On Shaky Ground

By: Danielle Romano | April 22, 2024

The health of the convenience store shopper appears to be wavering.

During the National Retail Federation’s (NRF) recent 2024 “State of Retail & the Consumer” discussion on the health of the American consumer and the retail industry, NRF Chief Economist Jack Kleinhenz said: “The economy is primarily supported by consumers who have shown much greater resilience than expected, and it’s hard to be bearish on the consumer. The question for 2024 ultimately is: Will consumer spending maintain its resilience?”

Consumers appear to have a favorable outlook, which should support their willingness to spend. Yet, many are feeling a pinch from tighter credit and inflation, NRF noted while announcing its forecast that U.S. retail sales this year will increase between 2.5% and 3.5%. 

The latest meeting of Convenience Store News‘ Editorial Advisory Board likewise included a conversation about the health of the c-store shopper. Board members reported that they are seeing a slowdown in foot traffic, which they believe is related to macroeconomic conditions. Additionally, among the customers who are coming into their stores, more shoppers are trading down and more shoppers are paying for their purchases with credit — both signs that things are getting tighter. “I don’t think it’s reached a tipping point yet,” one board member remarked.

In this climate, it is imperative that convenience store retailers offer consumers the products they want at the prices they’re willing to pay in the manner they want to shop. 

The findings of our 15th annual Realities of the Aisle Study revealed that the percentage of shoppers who say they visit a c-store at least once a week declined 4 points compared to a year ago. The percentage who say they visit the same convenience brand each trip also dropped 7 points year over year, while the percentage who say they shop at the same c-store all the time fell 10 points. This also coincides with a rise in shoppers citing more basic factors such as affordable prices and in-stock products as their top requirements for a positive experience.

In this climate, it is also imperative that convenience store retailers focus on improving their forecourt-to-store conversion rate, getting the most out of every person who comes to their site. Check out our April issue feature for advice on how to draw motorists inside. 

Only 32% of the c-store shoppers surveyed for our Realities of the Aisle Study said they always or almost always purchase in-store items when stopping for fuel. That means nearly seven in 10 do not. Develop a strategic plan today to seize this significant opportunity. 

Source: Convenience Store News

Three Factors Drove Consumer Spending in March

By: Danielle Romano | April 22, 2024

However, rising prices for services remains a problem.

WASHINGTON, D.C. — Consumer spending was on the rise in March as an early spring holiday, tax refunds and job growth put more money in shoppers’ wallets.

Citing data released by the U.S. Census Bureau, National Retail Federation (NRF) Chief Economist Jack Kleinhenz said the numbers confirm that consumer spending remains steady, underscoring a resilient consumer despite inflationary pressure.

“While sales were mixed, several factors supported retail sales including an early Easter holiday, slightly larger 2023 tax refunds and stronger payroll growth over the last three months,” he said. “Nonetheless, the increasing share of consumer spending going to services as prices for services rise remains a stubborn problem because it leaves less household income available to spend on retail goods.”

Overall retail sales were up 0.7% in March, seasonally adjusted from February, and up 4% unadjusted year over year, according to the Census Bureau. That compared with increases of 0.9% month over month and 2.1% year over year in February.

Based on the Census data but excluding automobile dealers, gasoline stations and restaurants, March’s core retail sales as defined by NRF were up 1.1% seasonally adjusted from February and up 3.2% unadjusted year over year. Core retail sales were up 3.9% unadjusted year over year on a three-month moving average as of March.

[Read more: Consumers Experiencing Credit Card Fee Fatigue]

On April 12, the CNBC/NRF Retail Monitor, powered by Affinity Solutions, reported that March sales grew at a steady pace. The Retail Monitor found core March retail sales were up 0.23% seasonally adjusted from February and up 2.92% unadjusted year over year. That compared with increases of 0.27% month over month and 2.99% year over year in February.

NRF provides data on retail sales each month and also forecasts annual retail sales and spending for key periods such as the holiday season each year.

The Washington, D.C.-based organization advocates for the people, brands, policies and ideas that help retail succeed. 

Source: Convenience Store News

Chocolate & Candy Sales Reach All-Time High

By: Danielle Romano | March 25, 2024

U.S. confectionery sales are expected to hit $61 billion by 2028.

WASHINGTON, D.C. — Despite unpredictable economic shifts, consumers are still holding strong to their connection to chocolate and candy.

Confectionery sales hit $48 billion in 2023, a number largely driven by inflation, according to the “2024 State of Treating” report published by the National Confectioners Association (NCA). Last year, more than 98% of American consumers purchased chocolate, candy, gum and mints.

The report projects that U.S. confectionery sales will reach $61 billion by 2028.

“Our new research shows that, even when faced with unpredictable environmental shifts and changes, consumers feel a strong connection to chocolate and candy — and they embrace classic favorites and innovative novelties with an emotional drive that keeps the category fresh and vibrant,” said John Downs, president and CEO of NCA. “Consumers seek out chocolate and candy to help enhance holiday seasons, family celebrations and those important ‘treat yourself’ moments.”

NCA 2024 State of Treating_Category Performance

The fifth annual “State of Treating” reflects on confectionery shopping and treating trends in 2023 — a year defined by inflation. Leveraging the long trendlines, the report documents what changed and why in confectionery shoppers’ perceptions, attitudes and behaviors to help uncover category growth opportunities in 2024 and beyond.

[Read more: Consumers’ Definition of Value Expands Beyond Price]

Other findings of the report include:

  • Shopping: The marketplace prompted 41% of consumers to make changes to their confectionery purchases over the past year. Sales promotions took on a key role as fewer consumers perceive chocolate and candy to be as affordable as it has been traditionally.
  • Purchase decisions: Price now dominates the confectionery purchase decision across all generations. Overall, brand is the second-most important factor when purchasing confectionery.
  • Permissibility: Confectionery enjoys very high permissibility with 86% believing it is perfectly fine to treat.
  • Reasons to splurge: Nine in 10 shoppers can be persuaded to spend a little more on chocolate or candy than planned.
  • Seasonality: More than eight in 10 Americans celebrate Valentine’s Day, Easter, Halloween and the winter holidays. Together, these holidays account for 64% of total confectionery sales.

The “State of Treating” combines proprietary NCA consumer survey findings with syndicated data provided by Circana and Euromonitor. Shopper insights were collected using an online survey conducted in December 2023 among a national sample of 1,556 consumers between the ages of 18 and 75. The survey findings are overlaid with Circana retail measurement and household panel data. Future market predictions are provided by Euromonitor. The study was conducted by 210 Analytics.

Headquartered in Washington, D.C., the NCA is a leading trade organization for the $48 billion U.S. confectionery industry.

Source: Convenience Store News

Consumers Identify the Foundation of a Good Pizza

By: Angela Hanson | March 22, 2024

Crust quality plays a significant role in the decision to purchase or not, according to new survey data.

MINNEAPOLIS — Pizza fans across the country agree: crust is the make-or-break pizza component. Ninety-one percent of Americans say that a bad crust can ruin a pizza, according to the results of a nationwide survey commissioned by General Mills Foodservice and conducted by The Harris Poll.

Additionally, 80% say they would pay more for a pizza with a high-quality crust.

“The survey demonstrates that the crust is truly the heart of the pizza,” said Paras Bansal, who analyzes consumer insights for General Mills Foodservice. “We learned that consumers are passionate about pizza crust, which indicates pizzerias and operators want to make sure they get it right to please their pizza-loving patrons and be more profitable with pizza.”

[Read more: Alta Convenience Adds Pizza Program at 21 Stores]

The survey also found that consumers are more likely (87%) to eat pizza when dining out or ordering takeout if they know the pizza has a good crust. The top attributes of their favorite crust include having just the right taste/flavor (58%), thickness (51%), texture (38%), golden brown color (35%) and char (12%).

Other key findings include:

  • Nearly two-thirds of Americans (65%) named pizza crust as the top reason they like their favorite pizza place;
  • 72% of Americans would be more interested in eating pizza at breakfast or lunch if they knew it had a good crust;
  • The most preferred texture of good pizza crust is dual texture-crispy on the outside, airy on the inside (33%), followed by crispy (32%), thin (29%), thick (26%) and airy/chewy (15%);
  • Hand-tossed/traditional is the top-listed style of pizza crust when ordering/eating away from home (34%); and
  • New York-style is the most popular regional-style pizza (listed by 36%), followed by Chicago deep-dish style (20%).

“A good crust is the heart of any great pizza, yet it can be a challenge for many pizza makers to get consistent and quality results,” said Tom Santos, senior technical training specialist at General Mills Foodservice. He also serves on the Doughminators team and specializes in helping pizza makers find the best crust solution to meet their needs. “We are here to help operators find the flour, dough or crust to give them peace of mind and help them serve pizza they can be proud of every time.”

Minneapolis-based General Mills Foodservice serves the foodservice and bakery industries. Its brand portfolio includes Big G Cereals, Yoplait, Nature Valley, Gold Medal, Pillsbury, Chex Mix, Bugles, Gardetto’s, Annie’s and TNT Crust.

Source: Convenience Store News

Inside the Consumer Mind: Value Seekers

March 22, 2024

A positive c-store shopping experience increasinglymeans reasonable prices

U.S. households continue to spend, but challenged with less disposable income, consumers are more cognizant of product prices these days and looking for a good value. According to the 2024 Convenience Store News Realities of the Aisle Study, which surveyed 1,500 consumers who shop a c-store at least once a month, 59% of participants said the No. 1 factor that defines “a positive shopping experience” for them is the price of products — up 5 points from a year ago. The survey, fielded at the beginning of this year, also revealed:

  • Compared to one year ago, 65% of convenience store shoppers say they are noticing price increases more now when they shop the channel.
  • Only 6% say they are noticing fewer price increases when they shop at c-stores, while 23% report that they are seeing the same amount as last year.


