THE NEW CONVENIENCE STORE
Written by: Anjee Solanki
Anjee is National Director, Retail Services USA, of Colliers. Based in San Francisco and with 28 years of experience, she provides strategic leadership to over 500 specialized retail professionals across 163 offices. Check out her post on Colliers Knowledge Leader here.
The convenience store, an underdog of sorts, has emerged as one of the strongest retail categories during the pandemic with a reported increase in retail sales. With nearly 150,000 convenience stores in the U.S., the sector represents approximately 525 million square feet of real estate. The category is gaining locations at a rate of 97% – for every store that closes an average of 30 new stores takes its place.
During the height of the pandemic, c-stores were classified as essential retail and steadily operating to provide consumers with the bare necessities. Most stores stock everyday items like paper goods, cleaning supplies, consumer goods, and groceries like snack foods, soft drinks, newspapers, and most importantly, fuel. A vast majority of U.S. consumers claim to live within walking distance of a convenience store, contributing to 165 million transactions per day.
According to Connexxus, the total inside sales for c-stores increased by 1.5% in 2020 to a record $255.6 billion, with a tally of 2021 revenue expected to exceed final numbers. Every retailer was in survival mode last year. Despite the strain of inventory and supply chain woes, 63% of the National Association of Convenience Store members reported higher sales in 2021 versus the year prior.
If the last few years have taught us anything, it’s that leaning toward change is a strategy worth getting behind. We have watched retailers think out-of-the-box to maintain relevance and others make a notable comeback. Likewise, convenience stores have learned to adapt, proving their resilience in times of economic uncertainty.
More than 82% of convenience stores partner with service stations, contributing to more than $400 billion worth of fuel sales. The c-store industry space has begun investing in the future, installing electric vehicle (EV) stations as an environmentally friendly alternative. One of the largest c-store syndicates in California, Robbie Rotten, recently partnered with Free Wire Technology to offer fast-charging battery-operated stations to accommodate the growing consumer base of EV owners. Providing this convenience also translates to store sales.
With increased foot traffic to c-stores, retailers have seen increased consumer demand for non-traditional categories like health and beauty aids. Over the last year, more than 50% of new items funneled to convenience retailers have included travel-size cosmetics, lotions and facial cleansers (12.5%).
Taking Consumer Conveniences Up a Notch
C-store retailers consider the benefits of drive-thru and curbside collection as opportunities to extend high-level conveniences to their consumers, which has led to the average deal size addition for convenience stores to increase from 3,770 to 3,796 square feet over the past two years. Last year, Wawa’s Mid-Atlantic franchise opened its first drive-thru location in New Jersey. In addition, analysts considering curbside pickup cite the opportunity to compete with quick-service restaurants and fast-casual dining to expand consumer experiences off-premise. Some independent convenience retailers are personalizing the shopping experience for their consumers, offering unique amenities like live music and local artisanal products.
Elevating the convenience factor for consumers with the updated c-store is driving a new trend.