QSR, Dollar Stores Zero in on Convenience Stores

With Americans changing how they shop for snacks and beverages, c-stores face increased competition.

January 26, 2018

ALLENTOWN, Pa. – Convenience stores are encountering competition from a variety of places, from fast-food restaurants to supermarkets, from Amazon.com to dollar stores, The Morning Call reports. But convenience stores are fighting back with better food, online ordering and delivery options.

“They’re just facing a lot more competition for convenience than ever before, whether it's for coffee, food service, or whether it’s for gasoline,” said Todd Hale, a consultant and former senior vice president of consumer and shopper insights at Nielsen Co. “Now they have to figure out what they're going to do in the world of e-commerce.”

With the economy still struggling in many parts of the country, restaurants and retailers are scrambling to stay relevant and affordable. That new reality has dollar stores, which have been expanding their food section, and fast-food chains, which continually offer deals and dollar menus, positioned more as direct competitors to convenience stores. Retailers have also become more adept at serving fresh food to busy consumers.

“We're giving them an alternative so they don't have to make another stop in their day,” said Dayna Reed, RaceTrac's executive director of reporting and insights. “The entire industry is looking at what foodservice means and how we can grow the foodservice business.”

Some analysts predict that convenience stores, with their wide assortment of convenient, packaged goods and drinks, will come out on top when pitted against online retailers. “I would expect Amazon and e-commerce growth to have more of an impact on channels outside of [convenience] stores,” Rob Wilson, managing director at L.E.K. Consulting, said. “They're going to take away the planned purchase a lot faster than they're going to take away the impulse and gratification purchase.”

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