snacks. Some 59% of consumers say they indulge when snacking, according to IRI data. Technomic reported that the desire to treat oneself is one of the biggest motivators for snack purchases, second only to hunger. Consumers are likely to purchase indulgent snacks in the afternoon, as studies show consumers are more willing, and more successful, at rationalizing a treat later in the day.
There is an opportunity to maximize indulgent snack sales throughout the day by placing popular impulse items in key positions around your stores. Play up seasonal craveability with holiday treats featuring peppermint or caramel flavors. Look for bite-sized indulgent snacks offered in cups or resealable bags, which are perfectly suited for grab-and-go impulse items.
As snacking continues to grow, and as consumers seek out craveable flavors, the opportunity for boosting snack sales grows, too. Prairie City Bakery has a variety of portable, mouthwatering snacks to entice impulse purchases in your store. For more information, visit Prairie City Bakery here. read morehttp://www.cspdailynews.com/category-news/snacks-candy/articles/6-tips-boosting-snack-sales
The US Department of Labor is poised to propose new rules regarding the minimum salary level for employees exempt from overtime pay. Presently, for an employee to be exempt from overtime pay they must earn $455/week or $23,660/year and meet certain minimum tests related to primary job duties. The Department of Labor, at the encouragement of the President, is proposing an increase in the exempt salary to $970/week or $50,440/year. This poses a significant challenge to the retail community, as many retailers have salaried positions earning less than $50,440/year.
In addition, there is also a proposed increase for the Highly Compensated Employee from $100,000 to $122,148 to make them exempt from overtime.
The final rule will most likely be published in May. Once it is published, it will become effective 60 days later. At this time, we do not know exactly what the new exempt salary amount will be, but we do know it will be much greater than the current $23,660/year. And it has yet to be determined if the Department of Labor will make changes to the existing duties test.
So what can you do now to prepare?
Now is the time to begin the process. Even though we are not certain of the exempt salary amount, there is work you can do right now and steps you can take to prepare for the new rule. GET STARTED…IT’S COMING!
Disclaimer - This document was designed to provide education and assistance to you, our members, as you evaluate the proposed overtime rule. It does not purport to be legal advice or professional direction. We recommend you work closely with your legal counsel and human resource professionals to determine the best plan for your specific business.
Convenience continues to resonate with consumers, with record in-store sales of nearly $215 billion and overall industry sales closing in on $700 billion in 2014.
April 16, 2015
CHICAGO – Buoyed in part by low fuel prices, the U.S. convenience store industry had record in-store sales of $214.9 billion in 2014, higher than overall industry sales in 1998, according to figures released today by NACS. Overall industry sales for 2014 reached $697.5 billion, evidence that the value of convenience continues to resonate with consumers.
The industry’s 2014 numbers were announced at the NACS State of the Industry Summit, a two-day conference that reviews and analyzes the industry’s key economic indicators.