  • 38% of shoppers said they left without making a purchase
  • 32% said they purchased a different product type instead
  • 30% said they purchased the product anyway because they needed it
  • 27% said they went to a different store instead

Generation Z shoppers (aged 18 to 26) and millennial shoppers (aged 27 to 42) are the most likely to say they purchased a different product type instead — 46% for Gen Z and 40% for millennials — or they purchased the product anyway because they needed it — 43% for Gen Z and 37% for millennials.

When shoppers were asked which store brand products they bought at c-stores in the past month, packaged snacks (25%), hot beverages (25%) and prepared food (23%) topped the list.

Nonstore brand purchasers said, if available at convenience stores, they would be most interested in purchasing private label options in the following categories:
• Health and beauty care (37%)
• Nonedible grocery (35%)
• Cold/frozen dispensed beverages (33%)
• Packaged snacks (32%)
• Hot dispensed beverages (32%)
• Edible grocery (32%)

Source: Convenience Store News

Consumers’ Definition of Value Expands Beyond Price

By: Danielle Romano | March 8, 2024

Retailers can inspire experimentation across dayparts through snacks and food.

CHICAGO — New data sheds light on the evolving landscape of the food industry by highlighting consumers’ ever-changing concept of “value.”

Joint research from Circana, FMI – The Food Industry Association and management consulting firm Oliver Wyman entitled “Finding Growth for Food & Beverage at Retail: Winning Eating Occasions throughout the Day” demonstrates how consumers are increasingly drawn to food and beverage options that promote well-being, offer competitive pricing, and provide convenience in purchasing and preparation.

“The research showcases how food and beverages that promote well-being, those that are competitively priced and products that are decidedly convenient to buy and prepare, will ultimately earn shoppers’ allegiance,” said Mark Baum, senior vice president of industry relations and chief collaboration officer, FMI. “We are witnessing shifts toward foodservice spending, a rise in digitization and return-to-office protocols that all provide food and beverage retail with opportunities to improve how they deliver on what matters most to consumers.”

[Read more: Snack, Meal or Both?]

For example, the research revealed that while 87% of morning eating occasions and 76% of midday eating occasions are sourced from home, there is an increasing trend toward foodservice across many consumer segments, particularly Generation Z and Generation X, reflecting growing demand for convenience.

“Time is of the essence for Americans, especially when it comes to their morning routines. Sixty-five percent of morning eating occasions are prepared in less than five minutes, and we see opportunities for new appliances that give consumers quick solutions, with the microwave gaining the most ground since 2020,” said Sally Lyons Wyatt, global executive vice president and chief advisor, consumer goods and foodservice insights, Circana.

Other insights include:

  • In the evening, lower-prep, quick-cleanup and fewer ingredients are growing trends. “Dinner represents the largest financial upside for retailers winning at home relative to other eating occasions throughout the day. To increase their share of evening consumption, retailers and suppliers must offer solutions that are not only sufficiently convenient but also offer the varieties of cuisines and textures found in a foodservice offering,” Randall Sargent, partner at Oliver Wyman, pointed out.

  • Retailers can share a compelling story for how these solutions meet the value-for-money and health preferences for busy consumers to prepare their midday food and beverages. “The insights demonstrate how our industry can be successful by capitalizing on consumers’ shifting habits, especially when companies consider dayparts, such as snacks, to inspire experimentation and create new memories through food,” said Steve Markenson, FM vice president, research & insights.

  • Retailers can cater to newfound eating experiences among consumers. Operators should explore new channels to compete for untapped potential in places primarily occupied by food distributors.

To download “Finding Growth for Food & Beverage at Retail: Winning Eating Occasions throughout the Day,” click here.

Based in Arlington, Va., FMI works with and on behalf of the entire industry to advance a safer, healthier and more efficient consumer food supply chain. 

Headquartered in Chicago, Circana advises on the complexity of consumer behavior through technology, advanced analytics and cross-industry data to unlock business growth.

Source: Convenience Store News

Inflation Will Continue to Play Pivotal Role in 2024

By: Amanda Koprowski | March 6, 2024

All eyes are on the consumer as the Federal Reserve considers moves around interest rates.

WASHINGTON, D.C. — In its analysis of trends to watch out for in 2024, the National Retail Federation (NRF) has predicted inflation, along with the Federal Reserve’s efforts to bring it under control, will continue to play a major role in the economy this year. 

[Read more: Valentine’s Day Spending Reaches New Heights]

“With the U.S. economy’s strength resting heavily on household spending, all eyes are on the consumer — and how consumers will respond [in] the next few months to the Federal Reserve’s ongoing efforts to tame inflation,” said Jack Kleinhenz, NRF chief economist. “While inflation is down from its peak, it has slowed less than expected and is still an important problem that remains to be solved.”

Kleinhenz’s comments came in the March issue of NRF’s Monthly Economic Review, which said January’s 3.1% year-over-year inflation as measured by the Consumer Price Index (CPI) was an improvement from December’s 3.4% but “still a considerable distance” from the Fed’s target of 2%. However, the Personal Consumption Expenditures Price Index showed inflation at 2.4% in January, a fall from 2.6% in December.

Kleinhenz said a key issue is the difference between prices for services, which were up 4.9% year over year in January, and commodity-based prices (including retail goods), which were up only 0.1% for the same period, according to the CPI. As of the fourth quarter of 2023, 65% of consumer spending was on services, which was short of 68% in the fourth quarter of 2019 but up from the pandemic low of 63% in April 2021.

Overall consumer spending dipped in January due to a decline in spending on goods and lower prices, even though there was a rise in services spending and prices for services were elevated.

In January, the Fed also left interest rates unchanged for the fourth straight time over about seven months. The central bank’s Federal Open Markets Committee (FOMC) said its employment and inflation goals “are moving into better balance” but also that it would not be appropriate to reduce rates until it has gained greater confidence that inflation is moving sustainably toward 2%.

Kleinhenz said he expects the Fed to hold rates steady in March but then cut rates by a quarter of a percentage point either at the FOMC’s meeting at the end of April or at its June meeting. 

[Read more: Five Takeaways From NRF 2024: Retail’s Big Show]

Washington, D.C.-based NRF empowers the industry that powers the economy. Retail is the nation’s largest private-sector employer, contributing $3.9 trillion to annual gross domestic product and supporting one in four U.S. jobs — 52 million working Americans.

Source: Convenience Store News

Private Label Brands Reached Record Dollar Sales in 2023 

By: Amanda Koprowski | March 5, 2024

PLMA: One of every five grocery products sold in the U.S. carries the retailer’s name or own brand and was supplied by a store brand manufacturer.

NEW YORK — Sales of store brands increased $10.1 billion to a record $236.3 billion last year compared to 2022, according to a new report from the Private Label Manufacturers Association (PLMA).

The “2024 Private Label Report,” released in conjunction with Circana, found a 4.7% rise in dollar sales for private labels from all outlets between Jan. 1 and Dec. 31, 2023 vs. the same period the prior year. Store brands bested national brands, which grew 3.4% in dollar sales.

[Read more: Five Private Label Trends Spotted at PLMA’s 2023 Expo]

Compared to 2019, annual store brand dollar sales in 2023 increased by $60.2 billion, a 34% gain. Store brand dollar share also rose 1.2 points to a record 18.9%. During the four-year period, store brand unit sales were ahead by $500 million and unit share improved 0.8 points to 20.7%, also a new high, according to the report.

The PLMA believes the results show that today’s consumers are directing more of their budgets to private label items, the association stated.

“Overall, the industry is healthier than ever,” said PLMA President Peggy Davies. “One of every five food or nonfood grocery products sold across the United States carries the retailer’s name or own brand and was supplied by a store brand manufacturer.”

According to the report, nine out of 10 departments that Circana tracks continued to show growth over the year before. The sole outlier was tobacco, which continued to trend downward overall.

[Read more: PLMA Recognizes Yesway for Private Label Innovation]

Departments with the highest dollar sales growth over 2022 were:

  • Beauty, up 10.5% 
  • General food, up 10%
  • Beverages, up 8.9%
  • Home care, up 8.7%
  • Frozen, up 4.4%
  • General merchandise, up 4%

The annual report analyzes store brand and national brand sales in unit and dollar sales in key categories. It is based on sales figures from the PLMA/Circana Unify+ market data portal.

The full report may be found here.

Founded in 1979, the Private Label Manufacturers Association is a nonprofit trade organization which promotes the store brands industry. With executive offices in New York and international council offices in Amsterdam, the PLMA currently represents more than 4,500 member companies worldwide and provides its members with annual conferences, executive education  programs and professional development opportunities. 

Source: Convenience Store News

McLane Brings Emerging Brands to Online Marketplace

By: Amanda Koprowski | March 1, 2024

The line will include local, small-batch and new-to-market products, including those not in distribution.

TEMPLE, Texas — McLane Co. Inc. launched a new expanded offering for convenience store retailers, Emerging Brands. 

The line was designed to allow retailers to diversify their product selection with new, innovative and trending brands. 

[Read more: 7-Eleven Franchisees Select McLane as Service Provider of the Year]

“Consumers today are more conscious than ever about their choices and have come to expect a personalized shopping experience,” said Vito Maurici, McLane’s customer experience officer. “With its flexible model, Emerging Brands provides retailers of any size a best in class, innovative platform to capitalize on the increasing demand for unique products and to tailor their offerings to what their consumers are looking for.”

Emerging Brands can potentially bring differentiation and variety to retailers by expanding access to local, new-to-market, small-batch and values-driven products, including those not in distribution. The line will allow retailers to vary their offerings with trending products in popular categories like alternative snacks, salty and sweet snacks, and packaged sweets and candy.

The line also enables retailers to test new products quickly with low order minimums, rapid processing and warehouse-less drop, utilizing the same order and payment methods they use to buy other products from McLane’s warehouses. 

The new digital marketplace was created in partnership with Mable and lets retailers search, filter and sort products by location, dietary preference, brand values, category and more. Customers can also add products to their favorites and receive personalized order recommendations based on their collections.

