Study: Close Look at Convenience Stores

K I N G R E TA I L S O L U T I O N S CLOSE LOOK

CONVENIENCE STORES

WHAT SHOPPERS APPRECIATE MOST I N C - S T O R E S , W H A T T H E Y D O N ’ T, A N D WHAT RETAILERS CAN LEARN FROM THE TOP-RATED CONVENIENCE EXPERIENCES IN OVER 20 U.S. MARKETS.

In Winter 2015, retail design firm King Retail Solutions (“KRS�) identified and surveyed 40 top rated convenience stores/chains in 22 cities from 4 distinct regions (West, Midwest, South, Northeast) around the country. The 550 most recent Yelp! reviews (~140 from each region) were analyzed. Any pros and cons mentioned were identified and catalogued. This document represents the results of that analysis.

W H AT S H O P P E R S A P P R E C I AT E M O S T I N T H E I R FAV O R I T E C - S T O R E S thumbs up...

but...

43% 35% 33% 23% 21% 19% 9% 8%

7% 7%

7% 6% 6%

4%

3%

love the friendly staff love the fresh prepared food love the low prices love that it’s clean love all the beverage options love the food/snack options love that it’s fast love that the shelves are well- stocked love the store’s rewards card love that it’s open 24 hours

said the staff is unfriendly said it’s expensive said they have to wait too long in lines or for slow service wished there were more options complained about broken equipment 2% said the food quality is poor 2% said shelves weren’t stocked

DRILLING DOWN BY GENDER AND

BY REGION OF THE U.S. ( % I N D I C AT E S P E R C E N TA G E W H O P R A I S E D T H E FA C T O R )

MEN GAVE THE MOST PRAISE FOR C-STORES WITH: friendly staff (36%), low prices (36%), and fresh food (34%)

WOMEN GAVE THE MOST PRAISE FOR C-STORES WITH: friendly staff (50%), fresh food (37%), and low prices (31%)

W

WESTERNERS GAVE THE MOST PRAISE FOR:

MW

MIDWESTERNERS GAVE THE MOST PRAISE FOR:

S

SOUTHERNERS GAVE THE MOST PRAISE FOR:

NE

NORTHEASTERNERS GAVE THE MOST PRAISE FOR:

friendly staff (54%), low prices (40%), and beverage options (19%)

fresh food (36%), friendly staff (34%), and low prices (34%)

friendly staff (44%), fresh food (40%), and cleanliness (34%)

fresh food (48%), friendly staff (36%), and low prices (28%)

WHY ARE SHOPPERS BUZZING A B O U T T H E I R FAV E C - S T O R E S ?

7-Eleven

friendly (70%)

clean (40%)

low prices (40%)

fresh food (20%)

ampm (BP)

low prices (90%)

clean (25%)

friendly (25%)

fresh food (15%)

Casey’s Gen. Store Chevron Circle K Cumberland Farms Flash Foods

fresh food (75%) low prices (50%) friendly (25% friendly (80%) clean (40%) drink options (35%) friendly (75%) drink options (45%) clean (35%) low prices (75%) friendly (30%) clean (20%) low prices (70%) clean (50%) friendly (50%)

clean (20%) low prices (25%) low prices (20%) fresh food (15%) fresh food (20%)

GetGo by Giant Eagle

low prices (60%) rewards card (60%)

Kwik Trip Mapco QuikTrip Racetrac Sheetz Shell Speedway Sunoco Tedeschi Food Shops Turkey Hill United Dairy Farmers Wawa Valero

friendly (45%)

car wash (40%)

friendly (30%)

low prices (40%) snack options (35%)

clean (35%)

friendly (35%) fresh food (25%) clean (80%) friendly (70%) fresh food (65%) clean (55%) fresh food (70%) low prices (30%) clean (40%) low prices (30%) low prices (50%) rewards card (45%) friendly (60%) clean (45%) open 24 hrs (35%) well-stocked (25%) fresh food (40%) friendly (40%) fresh food (85%) open 24 hrs (25%) fresh food (75%) friendly (30%) fresh food (35%) friendly (35%)

low prices (25%) fast service (25%) drink options (45%) fast service (35%) friendly (45%) low prices (35%) drink options (30%) snack options (25%) open 24 hrs (20%) friendly (15%) friendly (25%) fresh food (15%) fresh food (30%) low prices (30%) low prices (20%) snack options (20%) rewards card (40%) snack options (40%) friendly (15%) low prices (15%) snack options (25%) fast service (20%) low prices (35%) clean (20%)

The above list represents c-store chains on Yelp! with an extensive regional/national presence. In addition to these large chains, we also looked at the highest-rated local retailers, regardless of size, in the “Convenience Store” category in Atlanta, Austin, Boston, Chicago, Cincinnati, Cleveland, Columbus, Dallas, Denver, Des Moines, Hartford, Las Vegas, Madison, Nashville, New Orleans, New York City, Omaha, Philadelphia, Phoenix, San Francisco, Seattle, and Tulsa. Several local operators rose to the top of Yelp! in their markets (here are the ones with 10+ Yelp! reviews)...

