CSN January 2024

JANUARY 2024 CSNEWS.COM

W H AT ’ S N E X T I N C O N V E N I E N C E A N D F U E L R E TA I L I N G

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W H AT ’ S N E X T I N C O N V E N I E N C E A N D F U E L R E TA I L I N G

HOW TO MITIGATE CRIME

STUDY 2024

Stuck in

Neutral OPTIMISM STALLS AMONG RETAILERS AND SUPPLIERS IN THE CONVENIENCE CHANNEL AS CONSUMER RESILIENCY WANES

JANUARY 2024 CSNEWS.COM

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EDITOR’S NOTE

Amping Up the “News” in Convenience Store News 2024 brings a new look and more exclusive content to CSNews.com IN 1969, when there were fewer than 11,000 con-

venience stores in the United States and few people could even agree on the definition of a “convenience store,” founding publisher Harry Troutgott started Convenience Store News, the c-store industry’s oldest continuously published publication.

Over the last 54 years, as the c-store industry has evolved — and boy, has it! — Convenience Store News has evolved alongside it, constantly innovating and expanding our portfolio of offerings to meet the changing information needs of the U.S. convenience channel.

Our mission is to deliver the insights, analysis, market research and business intelligence that helps c-store retailers stay ahead of what’s next — critical information to grow sales and profits. It’s a mission we take seriously, which is why each year, we identify ways to better serve our audience.

As 2024 kicks off, one of our major initiatives for the new year is to amp up the “news” in Convenience Store News. This month, we debuted a new, contemporary look for our website, CSNews.com, that makes it easier for our readers to access the top headlines.

We’ve also added a new Top 100 section that features individual news pages dedicated to each of the industry’s top 10 chains: 7-Eleven Inc., Alimentation Couche-Tard Inc., Casey’s General Stores Inc., EG America, GPM Investments LLC, Murphy USA Inc., Wawa Inc., QuikTrip Corp., Kwik Trip Inc. and Sheetz Inc. This section also provides quick access to our annual Top 100 ranking, one of our most widely viewed pieces of content every year.

Additionally, as part of this year’s initiative, we’ll be more frequently alerting you of breaking news developments in the industry, and delivering a lot more original and exclusive content on CSNews.com. For instance, this month, our Executive Editor Melissa Kress runs down the emerging trends that are poised to change the convenience store industry in 2024.

If you have any suggestions on how Convenience Store News can better meet your information needs, I would love to hear from you. Don’t hesitate to drop me a line.

For comments, please contact Linda Lisanti, Editor-in-Chief, at llisanti@ensembleiq.com.

EDITORIAL EXCELLENCE AWARDS (2016-2024)

EDITORIAL ADVISORY BOARD Laura Aufleger OnCue Express

2021 Jesse H. Neal National Business Journalism Award Finalist, Best Infographics, June 2021

2018 Jesse H. Neal National Business Journalism Award Finalist, Best Editorial Use of Data, June 2017

2023 American Society of Business Press Editors, National Azbee Awards Silver, Data Journalism, January/April/June 2022

2023 American Society of Business Press Editors, Upper Midwest Regional Azbee Awards Gold, Data Journalism, January/April/June 2022 Bronze, Diversity, Equity and Inclusion, March 2022

2016 American Society of Business Press Editors, National Azbee Awards Gold, Best How-To Article, March 2015 Bronze, Best Original Research, June 2015

2016 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best How-To Article, March 2015 Silver, Best Original Research, June 2015

2020 Trade Association Business Publications Intl. Tabbie Awards Honorable Mention, Best Single Issue, September 2019

2016 Trade Association Business Publications Intl. Tabbie Awards

2023 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, September 2022 Business to Business, Retail, Single Article, March 2023

2022 Eddie Award, Folio: magazine Winner, Business to Business, Retail, Single Article, March 2022 Winner, Business to Business, Food & Beverage, Series of Articles, October 2021 Honorable Mention, Business to Business, Retail, Single Article, September 2021

2020 Eddie Award, Folio: magazine Business to Business, Retail, Series of Articles, September 2019

Billy Colemire Stinker Stores Robert Falciani ExtraMile Convenience Stores Jim Hachtel Core-Mark Chris Hartman Rutter’s

Ruth Ann Lilly GPM Investments LLC Vito Maurici McLane Co. Inc. Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Tony Sparks Curby’s Express Market

2018 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Website Business to Business, Retail, Full Issue, October 2017 Business to Business, Editorial Use of Data, June 2017

Faheem Jamal CPD Energy Corp./ Chestnut Markets

Roy Strasburger StrasGlobal

2017 Eddie Award, Folio: magazine Winner, Business to Business, Retail, Single/Series of Articles, May 2017 Honorable Mention, Business to Business, Retail, Single/Series of Articles, June 2016

2016 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2015 Business to Business, Retail, Single/Series of Articles, August 2015

Silver, Front Cover Illustration, June 2015

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VIEWPOINT

Crystal-Balling the Coming Year in Convenience Some trends are more obvious than others THE START OF A NEW YEAR is usually a good time to look forward, with anticipation

and excitement about how the next 12 months will unfold. One thing’s for sure: 2024 will present its share of challenges and triumphs for retailers in the ever-evolving convenience store industry.

Looking into my crystal ball, I see some trends that are more obvious than others.

For example, I don’t think anyone will argue that electric vehicles (EVs) will have an accelerated impact on the c-store industry this year. More convenience stores will incorporate EV charging stations and add diverse amenities for these EV customers, including more sit-down dining opportunities.

I don’t think After EV, the second most talked about trend is probably artificial intelligence (AI), specifically generative AI that will automate more complex tasks, from inventory anyone will management to robotic tools that can cook your hamburger from patty to bun. argue that We’ll see more utilization of GenAI to increase productivity and boost output. But electric vehicles will it present retailers with new challenges around cybersecurity?

What else do I see in my crystal ball? will have an accelerated • More c-store retailers will be striving to differentiate themselves from their competition — especially through their foodservice offerings. Consumers want impact on the unique and different experiences. Retailers need to find and celebrate their own c-store industry particular “secret sauce.” The retailers that can change the customer’s thinking from “I’m going to the convenience store” to “I’m going to Rutter’s or Kwik Trip or (fill in this year. your brand name)” will be winners in 2024.

• Beverages will also play a huge role in foodservice growth this year. Healthconscious consumers seeking protein, energy and a host of other functional benefits will fuel this trend. The beverage category was one of the most exciting in terms of new product innovation at last year’s NACS Show.

• Although the Biden Administration delayed its federal menthol ban until at least March 2024, I expect we’ll see more flavored tobacco bans going into effect due to state regulatory action in the coming year.

• Employees will become more demanding of their employers for hybrid work schedules, time off, childcare and other work-life balance issues. In addition, the growing use of automation will have a negative effect on frontline morale.

• Merger and acquisition activity will accelerate among both large and midsized retailers.

• There appears to be a 50/50 chance of a recession in 2024, so retailers must think value first, value second and value third in their offers to cash-strapped consumers. This also means finetuning their digital offers and making them more strategic and targeted.

• After attending a presentation on retail media networks at the 2023 NACS Show, I think this type of digital advertising will grow in the coming year. It serves as both a new revenue stream for retailers and an effective way to promote products and services in-store.

• If retail theft isn’t stemmed — and I don’t see much action by lawmakers to crack down on it — the large-scale store closings we’ve seen in the department and drugstore channels will happen in the convenience store industry as well.

I hope all our readers have a wonderful and prosperous 2024, and I hope to see many of you at industry events in the coming year.

For comments, please contact Don Longo, Editorial Director Emeritus, at dlongo@ensembleiq.com.

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CONTENTS JAN 24

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COV ER STORY PAGE 24

STUDY 2024

70 FEATURES

DEPARTMENTS

FORECAST STUDY

EDITOR’S NOTE

TWIC TALK

24 Stuck in Neutral Optimism stalls among retailers and suppliers in the convenience channel as consumer resiliency wanes.

4 Amping Up the “News” in Convenience Store News 2024 brings a new look and more exclusive content to CSNews.com.

53 Creating & Maintaining a Top Workplace for Women Through supportive practices, companies can develop future leaders and attract top talent.

VIEWPOINT

INSIDE THE CONSUMER MIND

6 Crystal-Balling the Coming Year in Convenience Some trends are more obvious than others.

70 Eight Consumer Insights to Guide Your 2024 Strategy From foodservice to loyalty programs, new opportunities abound.

26 A Lackluster Outlook While there are bright spots, c-store retailers feel apprehensive about the year ahead.

28 Tempered Optimism Many of the convenience channel’s small operators are expecting the status quo in 2024, though some are more bullish about their prospects.

12 CSNews Online 20 New Products

32 Different Year, Same Story Many product categories are expected to remain unchanged in 2024, but there are some signs of growing optimism.

46 Down the Middle C-store suppliers and distributors have mixed feelings when assessing their outlook for 2024.

FEATURE

50 Crime Spree Employee preparedness and technology can play vital roles in mitigating crime.

20

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8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631 (773) 992-4450 Fax (773) 992-4455 WWW.CSNEWS.COM BRAND MANAGEMENT SENIOR VICE PRESIDENT-GROUP PUBLISHERUS GROCERY & CONVENIENCE GROUP Paula Lashinsky (917) 446-4117 - plashinsky@ensembleiq.com EDITORIAL EDITOR-IN-CHIEF Linda Lisanti llisanti@ensembleiq.com EXECUTIVE EDITOR Melissa Kress mkress@ensembleiq.com SENIOR EDITOR Angela Hanson ahanson@ensembleiq.com MANAGING EDITOR Danielle Romano dromano@ensembleiq.com

ASSOCIATE EDITOR Amanda Koprowski akoprowski@ensembleiq.com EDITORIAL DIRECTOR EMERITUS Don Longo dlongo@ensembleiq.com CONTRIBUTING EDITORS Renée M. Covino, Tammy Mastroberte

INDUSTRY ROUNDUP 14 RaceTrac Takes Ownership of Gulf Oil 16 Kwik Trip to Invest $151M in Wisconsin Growth

TECHNOLOGY 48 The Top Technologies to Watch in 2024 These innovations are poised to transform the convenience store business this year.