[Read more: McLane Explores Long-Term Solutions Following Pandemic-Driven Challenges]

More information on Emerging Brands and other convenience store solutions from McLane is available here

Founded in 1894, Temple-based McLane distributes beverages, food and other consumer packaged goods to convenience stores, mass merchants and chain restaurants throughout the United States. It has more than 80 distribution centers across the country and employs more than 25,000 teammates. McLane is a wholly owned subsidiary of Berkshire Hathaway Inc.

Source: Convenience Store News

Snack, Meal or Both? 

February 26, 2024

The once-clear line between snack time and mealtime will blur in 2024 

According to Merriam-Webster, a meal is defined as an act or the time of eating a portion of food to satisfy appetite. A snack is defined as a light meal or food eaten between regular meals. In 2024, the once-clear line between snacks and meals will blur as Americans struggle with a lack of time to prepare, eat and enjoy meals, according to the fifth annual “U.S. Snack Index” released by PepsiCo Inc. divisions Frito-Lay North America and The Quaker Oats Co. The national survey of 2,000 U.S. adults aged 18 and older also found that: 

  • The average American has only 52 minutes per day to prepare, eat and enjoy their meals. One-third of consumers say they have even less time — under 30 minutes. 

  • More Americans are integrating their favorite snack foods into meals, up 35% over previous years. Men are just as likely as women to use snacks in meals — 92% vs. 93%, respectively. 

  • More than half of consumers report proudly using snacks as a key ingredient in no-prep dinners at least once a week, while more than a third seize this opportunity multiple times a week

  • When considering snacks at the store, consumers cite protein as the most important nutritional attribute they seek (55%). This is especially true among those most time-crunched. 

  • Energy is also a top-rated attribute as 60% of consumers look to their favorite snack products to provide energy. Generationally, millennials (72%) are by far the group most likely to be looking for a pick-me-up, followed by Generation Z (62%). 

  • Across all generations, nearly three-quarters of Americans (74%) refuse to sacrifice taste when selecting their snacks. Baby boomers are the most unwilling to compromise on taste (84%), followed by Generation X (75%). 

  • 2024 is expected to see the continued rise of the self-proclaimed “Snack Savant,” who embraces all things food, adventure and community. Millennials (83%) and Gen Z (82%) embrace this title most of all — and the majority of Snack Savants are city dwellers (77%). 

Source: Convenience Store News

Self-Checkout Adoption Is On the Rise

By: Amanda Koprowski | Associate Editor | February 26, 2024

Thirty-seven percent of convenience store and fuel retailers are currently piloting or scaling deployments.

ATLANTA — More retail executives are embracing self-checkout (SCO) capabilities, whether they already have kiosks in place or plan to install stations in the future.

According to a new survey conducted on behalf of NCR Voyix Corp. by Incisiv entitled “The State of the Industry: Self-Checkout in Convenience & Fuel and Food & Grocery Retail,” revealed 43% of retailers have mature SCO networks, while an additional 17% are planning to further scale up their self-checkout deployments.

[Read more: Kwik Trip to Install Self-Checkout at New C-stores]

SCO adoption rates currently vary by retail vertical; about half (53%) of retailers in the food and grocery segment have mature SCO adoption vs. 34% of retailers in convenience and fuel industry. However, convenience and fuel retailers plan to catch up quickly, with 37% currently piloting or scaling SCO deployments, according to the report.

Executives who have already implemented SCO reported benefits for both retailers and shoppers, such as:

  • 79% reported a better customer experience
  • 75% believe the SCO stations enhanced store layout and space utilization
  • 58% reported lower labor costs
  • 51% reported improvements in operational efficiency

“Self-checkout is now essential for retailers aiming to provide a better and more convenient checkout, while also freeing up employees for other engaging and critical tasks like helping customers in the aisles or keeping inventory stocked,” said Eric Schoch, executive vice president and president, retail at NCR Voyix.

[Read more: New Survey Sheds Light on Self-Checkout & Theft]

Polled executives also commented on common technology woes:

  • Less than half (48%) reported it taking more than a month to roll out a standard bug fix or update at SCO terminals.
  • Nearly all (94%) retailers encounter challenges implementing simultaneous software updates across their store network.

Headquartered in Atlanta, NCR Voyix provides digital commerce solutions to the retail, restaurant and digital banking industries through comprehensive, platform-led SaaS and services capabilities. It employs approximately 16,000 staff members in 35 countries.

Source: Convenience Store News

Convenience Store Retailers Expect Beverage Sales to Tick Up in 2024

By: Melissa Kress | Executive Editor | February 9, 2024

However, the “Beverage Bytes” fourth quarter 2023 survey finds growing pessimism around hard seltzer.

NEW YORK — Beverage sales in the convenience store channel closed out 2023 on a strong note, leaving retailers feeling optimistic about the category. 

According to the Goldman Sachs “Beverage Bytes” survey for the fourth quarter of 2023, beverage sales accelerated sequentially — up 4.8% in the fourth quarter vs 4.4% in the third quarter — and retailers continue to expect healthy 4.5% growth in 2024.

The “Beverage Bytes” survey represents approximately 40,000 retail locations, or roughly 27% of the c-store channel.

While retailers were positive about the energy drink category, according to the survey, several retailers remain concerned about broader economic pressures and inflation weighing on the category, said Bonnie Herzog, Goldman Sachs senior financial analyst.

Other notable takeaways from the Q4 survey include: 

  • The pricing environment remains healthy/rational with all retailers expecting incremental pricing by both nonalcoholic beverage manufacturers and brewers this year.
  • Fewer retailers are seeing promotional activity picking up in the nonalcoholic space, but the majority of retailers (65%) expect manufacturers will have to start to promote more to prevent volume erosion.
  • Alcoholic beverage promotional activity was broadly stable in the last few months, while most retailers believe that brewers can continue to push through more pricing this year. 
  • Retailers are largely upbeat on Celsius Holdings Inc.’s new Celsius Essentials, with many planning to add incremental shelf/cooler space to the brand, while retailer sentiment on Bang was slightly more mixed.
  • Recent trends have stabilized for Bud Light and in some instances improved, though Constellation Brands Inc. and Molson Coors Beverage Co. continue to be beneficiaries and have likely gained structurally more market share as a result.
  • Hard seltzer category declines accelerated in the fourth quarter and retailers are even more pessimistic on the category’s growth outlook this year vs. the prior “Beverage Bytes” survey.
  • Twisted Tea’s strong recent momentum is showing no signs of slowing, and retailers are slightly more optimistic on the brands’ growth outlook this year.

“Retailers have turned slightly more optimistic over the last one to two months, with 33% of respondents indicating their outlook on the total beverage category has improved recently (vs. 7% in our Q3 survey),” Herzog added. 

Source: Convenience Store News

NRF Sees Consumer Spending Slowing Down in 2024

By: Danielle Romano | Managing Editor | January 12, 2024

Pandemic savings that boosted spending last year are shrinking and consumer confidence has risen but remains low.

WASHINGTON, D.C. — Consumers spent more than expected in 2023 amid high inflation and high interest rates, however, spending growth is likely to slow in 2024.

“The 2023 U.S. economy was marked in large measure by the impressive resiliency of the consumer. A year ago, many commentators were skeptical and calling for a recession, but the recession never came. With each passing month, consumers kept spending despite inflation and higher borrowing costs,” said National Retail Federation (NRF) Chief Economist Jack Kleinhenz in the January issue of the association’s “Monthly Economic Review.”

[Read more: NRF Show Puts Innovation in Foodservice Technology on Display]

“Nonetheless, those tailwinds are not necessarily sustainable. Tighter credit conditions along with higher borrowing costs continue to be in place now that we’ve turned the page on the annual calendar, and employment reports confirm that the labor market expansion is slowing,” he added.

According to the report, 2023 spending was supported by a tight labor market, a “wealth effect” from a rise in equity and home prices, and savings built up during the pandemic. 

Inflation-adjusted gross domestic product grew a “solid” 2.3% over 2022, December’s unemployment rate of 3.7% was one of the lowest in decades, and the 4.5% year-over-year increase in wages surpassed the year-end 2.6% rate of inflation as measured by the Personal Consumption Expenditures Price Index followed by the Federal Reserve.

Unadjusted for inflation, consumer spending was up 5.2% year over year in October and November, boosted by a 7% year-year-over increase in disposable personal income. Core retail sales — excluding automobile dealers, gas stations and restaurants — were up 3.7% year over year for the first 11 months of 2023.

Despite the rise, job openings fell to 8.79 million in November, the lowest level since March 2021. Additionally, while the U.S. Labor Department reported nonfarm payroll growth of 216,000 jobs in December, the net growth in private-sector jobs was only 68,000 after accounting for downward revisions to previous months’ job growth, NRF found.

[Read more: Retail Groups Applaud Federal Reserve’s Move on Debit Card Swipe Fees]

“The labor market looks set to cool further this year, which will impact consumer expectations for employment and wage growth, and, in turn, affect spending decisions,” Kleinhenz said. “Spending is elevated relative to current income, and maintaining the recent pace of growth will be increasingly difficult.”

Pandemic savings that boosted spending last year are shrinking, revolving debt has risen to pre-pandemic levels, and consumer confidence has risen but remains low. Recent surveys show consumers are worried by a number of factors, such as: 

  • The outlook for income;
  • Business and job market conditions slowing because of higher interest rates;
  • Ongoing inflation; and
  • Political stress.

As Kleinhenz posed, a key question in the outlook is what the Fed will do with interest rates. The central bank has indicated that rate hikes are likely over and that the benchmark federal funds rate — currently 5.25% to 5.5% ­— could be cut to 4.6% by the end of the year.

Washington, D.C.-based NRF empowers the industry that powers the economy. Retail is the nation’s largest private-sector employer, contributing $3.9 trillion to annual gross domestic product and supporting one in four U.S. jobs — 52 million working Americans.