Brother’s Food Mart (New Orleans) Chansky’s Market (Boston) Harvest Country Store (Hartford) Intown Market (Atlanta) Jay’s Market (Las Vegas) New College Hill Mkt (S. Francisco) Pronto Food Mart (Austin)

fresh food (90%) friendly (80%) fresh food (90%) friendly (80%) friendly (50%) fresh food (100%) friendly (70%)

open 24 hours (45%) drink options (60%) friendly (60%) drink options (60%) low prices (40%) friendly (50%) low prices (60%)

low prices (15%) snack options (30%) snack options (40%) fresh food (50%) fresh food (20%) low prices (40%) drink options (30%)

C-stores are so much more than gas & fast snacks... In fact, aside

from appreciating a low cost gas offering, what people on Yelp! talked about most when reviewing convenience stores had little to do with fuel or candy bars. Top reviewed c-stores are serving their modern shoppers in a much more robust fashion than c-stores of yore. Today’s top convenience merchants should expect to provide all of the givens that the industry format was built upon: grab-and-go snacks, drinks, fuel, and nicotine. At the same time, they are actively shattering the negative stereotypes that grew up around their former iterations. They’re clean, friendly, price leaders, and they often serve fresh prepared food that people not only are willing to eat, but go out of their way to purchase and rave about to their friends, family, and “followers”.

And in this age of superfree, superfast information sharing, with apps that can guide shoppers to the cheapest gas in a given radius, and with every customer being a potential reviewer (often with accompanying photos), competition between c-store players has never been fiercer, opportunity has never been greater, and the playing field has never been more level than it is today.

Like any retail category, not all convenience operators can or should be the same. Smart retailers are mastering the givens and then specializing in customer offerings that set them above their competition. Down South, this may mean installing an authentic tacqueria with the best salsa verde in town (think Valero in Texas). In the Northeast, this may mean focusing on facilities upkeep and service training (think Sunoco in NYC where clean stores and friendly faces are an oasis).

Today’s leading c-stores are poised to keep raising the bar. Those who only have room to grow are in a great position to survey the local market and determine what’s already dominated and what’s missing... Fresh food? A growler bar? A micro-grocer? A car wash? Or is it simply a nice, clean store with friendly staff? Whatever it is, it seems that where convenience stores make bigger, better offerings available to shoppers, the shoppers sit up and take notice (and make purchases).

Data cannot be the teacher, but it can be the guide. In the case of this study, some assumptions we feel comfortable making might be: –– If more stores had rewards cards, more shoppers would love them. Loyalty cards at c-stores seem to work for the stores that run an organized program –– If more c-stores sold great fresh prepared food, more shoppers would buy fresh prepared food at c-stores. Women mentioned appreciating the fresh food a bit more frequently than men (37% vs 34%) and as females still serve as the primary shopper in the majority of homes, this indicates an opportunity for convenience stores to appeal to women (and men too, of course) purchasing meals-to-go for themselves and their families, providing the quality is there.

–– Regionally it’s worth considering whether different factors rose to the top because of shopper demographic (“Do Southerners simply appreciate cleanliness more?”) or because those regions have a void in their c-store offering that is just waiting to be filled. If this is the case, then c-stores in the West should be looking at adding fresh fare.

And then it’s important to keep in mind that people simply take snacks, beer, fuel, and smokes for granted. Along with four walls and a roof, quick, friendly service, and well-kept facilities, these are the minimum expected when a shopper enters a c-store. Go above and beyond these basics, and you start delighting your customer. And while shoppers don’t always give shout-outs for candy bar selection, they do vent their frustrations when shelves aren’t stocked or floors are dirty.

Mastering the basics, and then creating a niche by dominating contemporary or up-and-coming trends in convenience retail is the earmark of leading c-stores of today and will continue to distinguish the leaders as we take convenience (and what it means) into the future.

HOW TO RUN A C-STORE S H O P P E R S C A N ’ T L I V E W I T H O U T. . . ( O R AT L E A S T O N E T H E Y W R I T E R AV E R E V I E W S A B O U T )

- Employ genuinely friendly staff and train them to be consistenly awesome and efficient - Offer a fresh food menu that tastes great - Keep overall prices reasonable and be the “go to” price leader for at least one “must have” product (ex. coffee, gas, or milk) - Keep it clean and well-stocked with snacks and household staples - Stock a variety of beverage options that appeal to your local shopper, such as craft beer, wine, organics, energy, or other specialty choices - Implement a rewards program for loyal shoppers - Stay open late or round-the-clock so you can always be there for your customer

“Always sparkling clean and well-stocked... Employees greet customers as they come in the door and are always helpful and efficient.”

- Jackie S. Tulsa, OK RE: QuikTrip

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