ALEXANDRIA, Va.—Convenience retailers anticipate that leisure travel and routine customer trips will return to pre-pandemic levels this summer, according to the results of a new survey of U.S. convenience store owners by NACS Research.
Convenience stores, which sell 80% of the fuel purchased in the country, experienced a 13% decrease in fuel sales and less customer traffic throughout the pandemic. However, most (52%) say that summer travel and commuting patterns will be close to pre-pandemic levels. However, this is not shared optimism: 28% don’t expect to see traditional travel patterns emerge until 2022.
Retailers anticipate growth in categories like dispensed cold beverages and coffee (43% foresee growth), as well as immediate consumption prepared foods (62% foresee growth). These self-serve categories experienced, and continue to experience in some areas, various state and local restrictions.
NACS will release complete 2020 industry performance metrics and analysis of trends driving this performance during the live virtual NACS State of the Industry Summit on April 14. Registration is open to retail, supplier and state association attendees and includes access to all sessions and collaboration forums on a highly interactive platform. Attendees also will receive exclusive access to the latest industry benchmarking report: NACS State of the Industry Report® of 2020 Data.
The pandemic-related decrease in commuting and vehicle miles driven during the past year led to shifts in morning traffic and sales at convenience stores, with coffee and breakfast food sales off by 10% to 15%. Convenience retailers are reestablishing their locations as morning daypart destinations: 40% are offering discounts for repeat purchases, and 27% are promoting offers that incentivize shoppers to return for discounts.
“Retailers are optimistic that traditional driving routines are returning—from the morning commute to the family summer road trip—and that’s great news not just for our industry but for the overall economy,” said NACS Vice Chairman of Research and Technology Andy Jones, who operates Sprint Food Stores, based in Augusta, Georgia.
Before the pandemic, most items sold at convenience stores (83%) were considered immediate consumption, like snacks, beverages and confections, and consumed within an hour of purchase. But as more consumers have relied on convenience stores for take-home items, retailers also expect those sales to increase: 36% are focusing on multi-serve meals and prepared foods for future consumption, and 13% are expecting more stock-up grocery and pantry item sales.
Convenience retailers also say they will continue safety protocols, with 71% encouraging their employees to get vaccinated. The most common incentives offered are paid time off to get a vaccine (34%), coordinating a vaccine location specific to their employees (26%) or offering monetary incentives (10%).
When asked which retail innovations they saw in 2020 that they will apply to their stores, most convenience retailers said contactless payments and last-mile offers like home delivery and curbside pickup will grow. Tying together new offers that emerged during the pandemic, 20% will expand services like drive-thrus, delivery and curbside pickup.
“Online ordering attached to a quick local delivery is not a new idea, but it is one that demonstrated significant use this past year. This has shown consumers that it is possible, and it will drive more usage and expectations, making it a standard option for retailers to provide,” said Charlie McIlvaine, CEO of Coen Markets Inc., based in Canonsburg, Pennsylvania.
Other retailers agreed that focusing on basic operations like inventory control and customer service will pay off as the pandemic recedes. “We saw the value of customer service—it’s essential for us to be friendly and act locally to continue earning our community's support,” said Malik Yousif, president of MYS Energy, based in Manassas, Virginia.
The NACS Retailer Member Pulse Survey was conducted in March 2021 by NACS Research. A total of 70 member companies, representing a cumulative 3,524 stores, participated in the survey. NACS Research conducts quarterly custom research with retailer members to identify key priorities and opportunities across the convenience and fuel retail landscape. Learn more about NACS Research.