Source: Convenience Store News

Global Chocolate Consumption Holds Steady

By: Danielle Romano | Managing Editor | January 10, 2024

Mintel: U.S. consumers choose chocolate more often for pleasure than practicality.

NATIONAL REPORT — Chocolate is a staple worldwide, but consumer consumption behaviors are changing over time.

New research from Mintel centered on chocolate confectionery around the world uncovered behaviors and attitudes toward the confection in different nations to find out which countries eat the most chocolate. 

“In countries where chocolate is a daily indulgence for most, as well as in those countries where it is enjoyed occasionally, the levels and frequency of chocolate consumption have remained steady in recent years,” said Richard Caines, senior food and drink analyst at Mintel. “This signals that there is a certain loyalty and consistency in chocolate consumption, and populations are unlikely to drastically change in their chocolate consumption habits.”

Mintel research revealed:

American Chocolate Consumption

American consumption of chocolate confectionery falls slightly behind that of British consumers, as 3% fewer Americans purchased chocolate of any kind in the last three months. However, more than four out of five American consumers are eating the same amount or more chocolate than last year.

[Read more: Three Snacking Trends to Watch in 2024]

Nearly two-thirds of American consumers purchase chocolate as a treat vs. one-third who purchase chocolate as an energy boost, suggesting that chocolate consumption in the United States is more commonly for pleasure than practicality, Mintel found. This is further reiterated by the fact that more than half of the Americans who ate more chocolate in 2022 attributed it to an increased desire for indulgence.

British Chocolate Consumption

A whopping 95% of British consumers eat chocolate. Four in five British people eat chocolate once a week or more, making it a regular part of British diets. This has slightly decreased since 2022, with a shift toward eating chocolate only once every two weeks or less regularly than previously. 

In 2023, British consumers ate less chocolate. One reason may be that the HFSS (high in fat, sugar or salt) products have faced tighter restrictions on where they can be located in stores since October 2022, so confectioneries including chocolate are less visible to consumers than previously, Mintel said. 

This has caused a decline in impulse chocolate purchasing. In 2022 almost seven in 10 British consumers declared that they impulsively buy chocolate on promotional deals. In 2023, however, only a third of British consumers said that they bought chocolate for themselves because it was on special offer.

German Chocolate Consumption

In 2023, three-quarters of German consumers eat chocolate at least once a week, with more than 10% eating chocolate once a day or more, Mintel found. More than half of German consumers agree that eating chocolate is an affordable way to improve their mood, and most prefer to buy chocolate blocks that can be eaten across multiple occasions. This shows that eating chocolate is part of a regular routine for German consumers, rather than being an occasional and unpredictable treat, the market research firm said.

[Read more of CSNews‘ coverage of Candy & Snacks here]

When it comes to what chocolate they eat, Germans ages 44 and under are far more likely to purchase single-serve bars compared to older consumers, who prefer blocks. With three-quarters of consumers saying that smaller bars are better for trying different flavors, this suggests that younger consumers are more interested in novel varieties than older consumers.

Canadian Chocolate Consumption

Consumers in Canada, like those in other parts of the world, seem to have maintained their chocolate consumption levels. This is true for Canada, where only one in five consumers are eating either more or less chocolate than last year, which causes overall chocolate consumption to balance out. While nine in 10 Canadians eating chocolate regularly might seem like a large portion of the population, it is comparatively one of the world’s smaller chocolate consumers, Mintel reported.

Canadian attitudes toward eating chocolate is that consumers primarily appreciate the convenience of chocolate snacks, although some prefer to choose more healthy options. More than half of those eating less chocolate and candy in Canada in 2022 have consciously made an effort to reduce their sugar intake. Alternatively, two-thirds of those eating more chocolate and candy in 2022 did so as they are snacking more at home.

Final Takeaways

Overall, Mintel provided these takeaways:

  • The United Kingdom is one of the world’s most loyal and consistent consumers of chocolate, with the vast majority of the population eating chocolate regularly and enjoying a wide variety of chocolate types.
  • Similarly, consumers in the U.S. are eating chocolate on a comparable level to recent years, with most of the population enjoying chocolate confectioneries. Comparatively, German and Canadian consumers eat less chocolate than their counterparts in Britain and America.
  • In countries where chocolate is a daily indulgence for most, as well as in those countries where it is enjoyed occasionally, the levels and frequency of chocolate consumption have remained steady in recent years. This signals that there is a certain loyalty and consistency in chocolate consumption, and populations are unlikely to drastically change in their chocolate consumption habits. 
  • Even in cases where some individuals may consume more or less chocolate than in previous years, the changes are balanced on both sides, resulting in an overall consistent level of consumption.

The full report can be accessed here.

Chicago-based Mintel is a market intelligence agency with the knowledge, expertise and insight can inform and guide marketing strategies.

Source: Convenience Store News

Convenience Store Operators Will Switch Up Beverage Space in 2024

By: Melissa Kress | Executive Editor | December 28, 2023

Energy drinks are expected to gain the most ground in spring resets.

NEW YORK — Convenience store operators will be changing up their beverage merchandising in the coming months. 

According to Goldman Sachs’ recent “Beverage Bytes” survey, retailers expect to make more shelf/cooler space changes for the total beverage category in their upcoming spring resets vs. prior years — giving more space for energy drinks.

The c-store retailer contacts in the survey represent approximately 37,000 retail locations or roughly 25% of the convenience channel.

[Read more: Beverages, Grab & Go Expected to Drive Sales in 2024]

Key takeaways from the survey include: 

  • The total beverage category — alcoholic and nonalcoholic — is expected to gain incremental shelf/cooler space in the upcoming spring resets in the c-store channel, with 21% of retailers surveyed expecting to allocate more space to total beverages; 
  • The energy drink category is widely expected to be the largest shelf/cooler space gainer in total beverage (alcoholic and nonalcoholic) spring resets, followed by flavored malt beverages at a distant second place, while ready-to-drink teas, beer and juice are expected to lose the most space; 
  • Celsius is expected to be the biggest shelf/cooler space winner within the nonalcoholic beverage category spring resets, with 87% of retailers surveyed expecting to allocate more space to the brand, followed by C4 and Monster Beverage Corp., while Red Bull is expected to lose the most space;
  • Overall, retailers’ outlook for the energy drink category remains quite healthy, with a few retailers noting expectations for continued double-digit percent category growth in 2024; 
  • The vast majority of retailers indicated that Red Bull’s recent price increase is sticking, and therefore most expect Monster Beverage will follow suit and also raises prices (with many expecting an announcement in the first quarter); and 
  • Constellation Brands Inc. and Molson Coors Beverage Co. are expected to be the biggest shelf/cooler space winners within the alcoholic beverage category spring resets, while Anheuser-Busch Inbev is expected to lose the most space.

Additionally, despite concerns over the financial health of the consumer, retailers broadly expect to keep their total private label shelf/cooler space unchanged vs. prior years, said Bonnie Herzog, Goldman Sachs senior financial analyst.

Source: Convenience Store News

Upcoming Beverage Trends Feature Sweet Heat & Indulgence

By: Angela Hanson | Senior Editor | December 26, 2023

Brand collaborations are also expected to increase in 2024.

LOUISVILLE, Ky. — A significant surge in the popularity of “sweet heat” fusions, which blend fruity profiles with spicy twists, is likely to occur in 2024, reported beverage development company Flavorman.

Examples include mango habanero pressed juice or a zesty spicy margarita, but whatever the combo, this innovative flavor trend is expected to captivate consumer taste buds throughout the new year, according to Flavorman’s “Beverage Trends of 2024” report, which provides insights into the flavors, ingredients and strategies that will shape the industry in the coming year.

[Read more: Five Private Label Trends Spotted at PLMA’s 2023 Expo]

There is also an increased demand for indulgent flavors even as the beverage industry maintains a focus on health-conscious formulations. Accordingly, the forecast is for growth in indulgent flavor profiles such as sugar cookies, brownies, pastries and red velvet, juxtaposed with a low-calorie label. Whether that means enticing functional beverages that cater to sweet cravings or ready-to-drink cocktails that won’t disrupt a caloric balance, 2024 will be the year for indulging in self-care — but with a health-conscious approach, the report revealed.

Additionally, Flavorman’s Beverage Architects expect to see departure from artificial colors and additives. The ingredient “cloud,” an oil emulsion that adds opacity or haziness to drinks, will likely see reconsideration.

“From a formula standpoint, removing color and cloud is only a positive — they’re not doing anything to stabilize the beverage,” said Kristen Wemer, chief technical officer at Flavorman. “Also, since everything these days is going into a can, the way the liquid looks is much less important. Less ingredients — and less cost — is better for everyone involved.”

[Read more: NACS SHOW REWIND: Boosting Foodservice Sales Through Innovation]

An overall trend toward simplicity in 2024 aligns with a broader shift toward environmental conscientiousness in the technology sector, as major players in the beverage manufacturing space strive for net-zero emissions, likely encouraging others to do the same. Artificial intelligence (AI) will also play a part in beverage development, with some startups already leveraging the technology to analyze consumer preferences and streamline production processes.

Despite anticipating the normalization of AI and robotics, Flavorman stressed the importance of preserving the “human touch in the craft.”

On the branding front, beverage brands are predicted to venture into new territories via collaborations and product diversification. Examples include nonalcoholic brands building alliances with alcoholic counterparts and vice versa, or confectionery companies entering the beverage market via strategic collaborations.

Flavorman anticipates a surge in brand partnerships and market expansions in 2024, underscoring a commitment to innovative strategies aimed at establishing effective market positions. Local craft breweries and coffee shops currently lead this collaborative branding movement as both continue to release creatively flavored varieties.

“Coffee will also continue to expand flavorings and follow-suit of its symbiotic pollinating friends, via botanical and herbal roots,” said Brad Nichols, Flavorman’s director of business development. “Unconventional flavors like rose, pistachio, lavender and rosemary have made their way into latte and syrup.”

