DALLAS—America’s convenience stores run on providing a convenient way to grab snacks, cigarettes, beer and gas. However, the coronavirus pandemic has upended in-person shopping, leaving these retailers to look to delivery as a way to boost business, Bloomberg Businessweek reports.
Both large and small convenience stores have launched or expanded delivery options, usually via third-party platforms like Uber Eats, Postmates or DoorDash. “What [COVID-19] really did is it gave the industry a peek into the future,” said retail consultant Frank Beard, a frequent contributor to NACS Magazine and NACS Daily.
The convenience and fuel retail industry has had a string of successes lately, with its food and beverage offerings to its in-store foodservice. But the pandemic brought a steep decline in fuel sales and trips, thus reducing in-store sales as well. Supermarkets accelerated online ordering and delivery, restaurants fine-tuned takeout menus and independent stores partnered with third-party delivery apps.
This month, DoorDash—which delivers for many convenience store chains—debuted its own online convenience store called DashMart. “There is this growing pressure to explore delivery, but delivery is tough,” said Jennifer Bartashus, an analyst for Bloomberg Intelligence. “In the short term, it meets a need for customers who don’t want to come into stores, but there are questions about long-term profitability.”
To sell successfully online, convenience retailers must adapt to the marketplace. Outsourcing delivery is expensive, cutting into already razor-thin margins, and many states prohibit delivery of age-restricted items, such as tobacco and alcohol. Convenience stores see early signs that customers are spending more online, especially later in the evening. But retailers must take a careful look at what to offer and how to make online ordering and delivery profitable.
For example, Casey’s General Stores had its own drivers to delivery mostly its popular pizza. The Midwest chain had been running a pilot program with DoorDash when the pandemic began, which it quickly expanded to 600 locations. We’ve got a real advantage based on our physical locations,” said Chris Jones, chief marketing officer. Casey’s can make most deliveries within 45 minutes.
7-Eleven now offers delivery in 1,300 U.S. cities. “The definition of convenience has rapidly evolved during this pandemic,” said Chris Tanco, COO of 7-Eleven. “Delivery expansion is here to stay.”
For more on c-stores and delivery services, read “Labor & Delivery: Despite challenges, many retailers are jumping on the delivery train” in the April 2020 issue of NACS Magazine.