Should C-store operators and suppliers be wary of inflationary pressures?
C-store shoppers are willing to spend more as trips continue to grow back to pre-covid levels.

Strong basket spend and steady, albeit slow, trip return during 2H 2020 ultimately helped “save” 2020 for C-stores and a wide range of categories. In the past six months we’ve seen trips continue to lag 2019 levels, but it appears shoppers are continuing to return and/or increase the number of their C-store trips.

Moreover, they’re telling C-store retailers and CPGs alike by “voting with their wallet” that they’re willing to spend more each trip. While shoppers are driving these outcomes with a somewhat untraditional behavioral pattern, 2%+ year-over-year growth is actually quite respectable.

Food service sales have been rising as markets have been entering the “fully reopened” state, and this trajectory continues to offer C-stores a significant opportunity for product and occasion differentiation from other retail channels.

However, inflationary pressures are beginning to pose a risk, particularly to trips. Much like after the 2008-2009 recession and the 2010 rebound, broad-based price increases in 2011 sent sales down for many categories and retail channels. C-stores and CPGs need to be wary of the same pattern occurring during this economic rebound.

In particular, consumers have recently demonstrated that they have new choices in how they shop, and widespread price inflation can quickly send them looking for alternatives if they don’t like what they see at first. As a result, it’s even more critical to deliver overall value and an exceptional customer experience beyond just price.

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