Flavorman’s full 2024 beverage trends report is available here.

The company noted that its 2023 predictions accurately foresaw the rise of floral flavor profiles like elderflower and lavender along with the continued popularity of fruity twists such as pineapple and mango. Both of these flavor classes gained traction in the manufacturing space over the last year.

Based in Louisville, Flavorman is a custom beverage development company that helps clients bring custom products to market from concept to production planning and quality control.

Source: Convenience Store News

Beverages, Grab & Go Expected to Drive Sales in 2024

By: Angela Hanson | Senior Editor | November 7, 2023

Circana: Consumers seek options to address diverse needs and health priorities.

CHICAGO — Modest food and beverage growth is likely to take place next year following three consecutive years of volume decline, according to Circana’s 2024 food and beverage outlook. 

The categories are likely to experience a more favorable landscape as certain challenges from 2023 are expected to recede, the marketing firm said.

High inflation is anticipated to ease considerably in the year to come, and the impact of increased mobility on retail food and beverage consumption will likely be less pronounced, according to the forward-looking outlook, which offers insight into the likely performance of the food and beverage industry throughout 2024.

[Read more: Candy & Gum Sales Surpass $34B]

Additionally, Circana research indicates that several factors will impact food and beverage growth throughout the year, including an improving macroeconomic environment and growing promotional investments.

“Amid shifting consumer preferences and evolving market dynamics, our food and beverage outlook not only highlights key growth opportunities for 2024 but reveals a cautiously optimistic outlook as we emerge from a myriad of challenges that the industry has faced over the past several years,” said Sally Lyons Wyatt, executive vice president and practice leader, Circana. “With continued innovation and adaptability, retailers and manufacturers will be poised to position themselves for success in the coming year and beyond.”

Certain departments are expected to lead the pack in volume growth. Circana predicts that the beverage and deli sectors will continue to outperform overall food and beverage unit sales in 2024. One factor driving this trend is an increase in health-conscious consumers seeking more protein and energy options in their diet, as well as increased innovation in beverages, which has boosted consumer excitement and encouraged category exploration.

[Read more: Consumer Priorities Shift Beyond Discretionary Spending]

Convenient grab-and-go options will also likely continue driving sales as consumers prioritize meal options that address diverse needs. Shifting consumer preferences in other departments will likely put pressure on unit growth, according to Circana, which advises retailers to optimize turnkey options for on-the-go customers.

Additionally, consumers will likely turn to the center store for solutions that deliver convenience, quality and value.

Circana’s 2024 food and beverage outlook was developed using econometric demand models leveraging Circana’s Demand Forecasting Platform. Forward-looking input variable assumptions were developed using historical trends and insight from industry experts, the company said.

Chicago-based Circana serves as an advisor on the complexity of consumer behavior. Through advanced analytics, cross-industry data and subject matter expertise, Circana provides insights and research that helps clients unlock business growth.

Source: Convenience Store News

C-store Beverage Sales Moderate During Q3 2023

By: Melissa Kress | Executive Editor | October 25, 2023

Retailers expect the energy drink category to see double-digit growth through 2024.

NEW YORK — Sales in the cold vault continued at healthy clip in the third quarter of 2023, though growth did slow a bit from the previous three months.

According to the Goldman Sachs “Beverage Bytes” third quarter retailer survey, beverage sales were up 4.4 percent in the quarter compared to a 6.6 percent increase in the second quarter. Additionally, retailers expect beverages sales to increase roughly 5 percent this year — down from roughly 6 percent in the previous survey.

“Beverage Bytes” surveys retailers representing approximately 40,000 retail locations or approximately 27 percent of the convenience store channel.

Overall, retailers remain very positive about the growth trajectory for Constellation Brands, with approximately 11 percent year-over-year growth expected this year and 8 percent expected in 2024. Additionally, double-digit growth is forecasted for 2023 and 2024 in the energy drink category, said Bonnie Herzog, Goldman Sachs senior financial analyst.

However, she noted, retailers “remain concerned about broader economic pressures/fears of recession and residual fallout from the Bud Light controversy, albeit moderating.”

Other notable takeaways from the “Beverage Bytes” survey include:

  • The pricing environment remains healthy/rational with many retailers expecting incremental pricing by both nonalcoholic beverage manufacturers and brewers this year and in 2024.
  • Beer promotional activity appears to have leveled off in the last few months, as the majority of retailers are not seeing a pickup in promo activity and believe that brewers can push through incremental pricing.
  • Conversely, promotional activity in nonalcoholic beverages is still picking up according to the majority of retailers, as manufacturers continue to drive promos to support unit growth.
  • The hard seltzer category declines moderated in the third quarter and retailers expect the moderation to continue for the full year and into 2024.

Source: Convenience Store News

McLane Brands Proprietary Pizza Program as Foodservice Evolution Continues

By: Melissa Kress | Executive Editor

The company also adds to its fresh food ranks with two new team members.

TEMPLE, Texas — A month after debuting its expanded retail foodservice program at its McLane Engage convention, McLane Co. Inc. revealed the name and branding for its new proprietary pizza program made for convenience stores: Prendisimo

Prendisimo, which translates to “take away” in Italian, is the latest in the McLane Fresh family of brands. McLane debuted Prendisimo at the 2023 NACS Show on Oct. 4 in Atlanta with an immersive culinary experience with an of available samples and marketing materials on display for the brand.

In addition to Prendisimo, McLane also featured CupZa!, its newly launched beverage program which includes bean-to-cup coffee, cold brew, iced tea and lemonade; and new products from Central Eats including a Texas toast grilled cheese, maple sausage waffle and cheeseburger.

“Prendisimo is more than just incredible pizza. It’s a highly marketable brand that attracts and appeals to consumers, supported by the end-to-end solutions that McLane Fresh offers,” said Vito Maurici, McLane’s customer experience officer. “McLane is scaling our offerings across the board, creating programs and products that are more accessible and customizable than ever. We are proud to introduce Prendisimo and look forward to partnering with our customers to make a variety of quality fresh foods a reality for convenience stores of all sizes nationwide.”

As the McLane Fresh program continues to grow, the company added to its team member ranks. Anne Hughes and Jeremy Reinicke have joined the team as category director, fresh food and commissary, and corporate executive chef, respectively.

With more than 15 years of experience working with quick-service restaurants and retailers, Hughes brings fresh ideas and proven marketing expertise to the expanding program, while Reinicke’s extensive professional culinary experience will invigorate menu innovation for the program.

“Anne and Jeremy share in our vision for the future of convenience, and their skills, experience and perspective will help bring that vision to life,” said Farley Kaiser, McLane’s senior director of culinary innovation. “We are excited to have these incredible additions on board the McLane Fresh team as we build on the momentum of our core brands to ideate new products, programs and extensions for our customers.”

Temple-based McLane Co. is one of the largest supply chain services companies in the United States. Through McLane Grocery and McLane Foodservice, it operates more than 80 distribution centers and one of the nation’s largest private truck fleets, and provides alcoholic beverage distribution through its subsidiary, Empire Distributors.

McLane is a wholly owned unit of Berkshire Hathaway Inc.

Source: Convenience Store News

Consumer Priorities Shift Beyond Discretionary Spending

By: Amanda Koprowski, Associate Editor | September 15, 2023

Edible and nonedible CPG sales continue to outperform general merchandise spending, according to Circana.

CHICAGO — In August 2023, U.S. retail sales revenue, including both discretionary general merchandise and consumer packaged goods (CPG), remained unchanged compared to the same month last year while unit sales declined 2 percent. 

[Read more: Foodservice Customers Increasingly Dine Out on Deals]

According to Circana, discretionary spending declines continued with a 5 percent decline in dollar sales and 7 percent drop in unit sales compared to August 2022.

CPG spending gains slowed slightly from the previous, with 3 percent growth in food and beverage, a 2 percent increase in nonedible revenue compared to last year. Demand levels held steady from July across CPG, with unit sales falling 1 percent and 3 percent respectively in edible and nonedible segments.

“The purse strings are tightening and shifting when it comes to retail spending,” said Marshal Cohen, chief retail industry advisor for Circana. “Inflation is easing, but consumers continue to feel the pinch of still-elevated food and beverage prices. Impacts of higher prices, lower demand, and weather disruption may be starting to extend beyond discretionary spending.”

For food and beverage spending, households continued to look for deals and switch to lower-cost options to save money, though some specialty stores continued to see benefits in shifting spending habits. 

When recent trends in discretionary general merchandise, food and beverage, and nonedible CPG are viewed together, a picture of changing consumer priorities emerges. Over the past two years, Circana found the once minimal gap in spending changes has varied. A year ago, spending on food and beverages rose above both nonedible CPG and the general merchandise segment. Now, slowing growth activity has closed the gap between food and nonedible CPG, while their gains continue to outperform general merchandise, which has established a new baseline.

previous Circana report further observed that delayed purchasing during the key back-to-school season aligns with overall shifts in how and when consumers prioritize spending. 

“Manufacturers and retailers need to adjust to and align with the consumer’s priorities in order to maximize purchase opportunities through this year’s remaining shopping holidays and into the year ahead,” said Cohen, “Consumers are spending on their needs and on their schedule.”

[Read more: SNAP Households Cut Back on Food & Discretionary Spending]

Chicago-based Circana serves as an advisor on the complexity of consumer behavior. Through advanced analytics, cross-industry data and subject matter expertise, Circana provides insights and research that helps clients unlock business growth.

Source: Convenience Store News

C-store Retailers Can Keep Backbar Steady by Managing Downtrading

By: Renée M. Covino

Tobacco industry insiders offer four tips for leveraging the trend.

NATIONAL REPORT — Tobacco’s latest oxymoron is here: Downtrading is on an upswing.

Pressures from ongoing inflation and continued list price increases across all tobacco categories are forcing consumers to make difficult decisions to either buy less, buy cheaper or try to quit, according to Bonnie Herzog, senior financial analyst at Goldman Sachs.

