s the world reels from the effects of the COVID-19 global pandemic, certain industries experienced various levels of decline brought about by worldwide lockdowns, government mandates, and the encompassing reluctance of people to leave their homes. One of the businesses heavily impacted by these global restrictions was the convenience store.
The convenience store industry had a large shadow cast over it throughout 2020 and 2021. Known as your go-to, all-in-one destination for daily necessities, the convenience store suffered hits to its inventory management, logistical procedures, and customer service experience, brought about by multiple factors related to the pandemic. Because people preferred to stay home, deliveries from grocery stores became the norm, and people would hoard supplies instead of relying on your quick and convenient visit to your local convenience store.
With 2022 in full swing, lessened government mandates and restrictions and successful vaccination drives around the country have led to more and more people shifting back to a more normal state of living. Not only that, but retailers, suppliers, and wholesalers have become more proficient and adept at navigating detours throughout their business practices, and have found newer ways to satisfy customers’ changing expectations for more convenient shopping. All this has led to a steady increase in c-store sales throughout the nation, and has opened the door to a better future for the industry as a whole.
Convenience store performance for this year is primarily fueled by larger operators. Those operating 20 stores or less continue to feel the pressure of a dwindled-down economy, compared to larger operators who have seen more sunny days in recent months. Only 6% of small operators are returning positive results, with a majority 67% of small operators reporting negative results in their data. Compare this to an impressive 50% of large operators coming up with positive data, and you can see how business size directly affects performance in today’s recovering economy.
For overall business outlook in 2022, small-scale operators surprisingly feel more positive about their chances this year, reporting an equal split between having a more neutral outlook and reporting that it’s going to be their best year ever. Large scale operators are heavily neutral in this regard, with 56% of large operators positioning in the middle.
Convenience store performance for this year is primarily fueled by larger operators. Those operating 20 stores or less continue to feel the pressure of a dwindled-down economy, compared to larger operators who have seen more sunny days in recent months.
Average sales per store expectancy in 2022 is on a high, with nearly ⅔ of all c-store retailers expecting an increase in their sales for this year. The average % expected increase is a conservative 18%, and the average % expected decrease is 15%. Overall, most c-store operators believe that sales will increase, which is always a good thing. Similarly, average profits per store see expectations of 56% for an increase in 2022.
Labor turnover and hiring continue to be the major issues that c-store retailers foresee to produce the most problems for this year, with about 4 in 10 operators seeing these as their primary concern. And recently, motor fuel prices have proven to be an additional concern for convenience store retailers, with a lot of retailers claiming that the rise in price per gallon has started to affect inside sales.
For convenience store products, retailers forecast more of the same for their product categories amidst current supply chain disruptions and labor shortages. Specifically, c-store retailers are optimistic about sales for motor fuel, prepared food, and certain tobacco products, while remaining pessimistic about health, beauty care, and cigarettes.
C-store retailers have been looking into and experimenting with a variety of techniques in order to boost sales and profits throughout the pandemic. For 2022, what stands out are emphasis on foodservice offerings, more aggressive loyalty programs, and the innovation of mobile applications for promotions to further enhance the concept of ‘convenience’. Speaking of mobile promotions, there has been a trend of incorporating mobile apps to pay for products and services in-store. Another clear trend that continues to dominate is the emphasis on delivery, with c-stores continuing to use third-party delivery services for another stream of revenue.
For upcoming trends this year, beverages and healthy snacks are making an explosion into the c-store market, driven by recent focus on going bold with flavors and healthier alternatives respectively. Micro-fulfillment is also playing a major role, as consumers increasingly prefer same-day delivery and curbside pickup options for their shopping. Recent technological advancements have enabled micro-fulfillment to be even more seamless and easy to integrate as well.
Trends and expectations aside, the industry of the convenience store is looking to shape up for 2022. With the world steadily recovering from the pandemic, businesses like the c-store are making a comeback for consumers everywhere, and customers are once again placing value into the convenience store. You could say, 2022 is placing convenience back into your resident convenience store.
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