By Sara Counihan and Kim Stewart
ALEXANDRIA, Va.—The final day of the NACS State of the Industry Summit wrapped up Thursday with an overview of the legislative landscape for the convenience retailing industry, a deep dive into regional data and a fuels outlook.
“We left Chicago excited about the future of our industry and ready to roll up our sleeves and tackle the opportunities that lie ahead for the convenience and fuel retailing industry,” said Lori Stillman, NACS vice president of research.
“The NACS State of the Industry Summit is an event unlike any other. No other retail channel comes together to share and analyze the performance metrics, benchmarks and insights that enable us to improve our operations and better serve our shoppers,” Stillman said. “This year’s summit dove deeper into top category performance, regional financials, the legislative updates, networking, first-hand looks at innovative technology solutions and more, making for an exciting return to an in-person event. Our mission to share knowledge, foster collaboration and charge the industry with new insights was definitely achieved.”
The three-day event in Chicago, which was the first SOI Summit hosted exclusively by NACS, drew strong attendance, including more retailer registrants than the last in-person SOI Summit in 2019.
New this year was the technology solutions center—an exclusive opportunity for SOI attendees to meet with and explore critical customer, employee and back-office technology solutions providers that are transforming convenience retail.
Also new for the event was a pre-conference Retailer Strategy Session, an exclusive daylong supplier member session held on Tuesday ahead of the SOI Summit. The session was open only to suppliers. C-suite executives from bp ampm, Casey’s, GPM Investments, Kwik-Trip, Maverik and Parkland shared their strategies and priorities on how they are building upon their supplier relationships.
Inside Washington
Thursday kicked off with a legislative update from Lyle Beckwith, NACS senior vice president of government relations, and Doug Kantor, NACS general counsel. The pair highlighted some important issues on the legislative front that are impacting convenience stores.
One of those issues is more tobacco regulation. Beckwith shared that NACS will be filing comments with the U.S. Food and Drug Administration in opposition to an expected ban on menthol flavored tobacco products and flavored cigars.
“Unfortunately, the proposed ban on menthol and flavored cigars creates an unlevel playing field,” Beckwith said. “Menthol makes up 30% of the tobacco marketplace, and that marketplace is not going to go away. It’s going to go to the illicit market, and your legal customers will be going to unregulated sources to get the products they want. And those sources don’t check ID. They don’t collect taxes, and they don’t limit themselves to selling cigarettes. They sell all kinds of other unregulated things.”
Beckwith and Kantor said NACS has joined two coalitions to address supply chain issues that every part of the industry is experiencing.
“Clearly we’re not supply chain experts,” Beckwith said. “But our involvement here is really to make sure that whatever is being constructed doesn’t somehow adversely affect our industry or favor another industry. We’re trying to keep the scales balanced.”
Another key topic for convenience retailers is the Supplemental Nutrition Assistance Program (SNAP).
“The SNAP program is important to this industry,” Kantor said. “One of the things that the industry wants is to be able to sell hot prepared foods. Frankly, this distinction between hot and cold prepared foods does not make a lot of sense anymore given the way Americans live today,” Kantor said.
Beckwith mentioned success with securing temporary waivers from the hot foods restriction so SNAP recipients can use their benefits to purchase hot prepared foods at convenience stores during times of natural disasters.
“We’ve lobbied Congress to try to make that permanent,” Beckwith said. “We have bipartisan support for it. People think the time has come.”
Beckwith is optimistic about the chances to get legislation enacted next year when Congress considers the 2023 Farm Bill, but there might also be an opportunity this year.
Regional Breakouts
Next, regional breakout sessions filled retailers in on data specific to six regional areas of the country.
The Northeast region remained strong in 2021, posting higher profits than the national average with foodservice leading the way. Lisa Dell’Alba, president and CEO of Square One Markets, based in Bethlehem, Pennsylvania, gave an overview of the Region 1’s performance from the SOI Summit stage.
The Northeast is 2nd in the country for registered EVs, and the potential remains for serving customers with vital services.
In Region 2, operating profit topped 2019, but the Southeast region faced some headwinds that most of the country also saw.
“2021 was a really good year for Region 2,” said Jon Rier, CFO of Refuel Operating Company, based in Mt. Pleasant, South Carolina. “Profits were driven by solid fuel performance, and we made great strides inside the store with foodservice. But on the flip side, there were some real challenges we faced like employee turnover and inflation.”
In Region 3, Art Sebastian, vice president of digital experiences, Casey’s, said “things are looking pretty positive” in the Midwest, and he is optimistic about where the industry is heading with its recovery from the pandemic.
In the Central region, Stuart Taylor, vice president, Kum & Go, noted that comparing Region 5 metrics to the national level provides a good starting point for retailers to better understand their relative strengths and weaknesses.
Over in Region 6, c-store profits were shy of the national average, but staff turnover posted better than the national average, Varish Goyal, CEO, Loop Neighborhood Markets, based in Fremont, California, shared in the West regional breakout. Still, hiring and retaining staff remain a top issue for all retailers.
The West leads the U.S. in terms of the number of registered electric vehicles. This offers great opportunities for retailers to focus on customer charging needs and grow larger baskets, Goyal said.
Finally, Denton Cinquegrana, OPIS, broke down the 2021 energy landscape, including the future of alternative fuels, and he addressed headwinds in the industry, which has already experienced record-breaking gas prices.
The SOI Summit gives convenience retailers early access to the 2021 convenience industry data that drive convenience retail’s premier benchmarking tool, NACS State of the Industry Report®, which offers exclusive data and insights not available anywhere else. NACS Research will publish the 2021 report in June.
Look for exclusive coverage of the NACS SOI Summit in the June issue of NACS Magazine.
The 2023 NACS State of the Industry Summit is set for April 18-20, 2023, at the Hyatt Regency DFW International Airport, in Dallas, Texas. Sign up to be notified when registration opens.
Sara Counihan is contributing editor of NACS Daily and NACS Magazine. She can be reached at scounihan@convenience.org. Kim Stewart is editor-in-chief of NACS Magazine and editorial director of NACS. She can be reached at kstewart@convenience.org.