ADVERTISING SALES & BUSINESS ASSOCIATE BRAND DIRECTOR & NORTHEAST SALES MANAGER Rachel McGaffigan - (774) 212-6455 rmcgaffigan@ensembleiq.com ASSOCIATE BRAND DIRECTOR & WESTERN SALES MANAGER Ron Lowy - (330) 840-9557 - rlowy@ensembleiq.com ACCOUNT EXECUTIVE & CLASSIFIED ADVERTISING Terry Kanganis - (201) 855-7615 - tkanganis@ensembleiq.com CLASSIFIED PRODUCTION MANAGER Mary Beth Medley (856) 809-0050 - marybeth@marybethmedley.com DESIGN/PRODUCTION/MARKETING

18 Eye on Growth

ART DIRECTOR Lauren DiMeo ldimeo@ensembleiq.com

18 Fast Facts

PRODUCTION DIRECTOR Pat Wisser pwisser@ensembleiq.com

19 Retailer Tidbits

SENIOR MARKETING MANAGER Krista-Alana Travis ktravis@ensembleiq.com

19 Supplier Tidbits

SUBSCRIPTION SERVICES LIST RENTAL mbriganti@anteriad.com SUBSCRIPTION QUESTIONS contact@csnews.com

48

CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER

Jennifer Litterick

CHIEF FINANCIAL OFFICER

Jane Volland

CHIEF PEOPLE OFFICER

Ann Jadown

CHIEF STRATEGY OFFICER

Joe Territo

CHIEF OPERATING OFFICER

Derek Estey

CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631. Subscription rates: Subscription rate in the United States: $150 one year; $276 two year; $14 single issue copy; Canada and Mexico: $204 one year; $390 two year; $17 single issue copy; Foreign: $204 one year; $390 two year; $20.40 single issue copy; Digital One year, digital $87; two year, $161. Periodical postage paid at Chicago, IL 60631, and additional mailing addresses. Copyright 2024

by EnsembleIQ. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or information storage and retrieval system, without permission in writing from the publisher. POSTMASTER: send address changes to Convenience Store News, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631.

10 Convenience Store News C S N E W S . c o m

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CSNEWS ONLINE

TOP VIEWED STORIES

1

EXPERT VIEWPOINT

Six Convenience Retailers Named Among America’s Largest Private Companies

Love’s Travel Stops & Country Stores ranked highest at No. 9 with $26.5 billion in revenue from the most recent fiscal year. QuikTrip Corp., RaceTrac Inc., Wawa Inc., Sheetz Inc. and FJ Management, parent company of Maverik — Adventure’s First Stop, also appeared on the list.

K Rewards Program Gains Steam 2 Circle The Inner Circle membership program now has more than

8 million members. During its first five months, the program grew to seven Circle K business units covering nearly 3,000 locations, and it is expected to reach 10 out of 13 U.S. business units by the end of the fiscal year.

Murphy USA Previews Strategy

the Next 10 Years 3 for The company plans to continue transforming the kind of stores it does business in, as well as how it interacts with customers.

Murphy USA’s new-build stores bring higher volumes, merchandise sales and margins, but also higher operating costs due to their larger footprint, according to President and CEO Andrew Clyde.

Casey’s Acquires 11 Former EZ GO Stores

seven Oklahoma locations and four Nebraska locations 4 The were previously part of a 22-store portfolio that Love’s acquired from Carey Johnson Oil Co. Inc. in April 2023. Within weeks of the deal’s closing, Casey’s General Stores Inc. shared plans to rebrand several of the stores.

Buc-ee’s Opens in Missouri, But Faces

in North Carolina 5 Roadblock Buc-ee’s opened the doors to its first Missouri location in Springfield on Dec. 11. Meanwhile, an intended site in Mebane, N.C., failed to receive recommendation for a necessary rezoning permit from the city’s planning board.

Start Thinking About Customer Operating Zones To be truly effective, convenience store path to purchase (P2P) communication strategies must be developed based on understanding customers and how they operate (use and interact) within each “zone” in the store, writes Tom Cook, a principal of King-Casey. By identifying these zones, understanding how customers behave in each zone and establishing specific business goals for each zone, retailers can craft zone-specific P2P merchandising strategies that are responsive to how customers use these zones and designed to achieve specific business objectives. This makes the customer experience faster, easier and more enjoyable, while distinguishing the brand and maximizing business results.

For more thought leadership, visit the Expert Viewpoints section of csnews.com.

MOST VIEWED NEW PRODUCT

Perfect Hydration Alkaline Water Rebrand

OUT & ABOUT

Mars Wrigley Unwraps New Innovations Held at the Mars Wrigley headquarters in Newark, N.J., a Mars Unwrapped event provided a first-look showcase of innovations from Mars’ portfolio of brands, which spans Mars Wrigley, Mars Food and Mars Petcare. Fulfilling particularly Generation Z’s desire for experiential snacking, the company is driving big innovation in small formats. Product debuts include Skittles Littles and M&M’S Peanut Butter Minis among numerous new releases for gum, salty snacks, seasonal confections and more.

Perfect Hydration Alkaline Water unveils a rebrand of its full product line intended to emphasize the water’s 9.5+ pH alkaline formula, electrolyte minerals and sustainable packaging. According to the company, the new trademarked logo is meant to imply action and creates more ownability for the brand. The new bottles and cans incorporate fewer elements to capture consumers’ attention while accentuating Perfect Hydration’s unique selling points. The packaging is also sustainable, made of 100% post-consumer recycled plastic for all bottle SKUs and recyclable aluminum for the cans.

Perfect Hydration Los Angeles perfect-hydration.com

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ENTICE CUSTOMERS WITH

FLAVOR THAT FUELS YOUR COMMUNITY WHEN CUSTOMERS BUY A BOWL,* CHUNKY DONATES A MEAL.**

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INDUSTRY ROUNDUP

RaceTrac Takes Ownership of Gulf Oil The convenience and fuel retailer acquires Gulf’s iconic brand in the U.S. and Puerto Rico RACETRAC INC. closed out 2023 by wrapping up its acquisition of Gulf Oil LLC.

In a deal that made headlines in July, RaceTrac’s wholly owned wholesale fuel supply and trading subsidiary, Metroplex Energy Inc., closed the transaction for Gulf Oil in December.

It acquired Gulf’s iconic brand in the United States and Puerto Rico, all Gulf-branded distributor and license agreements comprising approximately 1,100 branded sites, and exclusive rights to market fuel at 11 Massachusetts Turnpike service plaza locations.

“Customers, distributors and licensees have looked to the Gulf brand for quality and dependability for over 100 years, and we are excited to announce its addition to the RaceTrac family,” said RaceTrac then-CEO Max McBrayer. “The timeliness of this transaction represents an immediate opportunity for growth through geographic expansion, scale and diversification. We have been working closely with the Gulf team and are prepared to steward the Gulf legacy in its second century.”

The financial terms of the deal were not disclosed.

Metroplex Energy is an Atlanta-based wholesale fuel supply and trading company that secures bulk fuel to supply rack sales and delivery of gasoline, diesel and biofuel products by pipeline, rail, truck, barge and vessel.

Metroplex Energy supplies fuel to all RaceTrac and RaceWay locations, as well as many other

leading retailers and fuel wholesalers in 15 states.

“This acquisition provides Gulf with a historic opportunity to succeed in the rapidly evolving retail fuel marketplace,” said AJ Siccardi, president of Metroplex. “Gulf’s extensive distributor network and nationally recognized brand, combined with Metroplex’s expertise in providing consistent, dependable fuel supply, creates tremendous possibilities to serve current and future branded distributors and licensees in a manner that will make their businesses successful in the future.”

Metroplex appointed Ron Sabia as chief operating officer of the acquired Gulf entity and head of the Gulf business unit. He has more than 30 years of experience in the fuel industry. Sabia served as president of Gulf Oil LP from 2005 to 2016.

According to RaceTrac, this acquisition adds another renowned, consumer-facing brand to its family of companies, as well as complementary expertise and even deeper industry relationships.

The deal reflects RaceTrac’s ongoing strategy to accelerate growth in its core business activities and drive enhanced operating efficiencies, the retailer noted.

Headquartered in Atlanta, family-owned RaceTrac is the 22nd largest privately held company in the U.S. and has been serving guests since 1934.

RaceTrac has nearly 800 retail locations representing the RaceTrac and RaceWay brands in 12 states.

It employs more than 10,200 team members across RaceTrac, RaceWay and affiliated companies Metroplex Energy and Energy Dispatch.

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Display More. Sell More.

NEXT™ 2.0 trays display 20-30% more products.

Before

NEXT™ 2.0 Trays

Increase sales with a fuller, more attractive display The NEXT™ 2.0 Tray Merchandising System allows retailers to increase merchandising space and improve product visibility. Each item remains faced and visible to the customer for easy product selection.

By incorporating the NEXT™ 2.0 System into a planogram, retailers can expand the selection of products beyond the limits of peg hooks and put more product in its place. This usually translates to an additional row of merchandise and up to 25-30% more facings in a given section.

Reduce labor with pull-out trays for easy restocking and cycle counting of inventory

Retailers can further reduce labor costs and simplify restocking with the NEXT™ 2.0 pull-out tray option. Customers benefit from a more organized and cohesive layout featuring enhanced product depth and merchandising which, in turn, increases sales.

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INDUSTRY ROUNDUP

Kwik Trip to Invest $151M in Wisconsin Growth The convenience retailer will create more than 500 jobs as it expands operations KWIK TRIP INC. is going bigger in its home state.

The convenience store chain plans to invest more than $151 million to expand operations at multiple locations throughout Wisconsin, creating more than 500 jobs by 2027.

This qualifies Kwik Trip to earn an additional $15 million in performance-based Enterprise Zone tax incentives from the Wisconsin Economic Development Corp. (WEDC).

“Growth is good, not only for Kwik Trip but, most importantly, for our coworkers and the communities we serve,” said Kwik Trip President and CEO Scott Zietlow. “As a Top Workplace, we are able to provide strong, vibrant jobs throughout Wisconsin. We appreciate the support from the WEDC to make this happen.”

La Crosse, Wis.-based Kwik Trip operates more than 840 convenience stores in the Midwest. Its stores are known as Kwik Trip in Minnesota and Wisconsin, and as Kwik Star in Iowa and South Dakota.

The retailer’s latest expansion plan marks the third time that the state has invested in Kwik

Trip’s growth in Wisconsin, raising its eligibility for tax credits to a total of $41 million.

In 2017, Kwik Trip and Wisconsin entered into the Enterprise Zone agreement. Since then, it has invested more than $325 million into its Wisconsin support center operations, created nearly 1,800 new eligible full-time jobs, and grown and fostered mutually beneficial relationships with numerous Wisconsin supply chain partners, according to WEDC. After Kwik Trip was awarded up to $21 million in Enterprise Zone tax credits in 2017, its rapid growth prompted an amendment raising that eligibility by $5 million with the primary purpose of expanding the company’s production facilities in La Crosse.

Kwik Trip has since spent more than $325 million in capital investment and created 1,793 new jobs eligible to earn tax credits.

Based on Kwik Trip exceeding the goals of its Enterprise Zone agreement, the WEDC board voted in November to amend Kwik Trip’s contract to make it eligible for the additional $15 million in tax credits. The final amount of incentives to be awarded will depend on the number of jobs created and the amount of capital invested.

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Eye on Growth

Alimentation Couche-Tard Inc. has more than 100 sites in its construction pipeline, along with 1,000 sites identified for future growth opportunities. The retailer has a goal to build 500 new convenience stores over the next five years.

Casey’s General Stores Inc. picked up 11 EZ GO stores from Love’s Travel Stops, adding to its store count in Nebraska and Oklahoma. The operator began rebranding the sites last month.

Royal Farms opened three new locations in November and December, including one in Georgetown, Del., and the other two in Abington and Suffolk, Va. All three stores sell gas, and the Abington site additionally features an ethanol-free fuel pump and a car wash.

