Our Crystal Ball for 2021

By Jeff Lenard   read

Whether through weak signals or a steam roller, the convenience retail industry is experiencing unique trends and possibilities.

January 11, 2021

Crystal-Ball-for-2021-(1).jpgNo one realistically could have predicted the specific events of 2020, but if you take a step back, some broad trends continued last year that were very much forecast, whether the continuation of online shopping or the consumer embrace of new forms of convenience. So, thinking broadly, we’ve identified 10 broad trends that are already happening and poised to emerge to as much greater extent in 2021. And, we’re not just identifying trends, we’re actively engaged in looking at what our role is as they develop.

1. Fighting Food Insecurity
Feeding America reports that 50 million people may have faced hunger in the United States during 2020—including more than 17 million children—many of them as a result of a downturn in their economic status related to the pandemic.

The need to fight hunger has grown, especially as communities strive to reach post-pandemic normalcy. And solutions are available. Feeding America helps retailers donate prepared food and packaged items through its MealConnect program, which gives donors a safe way to reduce waste and connect surplus meals with food insecure neighbors via a free mobile app.

2. Fostering Food Safety Culture
Food safety culture is one of the four core elements outlined in the U.S. Food and Drug Administration’s (FDA) 2020 report, New Era of Smarter Food Safety Blueprint. Industry experts recognize that there is a growing need to address food safety not just from an operational and technical level, but also from a behavioral and transformational level. And that is true at c-stores as foodservice drives 35% of inside profits.

NACS is working with Lone Jespersen, Ph.D., the founder and principal of Cultivate, to create the industry’s first “Convenience Store Risk Culture Maturity Model” that fits the specific needs of convenience retailers. Changing behaviors take time, and with food safety culture this will be a journey, not a destination.

3. Planning and Preparing for Disasters
Last year, the global pandemic and social unrest were front and center but weren’t the only concerns in communities. In addition, the U.S. South and East Coast saw a record-breaking Atlantic hurricane season and the West and Rocky Mountain region faced wildfires that burned 9.5 million acres, while other areas across the world faced other disasters. The year 2020 clearly showed the need for the global convenience retail industry to be ready for just about anything, which is why more retailers are elevating how they plan, prepare and respond to disasters as part of their long-term business continuity strategies.

4. Supporting Local in a Large Way
The convenience retail industry contributes more than $1 billion a year to charitable groups, nationally and locally. While community support is at the heart of convenience retail operations, localizing their charitable efforts allows retailers to dig deeper into the needs of their communities and engage their employees to take ownership of these efforts.

Convenience retailers provided free lunches to kids, hosting food drives and food pantries at their sites and/or offering free food and beverages to first responders and medical workers in 2020 to help their neighbors in need.

Retailers diversifying their community efforts to focus on their immediate local operating areas will continue well into 2021 as the global pandemic impacts neighborhoods socially and economically.

5. Enhancing Inclusion and Diversity
For years, race, religion and politics were taboo in the workplace, but the events in 2020 clearly showed that there is a need for honest and candid conversations to fully understand race and other diversity dimensions that make an impact on the workforce.

Expect to see more convenience retail leaders create space within the workplace to talk about racism and have transparent, honest and inclusive conversations. Also, more companies will continue to bring more balance and diversity to their teams, particularly in leadership roles, and celebrate that diversity

6. Developing Sustainable Businesses
Sustainability has evolved considerably from being largely driven from an environmental perspective; now there is a focus on three key pillars: people, planet and prosperity, which ties in how businesses can benefit from being good environmental stewards.

The NACS Sustainability Playbook provide a framework for retailers to grow their sustainable business strategies. We also expect to see more movement in environment, social, and governance (ESG) planning, particularly within the fuels and transportation industries. The over-arching ESG goal for these industries will be to reduce costly risk exposures and improve operational efficiencies while increasing opportunities for new capital.

7. Embracing Food as ‘Medicine’
Convenience retailers have responded to consumer expectations for healthier options. The alternative snacks category has become a home base for quick, grab-and-go options high in protein and low in calories. And in foodservice, prepared foods often include the use of more clean, local and sustainable ingredients.

A new trend experiencing growth is food as “medicine” to boost the health of one’s immune system, which has been highlighted in recent years by the Partnership for a Healthier America (PHA) and the Produce Marketing Association and amplified during the pandemic. PHA found that consumers are also shopping more with health in mind: 59% say they are shopping more health-consciously and will likely continue to do so post pandemic.

8. Attracting Electrification
Globally, the move towards electrification is unevenly distributed, with some countries embracing electric vehicles and shunning the internal combustion engine. In the United States, for example, new electric vehicle (EV) sales are less than 2% of the U.S. vehicle fleet—but is expected to rapidly accelerate. And, charging times are getting faster, making charging a more convenient option for convenience stores.

Convenience retailers who anticipate future demand are identifying how to enhance site layouts and offers to create a charging experience as close to liquid fuels as possible, while also providing opportunities for customers to take advantage of in-store profit centers.

9. Re-examining Safety Measures
“If you have time to lean, you have time to clean” is more than just a saying; it’s what customers expect during the global pandemic, even if it’s increasingly unclear whether constant cleaning and sanitizing is more “hygiene theater” than a necessary precaution to reducing the risk of COVID-19 exposure via surface transmission.

But when customers see store employees cleaning and wiping down surfaces, the perception is that their local c-store is safe and taking both customer and employee health and well-being into account. That will require more retailers to carefully determine how they distinguish what’s best for safety protocol and what’s best as far as what customers want. Communications will become critical to tell both customers and employees what you are doing—and why.

And that will be a fine line to walk as retailers determine the best course of action for communicating safety while balancing which safety measures will continue beyond 2021, especially as more people receive a coronavirus vaccine.

10. Evolving the Business Model
The big question this year will be how much of the massive changes that convenience retailers quickly embraced in response to the pandemic will stick. For example, drive-thru, curbside pickup, third-party delivery and other last-mile methods of getting product to consumers beyond the box.

Which are trends and which are shorter-term fads? If I knew for certain, I’d be too busy developing a winning stock portfolio. But I don’t know—and neither does anyone else. Well, that’s not entirely true. The customer always knows, because that’s who decides winners and losers. For our industry, it will continue to focus on how we sell time and convenience to customers better than anyone else while looking at some of these broader trends.

Jeff Lenard is the NACS vice president of strategic industry initiatives.