While the pandemic overall has been dismal for many, some consumer habits that have changed and are being witnessed in grocery stores, may also take place in convenience stores.
Consumers, for instance, still want fresh produce readily available, though the quantity and duration are changing, says Brian Numainville, principal at Lake Success, NY-based Retail Feedback Group, a consultancy that designs feedback systems for retailers.
A recent Retail Feedback Group survey found 57 percent of supermarket shoppers keep one week of produce on hand, yet 39 percent of shoppers, compared to 25 percent pre-pandemic, are keeping more fresh produce on hand, with enough for two to four weeks.
“It is likely that similar purchasing behavior translates over to convenience stores as it relates to fresh produce,” he says.
“Plus, far more people are cooking at home, which has resulted in increased fresh produce sales. For the foreseeable future, it is likely this trend will remain similar, but the verdict is out longer term, post-pandemic.”
Climbing sales
Prior to the pandemic, fresh produce sales in convenience stores totaled about $242 million per year, according to Jeff Lenard, vice president of strategic industry initiatives at the National Association of Convenience Stores.
“That’s a pretty significant number compared to where the convenience store market was about a decade ago, when it was zero,” he says.
Although this number is dwarfed by the $61 billion in produce sold at grocery and big box stores annually, it signifies new opportunities for convenience store operators, as well as growers and distributors.
The Association also reports that C-stores experienced their 16th consecutive year of record in-store sales in 2018, with total sales rising 8.9 percent to $654.3 billion.
Lenard says consumer habits, especially among millennials, are gradually changing and driving demand. “Consumer preferences have changed, as well as the channels that used to be very clearly defined,” he points out, adding that people now tend to shop according to their needs rather than where they had planned to shop.
In the past two decades, growth among large North American grocery chains has been just 2 percent, according to a report by McKinsey & Company, which anticipates that by 2026, $200 to $700 billion in grocery sales could move toward nontraditional channels such as convenience stores.
This is an excerpt from the cover story of the November/December issue of Produce Blueprints Magazine. Click here to read the full feature.