Liz Williams will become CEO, while Don Fitzgerald will serve as Dom’s Kitchen & Market president and chief operating officer through a transition period.

Foxtrot Market and Dom’s Kitchen & Market reached an agreement in principle to merge. Upon closing, the merger will create a new entity, Outfox Hospitality.

Pro Food Systems Inc. (PFSbrands) is expanding its presence in Missouri with the acquisition of Show Me Oil Co. As part of the transaction, PFSbrands will pick up one c-store and eight grocery stores operating under the Moser’s Foods banner.

FAST FACTS

64% 15% Among Gen Z shoppers, 64% say they buy store brands always/frequently.

15% of self-checkout customers report purposely taking an item while supposedly scanning.

— The Private Label Manufacturers Association

— LendingTree

1.7%

C-store trips were down 1.7% in 2023, but the percentage of shoppers spending five to 10 minutes per trip in the store has grown year over year.

— PDI & GasBuddy

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INDUSTRY ROUNDUP

Retailer Tidbits

Yesway partnered with Relay Payments to bring cardless purchasing to more than 100 Yesway and Allsup’s convenience stores. The pact will allow more fleets and drivers to avoid fuel fraud caused by card skimming, according to the companies.

Rutter’s went bigger with a recent remodel that nearly doubled the site’s interior footprint, going from 4,300 square feet to 7,800 square feet. As part of the project, the retailer added a second-floor mezzanine with seating for 30.

The network is now present in 13 states.

Pilot Co., in conjunction with General Motors Corp. and EVgo Inc., opened the first 17 locations of its previously announced national electric vehicle fast charging network.

Kwik Trip Inc. is bringing self-checkout stations to its newest locations throughout Wisconsin. The retailer will install two stations at all stores completed in the last six months, as well as at the 25 to 30 sites currently under construction and due for completion by the end of 2024.

Supplier Tidbits

British American Tobacco is writing down approximately $31.5 billion. The company pointed to a steep decline in the number of cigarette smokers as the major factor behind the impairment charge.

Novolex brand Eco-Products launched a new program called Controls Intended to Remove Contamination (CIRC) that helps foodservice operators keep noncompostable items out of their organics streams.

Chevron Technology Ventures made an investment in Electric Era Technologies.

The move will accelerate the deployment of Electric Era’s PowerNode charging station technology to gas stations and convenience stores.

Friendly Express Inc. is adding an extension of the Standard AI Vision platform to address loss, inventory management and other operational challenges. Standard AI’s Zone Monitoring is currently used for the foodservice, beer and tobacco sections of the store.

Texas Born (TXB) added more products to its private label line in all of the markets the convenience store chain serves. New products in TXB’s “Leave ‘Em Better” initiative span beverages, snacks and apparel.

Nayax and Cantaloupe, to implement a self-pay option for existing Fresh Blenders and provide a more seamless customer experience.

Nexus Energy Services LLC (NES) acquired the assets of Whitemarsh Corp., a distributor of fuel dispensing and pointof-sale equipment for retail and commercial fueling in New York, New Jersey and eastern Pennsylvania. NES will continue to use the Whitemarsh brand in its marketing territory.

Siffron acquired the merchandising display products division of Process Retail Group.

Products from this division include various merchandise pusher systems utilized throughout retail stores.

Splash Beverage Group Inc. entered into a new agreement with the Horizon Retailers Association. The convenience retail association represents more than 2,500 retailers and 20 major vendors in the Southeast United States.

The new partnerships are set to launch in early 2024.

Fresh Blends is launching new partnerships with fintech companies, including

Verifone integrated its Commander Site Controller software with TruAge. Convenience and fuel retailers can now use Verifone’s Commander POS software to utilize TruAge’s services to verify an adult customer’s age for purchases of age-restricted products.

J ANUARY

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NEW PRODUCTS

Kit Kat Chocolate Frosted Donut New from The Hershey Co., the Kit Kat brand presents its newest permanent flavor: Chocolate Frosted Donut. Taking its cue from the classic breakfast treat, the new Kit Kat flavor was created to deliver the experience of biting into a fresh doughnut, featuring milk chocolate lightly layered over top of a doughnut-flavored creme. Now available nationwide in both standard and king sizes, the Kit Kat Chocolate Frosted Donut Flavored Bar joins the brand’s list of exciting, and sometimes unexpected, flavors including Mint + Dark Chocolate, Birthday Cake, and Strawberry + Dark Chocolate.

THE HERSHEY CO. • HERSHEY, PA. • THEHERSHEYCOMPANY.COM

Tsingtao 0.0 Nonalcoholic Beer Paulaner USA, the importer of Chinese beer brand Tsingtao, introduces Tsingtao 0.0. Made to take advantage of the growing market for nonalcoholic alternatives, Tsingtao 0.0 provides an alcoholfree beer for a variety of drinking occasions. Brewed and fermented with a gentle alcohol removal and blending process to achieve a fruity flavor with slight malty notes, the product has an ABV of no more than 0.03%. Tsingtao 0.0 is also low in calories, clocking in at only 63 calories per unit, appealing to health-conscious consumers who are searching for a high-quality, refreshing brew that offers the same experience of drinking a beer.

PAULANER USA • WHITE PLAINS, N.Y. • TSINGTAO.COM

Whoa Dough Snack Bars Whoa Dough is bringing its vegan cookie dough snack bars to the convenience channel in seven flavors: Oatmeal Cookie, Chocolate Chip, Sugar, Sprinkle Sugar, Peanut Butter, Peanut Butter Chocolate Chip and Brownie Batter. The bars are available as single flavors or in a variety pack. Made with no artificial ingredients, each Whoa Dough Cookie Dough Snack Bar contains 140 to 170 calories per serving, 4 to 5 grams of protein, 5 grams of fat and less than 10 grams of sugar.

They are certified gluten-free, dairy-free, soy-free, egg-free, OU Kosher and Non-GMO Project verified.

WHOA DOUGH • HIGHLAND HEIGHTS, OHIO • WHOADOUGH.COM

Ovention Shuttle S2600 Ovention unveils the Shuttle S2600, a new size in the company’s Precision Impingement oven lineup. Utilizing top and bottom hot air for a fast, high-quality cook without microwaves, the S2600 includes all the features of previous Shuttle ovens with the benefit of being able to accommodate a full-size sheet pan. The S2600 can also operate as a conveyor with a sealed baking chamber, allowing for better menu flexibility and energy efficiency. The 26-inch belt has patented dual auto-load and unload capability for multitasking and increased output, while two full-color, front-facing touchscreens can store more than 1,000 multistage recipes and self-diagnostics for monitoring oven components and performance.

OVENTION • MILWAUKEE • OVENTIONOVENS.COM

Rovertown Integration Store Rovertown debuts the new Integration Store, the latest version of its mobile app platform for convenience stores. A fully agnostic platform, it allows retailers to browse and select from dozens of native features and third-party integrations from other technology vendors for loyalty marketing, mobile payments, mobile ordering, car wash subscriptions, age verification and more. The program can also be paired with Rovertown’s drag-and-drop user interface to provide better levels of control, customization and flexibility.

Upcoming additions will feature in-depth tutorials via RoverUniversity, new native capabilities, more integrations and advanced automation.

ROVERTOWN • ST. LOUIS • ROVERTOWN.COM

20 Convenience Store News C S N E W S . c o m

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1/8/24 1:51 PM

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NEW PRODUCTS

Snack’in for You Baked Puffs Sigma Foods’ snack brand Snack’in For You introduces a new product line of vegetable-based, high-protein baked puffs. Gluten-free and featuring four grams of protein per 1-ounce serving, each variety is made with real vegetables and four base ingredients: cauliflower or broccoli, rice flour, chickpeas and pea protein. Four varieties are available: Buffalo Ranch Cauliflower, Mesquite Barbeque Broccoli, Cheddar Jalapeño Broccoli, and Sour Cream and Onion Cauliflower. The brand has been available in select southwestern U.S. convenience stores and now plans to expand nationally across all channels.

SIGMA FOODS • PHOENIX • SNACKINFORYOU.COM

Raybern’s Sandwiches Starting in the first quarter of 2024, Raybern’s will kick off a full rebrand of its sandwich line, including new packaging and an expanded range of flavors.

The company will introduce new recipes for its packaged sandwiches, including a soft poppy seed roll for its Roast Beef & Cheddar Sandwich, and a sweet deli roll for the relaunch of its Ham & Cheese Sandwich. Its Philly Cheesesteak, Chicken Bacon Ranch and Barbecue Pulled Pork options also have been upgraded with new meats, cheeses and sauces. The five new Raybern’s varieties will be available in freezer cases, with each two-count pack having a suggested retail price of $5.79.

RAYBERN’S • TUPELO, MISS. • RAYBERNS.COM

Ascent Touch Bean-to-Cup Coffee Machine Concordia Beverage Systems is rolling out a major update to its Ascent Touch bean-to-cup coffee machine: Onboard Self Cleaning. The Ascent Touch uses four independent grinders to brew SCA Gold Cup Standard coffee in as little as 30 seconds. The new self-cleaning feature enables operators to schedule an automated daily cleaning cycle and eliminates the need for staff to manually clean the machine. Onboard Self Cleaning utilizes precise valve technology developed by Newton CFV, which allows for the use of a concentrated cleaning solution. By using smaller amounts of cleaner, the canister can keep an Ascent Touch machine clean for approximately six months before needing to be replaced.

CONCORDIA BEVERAGE SYSTEMS • RENTON, WASH. • CONCORDIACOFFEE.COM

Big Bear Pop Giant Gummy Bear Nassau Candy’s Clever Candy brand adds the Big Bear Pop Giant Gummy Bear.

Individually packaged, each 8-ounce giant gummy bear on a stick features classic fruit flavors such as cherry, apple, blue raspberry and orange. All varieties are made with a palm oil free formula, meeting today’s lifestyle trends, according to the company.

Keeping with the look and feel of the Clever Candy brand, each gummy bear pop features a joke or fun fact. The peggable packaging comes in a shelf display, allowing for the product to be merchandised at the point-of-sale in the display or on a peg wall.

NASSAU CANDY • HICKSVILLE, N.Y. • NASSAUCANDY.COM/BRANDS/CLEVER-CANDY

Watchfire 16” Price Watcher Sign Watchfire Signs unveils its newest LED convenience store signage product, the 16” Price Watcher. Available in red, green, white and amber, these signs offer a vibrant fuel price display that can be changed efficiently and safely, day or night, according to the company. The 16” Price Watcher enables c-store operators to advertise unleaded, diesel or E85 fuel prices with the touch of a button. An optional point-of-sale capability lets operators instantly sync signs with in-store pricing and control prices in multiple locations at one time. The plug-and-play solution offers quick and easy installations or upgrades.

