NEW YORK—Convenience stores were go-to places for groceries and other essential products during the pandemic, but c-store retailers are now struggling to keep products in stock, reports CNN. The persistent supply-chain disruptions have hampered their abilities to supply meet the fill-in needs of shoppers in larger cities and the daily essential needs of customers in secondary markets and rural areas.
“Here's the magnitude of the problem right now,” Kevin Smartt, CEO of TXB Stores and 2020-21 NACS chairman, told CNN. “As a chain, we're probably averaging 6,500 to 8,000 outs a week from manufacturers.”
Across TXB, out-of-stock products are averaging 12% to 13% currently, Smartt said. “In a normal environment, it would be about 1.5%.” Smartt says that typically, the company would replace out-of-stocks with other brands, but that is difficult now because every other store is trying to do the same thing. And the substitute products are often more expensive.
TXB is headquartered northwest of Austin and has stores in the Texas capital city, but many of its locations are in small towns where shopping options are limited.
“In those places, the convenience store is a lifeline for the community,” Smartt told CNN. “There's a lot of frustration from customers. Anything on top of the supply-chain challenges, like bad weather, is making the situation worse.”
GPM Investments, whose controlling shareholder is ARKO Corp., based in Richmond, Virginia, is also facing the same challenge, and in local communities, its c-stores are about more than food and necessities.
“A local health department contacted us about a store in Southwest Virginia to use it as a mobile location for vaccinations,” Mike Welsh, the company’s senior vice president of operations, told CNN. “The community relies on us for [safety] products. For us, especially in our markets, it's critical to have a well-oiled supply chain that's moving quickly.”
Convenience retailers are being forced to adapt to all sorts of product disruptions, including the beverage category, which has been hit particularly hard.
“It’s everything—soda, energy drinks, juice, beer,” remarked Vince Segura, general manager and retail director at Fuel City, in this month’s NACS Magazine article “High and Dry.” “It’s hit or miss. One week it may be a certain package of beer; the next week, it’s something different.” Unfortunately, for Segura and other c-store operators, the situation isn’t expected to abate any time soon.
Last month, NACS filed comments with the Federal Trade Commission outlining the impact that channel price discrimination has on the industry and specifically how it can exacerbate supply chain issues, especially when it comes to packaged beverages.