“Retailers note consumers are increasingly making purchase decisions based on what is on sale or discounted, with one retailer documenting that nicotine salt e-vapor products are among the least expensive nicotine delivery formats,” Herzog stated in her firm’s “Nicotine Nuggets” survey from the first quarter of this year.

Inflation and rising prices throughout 2023 will continue to drive tradedowns to off-brands, private label and generics/subgenerics in the tobacco/nicotine category, predicts Alex Morrison, senior business analyst for Cadent Consulting Group, based in Wilton, Conn.

[Read more: Backbar Shifts Reflect Continued Pressures on the Tobacco Consumer]

Some good news is that there are multiple opportunities for convenience store operators to pivot a bit and take advantage of downtrading.

Keep Up With Value Trends

The most obvious way for c-store retailers to cater to cash-strapped tobacco consumers is to stock more items with a lower product quantity and/or lower price point and then, make note of these value offerings through in-store and window signage.

The top subsegments to do this in are value cigarettes, value moist, modern oral and vapor disposables, according to Don Burke, senior vice president of Management Science Associates Inc. (MSA), a Pittsburgh-based company focused on analytics and informatics.

“Being able to offer a strong product selection of value-priced items, while maintaining the right items in the higher-priced segments, will require some retail ingenuity,” he said.

In addition to stocking robust value brands, c-store operators should also keep up with the latest lower-priced premium offerings. For instance, Richmond, Va.-based Altria Group Inc.’s Marlboro Black Gold Pack nonmenthol cigarettes are the company’s latest answer to offset inflation-induced downtrading among its cigarette smokers. The product became available nationwide in May, coupled with increased marketing support for the overall Marlboro Black line. It is intended to gain back adult smokers who left the Marlboro brand, as well as keep those who are considering downtrading out of the brand.

“If consumers had felt the need to trade out because they were under economic pressure, it gives them a space within the Marlboro franchise where they can reengage — or if a consumer comes under pressure, it gives them a space to continue to engage with Marlboro,” explained Altria Group CEO Billy Gifford.

Embrace the DIY Trend

When economic times get tough, consumers lean into the do-it-yourself (DIY) space and for tobacco consumers, that means roll-your-own (RYO) items. RYO is experiencing somewhat of a resurgence, providing adult consumers with “a less-expensive alternative to factory-made cigarettes and allowing them to build the perfect taste for themselves and making them feel that they’re crafting something themselves,” said Becky Roll, chief revenue officer at Glenview, Ill.-based Republic Brands, which bills itself as the world’s leading rolling company.

Considering downtrading, Roll recommends that c-store retailers choose to become a top-of-mind destination for RYO, carving out a dedicated space for this segment in-store.

MSA’s Burke also points to another resurgent segment of RYO — pipe tobacco — and suggests retailers consider carving out a small space for that adjacent to RYO.

Map Out Geography Trends

Retailers should keep abreast of geographic influences affecting downtrading or the lack thereof. An industry report released in June found that adults and young adults in 12 states — Alabama, Arkansas, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Ohio, Oklahoma, Tennessee and West Virginia — have a 50 percent higher prevalence of smoking cigarettes, and smoke significantly more cigarettes per capita annually than people living in other states (53 packs vs. 29).

These states also have lower taxes, resulting in a pack of cigarettes costing nearly 20 percent less than in other states. And these states currently have virtually no flavored tobacco sales restrictions.

Focus on Digital Trends

Now more than ever, progressive retailers are harnessing the full power of digital capabilities, using adult consumer data from loyalty and app-based programs to become more efficient marketers and drive awareness of what matters most to them, such as the best nicotine prices and promotions. The digital space is also rapidly becoming a means of education for alternative products.

“The very best retailers are consciously making the investment today to leverage the data for the benefit of their adult consumer base, as well as their own retail operations,” said Matthew Hanson, chief financial officer/chief growth officer for Chicago-based Black Buffalo, a modern oral nicotine product that mimics moist smokeless tobacco but without the tobacco leaf.

Mike Wilson, vice president of trade strategy and operations for Reynolds Marketing Services Co., headquartered in Winston-Salem, N.C., echoes that the use of digital media to drive adult nicotine consumer engagement with c-store loyalty programs is a must for retailers that want to outpace their competition. New product introductions and reduced pricing/promotions are crucial messages for adult tobacco/nicotine consumers in these downtrading times, he said.

Altria, too, has increased its digital efforts at retail. At the highest level of participation, once a consumer is verified, a retailer can provide targeted offers and messaging within its app.

Source: Convenience Store News

Three Findings About Gen Z’s Snacking Habits

Fruity/chewy candy and meat snacks/jerky increased significantly in popularity.

CINCINNATI — Generation Z is disrupting many of the assumptions and conventions upon which marketers and retailers base their strategies, according to a new deep dive from neuroscience-based consumer insights market research firm Alpha-Diver.

The new report, entitled “Introducing The Snack 50 Psych Pulse Gen Z Edition: Surprising WHYs Behind Gen Z’s Snack Decisions,” delivers insights regarding the cohort’s snacking preferences. It is a follow-up to Alpha-Diver’s first-ever “Snack 50 Psych Pulse” report, released earlier this year, which measures psychological drivers of consumer decision-making when it comes to snacking.

The report analyses four emotional jobs — Functional, Experience, Conformity and Impulse — that different snacks do for consumers and shows the top two snacks for each “job.” The analysis studied 12 categories of snacks overall, with an emphasis on packaged snack and sweets brands.

Source: Alpha-Diver

The deep dive examines differences in preferences for snack “jobs” among Gen Z vs. the overall population, revealing how the cohort differs and what it means for brands.

The findings point to three macro differences for Gen Z when it comes to what categories and brands they decide to buy:

1. Choosing Chewy

Two categories increased most significant in popularity among younger consumers: fruity/chewy candy and meat snacks/jerky. Corresponding brands within these categories jumped similarly in their emotional importance to this generation.

Source: Alpha-Diver

Behavioral science offers an interesting insight regarding these improvements: these are the chewiest snacks included in the study, according to Alpha-Diver. “It’s been widely reported that young consumers are experiencing potent levels of stress and anxiety. The field of psychology has found that the physical act of chewing contributes to stress reduction. So, it’s likely no coincidence that ‘the chews’ are appealing to Gen Z,” said Alpha-Diver President Hunter Thurman and Director of Data Insights Mary Mathes, authors of the report.

2. Better-for-you May Not Be Better For Business

Snack categories like nuts reside in the “functional” space, meaning they make rational, practical sense. Typically, this is the domain of better-for-you, sensible options. Snack bars and pretzels also serve this emotional job.

Source: Alpha-Diver

[Read more: In the Driver’s Seat]

“With many headlines awash in the supposed importance of health and wellness for Gen Z, it’s surprising that snack nuts plummet in popularity among this cohort, dropping to No. 11 out of 12 (and the No. 12 spot belongs to pretzels),” Thurman and Mathes wrote. “Why don’t sensible snacks create the emotional voltage of their fun-forward (and generally less ‘healthy’) alternatives? Because snacking decisions for Gen Z are primarily about feeling better emotionally. Snacks’ role is to provide mental escape via an interesting experience, or just some feel-good satisfaction (and stress relief) that comes with salt, fat, and carbs/sugar.”

Alpha-Diver suggests marketers adapt their offerings to address not only BFY functionality, but also “better-to-you” emotional experiences.

3. Name Brands Matter

With ongoing economic uncertainty, most marketers are concerned about shoppers trading down to store brands and private label. However, the broader Snack 50 findings reveal that shoppers choose store brands not merely for prices, but because of social norms: shoppers perceive that other people like them.

Source: Alpha-Diver

For Gen Z, however, the importance of social conformity drops considerably when it comes to snacking. Individual experiences drive decision-making much more. As a result, the rankings of store brands in the list drop across the board.

“So, while the snacking decisions of Gen Z are often surprising, and counter to conventional assumptions, they are explainable. Experiences matter. Brands matter. And marketers have options beyond the price promotion race-to-the-bottom,” wrote Thurman and Mathes. “Brands that heed these explanations, serving the core emotional needs of these consumers, will enjoy strong potential.”

“Introducing The Snack 50 Psych Pulse Gen Z Edition: Surprising WHYs Behind Gen Z’s Snack Decisions” is available for download here.

Alpha-Diver is a market research firm that applies neuroscience to understand marketplace behavior more deeply. The firm’s neuroscientists and strategists work with leading brands, retailers and the Wall Street analyst community to explain, measure and predict consumer behavior. Clients include McDonald’s, Coca-Cola and Kellanova, among others.

Source: Convenience Store News

Three Key Dining Trends Emerge Among Young Adults

Y-Pulse: Millennial and Gen Z diners prefer convenience to cuisine, but also seek out communal meal experiences.

CHICAGO — Over the last few years, young adult consumers have developed a reputation for their interest in exploring new foods and setting trends, while also seeking out both convenient and connival dining experiences. 

[Read more: Consumers’ Satisfaction With C-store Foodservice Shifts]

The newest findings on young adult preferences comes from a Y-Pulse nationwide study of millennial and Generation Z consumers which delved into the cohorts’ dining perspectives and experiences. 

“This study found more than half of the millennial and Gen Z consumers surveyed agreed that convenience was more important than cuisine, and that was surprising and a bit unsettling,” said Sharon Olson, executive director of Y-Pulse. “Yet as we took a closer look at the … dining options available in fast casual restaurants and on college and university campuses around the country, we soon realized that there is little need for young adult consumers to have to make that choice.”

Overall, 71 percent of millennial and Gen Z respondents said they prefer meals they can consume on the go. Yet, that does not necessarily mean they are consuming those meals alone. Ninety-one percent enjoyed sharing meals with other people rather than dining alone, while 87 percent reported that they enjoy taking their to-go meal somewhere else to relax and enjoy with others. Additionally, 72 percent reported that sharing a meal with a friend or family member in the car suits their hectic lifestyle

Beyond the car grab-and-go, 77 percent of survey participants said they like convenience stores that have café seating, while 88 percent liked food markets because of the ease of sharing a meal with others when not everyone in the party wants the same type of food. For c-store operators, the research suggests simply offering customers the option of seating to enjoying meals will be attractive to this particular demographic.