WATCHFIRE SIGNS • DANVILLE, ILL. • WATCHFIRESIGNS.COM

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12/19/23 12:01 PM 1/5/24 1:44 PM

COVER STORY

STUDY 2024

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OPTIMISM STALLS AMONG RETAILERS AND SUPPLIERS IN THE CONVENIENCE CHANNEL AS CONSUMER RESILIENCY WANES

A Convenience Store News Staff Report HEADING INTO 2023, the state of the U.S. economy was not instilling a great deal of confidence in the convenience store industry’s retailers, suppliers and distributors. And so, the industry’s key players went into the year with a largely neutral outlook on their business prospects.

Fast forward one year and it appears the industry is still stuck in neutral.

According to the findings of the 2024 Convenience Store News Forecast Study, on a scale of one to five — where 1 represents “Terrible, wake me when it’s over” and 5 represents “It’s going to be our best year ever!” — the largest percentage of c-store retailers (39%) rate their expectations for 2024 at a 3.

The industry’s suppliers and distributors are slightly more positive with the largest percentage (45%) rating their expectations at a 4.

“The remarkably resilient consumer has been the story of 2023,” National Retail Federation (NRF) Chief Economist Jack Kleinhenz said in the December issue of NRF’s Monthly Economic Review, published Dec. 8. “A strong labor market, rising wages and access to excess savings have helped spending continue despite inflation and higher interest rates.”

In the same report, however, Kleinhenz cautioned that the “resiliency of the consumer is being tested” by a number of factors beyond inflation and interest rates. Excess liquidity built up during the pandemic is shrinking and access to credit has become more expensive as banks have become more cautious. Both these factors are curbing purchasing power, he explained.

Starting to see this play out, c-store operators reported a softening in the third and fourth quarters of 2023, and they are bracing for lower foot traffic this year as their customer base continues to have less discretionary income to spend on impulse items.

“Consumers are challenged with less disposable income and have to make choices. The current economy is not consumer or convenience friendly,” as one retailer told CSNews.

Read on to learn more about what the industry’s key players predict for 2024.

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® J ANUARY

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RETAILER FORECAST

A Lackluster Outlook

While there are bright spots, c-store retailers feel apprehensive about the year ahead

By Linda Lisanti INFLATION, rising operational costs and declining foot traffic have convenience store retailers heading into the new year with some apprehension.

“We’re competing for a shrinking dollar,” said one Forecast Study retailer participant.

Overall 2024 Business Outlook POSITIVE

10%

Because of this and other challenges the c-store industry is contending with, retailers are largely neutral on their overall business outlook for 2024. On a scale of one to five — where 1 represents “Terrible, wake me up when it’s over” and 5 represents “It’s going to be our best year ever!” — the largest percentage of retailers (39%) rate their expectations for this year at a 3. Last year, the foremost rating was also a 3.

8%

In the good news column, a small group of c-store retailers have shifted from neutral to a more positive rating this year.

Whereas last year, only 5% of retailers rated their expectations at a 5, this number jumped to 10% this year.

25%

Due in large part to price increases they must pass on to their customers, 67% of retailers project their total average dollar sales per store will rise in 2024. However, just 34% say their total average profits per store will increase — a decline of 8 points compared to a year ago.

A positive development is that fewer retailers expect their profits to decrease this year — only 12%, a drop of 18 points year over year. Many of these retailers instead expect their profits to stay the same — 54% selected this option, a rise of 25 points year over year.

“Increasing competition hinders profit markup,” one retailer observed.

After months of paying higher prices for goods and services purchased, consumers today are laser-focused on value and getting a good deal. So, it’s not surprising that convenience retailers perceive dollar stores as their biggest cross-channel threat this year.

Food delivery apps, such as DoorDash

NEUTRAL

34%

39%

Projected Average Dollar Sales per Store

Decrease

NEGATIVE

13%

3%

Projected Average Profits per Store

67%

Increase

Stay the same

12%

Decrease

34%

Increase

54%

Stay the same

“We’re competing for a shrinking dollar,” said one Forecast Study retailer participant. and Uber Eats, are also at the top of their watch list as foodservice has become a highly coveted category for the convenience channel.

This year, 46% of c-store retailers cite these apps as a top competitive threat, up 12 points vs. a year ago.

Driving Customer Traffic Consumers have shown impressive resilience over the past year, but it appears the breaking point has been reached as c-store retailers reported a softening in the third and fourth quarters of 2023. The culprit, they say, is less discretionary income among their customer base.

As one retailer put it: “Our customer base is feeling the economic crunch. Less money is being spent on impulse-buy items.” Another added: “Rising inflation means our customers are driving less and spending less.”

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STUDY 2024

Heading into the new year, optimism in the c-store retailer community toward foot traffic patterns has fallen; most operators anticipate a flat or declining trend for 2024. Only 33% of retailers expect their foot traffic to increase this year, a drop of 7 points, while 46% expect their foot traffic to stay the same as 2023, an increase of 9 points.

Expectations for In-Store Foot Traffic

Along with customer-count concerns and financial pressures, convenience store retailers are bracing for another year of labor difficulties. Each year, the Forecast Study asks retailers to identify the factors that will have the biggest impact on their sales and profitability in the year ahead.

For the third consecutive year, labor came out on top, ahead of increasing operational costs at No. 2 and inflation and economic issues at No. 3.

Anticipated Impact of Issues on Sales & Profitability

Retailer comments on the labor situation include: • “[This] has been an issue since COVID and quite frankly, just isn’t getting better.”

• “Finding talent, training and retaining talent in today’s workforce is competitive and nonstop.”

• “Challenges remain even with greatly elevated wages.”

• “Labor costs per hour increase, but the amount of work you get out of an employee is decreasing. You invest in training only for them to move on to the next job that pays a little more or has less responsibility.”

• “The quality of candidates is poor.

It requires sacrificing service or overstaffing, driving up costs.”

Given the correlation between customer service and foot traffic, c-store retailers find themselves in a precarious position.

“The inability to deliver consistent customer service sends guests elsewhere,” one operator pointed out.

Areas of Opportunity Convenience channel retailers are eying various initiatives to boost their business in 2024 despite the myriad challenges. At the very top of their do-list is investing in foodservice.

WILL INCREASE

STAY THE SAME

33%

RANKED BIGGEST IMPACT

46%

21%

RANKED IN TOP 3

Labor turnover and hiring

30%

Increasing operational costs

18%

67% 55%

Inflation and economic issues

12%

46%

Motor fuel prices

18%

31%

22%

Investments in foodservice

6%

Supply chain issues

1% 15%

Tobacco regulations

4%

13%

Changing expectations of "convenience" 1%

13%

Changes in foot traffic patterns

3% 12% 6%

Emerging technologies

When weighing in on the factors that will have the biggest impact on their sales and profitability in the coming months, 6% of retailers cited foodservice investment as their No. 1 factor and 22% ranked it in their top three.

Technology is another area primed for investment. At-pump ordering for in-store items is the leading enhanced convenience service c-store retailers plan to add in 2024, followed by self-checkout via a kiosk.

Third-party delivery rounds out the top three.

“The consumer continues to tell us what and how they want to shop and what convenient is to them. It is up to us to stay relevant,” one retailer remarked. CSN

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WILL DECREASE

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SMALL OPERATOR FORECAST

STUDY 2024

Tempered Optimism

Many of the convenience channel’s small operators are expecting the status quo in 2024, though some are more bullish about their prospects

By Danielle Romano THE LAST FEW years have been a mixed

bag of expectations for the convenience store industry’s small operators (those operating 20 stores or less).

As 2023 approached, the channel’s smaller players were trepidatious, still plagued by the unprecedented economic pressures brought on by the COVID-19 pandemic and worried about the vitality of their businesses in the coming year.

Now, with a new year ahead of them, the small operators who participated in this year’s Forecast Study don’t feel much different than those who participated in last year’s study. However, there are some areas of improvement heading into 2024.

The number of small operators who report a positive outlook on the economy is up 8 points from last year’s forecast. Still, less than a quarter of small operators (22%) have a positive economic outlook. Similarly, while the percentage of small operators who view the U.S. economy in a negative light is down by 13 points year over year, this number still accounts for more than half of smaller retailers (54%). The other 24% say they are neutral.

“Inflation is driving fewer impulse purchases, and the national outlook also has people watching spending closer,” one small operator observed.

On a scale of one to five — where 1 represents “Terrible, wake me up when it’s over” and 5 represents “It’s going to be our best year ever!” — the largest percentage of small operators (43%) rate their expectations for 2024 at a 3.

Reflecting a slight shift in optimism by some small operators, 14% of respondents put their expectations at a 5, a 7 point increase compared to the 2023 study. Another bright spot: No small operator surveyed for this year’s forecast selected a rating of 1.

Competitive Watch Foot traffic in the new year could be

Company View of U.S. Economic Conditions VERY/SLIGHTLY POSITIVE

22%

NEUTRAL

VERY/SLIGHTLY NEGATIVE

24%

54%

20%

57%

Small Operators

23% Large Operators

Only 32% of small operators expect their foot traffic to increase this year, a drop of 11 points.

Overall 2024 Business Outlook POSITIVE

14%

NEUTRAL

24%

NEGATIVE

43%

19%

Small Operators

7%

47%

33%

7% 7%

Large Operators

a stumbling block. There is more pessimism in the c-store retailer community toward foot traffic patterns this year. Only 32% of small operators and 33% of large operators expect their foot traffic to increase this year, a drop of 11 points and 3 points, respectively.

Nearly half of small operators (46%) expect their foot traffic to stay the same, up 5 points year over year, while the other 22% are bracing for a decrease, up 6 points vs. a year ago.

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1/8/24 4:50 PM

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SMALL OPERATOR FORECAST

Projected Average Dollar Sales per Store

17%

32%

Stay the same

Stay the same

Increase

Decrease

7%

Decrease

Increase SMALL OPERATORS

14%

30%

Decrease

50%

40%

Increase

Stay the same

Increase

77%

8%

60%

Projected Average Profits per Store

On the labor front, small operators lamented: • “Slim pickings in the hiring pool.”

• “We are seeing a sharp decline in the number of applicants for all levels of jobs and the ones who are applying are asking for significantly higher pay and benefits.”

• “In order to provide the service level we aspire to, we require a higher staff count. It is difficult to find the necessary talent at the current hourly wages.”

• “With 100% turnover, we can’t train fast enough.”

Similar to their larger counterparts, small operators are less concerned about supply chain issues in 2024. However, unlike the industry’s larger retailers, small operators are more concerned about the impact of tobacco regulations on their stores.

Another issue affecting the outlook of both small and large operators is increasing cross-channel competition, as cited by 60% of small operators and 73% of large operators.

Decrease

Stay the same

LARGE OPERATORS

When it comes to what will impact their sales and profitability in 2024, the industry’s small operators are apprehensive about a multitude of factors. Labor turnover and hiring jumped into the No. 1 slot this year, while other top areas of concern are increasing operational costs, inflation and economic issues (last year’s No. 1), and motor fuel prices.

