Remaining Relevant

The grocery categories at c-stores benefited from consumers’ pandemic-influenced shopping shifts, but can the momentum last?

By Renée M. Covino

AT THE HEIGHT OF THE PANDEMIC, many consumers who didn’t ordinarily shop at convenience stores got the brilliant idea that they could run in and out and get a few items they desperately needed — such as spray cleaner, a bottle of wine, toilet paper, etc. Fueled by accessibility, c-store grocery shopping became all the rage as customers caught on to the benefits of no lines, reduced human contact, speedy shopping, and in-stock shelves.

It was a time when “convenience stores became less about energy drinks and bags of chips on the go and more about getting the day-to-day essentials,” said Anders McGillis, principal at Ontario, Canada-based Jackman Reinvents, a customer engagement firm that helps organizations reinvent their customer experiences.

It was also a time when consumers everywhere rallied around supporting local. “The early stages of the pandemic exposed weaknesses in supply chains, alerting people to the value of being able to access goods in their local communities,” McGillis told Convenience Store News. “Faced with empty shelves at big-box stores, people turned to alternatives, both in terms of products and stores, to find what they needed.”

In turn, c-stores relied on local suppliers to stay in stock. McGillis pointed to family-owned c-store chain Duchess, based in Heath, Ohio, which he said, “leaned heavily into local products when designing and stocking the shelves of its new flagship store.”

During the pandemic, “community” also became more important than it’s ever been before, noted Mark Landini, creative director at Landini Associates, which recently worked with Batavia, Ill.-based Aldi (operator of supermarkets in 37 states) to launch the first Aldi Corner Store, a local, art-infused, urban-oriented small format developed in Sydney, Australia. “A local store not only feels safer, it is safer,” Landini said.

Becoming “local grocers” during the pandemic, he observed that c-store operators learned to make “informed decisions and put themselves in their customers’ heads.” He offered up a personal example: “I recently bought individual sticks of celery from a local store. They understood I only needed three stalks, so they didn’t attempt to sell me more. By weight, I may have spent more, but it felt good, less wasteful. I’ll be back.”

A Look at the Numbers

According to research firm NCSolutions, in mid-May of this year (around when the Centers for Disease Control and Prevention lifted indoor mask guidelines) through mid-July, dollar sales for edible grocery collectively across channels were 3.4 percent higher compared to the same period in 2019, while sales for nonedible grocery across channels were 2.6 percent higher compared to 2019 levels.

Produce sales during this period were also 3 percent higher than 2019 levels, and meat sales were 1 percent higher. “This demonstrates that increased at-home meal preparation is here to stay,” the research firm concluded.

NCSolutions also pointed out that the growth rate of health-driven categories, such as fruit (up 6 percent over 2019 levels) and vitamins and supplements (up 33 percent), demonstrates a heightened consumer focus on health.

Additionally, cleaning category sales for the period of May 9 through July 17, 2021 were collectively 3 percent higher than 2019 levels. “We are still using more cleaning products than we did pre-pandemic,” the research firm stated.

Looking at the top CPG categories with the highest spend, NCSolutions says those with the greatest staying potential moving into the next phase of the pandemic are:

• Beer (up 17 percent compared to the same period in 2019);

• Liquor (up 21 percent);

• Vitamins and supplements (up 33 percent);

• Isotonic/sports drink beverages (up 17 percent); and

• Frozen entrees (up 11 percent).

“While consumers have gotten more comfortable traveling and gathering this summer, overall grocery spend is still elevated compared to 2019 levels, indicating that consumers are continuing to spend more time and prepare meals at home,” Linda Dupree, CEO of NCSolutions told CSNews. “The CPG categories with the highest growth from 2019 levels reflect continued consumer focus on conviviality, health and convenience as they navigate continued uncertainty with the Delta variant.”

The Next Phase

Convenience stores can stay ahead of grocery trends by understanding the dietary, environmental and social attributes within their current product assortment, as well as their customers’ ever-changing need states, according to Hannah Polk, RD Solutions consultant at Label Insight, a NielsenIQ company. Polk identified some food and beverage trends relevant to the c-store space that are growing significantly in search volume vs. the previous six months: natural, electrolytes, low-calorie, pre-made, adaptogenic, sport, green ingredients, dairy-free, weight loss, and vegan.

