BP Takes Full Ownership of Thorntons

Convenience Channel’s Supply Challenges Could Last Throughout 2021

Only about a quarter of retailers and suppliers believe the situation will improve in the second half of this year

SUPPLY CHAIN PRODUCT procurement was a major challenge for convenience stores and their supplier partners during the second quarter of 2021, and the struggle is expected to continue through the remainder of this year.

According to two new surveys from industry trade association NACS, two in five convenience retailers (39 percent) said there were “significant” levels of disruption across the supply chain during the second quarter of 2021, with 86 percent reporting that at least 10 percent of their orders were disrupted.

During Q2, beverages in particular were a challenge for convenience retailers, who reported supply disruptions to packaged beverages (72 percent) and beer (67 percent).

Additionally, two in five suppliers (38 percent) said they faced significant levels of disruption for the materials necessary to create their products.

Supply chain disruptions also extend to equipment, with 79 percent of retailers experiencing delays getting store equipment and hardware deliveries.

Confidence among convenience store retailers and suppliers that improvements are coming is low: only 25 percent of retailers and 27 percent of suppliers are confident that the supply disruptions will improve in the second half of this year.

However, despite the challenges, in-store sales in the convenience channel have rebounded to pre-pandemic levels, according NACS CSX sales data ending April 2021. Another positive to come out of the supply chain disruptions is a heightened level of collaboration between convenience retailers and their suppliers.

The NACS Retailer and Supplier Member Pulse Surveys were conducted in June 2021 by NACS Research. Overall, 56 retailer members, representing a cumulative 1,497 stores, and 83 supplier member companies participated in the surveys.

FAST FACTS

More than 70 percent of consumers aged 18 to 55 are likely to increase how often they order from a store if the retailer’s mobile app is easy to use.

— Mobiquity, Restaurant & Convenience Store Digital Impact Report

Snacking orders for delivery are more popular in 2021, with increases seen for items such as glazed donuts (up 501 percent), sweet tea (up 284 percent), and sour cream and cheddar potato chips (up 112 percent).

— DoorDash, Mid-Year Deep Dish Report

70% 65% Consumers have become constant sippers: 65 percent say they always have a beverage on hand, including 73 percent of millennials and 63 percent of Gen Xers.

— The Hartman Group, Modern Beverage Culture