10%

57%

SMALL OPERATORS

LARGE OPERATORS

Expectations for In-Store Foot Traffic WILL INCREASE

STAY THE SAME

32%

WILL DECREASE

46%

22%

Anticipated Impact of Issues on Sales & Profitability RANKED BIGGEST IMPACT RANKED IN TOP 3 Labor turnover and hiring

27%

Increasing operational costs

19%

Inflation and economic issues

65% 51%

8%

51%

Motor fuel prices

22%

Tobacco regulations

19%

5%

Changing expectations of "convenience"

19%

3%

Investments in foodservice

14% 5%

Supply chain issues

14%

3%

Changes in foot traffic patterns

11%

3%

Emerging technologies Rise in e-commerce

35%

8% 3%

Demographic changes

5%

Brick-and-mortar competition

3%

5%

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STUDY 2024

Both small and large operators view dollar stores as the biggest threat.

Interestingly, small operators are more concerned about Amazon/Amazon Fresh than their larger counterparts (35% vs.

23%). However, large operators are more concerned than smaller retailers about the threat of quick-service restaurants and food delivery apps such as Uber Eats and DoorDash.

“We want to succeed and will do whatever it takes,” said one Forecast Study small operator participant.

Making Improvements Despite their apprehensions, small operators are prepared to make their stores more attractive to customers this year by meeting their expectations for enhanced convenience services.

Slightly more than three-quarters of the small operators surveyed (76%) currently offer mobile payment in-store, with 8% planning to add it in 2024. At the pump, 68% of small operators now offer mobile payment, with 8% saying this feature will be added in the coming year.

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Other top initiatives planned by small operators for the coming months are adding delivery via a third-party service (24%) and adding contactless shopping via kiosks (22%).

“We want to succeed and will do whatever it takes,” one small operator remarked. CSN

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J ANUARY

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CATEGORY FORECAST

STUDY 2024

Different Year, Same Story

Many product categories are expected to remain unchanged in 2024, but there are some signs of growing optimism

By Angela Hanson THE START OF A NEW YEAR does not

necessarily mean anything but the calendar is changing.

Rising costs, changes in consumer behavior and regulatory uncertainty have pluralities of convenience store retailers anticipating sales that are unchanged from the prior year in numerous product categories, according to the results of the 2024 Forecast Study.

The findings, however, do reveal some positive signs for the convenience channel. With the rate of inflation easing, c-store operators predict less of a difference in dollar sales vs. unit volume than they did in last year’s study, indicating they expect sales to better reflect how much consumers are buying, not just the higher prices they have to pay.

Additionally, in several categories, the percentage of study participants predicting sales increases grew year over year, even if those percentages are not the majority.

Category Forecast: Motor Fuels

18%

30%

Decrease

Increase

39%

43%

Stay the same

Increase

25%

Decrease

DOLLAR SALES

46%

Stay the same

GALLONS

Category Forecast: Cigarettes

46%

10%

Decrease

Increase

Here are the individual category forecasts for 2024:

MOTOR FUELS Retailers have mixed sentiments regarding the future of motor fuels.

Less than half of study participants (43%) expect average fuel sales per store to increase in 2024, down 13 points from a year ago. The percentage of retailers that expect sales to decrease rose 4 points to 18%.

Even as confidence in future dollar sales growth falters, though, retailers are more optimistic about gallon sales.

While 46% of respondents believe average gallons per store will stay the same this year, the percentage of those that expect their gallons to increase jumped 12 points to 30%, while the percentage that expect gallons to decrease fell 9 points to 25%.

Operators are largely aligned in their expectations for 2024 regardless of company size, with large operators and small operators making similar

37%

18%

Stay the same

Increase

DOLLAR SALES

29%

62%

Decrease

Stay the same

UNIT VOLUME

predictions for the category.

Survey respondents are divided on whether fuel sales are being helped by consumers driving more miles for work and leisure, or harmed by trip consolidation. There’s more consensus that economic issues, taxes and recessionary concerns are having negative effects on costs and pricing, which will continue this year. Some also perceive intensifying competition from other operators, particularly those that can sell at a lower margin.

32 Convenience Store News C S N E W S . c o m

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CATEGORY FORECAST

The growth of electric vehicles (EVs) is widely expected to continue as a major trend in 2024, although EV adoption is not yet at a tipping point. “Maybe once there are 20% to 30% of EVs on the road, it will affect the market,” remarked one operator.

STUDY 2024

Category Forecast: Other Tobacco Products

9%

53%

Decrease

Increase

CIGARETTES The outlook for cigarettes is dire heading into 2024. Expectations for cigarette dollar sales took a sharp downward turn, with nearly half of retailers (46%) reporting that they expect average sales per store to decrease this year — up 19 points from a year ago — while the percentage of those that expect average dollar sales to increase fell 19 points to 18%.

Retailers’ expectations for cigarette unit volume are steady compared to last year, but still quite pessimistic, with nearly two-thirds of survey respondents (62%) predicting that average unit volume per store will decrease.

Small operators express more negative sentiment regarding dollar sales, with 51% predicting a decline compared to 39% of large operators. Both small and large operators have similar expectations for unit volume, with a majority of both groups predicting declines.

Retailers cite “never-ending” rising costs as a major category trend in 2024, along with an overall decrease in cigarette smokers and a shift toward alternative products.

“Cigarettes will continue to decline as that customer moves to smokeless, nicotine and e-cigs,” one retailer predicted.

The current state of regulation is also having a negative impact, with one respondent noting that “there’s an uncertain regulation space, so we also have uncertainty.”

OTHER TOBACCO PRODUCTS The forecast for other tobacco products (OTP) is brighter than traditional cigarettes, same as it was one year ago.

More than half of retailers (56%) expect average OTP dollar sales per store to rise in 2024, a 7 point increase from last year.

Unit volume is also expected to increase or hold steady, with 53% of study participants predicting an increase in average unit volume per store. This marks an impressive 20 point jump from last year’s study.

36%

Stay the same

56%

Increase

DOLLAR SALES

36%

Stay the same

12%

Decrease

UNIT VOLUME

In a turnaround from cigarettes, small operators feel greater optimism than large operators do regarding both OTP dollar sales and unit volume. Around six in 10 small operators expect increases in both, while large operators are more tempered in their expectations.

The high cost of traditional cigarettes, as well as the growing variety of options available in OTP, are expected to positively affect the category this year.

“OTP products will continue to grow as cigarette sales decrease,” stated one operator. “Alternative OTP such as herbal products will start to sell more in our stores.”

Accordingly, nearly half of study participants say they plan to add more OTP SKUs this year, and 41% plan to devote more square footage to OTP.

PREPARED FOOD Foodservice sales haven’t yet hit their high point, according to c-store retailers.

Eighty percent expect their average prepared food dollar sales per store to increase in 2024, up from 70% last year. Additionally, 75% expect prepared food unit volume per store to increase, up from 60% a year ago.

While a healthy majority of both small operators and large operators are bullish regarding the prepared food segment, large chains are especially positive with 90% predicting that dollar sales of prepared food will rise and 86% predicting higher unit volume.

Large chains are likewise driving growth in prepared food SKUs and square footage. Nearly 70% of large operators and 62% of total retailers expect to add SKUs in 2024, while 66% of large operators and 57% of total retailers expect to add square footage.

Survey participants say they are planning for a variety of menu improvements and expansions this year. They are particularly

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1

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9:56 AM

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CATEGORY FORECAST

Category Forecast: Prepared Food

5%

75%

Decrease

Increase

15%

Stay the same

80%

Increase

DOLLAR SALES

7%

Decrease

UNIT VOLUME

18%

Stay the same

When it comes to plans for dispensed beverage SKUs and square footage this year, a significant majority of retailers expect to make no changes to either.

Small operators, though, are more likely than large operators to report planned increases for both.

As for notable trends in the segment for 2024, in addition to new brands and flavor offerings, retailers point to energy drinks and healthier options.

Cold brew and bean-to-cup coffee are also expected to be relevant, but specialized beverage equipment has pros and cons.

“Dispensed innovation is improving, but the machines are too complex and break down too often. Repair costs offset any sales growth,” one operator lamented.

PACKAGED BEVERAGES

Large chains are especially positive with 90% predicting dollar sales of prepared food will rise and 86% predicting higher unit volume this year.

interested in adding more grab-and-go offerings, fresh options, proprietary and unique items, and overall higher-quality options.

“Prepared food trends in the gas station industry are on the rise and will keep on going up due to the convenience factor and improved quality of food and variety offered,” one retailer said.

Compared to one year ago, convenience retailers’ expectations for packaged beverage dollar sales have softened somewhat. Slightly more than half of retailers (52%) foresee average dollar sales per store increasing in 2024, down from 57% last year, while 43% expect sales to hold steady. Just 5% expect dollar sales per store to decrease.

In contrast, confidence around unit volume is up. The percentage of retailers that expect average unit volume per store to increase jumped 10 points to 49%, while 43% expect no change.

Packaged beverages is another category for which chain size appears to make little difference in expectations, as around half of both large operators and small operators expect both dollar sales and unit volume in the category to increase this year.

Operators have less lofty expectations for dispensed beverages, which include hot, cold and frozen drinks. Both large operators and small operators have similar expectations this year for dollar sales and unit volume in this foodservice segment.

SKU counts and store layouts are largely expected to remain static in 2024, with most study participants reporting that they do not plan to change the number of packaged beverage SKUs they offer or the amount of square footage they devote to the category.

Overall, a little more than half of c-store retailers (52%) predict average dollar sales per store will increase this year, while 45% predict average unit volume per store will increase, similar to expectations for dispensed beverages in the 2023 Forecast Study.

Energy drinks and functional beverages will be more important in packaged beverages than in dispensed beverages this year, according to retailers.

“Many people have quit getting dispensed beverages since COVID-19 started and began getting packaged beverages instead,” one retailer observed. Another, however, noted that with the right offering, customers can “find value in fountain drinks.”

High prices continue to be a concern.

Some respondents point to aggressive promotions and loyalty-focused pricing as core to their plans for 2024.

DISPENSED BEVERAGES

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STUDY 2024

“Inflation threatens this significant contributor,” one retailer stated.

BEER & MALT BEVERAGES Convenience retailers who sell beer and malt beverages are split between predicting a boost in sales or more of the same this year, but few expect the category to go negative. Fifty-one percent of operators expect average dollar sales per store will increase, slipping 5 points from 56% one year ago, while 43% believe dollar sales will stay the same.

Retailers are less optimistic about unit volume, although this too is largely expected to stay the same or increase.

Just under half say average unit volume per store will not change, while 42% say unit volume will rise, a 6 point improvement from last year’s study.

In a divergence from nonalcoholic packaged beverages, small operators and large operators have differing expectations for beer and malt beverages. Nearly two-thirds of small operators (63%) expect average dollar sales per store to increase vs. just 35% of large operators. Additionally, half of small operators expect average unit volume per store to increase vs. 30% of large operators.

Beer and malt beverage SKUs and square footage are both largely predicted to stay the same in 2024, as respondents point to seltzers and ready-to-drink beverages as products likely to grow.