In non-edible grocery, consumers are shifting toward cleaner and more sustainable products, Polk said. Within the personal care space, growing attributes include plastic-free, aluminum-free, reef safe, paraphenylenediamine (PPD) free, and ultra-sensitive. Within the household cleaners space, niche attributes that are growing fast include “naturally derived” and “contains essential oils.” The pandemic-driven rise in frozen foods should also be on c-store radars.

A new report from integrated sales and marketing provider Acosta, entitled The Pandemic-Fueled Growth of Frozen Foods, found that produce, pizza, snacks and entrees are the frozen categories purchased more frequently since COVID-19, due to consumers cooking at home more, eating healthier, and adhering to a budget.

Retention Strategies

Convenience stores that increased their grocery sales during the pandemic have a new challenge as the nation tries to get back to normal: retention of these shoppers.

McGillis of Jackman Reinvents said his firm has seen “significant change” in the c-store space, with existing players going beyond the basics. He praised some players for elevating their assortment by adding organic, gourmet and fresh items. “Adding quality food products that consumers want can turn a convenience store into a grocery destination and part of their routine,” he told CSNews.

Rather than arranging the c-store based on product type, he challenges c-stores to group products based on shopper mindsets. “In the same way many grocery stores are set up, consider carving out a dedicated space for health-forward or wellness products, or those that serve a specific diet or nutrition,” McGillis advised.

Unique store design can be a powerful draw, too. With the idea that design has the power to make consumers smile and feel good about where they are shopping, Landini noted that Aldi Corner Store utilizes local art to personalize its store design and help set the brand apart from a typical grocery store experience.

“A supermarket used to be two words: an adjective describing a noun. Delivery and operational systems have compromised this and now it’s become unpersonal and somewhat absent of any joy,” he said. “We believe this can be challenged with design in the convenience channel.”

Along with store design and layout, and paying attention to product trends in the edible and non-edible grocery categories, c-stores can also remain relevant to grocery shoppers beyond the pandemic with some digital marketing ideas.

“Put your business on the map,” urges Devin Schumacher, founder of the digital marketing agency SERP. “With the technological advancements available, consumers rarely visit brick-and-mortar businesses without researching them first. People don’t walk around searching for c-stores; they look them up online.”

With that in mind, he advises c-store operators to create a Google My Business profile and then promote it. This will allow that c-store to pop up in Google search engines, social media recommendations, and even GPS navigation apps.

Location-based businesses like convenience stores should focus their marketing efforts on prospects within their service areas. “Targeting those from a different city will unnecessarily spike your ad spend,” cautioned Schumacher. “Identify where your most frequent

“The early stages of the pandemic exposed weaknesses in supply chains, alerting people to the value of being able to access goods in their local communities.”

— Anders McGillis, Jackman Reinvents

Trending Now

Grocery trends recently identified by research firm NCSolutions (based on sales data from May 9 through July 17, 2021 compared to the same period in 2019) include:

• The popularity of a convenient breakfast —

Sales of shelf-stable convenient breakfast grew 251 percent during the period analyzed; refrigerated quiche grew by 40 percent; refrigerated breakfast entrees and frozen breakfast entrees were both up 32 percent; and frozen breakfast sandwiches grew 30 percent.

• Tremendous growth in pet categories — Pet brushes grew by 51 percent; pet repellent by 50 percent; pet medicine by 49 percent; and pet toys by 36 percent.

• Prep-free beverages in demand — Consumers are gravitating toward convenient beverages that don’t require any prep. Premixed cocktails were up 193 percent, and bottled coffee was up 25 percent.

customers generally come from, then incorporate the locations into your next campaigns.”

He believes partnering with delivery apps such as Postmates is also a must for c-stores in these times. “If there’s anything the recent lockdowns taught us, it’s that many people will avoid leaving the comfort of their homes as much as possible,” he said. CSN