The new report also found a dramatic shift in the same age cohort surveyed in a 2017 Y-Pulse study that asked the same question about convenience. Six years ago, only 44 percent of those surveyed reported convenience as more important than cuisine in their dining decisions, compared to 59 percent in the latest study. 

[Read more: Consumers Continue to Choose Takeout or Delivery Over Dining Out]

Y-Pulse conducted the survey with 2,101 consumers representative of the U.S. population nationwide. Millennials included those born between 1981 and 1996, while the Gen Z group included those 18 years or older from the total cohort born between 1997 and 2012.

Founded in 2004 and headquartered in Chicago, Y-Pulse is a division of Olson Communications Inc. and a certified Women’s Business Enterprise.

Source: Convenience Store News

Eating on the Go Proves Popular Among U.S. Consumers

American consumers look for both convenience and variety in their on-the-go meal options, according to NCSolutions.

NATIONAL REPORT — Despite all of the changes in working Americans’ lives in the years since the start of the pandemic, the majority of consumers will still eat meals or snacks on the go at least sometimes.

[Read more: Consumers Crave Fruit Options for Snacking Occasions]

The findings came from a new consumer sentiment research survey commissioned by NCSolutions, a company focused on advertising effectiveness for consumer packaged goods brands. 

Of those surveyed, many quoted a hectic schedule as a key reason to rely on convenience foods for meals while traveling or commuting. Overall, 75 percent of respondents still eat meals or snacks on the go either “sometimes” or “always.”

Even with changes to commuting schedules and remote work becoming more common, the most popular times for grab-and-go foods remain the morning and midday. Lunch (52 percent) and breakfast (50 percent) are the most popular grab-and-go convenience item meals, followed by snacks (41 percent) and dinner (36 percent).

The report also found that customers often crave variety in their options, opening a possible channel of opportunity for c-stores and other retailers to tap into underserved markets. Just under half (48 percent) of Americans are only somewhat satisfied with the variety of flavors and options for convenience foods available, while almost one in three (31 percent) say they aren’t satisfied with the options for diet-specific choices offered in the grocery store, such as keto or gluten-free. 

Consumer dining habits continue to react and remain in flux due to the effects of the COVID-19 lockdown even three years on. Recent research by US Foods found American adults still prefer to eat at home and will more often choose takeout or delivery options over eating out. In the meantime, customer satisfaction with convenience foodservice has risen overall by seven percent year over year even as those who consider themselves “very satisfied” with c-stores’ prepared foods fell by 11 percent.

More information on NCSolutions’ research can be found here, along with a recent case study.

Source: Convenience Store News

Convenience Stores See Higher Sales in First Half of 2023

Labor remains a concern despite optimism about the rest of the year.

ALEXANDRIA, Va. — With more than half of 2023 behind them, convenience store operators are feeling good about the year so far and the remaining months.

Convenience retailers report that sales are up year to year and they are optimistic about that trend continuing through the rest of the year, according to new survey results from NACS.

Two out of three retailers (66 percent) report that their sales for the first seven months of 2023 were higher than sales during the same time period in 2022, while just 12 percent say sales were lower.

NACS’ CSX database of industry metrics shows similarly positive figures. During the first six months of 2023, in-store sales were up 9.4 percent compared to the first half of 2022. Inside transactions were also up 1 percent, according to the association.

[Read more: Food & Beverage Spending Drive Retail Sales Revenue]

Retailers are similarly bullish about the c-store channel’s sales for the remainder of 2023, as one-third (33 percent) of all c-store operators said that c-stores were the best positioned of six channels for success over the rest of the year. Thirty-two percent said online retailers were best positioned for success and 14 percent listed dollar stores.

Just 8 percent of c-store operators said the channel was the worst positioned for success in 2023. Retailers were more likely to name restaurants (39 percent), drug stores (25 percent) or grocery stores (12 percent) as being worst positioned for success.

Unsurprisingly, with unemployment near historic lows, the labor shortage remains a top concern, listed by 44 percent of retailers. Inflation, credit card swipe fees, government regulation, shoplifting and organized retail theft are also among c-store operators’ top industry concerns.

Retailers also shared their opinions on the top community-related issues facing the channel. More than half of operators (56 percent) listed preventing underage access to age-restricted products as the top community issue for the c-store industry to address. Addressing wellness (48 percent) and human trafficking (38 percent) were also top concerns.

The NACS Consumer Member Survey closed Aug. 4. A total of 170 retailer member companies participated. NACS Research conducts quarterly custom research with retailer members to identify key priorities and opportunities across the convenience and fuel retail landscape.

Alexandria-based NACS is a global trade association dedicated to advancing convenience and fuel retailing. NACS advances the role of convenience stores as positive economic, social and philanthropic contributors to the communities they serve, and is a trusted adviser to retailer and supplier members from more than 50 countries.

Source: Convenience Store News

No Foodservice, No Future?

The Convenience retail channel is reaching a turning point.

A distinctive, high-quality foodservice program is no longer a want-to-have for a convenience store operator, it’s a must-have. C-store retailers with existing foodservice programs must continue to evolve their offerings to meet the more demanding needs of today’s consumers, and those without foodservice programs must jump in fast to survive.

Although the evolution of convenience foodservice caught some by surprise, it’s been a long time coming, according to foodservice consultant and c-store industry veteran Jerry Weiner.

“This foodservice issue has been moving toward a ‘must-have’ for several years, even decades. I think now, more so than ever, you will need a high-quality food offering to have any success at all,” said Weiner, who has 45 years of experience in managing foodservice programs for both convenience stores and restaurants. 

The consumer has changed, too, and seems more willing to try convenience foodservice and “less likely to denigrate it to ‘gas station food,’” noted Tim Powell, managing principal of Foodservice IP, a research-based management consulting firm that specializes in foodservice. 

To develop a distinctive foodservice identity and not just a program that blends in with all the other food programs out there, a c-store retailer must have excellent food, a super friendly staff, a clean store and innovative limited-time offers, and be constantly using social media to connect with end users in a productive way, not just selling, according to Powell.

“They must think like restaurants for the food portion, but a grocery store for commodities,” he said. “It’s not an easy task. Each brand has a different mission and perception by its patrons.”

A distinctive, high-quality foodservice program is no longer a want-to-have for a convenience store operator, it’s a must-have.

Advances in Convenience Foodservice

Kevin Smartt, CEO of Spicewood, Texas-based Texas Born (TXB) — honored as Prepared Foods Innovator of the Year in the 2022 Convenience Store News Foodservice Innovators Awards — recognizes high-quality foodservice as a key driver in bringing fuel guests into the store. 

“Our industry is often criticized for serving unhealthy foods and being unclean. C-stores trying to break through this stigma are offering healthier, fresh snack and meal items like take-home salad kits, veggie kits, sandwiches and fresh fruit,” he explained. 

Smartt also noted that offering multiple modes of receiving meals, such as prepackaged grab-and-go options, theater-style made-to-order stations and mobile ordering availability, is enabling c-store retailers today to better compete against quick-service restaurants (QSRs). 

Additionally, he pointed to the increased use of technology in a variety of ways as the most important advancement in the prepared food space over the last 10 years. This includes mobile ordering, self-checkout stations, artificial intelligence (AI) technology to quickly identify store needs, customizable mobile apps and loyalty programs. 

Although the COVID-19 pandemic served as a huge catalyst for these advances due to customers shying away from human interaction and high-touch areas, their usage has stayed high even as pandemic protocols have slowed or disappeared entirely. 

“These are all extremely valuable tools to ultimately help our guests get in and out of the store as efficiently and comfortably as possible, while taking some of the pressure off our employees as well,” Smartt said. 

The role of technology in food at convenience store retailer Casey’s General Stores Inc. is also growing, said Art Sebastian, vice president of omnichannel marketing for the Ankeny, Iowa-based chain of 2,500 stores in 16 states. Casey’s has been honing its handmade pizza program for more than 35 years. 

The intersection of technology and food has been growing “over the last four to five years as we’ve assembled a new leadership team and started down this journey of becoming bigger, bolder, more contemporary both on the guest-facing side, but also on the team-member side as of late,” he shared.  

Sebastian anticipates technology becoming more and more integral to the category. 

“On the consumer side, we know that the role of technology in lives in general continues to increase, right? The stats around how many U.S. adults have a mobile device, the stats around how many hours they spend on the mobile device, the blurring of apps. Now, you can transact through social media channels directly. You can one-tap order. There are so many ways to order. So, for consumers, there’s a significant amount of change in that space,” he explained. 

A Chicago native, Sebastian has been pleasantly surprised by how quickly Casey’s guests have embraced technology. “I will bust the myth that rural America doesn’t use technology. They do. And that’s proven to us statistically in the fact that 6.3 million rewards members have downloaded our app and elected to engage with us digitally,” he said.

“I will bust the myth that rural America doesn’t use technology. They do.”

–Art Sebastian, Casey’s General Stores Inc.

“And we’ve shared in past earnings calls more statistics around our growing digital business that’s coming from our rewards members ordering in the mobile app,” he continued. “So, we continue to see mobile app usage, both for ordering pizza but also participating in our rewards program — and that means saving offers, using unique one-time-use offer codes, playing the games that we built in our app experience, and so on.”

On the team-member side, like many c-store retailers these days, Casey’s is taking on the challenge of making its employees’ jobs easier and more efficient. Sebastian likes to call it “the shift from clipboard and pen to technology-enabled ways of working.”

“For us, that’s going to continue to grow because we have to be efficient in order to keep up with the growing volumes our stores are seeing,” he said. “And as you know, this labor market is a challenging market and you’ve got to be a good place to work in order to keep your talent. A good place to work does not involve clipboards and pens; it involves what most team members are used to now: applications and technology.” 