Category Forecast: Dispensed Beverages

10%

10%

Decrease

Decrease

38%

52%

Stay the same

Increase

45%

45%

Increase

DOLLAR SALES

Stay the same

UNIT VOLUME

Category Forecast: Packaged Beverages

5%

8%

Decrease

Decrease

43%

52%

Stay the same

Increase

43%

49%

Stay the same

DOLLAR SALES

Increase

UNIT VOLUME

“We need to recognize the nonalcoholic beverage consumer,” one retailer added.

Among operators’ top concerns in this category for the year ahead are rising prices, competition from other channels, and space limitations.

Category Forecast: Beer & Malt Beverages

6%

43%

Decrease

Increase

“Key regional understanding will determine focus on this category. Sell where the fish are biting and use the space where it’s not to fill in opportunity items,” another operator advised.

CANDY Candy sales are again expected to see little change from the prior year, with 54% of survey respondents predicting no change in average dollar sales per store.

Nearly two-thirds (63%) expect average unit volume per store to stay the same.

43%

Stay the same

51%

Increase

49%

Stay the same

DOLLAR SALES

9%

Decrease

UNIT VOLUME

Large operators are somewhat more J ANUARY

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CATEGORY FORECAST

likely to anticipate increases, with 41% predicting dollar sales will rise (compared to 36% of small operators) and 31% predicting unit volume will rise (compared to 19% of small operators).

However, the majority still expect no change.

These flat projections are reflected in expectations for candy SKUs and square footage. Although just under a third (31%) do plan to add SKUs in 2024, 63% do not expect a change. More than eight in 10 respondents likewise expect no changes to square footage this year.

Price increases for candy draw sharp criticism from retailers. While general inflation may be to blame, some operators believe the prices in the category “are getting out of hand.”

“We are bringing in higher-margin, newer products, but their prices are too high!

Customers don’t want to spend $4 on a higher-end bar,” one retailer explained.

“Regular king-size Snickers at $2.95 for a single is just too pricey. Customers are being turned off.”

More variety in terms of sizing and packaging, along with product innovation, could have a positive influence on the category in 2024, operators said. “New product opportunities provide seasonal and promotional marketing funds and traffic drivers,” one retailer remarked.

SALTY SNACKS Expectations for salty snack sales are slightly more positive than a year ago.

When it comes to average dollar sales per store, surveyed operators are equally split on whether they expect sales to increase or stay the same (49% each), a 5 point difference from last year’s study.

As with the candy category, operators are more likely to expect more of the same in unit volume. While nearly four in 10 respondents expect average unit volume per store to increase — up 9 points from a year ago — the majority (60%) predict no change in 2024.

Large operators are slightly more optimistic about salty snack performance, with 55% predicting an increase in dollar sales (compared to 44% of small operators) and 41% predicting an increase in unit volume (compared to 36% of small operators).

Most retailers don’t plan to make any

Category Forecast: Candy

12%

8%

Decrease

Decrease

54%

Stay the same

39%

Increase

63%

Stay the same

DOLLAR SALES

25%

Increase

UNIT VOLUME

Category Forecast: Salty Snacks

39%

2%

Increase

Decrease

49%

Stay the same

49%

Increase

DOLLAR SALES

2%

Decrease

UNIT VOLUME

60%

Stay the same

While rising prices are having a negative effect on the salty snacks category, retailers say investment in new flavors, particularly spicy options, offer growth opportunities. changes to salty snack SKUs or square footage, but a healthy minority (35%) do expect to add some new items.

While rising prices are having a negative effect on the category, retailers say investment in new flavors, particularly spicy options, offer growth opportunities.

“Spicy flavors and nostalgic flavors will sell,” one retailer said.

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STUDY 2024

Another study participant also recommended retailers lean into consumers’ “increasing demand for portability of healthier and culturally diverse options.”

A little more than a quarter of retailers plan to give alternative snacks more square footage in 2024, while 38% say they will expand SKUs.

Category Forecast: Alternative Snacks

3%

3%

Decrease

Decrease

48%

Stay the same

49%

Increase

57%

39%

Stay the same

DOLLAR SALES

Increase

UNIT VOLUME

Category Forecast: Edible Grocery

18%

22%

Decrease

Increase

ALTERNATIVE SNACKS For the most part, the forecast for alternative snacks is similar to the forecast for salty snacks, and is an improvement from last year. Just under half of retailers expect average dollar sales per store to increase, up 14 points from a year ago, while 48% expect sales to stay the same.

The majority of respondents (57%) expect unit volume to stay the same.

However, the percentage of retailers that expect average unit volume per store to increase rose 10 points to 39%.

While operators of all sizes are aligned in their expectations for unit volume, small operators are noticeably more positive regarding dollar sales, with 56% predicting that average dollar sales per store will increase, compared to 41% of large operators.

More than half of study participants expect to keep their SKU count for alternative snacks steady this year, but 38% say they will expand SKUs in this category in 2024. A little more than a quarter of retailers plan to add square footage.

52%

Stay the same

30%

Increase

25%

Decrease

DOLLAR SALES

UNIT VOLUME

Protein-rich snacks, particularly jerky, will be on-trend this year, retailers said.

“We are building brand awareness for some of these snacks, focusing our partnership with local craft food vendors,” one retailer pointed out. “It continues to bring people into our location, even though some of these products are available in grocery stores.”

Healthy options are also in demand, yet not all consumers are willing to put their money down for this segment. “Customers request, but don’t purchase,” another retailer observed.

EDIBLE GROCERY Slightly more than half of surveyed retailers expect edible grocery to continue holding steady following a period of pandemic-boosted sales, with 52% expecting average dollar sales per store to stay the same and 53% expecting average unit volume per store to stay the same.

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53%

Stay the same

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CATEGORY FORECAST

Large operators are more pessimistic about the category, with 28% predicting average dollar sales will decline (compared to 10% of small operators) and 35% predicting that unit volume will fall (compared to 16% of small operators).

Category Forecast: Nonedible Grocery

17%

14%

Decrease

Increase

Large operators are also more likely to report plans to decrease edible grocery SKUs and square footage in 2024, although more than half expect to make no changes to either.

As with other categories, rising prices are an issue for this segment. And even more so than in other categories, cross-channel competition is a top concern.

61%

Stay the same

One retailer called edible grocery “a minor category,” pointing to “poor selection, noncompetitive pricing and SNAP tightening” as to why “we do not do a good job as an industry.”

Large operators are more likely to report plans to decrease edible grocery SKUs and square footage in 2024.

NONEDIBLE GROCERY Similar to edible grocery, most retailers expect little change in nonedible grocery sales this year. Approximately six in 10 predict average dollar sales per store will stay the same, with the remainder split between expectations that dollar sales will rise (22%) or fall (17%).

Retailers are even more certain that units will stay steady in 2024, with 68% saying they expect average unit volume per store to stay the same. Only 14% say unit

22%

Increase

19%

68%

Decrease

DOLLAR SALES

Stay the same

UNIT VOLUME

Category Forecast: General Merchandise

16%

24%

Decrease

Increase

52%

Stay the same

32%

Increase

DOLLAR SALES

15%

Decrease

61%

Stay the same

UNIT VOLUME

volume will increase, while 19% predict unit volume will decrease.

While retailers of all sizes are generally in agreement that nonedible grocery sales will be static this year, large operators are more pessimistic as just 15% expect an increase in dollar sales vs. 28% of small operators. There is a similar difference in the groups’ views on unit volume, as more than a quarter of large operators expect a decrease this year (compared to 13% of small operators) and just 7% expect an increase (compared to 19% of small operators).

Not surprisingly, retailers are largely unlikely to add nonedible grocery SKUs or square footage in 2024. However, retailers noted that pet items do well in this category.

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STUDY 2024

Looking for growth opportunities in HBC, some c-store retailers report offering more value-tier items at a lower price point.

In general, convenience retailers tend to not see nonedible grocery as a priority due to a lack of space and sales drivers.

Stocking local options, though, can make a difference as “the customer will shop with us vs. large-format [stores],” one retailer observed.

GENERAL MERCHANDISE Predictions for the future of general merchandise are largely a repeat of one year ago, with most operators in the convenience channel forecasting flat sales and the remainder split between predicting an increase or a decrease.

Fifty-two percent expect their average dollar sales per store of general merchandise to stay the same this year, and approximately six in 10 expect the same outcome for their average unit volume per store.

Small operators have a slightly more positive view on dollar sales, with 38% predicting an increase vs. 25% of large operators. There is also a smaller but noticeable difference in sentiment regarding unit volume: 29% of small operators predict an increase vs. 18% of large operators.

Phone accessories, school and office supplies, and novelty items are among the general merchandise products expected

Category Forecast: Health & Beauty Care

17%

19%

Increase

Decrease

57%

Stay the same

24%

Increase

21%

DOLLAR SALES

Stay the same

UNIT VOLUME

to perform well in 2024. One retailer noted that they are taking a cautious approach to expanding travel-related items this year, citing “demand for convenient and disposable products, balanced with the call for environmentally friendly.”

Still, around two-thirds of surveyed retailers expect their general merchandise SKUs and square footage to remain static this year.

Study participants cited a lack of customer interest, low margins and increased competition from dollar stores, drugstores and Amazon as their top category concerns for the year ahead.

HEALTH & BEAUTY CARE Sales of health and beauty care (HBC) are mostly expected to be flat in 2024, although there are some signs of shifting perspectives among convenience retailers.

More than half of surveyed operators (57%) expect average dollar sales per store of HBC to remain unchanged this year, but this is down 7 points year over year. A majority of retailers (62%) also expect average unit volume per store to stay the same, but that percentage also fell. Accordingly, most retailers are not planning to make any changes to HBC square footage or SKUs in 2024.

Dollar stores and drugstores are the convenience channel’s main competitors for HBC sales. “Drugstores are stocked now, so customers shop there,” one respondent reported.

Looking for growth opportunities, some c-store retailers report offering more value-tier items at a lower price point, along with products that are perceived to be healthier. “[The] trend is for healthier choices even in the health and beauty industry. They are looking for more natural ingredients,” one retailer noted. CSN J ANUARY

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62%

Decrease

20 24

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Here for the Snackz: PLADIS IS ALL IN ON C-STORES The snack category is one of the strongest performers in the convenience store channel, posting double-digit gains over the past year. pladis Global’s Flipz and Turtles contributed to c-store snack success. The company plans to ramp up support behind the brands in 2024.

“The Convenience channel makes up a large percentage of our sales at pladis. We understand the importance of this channel and are investing in helping it continue to grow,” Bryan Baker, sales lead for convenience told Convenience Store News.

Here, pladis recaps 2023 and offers a glimpse into its future blueprint for continued growth in c-stores.

How did Flipz and Turtles perform in 2023 in the convenience channel?

• We continue to drive unprecedented growth in convenience stores. Our brands ended the year strong, and we are really excited for 2024.

• Both brands resonate with convenience store shoppers and sales growth outpaced overall sales advances of 8.1%, as tracked by Circana.

• Flipz has doubled in size over the past three years and is the number one chocolate covered pretzel brand.

