Convenience Retailers Focus on New Opportunities

New realities instead of a return to normal are driving long-term strategic plans for convenience stores. 

June 01, 2020

By Chris Blasinsky

LONDON—Ask any convenience retailer what the “new normal” looks like and they’re likely to say it depends on which day. The reality is that the global COVID-19 pandemic crisis has many industry leaders taking a deep dive into their business structure and core values and revaluating how operations can meet new consumer demands in a safe and hospitable retail environment.

During the weekly Shop Talk Live webinar series, hosted by Dan Munford and the team at Global Convenience Store Focus, retail industry consultants Scott Annan and Dev Dhillon shared insights from their “Operating to the New Realities” report designed to help food businesses successfully and profitably operate during the pandemic and focus on long-term strategies.

David Sands, founder of David’s Kitchen, a four-store convenience retailer in Scotland, joined the discussion with a retailer perspective on how the past three months have changed his business, as well as signs that it will likely be a completely different business moving forward.

As a small business, Sands noted that this is a pivotal moment in time where his operations can adapt and change quickly, such as accelerating digital capabilities like delivery. Admittedly, he was skeptical of delivery and the challenges that come with managing the process. However, delivery is likely here to stay. He also disagrees with the sentiment that businesses will return to normal, noting opportunities for convenience retailers to focus on digital tools, like social media, to engage consumers who may not have frequented their stores or realized the great foodservice offers prior to lockdowns.

Dhillon noted concerns around third-party delivery platforms and their fees structure, which can run as high as 30%. However, there’s little doubt online retail is winning the race right now and when consumer reemerge from lockdowns to half-empty malls, for example, society will decide how to rebalance physical retail into spaces that provide greater community value.

Role of Governments

Globally, government bodies lead policies that determine timelines for lockdowns and phasing in reopening plans, which at any time during the pandemic could change. For many retailers, policies coming from different levels of government have created massive confusion and uncertainties for businesses to move forward.

Sands pointed out that an absence of clarity around government reopening policies and timelines hinders longer-term strategic business planning. This is a sentiment felt globally. In the United States, for example, many retailers have expressed confusion with following guidance not only from federal government agencies but also their local county health departments, as well as reversals in policies—like wearing face masks—that created difficulties securing necessary PPEs.

In-Store Experience

Sands commented that product availability has been an issue during the pandemic, which has helped his business focus more on a local strategy. “Our local suppliers simply haven’t let us down,” he said, noting that the relationships he’s built with the local companies have helped minimize supply chain disruptions. 

In terms of store safety and cleanliness, Sands is taking a good neighbor, common sense approach that emphasizes how stores will continue providing a clean and safe environment for employees and customers.

Retailers are also considering product range assortments, such as evaluating changes that reflect new consumer shopping patterns and being flexible enough to make the necessary adjustments quickly. There’s also a shifting approach to promotions, noting that the traditional “every three weeks we change out the promotions” mindset is ripe for disruption. Instead, Sands suggests using this time to focus less on promotions and more on innovations like digital platforms and delivery. 

There’s also an opportunity to redefine promotions, said Dhillon, such as offering meal deals that attach certain products to a shopper mission like food for later and family meal solutions.

Inside the store, Sands celebrated the fact that frontline employees are being recognized for the essential role they have for his business. “Our business wouldn’t exist without a strong team,” he said, noting that growing up in the business instilled his belief to treat everyone like family. And for his company, “It’s not about money—it’s about respect and thanking people for doing a great job.”

Chris Blasinsky is the NACS content communications strategist; she can be reached at cblasinsky@convenience.org, and on Twitter and LinkedIn.

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