The convenience stores market has not only weathered the COVID-19 pandemic economic storm but there are signs that the industry has emerged stronger and looks poised for future growth.
“The COVID-19 outbreak positively impacted the market. Convenience stores around the world have remained resilient to the pandemic, as customers visited convenience stores to avoid crowded places such as large stores or supermarkets,” says a Grand View Research report.
That report showed that the $2.12 global convenience store market is expected to grow at a compound annual growth rate of 5.6 percent through 2028.
“Strong economic growth in emerging markets, increased population density in urban areas, expanding investments in the retail business in developing nations, and rising popularity of the franchising idea all contributed to the growth of the market,” said the report authors.
U.S. Convenience Store Market Projected at $37.7 Billion in 2023
In the U.S., the convenience store market has recovered from the 2020 pandemic dip and is projected at $37.7 billion in 2023 – up from $35.5 billion in 2019 before the world crisis onset.
“With the COVID-19 pandemic’s unique impact on convenience store retailers, it’s been difficult over the past couple of years to predict even the next quarter — let alone begin investing in long-term business strategies,” said global conglomerate City Facilities Management Holdings Ltd. “But the industry has not only started to level out in 2022, it’s actually starting to look up, largely thanks to c-store operators’ willingness to innovate and adapt to consumers’ changing habits.”
Despite the optimistic outlook, City Facilities says a big caveat is that there is potential for increased competition within the convenience store market, making it “essential to stay on top of convenience store trends.”
While convenience store operators may long for a “return to normal” they need to stay on top of trends.
“You could argue 2023 will be the first year of normalcy in a while,” National Association of Convenience Stores vice president of strategic initiatives Jeff Lenard told C-Store Dive. “You could also argue 2023 will continue to force retailers to pivot and react quickly to things few saw coming. Plan for normalcy, but always prepare for the pivot.”
Keep an Eye on These 7 C-Store Trends in 2023
The convenience store industry is always keeping an eye on trends that could disrupt the market and here are 7 trends to watch in 2023:
- Focus on the Customer Experience: Speed, Quality, and Variety
Convenience store operators who succeed focus on making the customer experience truly convenient.
“One of the greatest attractions convenience stores offers is, well, just how convenient they actually are. In order to capitalize on this advantage, c-store operators should continue to study and cater to consumers’ post-COVID shopping expectations,” says City Facilities. “This will be especially important moving forward, as many restaurants and retail stores during the pandemic shifted their own business models to serve customers’ demands for better speed, quality, variety, and more.”
Contactless purchase options, curbside pick-up, delivery, well-stocked shelves, and clean restrooms can all play into elevating the customer experience. Delivery could especially be a differentiator in 2023.
One expert told C-Store Dive that they foresee “large and small c-store chains getting into delivery, with retailers prioritizing menu items that travel well. For example, cold sandwiches and wraps travel much better than french fries, which “are hard to deliver” because they can get cold or soggy by the time they arrive.”
- Food Offering to Include Healthier Choices and Higher Quality with Smaller Portions
Expect convenience food offerings to trend healthier in 2023 and look for stores to offer higher quality menu items at smaller portions.
“Adding or expanding the range of healthy and fresh foods available can eliminate the need for customers to visit multiple locations to meet all of their everyday needs,” says City Facilities.
Jessica Williams, CEO of c-store consultancy Food Forward Thinking, told C-Store Dive that she expects operators to focus on quality ingredients and menu items.
“Customers can expect to see smaller portions but higher quality,” Williams said. “How can we take our bacon from something small and flimsy to something that’s thicker and has a smoked flavor?”
The days of lukewarm burritos are clearly over as more c-stores offer customers farm-to-table fare and other enticing food choices.
- Sustainability From EV Support to Smart Energy Management
As more and more electric vehicles take to the road, convenience stores will rise to the challenge by installing more charging stations.
“Anticipating a surge in EVs on the road, convenience stores should look to add chargers to power these vehicles,” says City Facilities.
C-Store Dive even thinks that some retailers may be ahead of their client base in the EV movement as they take advantage of the Alternative Fuel Infrastructure Tax Credit available for businesses for EV charger hardware and installation costs.
EV charging stations will increase energy consumption at convenience stores and with rising energy costs, operators will continue to search for sustainable options fueled by smart technology to trim usage and help them with energy management.
“Energy management systems (EMS) are increasingly used for monitoring and controlling energy consumption in units such as refrigeration, hot bars, and other food and beverage equipment,” said City Facilities.
- Turning C-Stores into Community Hubs
Convenience stores are channeling the energy of the 19th-century general stores where townsfolk would come to meet, socialize and catch up on community issues.
“By becoming more of a “hangout” where consumers can not only order food but spend time and even relax, c-stores can gain more food service traction,” Donna Hood Crecca, principal for market research firm Technomic told C-Store Dive. “Consumers are into the type of seating and offering in a c-store that invites you to stay a while.”
One example of this trend is the Twice Daily c-stores in the south that are pairing locations with White Bison coffee shops that include indoor and outdoor seating and mobile charging ports – inviting consumers to stop in and relax vs. grad and go.
- AI to Assist and Supplement C-Store Labor
Artificial Intelligence (AI) has the ability to assist convenience store labor in both assisting and supplementing labor with digital transformation such as cashier-less checkouts and AI-powered scheduling of staff.
Gauthan Vadakkepatt, director of the Center for Retail Transformation at the George Mason University School of Business told C-Store Drive that AI can assist or replace employees in mundane tasks, freeing them up to be more productive and efficient.
Others noted that as labor costs continue to rise, look for c-stores to leverage emerging technology to trim their costs.
- Digital Loyalty to Drive Customer Engagement
Convenience stores do not enjoy the same number of loyalty members as other industries such as grocery stores, so some c-store operators are pinning their hopes on engaging customers with digital loyalty programs.
The bonus of digital loyalty programs is that it helps retailers gather customer information that otherwise is not available in a business that tends to be cash-based.
Some c-stores will use loyalty member-specific pricing and specials to boost program usage. Expect fuel and packaged beverages to be digital loyalty staples, eclipsing food offerings.
- Reimagining the Convenience Store Format and Footprint
As the advent of adding EV charging stations changes the design of some c-stores, some operators are reimagining what convenience store formats and footprints can look like in the future.
“Companies are experimenting with new formats that go beyond the traditional fuel canopy and store model,” explains C-Store Dive.
Some of the alternatives include walk-up c-stores without fuel being offered and drive-thru restaurant service. Others are designing indoor and outdoor spaces to accommodate those waiting for longer EV charges and others looking to make the c-store a community hub.