• The momentum continued to build in 2023, with dollar sales jumping 21.5% for the 52 weeks ending December 3, 2023 • The Turtles brand also produced remarkable growth, up 17.7%, per Circana. We continue to further Turtle’s position as the leading nut cluster brand.

How do you plan to build on those impressive results for 2024?

Our shopper marketing spend is increas ing 30% in 2024 versus 2023.

For 2024 and the years to come, people can expect pladis to continue investing in Flipz and Turtles through product innovation, in-store execution and strategic partnerships so that both brands can continue to be leaders in the sweets and snacks category.

GEAR UP FOR NATIONAL PRETZEL DAY 2024 National Pretzel Day is slated for April 26, 2024.

Get ready to serve elevated consumer demand from March to October as Flipz activates incremental marketing investment that’s sure to create a buzz and bring shoppers into your stores.

Pretzel Facts: • The average American consumes 1.5 pounds of pretzels per year.

• More than $550 million is spent yearly on pretzels.

• Pretzels were introduced into the U.S. in 1850.

Pretzel Hashtags: #NationalPretzelDay #Pretzels #PretzelDay #PretzelLove #ThesePretzelsAreMakingMeThirsty Source: https://nationaltoday.com/national-pretzel-day/

What about the potential for delivery services and c-stores?

Delivery, pick-up and drive-thru are becoming necessities for the convenience channel. Convenience stores are especially popular choices for impulse items like Flipz.

We’re nearly doubling our investment in delivery services such as Gopuff and DoorDash, which help convenience stores remain competitive while building impulse, add-on sales.

Are there any new products in the pipeline for C-stores?

Yes! We have exciting news from Flipz. Flipz Peanut Butter Fudge will be available to retailers starting March 1, 2024— joining our portfolio consisting of Flipz STUFF’D, Dark Chocolate, Milk Chocolate and White Fudge. We offer something for everyone…sweet, salty and crunchy. We also introduced a Dark Chocolate Pecan to our Turtles brand.

We offer off-shelf displays spotlighting the addition of Peanut Butter Fudge that will help drive impulse sales and deliver incremental dollars for the category.

FOR MORE INFORMATION: CONTACT YOUR BROKER AND/OR DISTRIBUTOR.

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SUPPLIER FORECAST

Down the Middle

C-store suppliers and distributors have mixed feelings when assessing their outlook for 2024

By Melissa Kress

THE NEW YEAR is often viewed as an

opportunity for a fresh start. However, convenience store retailers’ partners in the channel are stepping into 2024 with some trepidation.

Their outlook on the state of the U.S. economy is nearly split down the middle, with 41% of the suppliers and distributors participating in this year’s Forecast Study having a positive economic outlook for 2024 and the same number having a negative outlook. The remaining roughly 17% fall in the neutral zone.

Some good news is that the percentage of suppliers and distributors who hold a negative view of the economy for the coming 12 months is down slightly from 44% in 2023.

Concerns about the economy aside, convenience channel suppliers and distributors feel better about their personal business outlook for the year. Specifically, 48% have a positive outlook on this, while 41% hold a neutral view. Only 10% fall into the negative category.

When it comes to their product category, though, the optimism wanes. Only 53% of suppliers and distributors have a very/ slightly positive view on their product category for 2024, down 10 points from a year ago. At the other end of the spectrum, 28% have a very/slightly negative view, up 7 points from the previous year.

Their view toward business conditions in the convenience channel also has dipped from 2023. Even so, 70% of suppliers and distributors are bullish on the channel (down 5 points year over year), compared to 16% with a neutral view and 14% with a negative view.

Business conditions in the convenience channel still stand above other retail channels, according to respondents, with grocery coming in at 63% positive (up 4 points year over year) followed by dollar stores at 60% positive (down 5 points), mass merchandise at 53% positive (up 1 point), and drugstores at 31% positive (down 10 points).

Company View of U.S. Economic Conditions VERY/SLIGHTLY POSITIVE

NEUTRAL

41%

VERY/SLIGHTLY NEGATIVE

41%

17%

Overall 2024 Business Outlook POSITIVE

3%

NEUTRAL

NEGATIVE

45%

41%

10%

Anticipated Impact of Issues on Sales & Profitability RANKED BIGGEST IMPACT

RANKED IN TOP 3

17%

Inflation and economic issues

47%

12%

Consumer spending decline

38%

17%

Increasing regulation Increasing operational costs

9%

Labor turnover and hiring

5%

33% 29%

29%

14%

Investments in foodservice Supply chain

3%

19%

Consumer spending growth

3%

16%

New product development in your category Retailer consolidation

28%

5% 16% 14%

Raw material costs

7%

12%

E-commerce

5%

10%

Emerging technologies

5%

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STUDY 2024

Sizing Up the Competition As consumers continue to shift between channels in search of the best deals, c-store retailers are more wary of the heightened competition than suppliers and distributors. While 66% of retailers expect cross-channel competition to increase in 2024, just 47% of suppliers and distributors feel the same — down 14 points from last year’s forecast. More than half (52%) expect cross-channel competition to stay the same, up 20 points year over year.

2024 Outlook for Product Category VERY/SLIGHTLY POSITIVE

53%

VERY/SLIGHTLY NEGATIVE

19%

28%

Current Conditions in Retail Channels Company Works With VERY/SLIGHTLY POSITIVE

NEUTRAL

VERY/SLIGHTLY NEGATIVE

70%

Like their retailer partners, c-store suppliers and distributors view dollar stores as the biggest threat to the convenience channel this year (51% for the former, 50% for the latter).

16%

63%

Unlike their retailer partners, though, suppliers and distributors are far less concerned with other cross-channel threats such as food delivery sites/apps like DoorDash (28% vs. 46% among retailers), grocery retailer sites/apps (24% vs. 43% among retailers), and grocery delivery sites/apps like Instacart (24% vs.

40% among retailers).

Oddly enough, given the increased focus on foodservice in the convenience channel, quick-service and fast-casual restaurants are near the bottom of the pack for both groups.

NEUTRAL

21%

60%

17%

33%

53%

31%

14%

32%

41%

7%

15%

28%

Keying In on Key Issues Inflation and economic issues continue to weigh heavily on suppliers and distributors in the convenience channel.

Notably, 17% cite this as having the biggest anticipated impact on their sales and profitability in 2024, while 47% rank it in the top three.

C-store suppliers and distributors view dollar stores as the biggest Coming in second is a decline in consumer threat to the convenience channel spending, which moved up from fourth place last year. The numbers show 12% of this year. suppliers and distributors anticipate this having the biggest impact on their 2024 sales and profitability, and 38% include it in the top three.

Among the comments from this year’s respondents are: • “As inflation rises, consumers cut back on everything.”

• “Consumers are buying less and buying down to less quality products.”

• “Consumers are moving to value and that means different things.”

Other concerns bubbling to the top are regulation, increasing operational costs, labor turnover and hiring, and investments in foodservice. These round out the top six issues that suppliers and distributors believe will most impact their business in 2024.

As for new opportunities, some respondents are eager to get their products into more stores as their convenience retailer partners grow their networks and move into new markets. “We have business with some chains that are going to expand. This automatically gets our product into new stores,” one respondent noted.

Other suppliers and distributors are excited about new products they plan to launch in 2024. As one commented: “You have to have new items to show. Innovation is important.” CSN

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TECHNOLOGY

THE TOP TECHNOLOGIES TO WATCH IN 2024 These innovations are poised to transform the convenience store business this year

Artificial Intelligence Expect 2024 to be all about the rise of artificial intelligence (AI), according to Kristin Lynch, senior director of the Paytronix Strategy & Analytics Team. Driven by AI and machine learning, sophisticated brands are already segmenting audiences and creating targeted offers based on specific behavior patterns. Additionally, generative AI tools such as ChatGPT have the potential to completely transform businesses, Lynch noted. For instance, generative AI can automate the process of reviewing and responding to guest feedback; generate copy for menu item descriptions; or quickly summarize and categorize raw information, providing actionable summaries to store management. “Beyond 2024, AI will become a part of nearly every digital tool on the market, so learning how to use it today can propel people into the future,” she said.

OperationsFocused Technologies Technology’s growing role in operational excellence will be a key trend that will heavily impact the convenience industry in 2024, according to PDI Technologies.

Citing evolving labor challenges, the solutions provider predicts that forward-looking operators will invest in technologies that reduce complexity and make their processes — and their employees — smarter, faster and more efficient. Convenience retailers should invest in technologies that integrate easily with their existing systems, PDI advised, highlighting the need to leverage open architectures that improve technology integration. This will lead to a more connected convenience ecosystem and make it easier for operators to adapt faster.

Retail Media Networks RMNs, for short, have continued to grow over the past couple of years, but there is still significant untapped potential in this space. “The innovative advertising platform is likely to take on even greater importance in 2024,” according to Placer.ai, a provider of location analytics and foot traffic data.

The company points to consumer electronics retailer Best Buy and its Best Buy Ads RMN as an example of a retailer successfully experimenting with new ways of leveraging its digital and physical assets for advertisement partnerships. Through a recently launched self-service campaign platform, Best Buy Ads now allows brands and agencies to purchase, plan, view and manage campaigns while tracking results in near-real time. Layering in demographic or psychographic datasets reveals key differences in the preferences of shoppers by region.

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FEATURE

CRIME SPREE

Employee preparedness and technology can play vital roles in mitigating crime

By Danielle Romano CONVENIENCE STORE CHAIN Stewart’s Shops

recently closed an Albany, N.Y., store following a surge in theft, robberies, and verbal and physical assaults, which created an unsafe environment for customers and employees, and an unsustainable business environment.

“We pride ourselves on being part of the fabric of the communities we serve, and we worked closely with Albany Police and City of Albany officials in attempt to resolve concerns at our Manning Boulevard shop. The safety of our partners and loyal customers remains an issue at this location,” Stewart’s Shops President Gary Dake said in announcing the closure.

This is not an isolated incident. Since 2020, Pennsylvania-based Wawa Inc. has shuttered several convenience stores in the Center City neighborhood of Philadelphia — a decision made following a rise in safety concerns within the city. A Wawa store in Northeast Philadelphia was ransacked by a large group of juveniles, causing thousands of dollars’ worth of damage.

"Despite reducing hours and investing in additional operational measures, continued safety and security challenges and business factors have made it increasingly difficult to remain open in these two locations," the c-store chain explained in October 2022 when it closed stores at 12th and Market streets and 19th and Market streets in Center City.

In the convenience channel today, retail crime, violence and theft are impacting the industry at unprecedented levels. National crime statistics from the U.S. Federal Bureau of Investigation (FBI) showed that robberies alone increased 1.3% across the country in 2022. Looking specifically at the convenience store industry, c-stores and gas stations combined were the site of 13.8% of robberies that year. According to the FBI, 4.5% of all reported violent crime in 2022 took place at a gas station or convenience store.

The National Retail Federation’s “2023 Retail Securing Survey” reported that the average shrink rate for the 2022 fiscal year increased 1.6%, up from 1.4% for the 2021 fiscal year. When applied to NACS’ 2022 “State of the Industry” data, where industry dollar sales were calculated at $906.1 billion, this represented a c-store industry loss of more than $40 million every day.

