If you're a c-store management professional interested in maintaining a competitive business five, ten, or even 20 years from now, it's time to pull out your proverbial crystal ball and peer into the future of the American retail landscape.
If you’re a c-store management professional interested in maintaining a competitive business five, ten, or even 20 years from now, it’s time to pull out your proverbial crystal ball and peer into the future of the American retail landscape.

Convenience stores remain a staple of the American economy. Despite an ever-shifting market – now greatly impacted by eCommerce options – C-stores have continued to grow, expand and rake in profits. While this trend doesn’t show signs of slowing down any time soon, a glimpse into the future paints a more complicated picture.

In its latest report, “How U.S. Convenience Stores Can Stay Ahead of the Pack,” market research firm Nielsen explained that while the coming years look bright for the C-store industry, rapidly evolving consumer habits could pose threats to the sector down the line. If you’re a C-store management professional interested in maintaining a competitive business five, 10 or even 20 years from now, it’s time to pull out your proverbial crystal ball and peer into the future of the American retail landscape.

Read on to discover where the convenience store industry is headed and learn how your organization can stay ahead of the curve.

With fewer cars on the road, convenience stores lose out 
Drivers are a natural staple of the C-store consumer base. When they stop to refuel their cars, they’re also inclined to refuel themselves, and C-stores offer a convenient, affordable way to get some snacks and get back on the road. C-stores adjacent to gas stations or located along busy highways know that the best customers are the ones who need a quick break from being behind the wheel.

Unfortunately, due to a variety of factors, Americans are driving less and less. Nielsen reported that about 69 percent of 18-year-olds currently have their licenses, compared to 87 percent in 1983. The source attributed some of this downward trend to rising gas prices, which have already increased since 2016.

Notably, however, gas costs are only one factor in declining driving rates. The rise in affordable ride-sharing services like Uber and Lyft, which allow consumers to request rides with a swipe of their smartphones, have reduced the need for people to own their own vehicles. Additionally, many millennials – a key demographic for C-stores – are opting to move to cities and metropolitan suburbs, reported Forbes magazine. The walkability and access to public transportation provided by these areas minimizes the need for driving and car ownership.

The rise of e-commerce means Americans are taking fewer shopping trips 
While e-commerce channels currently fill different needs than convenience stores, they’ve already started to infringe on the foot traffic and impulse shoppers that contribute greatly to C-store profits. According to Nielsen, the number of retail shopping trips Americans take annually has declined by 1 million over the past five years. Fewer shopping excursions means fewer opportunities for convenience stores to pick up business.

Although Americans are going to brick-and-mortar stores less, they’re spending more each time they do so, reported Nielsen. Between 2012 and 2107, C-store sales rose by a robust 11.5 percent. The key to increasing sales even as people are shopping less? By offering on-trend, in-demand products that position C-stores as alternatives to quick-service restaurants.

Competing with quick-service restaurants gives C-stores a chance to shine 
Once referred to as “fast food,” many quick-service restaurants have sought to distance themselves from this label in recent years, largely due to its unhealthy connotation. While they still operate in the same manner, providing patrons with cheap food in just a few minutes, they’ve also revamped their selections. Chains that only served up greasy burgers and fries in the past now boast menus filled with salads, grilled chicken and fresh fruit. Additionally, strings of high-end QSRs have started popping up around the country, offering hungry travelers instant access to real, wholesome nourishment, no matter their budgets or time frames.

While the increased competition within the QSR industry might be intimidating to C-store management professionals, convenience stores are emerging as victors in the race to provide fresh, convenient food options to hungry shoppers.

According to CSP Industry News, most consumers consider C-stores on par with QSRs when it comes to providing high-quality healthy choices. Additionally, most C-stores are able to charge less and offer more variety, making them the clear choice for today’s on-the-go eater.

“Convenience stores compete with quick-service restaurants on value and variety. Most stores offer bundled value on meals that include center plate, side and beverage,” Darren Tristano, president of Technomic, explained to CSP Industry News. “With regards to variety, convenience stores provide incredible advantages over quick-service restaurants with the variety of fountain, hot beverages and canned/bottled options. In addition, the convenience of picking up other snacks and consumer items makes convenience stores competitive destinations for shoppers.”

Many QSRs have little wiggle room in terms of features, service styles and products, but C-stores aren’t held to the same boundaries. This means convenience stores have far more opportunities than QSRs to adapt to consumer trends. According to the source, just 7 percent of C-stores currently offer “extensive roller grill grab-and-go options” alongside “limited on-site or made-to-order prep,” which it refers to as “premium programs.” Only 3 percent of C-stores report having “super premium programs,” which means their menus and food products are a major focus and top priority.

Investing in food selection is also a smart move for C-store management professionals who want to maximize profits, noted CSP Industry News. Profit margins for non-edible items sold by convenience stores is 27 percent, while that of food products is 57 percent.

C-stores should keep focusing on ‘speed, experience, and personalization’
When mapping out their futures, C-store management professionals should keep in mind the three pillars of their industry. According to Nielsen, these are “speed, experience, and personalization.”

“These are the foundation blocks that they can build on as competition rises and channel lines blur. To execute, convenience stores need to get the product mix right (evolving when needed), emphasize health and wellness, and think beyond [ready-to-eat meals],” concluded the source.