By Erin Pressley
Words matter. So said Jeff Lenard, vice president of strategic industry initiatives for NACS, at the closing session of this year’s NACS State of the Industry Summit. “We sell perishables out of what we call a ‘coffin’ cooler.” We sometimes make it hard for consumers to want to purchase fresh and healthy from a convenience store.
Yet selling produce would be great for a retailer’s bottom line and more nutritious offerings would give the convenience industry a refreshed image. An image boost with a focus on freshness could help retailers as they approach zoning commissions and city councils, said Lenard, in an effort to get new stores opened or existing stores remodeled.
He shared with the audience that getting fresh produce into stores is just one aspect of what’s being called the NACS reFresh initiative, which addresses ongoing industry perceptions by focusing on three distinct elements:
- Creating tools that address NIMBY (not in my backyard) issues by educating the public about the contributions convenience stores make to their communities
- Sharing facts and data that demonstrate the evolution of the industry and corrects an outdated reputation
- Forming partnerships/relationships with credible nutrition- and community-focused groups, such as the United Fresh Produce Association
“reFresh is the ideal name for the program because it addresses our path forward,” Lenard said. “It’s about refreshing our image and refreshing our offer while still providing refreshments of all kinds. The idea is to give retailers who want more options — whether fresh produce or healthy options — the tools to access the landscape and determine if it’s right for them.”
And the environment is definitely changing. In the 1950s, singles living along comprised just 9% of the population while married couples with kids reached 55%. These days, singles living alone comprise 20% of the population, with married couples and kids reaching just 28%. That changes the dynamics around the dinner table for sure, suggested Lenard. More consumers are snacking and enjoying that “fourth meal.”
All of which makes convenience more important than ever before. Millennials’ openness to convenience stores and the expansion of fresh foods into new venues (think Walmart and Costco) are also helping to shape the new c-store landscape and surrounding perceptions. In general, consumers are seeking healthier options and c-stores are poised to capture that health-seeking consumer. A recent NACS consumer survey showed that 58% of consumers age 18-34 said that purchased more healthy snacks in the past year.
And consumers’ focus on fresh is helping to translate into a positive outlook for retailers, Lenard shared, among a few other influential factors. Lower fuel prices, a sound convenience business model and foodservice are also influencers, according to the results of recent NACS retailer sentiment survey.
Nearly 9 in 10 retailers (86%) say that they are optimistic about their business in the second quarter, an increase from 82% who expressed optimism in the first quarter, Lenard said.
Much of the optimism stems from a strong first quarter. More than two in three (69%) retailers say that merchandise sales in the first quarter of 2015 were more than the first quarter of 2014. And 45% say that gasoline sales increased in the first quarter compared to the same period in 2014.
More than one in three retailers (34%) say that consumers are spending the extra money from lower gas prices at their stores, and 29% say that consumers are driving more.
Convenience retailer optimism also extends from confidence in the industry’s growing foodservice offer. Nearly two in three (63%) say that they are optimistic about their ability to compete with quick-service restaurants, compared to 8% who expressed pessimism.
While retailers are extremely optimistic about their own business prospects in the second quarter, they are slightly less optimistic about the convenience retailing industry (80%, down slightly from 83% in the first quarter) and the economy as a whole (70%, up from 63% in the first quarter).
Overall, retailers cited three factors that could grow sales in the second quarter: low gas prices (cited by 30%), better weather (29%) and a continued emphasis on fresh food (19%).
The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their business, the industry and the economy as a whole. A total of 100 member companies, representing a cumulative 2,519 stores, participated in the Q2 2015 survey.
The NACS State of the Industry Summit took place last week in Chicago, the convenience and fuel retailing industry’s only event of the year where retailers gain the most comprehensive industry financial and operational metrics and consumer shopping behavior insights.