Convenience stores - the first stop for a pandemic-stricken population. Filled with necessities such as toilet paper, many remain open 24/7 so panicking shoppers can get what they need, when they need it and retreat to the safety of their homes in minutes. During the pandemic, more and more of these stores are accepting online orders and payments for utilities to accommodate their clientele.

The Growth of C-Stores During the Pandemic 

It is little wonder why the convenience store channel grew by 7.7% and outperformed the larger market for the third consecutive quarter. The sharp rise in growth was also due to the increased mobility – consumers were making more frequent trips to stores and also increased their basket sizes by up to 18.4% compared to 2019 when baskets were just $7.34. C-stores also experienced overall increase in visits as they increased their offerings. C-stores that kept popular items in stock also experienced faster turnarounds for them. Additionally, commissary was the only food based category that increased in 2020 as it shot up by 13.3%. 

In-Store Merchandise Stands Strong 

During the pandemic, gaps in the global supply chain became clearly apparent. The rise in demand for essentials added a sense of urgency that was on an unprecedented scale. High demand products had to remain stocked in c-stores. Besides toilet paper, this also included paper products, cleaning supplies and grocery items.

Convenience stores that ensured these items were never out of stock, experienced faster turnovers for them along with strong margins. Moving forward, they may need to add more shelf space for perishable items. However, these products will have to remain in-stock as they are in demand from infrequent visitors as well. 

Other items that can increase a c-store’s profits include tobacco products and alcohol, both which experienced an uptick in demand in 2020. Alcohol, such as beer, experienced growth as bars and restaurants shut down during lockdowns and travel came to a standstill. The demand for larger packs was also responsible for the sales uptick. 

Most consumers relied on c-stores for their frequent dose of flavored malt beverages (FMBs) such as hard seltzers. With premium beer at the FMBs being second in demand amongst consumers as they drive at least one-third of sales.  Similarly, the tobacco or cigarette category saw a boost in consumers as they stock piled products in anticipation of a lockdown. 

There was a shift in purchasing patterns in 2020 and 2021 not only in how products are sold, but also how they are bought. As home deliveries and other contactless options become the need of the hour, retailers who provide them and adjust to changing customer demands, can experience significant profits. 

The Transformation of C-Stores 

During the pandemic, retailers realized that all stores, in one way or another, are convenience stores. They allow consumers to acquire items quickly and conveniently through their channel of preference. Organizations that hunkered down to improve operations this way were eventually rewarded with an increase in sales. Those that didn’t, closed their doors. 

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Traditional convenience stores have transformed at an unprecedented rate as customer needs changed at a rapid pace after Covid-19 took over the globe. Gone are the days when they were just quick pit stops for shoppers in a hurry and who just wanted a quick cup of coffee before work.

Now, a large chunk of the population have no choice but to make their coffees at home and for that, they need ingredients in bulk or they lose out on their daily fix. Plus, shoppers don’t have to get gas on the daily as commuting was no longer necessary. In other words, the pandemic has helped retailers realize that they have way more to offer than they think. 

It has gotten to the point that many c-stores are investing in their own store brands and food products to increase customer loyalty and sales. For example, private labeled edibles saw an increase in sales amounting to an impressive 114.5% in the third quarter. They actually ranked in the top 10 growing convenience store brands. Additionally, these brands also ended up outperforming traditional ones when it came to edible sales in the last two quarters. In fact, the latter decreased by 10% and the former increased by 20.2%.

The fact is that c-stores don’t need a strong brand presence to make their products sell and to differentiate them from other brand offerings. Many provide unique offers that consumers cannot avail at any other store. These brands offer retailers a unique lever that helps them stand out among other stores and ensure that consumers return for years. 

What sets private labels apart from traditional ones is that they can grow across channels and particularly among young shoppers who want to explore new options. As such, c-stores that invest in their own labels have an incredible opportunity to shift towards better products by targeting this market. 

In Conclusion 

The pandemic may be here to stay for at least another year, if not more. Convenience stores that develop and maintain their own private brand program can ride this wave towards a better future especially if they work to differentiate themselves from competitors.

Some, such as 7-Eleven, have already launched their own brand of bottled water which is inexpensive and convenient to purchase. Even private labels that have upgraded to bigger and better offerings ensure they can meet basic budgets of target consumers. That is what sets them apart from larger brands who have had a stranglehold on the consumable market for decades. The introduction of private labels has made them sit up and take notice as well. 

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