The Why Behind the Crime Industry experts point to a myriad of factors as to why retail crime has risen in the last few years. By and large, inside shrink tends to rise when economic times are difficult.

“When people are concerned about their economic welfare, they tend to be more interested in taking things out of the store because they see it kind of as being a victimless crime,” noted Roy Strasburger, CEO of StrasGlobal, a privately held retail consulting, operations and management provider, and cofounder of the Vision Group Network. “[Their mentality is] they’re stealing from a big store that makes a lot of money. They think,

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‘I’m going to take some things off the shelf and nobody’s going to notice, or nobody's going to care at the end of the day.’”

But someone does notice. A recent survey of 1,000 U.S. consumers commissioned by Bazaarvoice and conducted by first-party data company Dynata found that 46% of shoppers experienced or witnessed incidents of customer theft while shopping, and 66% experienced or witnessed fewer items in stock due to shrinkage.

This can negatively impact business as theft and shrinkage incidents influence customers’ decisions on where to shop. Survey respondents said they avoid certain stores due to these concerns (20%) and they are more cautious in their choice of stores (24%). Interestingly, nearly half of respondents (46%) think price increases are directly associated with retail shrinkage.

Employee Preparedness In the face of these statistics, convenience store retailers should take a multipronged approach to mitigating potential crime. The best first line of defense is to provide comprehensive training to employees that includes prevention and safety measures, as well as guidance on how to respond if a robbery occurs, Tom Hart, director of business development and marketing for Ready Training Online (RTO), told Convenience Store News. This training should take place early in the onboarding process, ideally in an employee’s first three to five shifts.

“The worst thing you could do with new employees is have them be surprised by an incident that never occurred to them. You would think it'd be second nature to consider a circumstance that can occur working with the public, but it’s not,” he said.

“When people are concerned about their economic welfare, they tend to be more interested in taking things out of the store because they see it kind of as being a victimless crime.”

— Roy Strasburger, StrasGlobal

“People might walk into a convenience store and think, ‘Well, that looks like a really easy job.’ It's not. There's a lot of responsibility you have to take on. You're watching the fuel pumps at the same time as you’re watching the back of the store, all as you’re gauging how old a customer is to purchase an age-restricted product. It can be challenging.”

RTO, a full-service learning management solution, offers an extensive convenience store-focused content library that is comprised of short, engaging performance-based training modules.

“It’s important that critical areas like age-restricted sales of alcohol and tobacco, harassment, safe lifting, robbery prevention and safety overall aren’t being done on the 10th shift an employee is working because it could happen on their first,” Hart cautioned.

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FEATURE

Operational training and keeping an orderly store can deter theft as well, according to Strasburger, who believes that one of the best measures convenience store operators and their store employees can take against shoplifting is ensuring shelves are stocked properly and items are front-faced so that it’s obvious when something is taken off the shelf.

Some other simple measures are keeping windows clean, so nothing obstructs the line of sight to outside the store; making sure displays are where they’re supposed to be and keeping aisles clear; and checking that surveillance cameras are functioning correctly.

The Role of Technology Having the right connectivity and the right network is the lifeline of a convenience store, especially when it comes to theft and crime, noted Carl Udler, senior director of marketing for Hughes, a provider of managed service and networking solutions.

“From transactions to customer experience to employee experience, c-stores need to align their business goals with secure managed broadband and network services, managed Wi-Fi and digital media services. Using technology to support the business —

not for the sake of using technology, but in a way that it fulfills the business requirements to thwart theft — creates a good customer experience and keeps the store safe," he said.

One way to leverage technology and connectivity to mitigate crime or theft is displaying real-time video of customers as they shop. Setting up a camera in a high place can effectively let customers know they’re being watched in a way that doesn’t interfere with their shopping experience. This kind of connectivity gives employees visibility and awareness of what’s going on in the store and the surrounding area. They can be trained to know where the camera screens are and where to keep a close eye on things.

“It can be a very good experience if employees know they’re in a safe environment,” Udler said, pointing out that employees should know the processes that are in place by having proper training on how to do different activities within the store.

“Keeping employees up to date and trained — and having that reinforced through digital signage — shows employees they’re valued and will lead to reduced turnover,” he added. CSN

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TWIC TALK

Creating & Maintaining a Top Workplace for Women Through supportive practices, companies can develop future leaders and attract top talent

By Angela Hanson

IT TAKES more than one supportive leader to turn an average company into one with a truly equitable work environment that provides women with the support and opportunities they need to thrive in their careers. To truly become a top workplace for women, companies need buy-in at multiple levels and must back up their commitment with action.

Three female leaders came together to discuss this topic during a recent webinar entitled “TWIC Talk: The Makings of a Top Workplace for Women,” presented

by Convenience Store News and Altria Group Distribution Co. Talking and listening are a big part of creating a top workplace for women, according to Ericka Ayles, chief financial officer for Fort Worth, Texas-based Yesway, winner of the 2023 Top Women in Convenience (TWIC) Corporate Empowerment Award.

“Here at Yesway, we’ve taken probably a less prescribed approach to women’s empowerment, meaning that we want folks to have good conversation about who’s at the table,” said Ayles, a Woman

of the Year honoree in the 2021 TWIC awards program.

“Oftentimes, you’ll see in many of our meetings, we have folks that are anywhere from entry level to the C-suite.

So, it’s really about giving people an opportunity to learn here, find that mentor and find their place.”

Backing up words with action to create a company culture and atmosphere where people trust that they will be heard without penalty is also a necessity. Altoona, Pa.-based Sheetz Inc. focuses on “psychological safety,” which enables people to share their opinions even if it differs from the opinions or perspectives of others, noted Erin Matosziuk, assistant vice president of talent.

“Our culture is extremely important, and our employee engagement here at Sheetz and our culture is really founded in respect,” said Matosziuk, a 2022 TWIC Rising Star honoree. “[That] involves listening, making sure that women have a voice at the table and really creating that culture of inclusivity where you can bring your whole self to work.”

Advancing Women’s Careers Kelly Bucher, director of technology planning at Ankeny, Iowa-based Casey’s General Stores Inc., pointed out that supporting women in the workplace doesn’t mean supporting them in just one role, or even just one branch of the business.

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looking at the opportunities throughout the organization for our team and giving team members the opportunities to work in areas that they maybe traditionally didn’t think would follow their career path,” she said. “I started in internal audit and today my life is in technology.”

At Casey’s, the 2022 TWIC Corporate Empowerment Award winner, in-store team members have the opportunity to join the company’s Store Support Center in a variety of roles, while team members at the retailer’s distribution centers may seek out jobs in its field operations team.

This provides an opportunity to take one’s existing knowledge and apply it to other areas of the company, Bucher explained.

Casey’s also has resource groups that give team members the opportunity to take on a leadership role in a nonrisk environment. They can grow associated skills, get feedback from their teams and then take what they’ve learned into a leadership role within their career.

Ayles encourages companies to educate supervisors and department heads to make sure they understand the culture they are helping to build, and actively seek out future leaders.

“Go out and find those folks. Let’s identify them and figure out for those specific individuals, what is it that they need to

succeed? Sometimes, it’s just as simple as being told that ‘we think you have something here, we think you’re ready to grow.’ That, sometimes, is just enough confidence booster for somebody to believe in themselves. But really, it’s about us finding that talent,” said Ayles.

Building career development programs that start with the store-level workforce provides a natural opportunity for career progression. Sheetz, though, also makes it a priority to assist the sometimes-overlooked midlevel leaders, according to Matosziuk.

“We have a women’s leadership program that is for our mid-career women leaders who maybe have reached a point where they feel like they’re stalling out in their career,” she said. “And so, it’s really focused around how do they create their personal brand, how do they build their confidence, and having really great critical conversations with peers and leaders across the company. It’s really rooted in a lot of vulnerability, and it’s been extremely successful for us. We have a waiting list of female leaders wanting to get into the program.”

Companies should also consider creating mentorship programs or investing further in ones that already exist, the panelists agreed.

“I think one of the things that makes it challenging is that the c-store environment had previously been very male dominated,” Bucher said, emphasizing the value of “having that sense of community and belonging that you feel like there’s someone in your corner and that you can truly go to them and have conversations, look for guidance and have them guide you along your journey.”

“I am a firm believer in the right balance between leaning in as women and feeling that self-worth; that my career is just important, if not more important than my husband’s career,” Ayles added. “And so, I think sometimes it’s finding that right support for women that are earlier in their career trajectory and showing them that we believe in you. We think that you have a long way to go here.” CSN

THE 2024 CONVENIENCE STORE NEWS TOP WOMEN IN CONVENIENCE PROGRAM IS SPONSORED BY: Presenting Sponsor:

Platinum Sponsors:

Gold Sponsors:

Corporate Empowerment Award Sponsor:

Silver Sponsors:

The Top Women in Convenience program is part of The Convenience Inclusion Initiative, a Convenience Store News platform that champions a modern-day convenience store industry where current and emerging leaders foster an inclusive work culture that celebrates differences, allows team members to bring their whole selves to work, and enables companies to benefit from diversity of thought and background.

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INSIDE THE CONSUMER MIND

Eight Consumer Insights to Guide Your 2024 Strategy From foodservice to loyalty programs, new opportunities abound The new year is an ideal time to take stock of your business, and consider areas for improvement and new growth. Take into account these consumer insights as you formulate your plan of attack for 2024.

The perception of prices being too high at convenience stores is the leading reason shoppers say they do not purchase certain items from the channel. The highest incidences for this are: 65% 64% 61%

Nonedible grocery General merchandise Health & beauty care

Packaged beverages Edible grocery Packaged snacks

60% 59% 54%

Source: Convenience Store News Realities of the Aisle Study

35%

More consumers are integrating their favorite snack products into meals, up 35% over previous years. Once a week, more than half of consumers use snacks as a key ingredient in no-prep dinners.

Source: U.S. Snack Index

More than half of Generation Z grocery shoppers say they always/ frequently choose a place to shop because of its store brands. Additionally, 56% are extremely likely/likely to experiment with store brands to find the best value.

Source: Private Label Manufacturers Association

The top five factors that influence the pump-to-store decision are: 1. Was feeling hungry/thirsty 2. Loyalty program 3. Mobile app promotion 4. Promotional signage 5. Banners/window signs Source: Convenience Store News Realities of the Aisle Study

A nationwide study of millennial and Gen Z consumers that delved into the cohorts' dining perspectives found that 77% say they like convenience stores that have café seating.

Source: Y-Pulse

Convenience store loyalty programs generate the highest increase in check sizes across all restaurant segments, with loyalty member checks 12% higher.

Source: Paytronix Loyalty Report 2023

41%

For of U.S. consumers, affordability is the most important thing when looking for an electric vehicle charging station.

Source: PDI Technologies

A new study on self-checkout stations revealed that 15% of respondents admitted to having purposely taken an item while supposedly scanning and among them, 44% plan to steal items again when using self-checkout.

Source: LendingTree

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