By Chris Blasinsky
WALES—Industry issues, opportunities and challenges exist globally, but they are typically experienced by each country at different points of time and at varying levels of impact. Today, however, the most significant issue every convenience retail firm is focusing on is the COVID-19 pandemic crisis, the economic impact and changes in consumer behaviors.
From lockdowns to reopening non-essential businesses, countries are at various stages of their return to a “new normal.” Last week on Shop Talk Live, Dan Munford, host of the weekly Global Convenience Store Focus web series, asked panelists from the United Kingdom, Australia, Scandinavia and the Philippines how convenience retail has been impacted in these markets.
In the Philippines, which has one of the most restrictive lockdowns in the world, NACS Executive Committee member Victor Paterno, president and CEO of 7-Eleven Philippines, shared that customer counts are down by two-thirds because only one person per household is allowed to leave the home to shop for essentials. Girding for any possible scenario as the crisis began, Paterno implemented financial strategies that prepared for a worst-case scenario to ensure support for franchisees and keep the supply chain moving throughout stores.
Warren Wilmot, CEO of On The Run, Australia, said the virus has been well contained and measures to close borders between states and social distancing have been working. While petrol volumes are down, in-store sales have been positive, and the use of cash has not significantly declined. As lockdown restrictions ease throughout Australia, schools reopen and people return to work, he expects more local travelers on the roads in lieu of airline travel.
With 150 Starbucks locations reopening in the United Kingdom, those locations will be cashless, said Craig Phillipson, managing direct of Shopworks, noting that the preference for contactless payments reflects how retailers are rethinking current payment methods.
And as more non-essential businesses begin to reopen in the U.K., all eyes are on the convenience retail sector and how it has successfully operated for more than six weeks with social distancing and safety protocols in place. Phillipson said convenience retail is leading the world in how to get everyone back in operation safely.
Johannes Sangnes, CEO of Reitan Convenience, with stores throughout the Baltics and Nordic countries, said restrictions are loosening but not at the same levels in the seven countries Retain operates. While stores are well-located in communities, those in areas near public transportation likely won’t see signs of recovery until lockdown restrictions ease for workplaces, restaurants and non-essential retail.
The question on everyone’s mind—what will the “new normal” look like?—is being examined through a lens of new consumer behaviors, particularly as retailers help them feel safe shopping in stores, and around payments, with greater adoption by consumers who may not have otherwise used a contactless payment method. As such, retailers agree that click-and-collect, delivery, drive-thru and more prepacked hot and fresh foods will increase.
Paterno shared that one of the bigger barriers to consumers feeling a sense of normalcy is fear until a vaccine is found, as many people live with extended families. This type of behavior will make home delivery key, but he noted that many convenience stores are not suited for delivery because of limited SKUs and higher price points. However, c-stores are best positioned to serve as pickup points for grocery delivery and provide greater logistical efficiencies for e-commerce. “It’s a bright spot for us, and we’re going full steam ahead,” he said.
For the most part, the retailers are optimistic coming out of the COVID-19 crisis but are less so about the state of the global economy. “The bigger issue for all of us in next two years is the recession or depression that’s coming,” said Wilmot, noting that while sales may increase as lockdown restrictions ease, it’s likely the industry could see consumers tightening their discretionary spending.
NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.
Chris Blasinsky is the content communications strategist at NACS.