No End in Sight for Evolution

Looking ahead to the next 10 years, Weiner expects “a great ride for those out there that are working in foodservice.” The use of more high-quality ingredients and more creativity in the product offering are on the horizon, he said, while the days of “fresh food” equating to a frozen packaged burger or breakfast sandwich being microwaved and placed in a heated grab-and-go display are “basically over.”

“Fresh prepared and assembled onsite is the future,” he predicted. “Made-to-order and/or some level of hot and cold grab-and-go is where this goes in the near future and for the long run, dinner plates of a complete meal will be part of this. Snacktime offerings will also encompass high-end foods and sides that can be a snack or an add-on to a meal.”

“Fresh prepared and assembled onsite is the future.”

–Jerry Weiner, Foodservice Consultant

Smartt envisions a similar future. “Especially competing with QSRs, it’s critical c-stores are innovating in this space as customers are grabbing and taking meals home now more often than ever. We expect the future to also be filled with fresher options. No longer will guests have to decide between convenience and health or flavor,” he said. 

The chief executive also foresees “added convenience” as a major focus for the next decade. “The future of c-stores is improving guest convenience options,” he stated. “This will mostly be through mobile ordering, mobile payment, third-party delivery and simple pickup options. For example, we’ve begun adding heated food lockers for easy, quick pickup.”

The nation’s transition to electric vehicles (EVs) and the rollout of EV charging stations are poised to have a major impact on convenience foodservice as well, making it even more important to prioritize fresh food as a means of drawing customers in.

As Smartt pointed out, it’s “not only providing EV charging stations, but finding ways to make EV guests comfortable. They charge their cars for at least 20 minutes as opposed to gasoline cars needing only a few minutes. How can we appease EV fuelers to choose our location to charge? Is that enticing them with healthy meal options and providing comfortable places to sit and eat while their car charges?”

Regarding the future of convenience foodservice, and particularly how the shift to electric vehicles will impact the business, Powell believes it’s all going to depend on how quickly convenience stores can make the transition. Parking garages are now mostly empty and aspiring entrepreneurs will see this as an opportunity to develop car charging destinations, he said. 

“We will likely see less dependence on fuel as driving consumers in. If c-stores can be the go-to spot for EV charging, then coffee and bakery products will be popular,” Powell added. 

Weiner speculated that while the transition to EVs is “the inevitable future,” it will likely take at least a generation for its effect on c-store foodservice to be measurable. However, the change will be felt gradually as the upward trend continues over the years, with EV charging becoming increasingly available at QSRs and fast-casual restaurants, plus drugstores, dollar stores and more.

“Their availability will make it imperative that c-stores have a destination offering other than gas to get customers on the real estate, and some form of inside seating that will also make the stop of EV charging and eating a viable alternative,” he said. 

Keeping the Focus on the Customer

To stay on top of consumers’ foodservice wants and needs, technology will be essential. 

Smartt sees the rise of AI in retail as another opportunity for convenience stores to evolve and improve. TXB is testing SparkCognition’s Visual AI Advisor solution at its Georgetown, Texas, store. This solution enables it to learn the store’s demographic mix of shoppers; where and when people traverse the store and spend time; service-level measures at the foodservice and checkout counters; and movement of customers from the forecourt to the store.

“This is extremely insightful for us as we’re able to identify when shelves are low on product faster, how many times someone has entered the restroom and how often we need to go in and clean, when there is a line at the register and more employees need to be at the counter to help checkout, etc.,” he said. “We’re excited to keep working with SparkCognition and their technology to further improve our customer service.”

Keeping the focus on the customer is a vital part of developing a foodservice identity that enables a c-store retailer to stand out instead of blending in with the competition.

“Retailers who are looking to develop a distinctive foodservice identity should always start with the consumer,” Smartt advised. “You will quickly identify community needs, preferences and ultimately gain their trust.”

Retailers who are looking to develop a distinctive foodservice identity should always start with the consumer.

–Keven Smartt, Texas Born

Weiner suggests c-store operators study their competition and take note of what is working — and what isn’t. “I don’t mean to suggest that you should copy them. The last thing I believe in is a ‘me too’ approach,” he clarified. “However, looking at what they are doing that appears to be working will help in leading you down a path.”

Food that is new and different can yield very positive results.

“I am a great believer in unique but executable food,” Weiner said, recalling an instance where his company launched a fresh-off-the-grill cheesesteak in a region where no one else offered it. “Don’t be afraid to step out of the typical c-store box, but ensure you are keeping it high-quality and fresh.”

Source: Convenience Store News

Five Tips for Creating a Successful Bakery Program

By: Alyssa Barrett, Rich Products | July 27, 2023

An engaging bakery experience can lead to increased shopper frequency and impulse purchases.

With mounting challenges like inflation and labor shortages, convenience store operators are examining the bottom line now more than ever.

Foodservice is a bright spot in the dim economic landscape, as convenience retailers saw a 14.3 percent year-over-year increase in total foodservice sales, based on the 2022 NACS “State of the Industry” survey. A vital component of every c-store foodservice program is the bakery case.

C-store customers are looking for an everyday treat, at any time of day — a morning pick-me-up, an afternoon snack or a late night treat. Craveable, snackable items satisfy these cravings, like cookies and doughnuts.

“The Future of Fresh Bakery” study from Rich Products reveals that 31 percent of consumers say they’re purchasing more baked goods for an “anytime treat” now vs. previously.

This proprietary study examines how retailers —including c-store operators —can drive growth by evolving their fresh bakery portfolios, marketing and merchandising. The report, which analyzed data from 2020 through 2022, determined that an engaging bakery experience can lead to increased shopper frequency and impulse purchases.

Five key recommendations from “The Future of Fresh Bakery” study are:

1. Know Your Shopper

The consumer landscape is evolving. Five distinct shopper segments emerged in the study, based on consumer behaviors from the IRI Consumer Network Panel with attitudes, needs and usage survey information. Of the five bakery shopper segments, c-stores should focus on three:

  • Engaged Explorers are the sweet spot for c-stores. They spend the most per bakery trip and make up 16 percent of fresh bakery buyers. They are devotees with a love of exploration and variety. This segment indulges in satisfying a craving for themselves, sharing a fun treat with kids/friends, and including food in a social occasion with other adults. Engaged Explorers frequent the bakery case in the morning and also enjoy sweet snacks throughout the day. C-stores can reach them by creating visual stories, focusing on flavor variety across all fresh bakery categories, and creating limited-time offers (LTOs).
  • Special Treat Seekers make the most trips and comprise 24 percent of fresh bakery buyers. They crave baked goods with an eye on value and an appreciation for the specialness and fun of the fresh bakery. Special Treat Seekers make purchase decisions driven by price, especially compared with packaged bakery products. To score their sales, c-stores should offer special deals, promotions and a variety of smaller-sized options to create more “treatable moments.”
  • Health Balancers are an important audience as they make up 15 percent of fresh bakery buyers and are health-focused shoppers with a preference for “better for you” baked goods. Since they believe “food is fuel,” c-stores can win them over by providing premium experiences in a transparent, permissible way with smaller, individual or bite-size portions.

2. Create Ambiance

When a retailer understands its target audience, it’s easy to create an environment that attracts, inspires and leads shoppers to purchase. All three of the target audiences —Engaged Explorers, Special Treat Seekers and Health Balancers —prioritized freshness as a key purchase driver for bakery items.

In the study, consumers ranked the attributes that drove their purchases, aside from taste, price and freshness. The bakery case’s appearance rated highest in importance at 65 percent. Other top attributes were having a variety of options to choose from (55 percent), convenience (53 percent), and the aroma of fresh baked goods (48 percent).

Given these results, c-stores must keep the bakery case stocked and looking fresh throughout the day. This is why Rich’s spent over three years developing extended shelf-life recipes for Fully Finished Donuts. All eight flavors maintain an airy, soft texture, fresh flavor and longer ambient shelf life.

3. Offer Variety

The study uncovered three types of anytime treats that every retailer should offer. The first is snackable breakfast and mini-meal items that are portable for eating on the go. To satisfy snack attacks later in the day, c-stores should also offer bakery items that are fun, flavor-forward treats that can be enjoyed every day. And another solid menu item is a delicious, “better for you” snack with an enticing, unique twist or flavor.

Premium bakery items deserve a place in the case since they were a purchase driver for 37 percent of consumers. Two out of three shoppers bought these indulgences because they said they “like to treat myself/my family.” When asked what attributes signal “premium,” shoppers stated fresh fruit (46 percent), visible inclusions (42 percent), unique flavors (42 percent) and some type of decoration (39 percent).

Popular brands also rated highly as 35 percent of consumers said that brand is important when buying baked goods. National favorites like Hershey’s and Reese’s are popping up in bakery items like brownies, and consumers are eating them up. Plus, brand recognition is a high driver in digital ordering and is a key catalyst for future growth and expansion.

4. Co-Locate Impulse Drivers

Brownies ranked as the highest impulse bakery purchase at 61 percent. Other items that enticed shoppers include cookies (51 percent), cinnamon rolls (47 percent), doughnuts (46 percent) and muffins (42 percent). To tempt consumers, c-stores should merchandise these high-impulse items adjacent to planned purchases, such as placing brownies by the fountain drinks and placing doughnuts by the coffee counter.

5. Leverage Loyalty

Consumers are making fewer trips to retailers and incorporating new ways of shopping, such as ordering via an app and using delivery or pickup options. The key to reaching these consumers is inspiring impulse purchases on the app. C-stores can do this by featuring LTOs, bundling discounts, and offering loyalty points for bakery purchases. The sight of a premium baked good bundled with coffee in the morning will tempt hungry morning commuters.

Focus on seasonal and limited-time-offers, which will create differentiation from other retailers.

Delighting the three target shopper segments will pave the road to sustained growth. However, note that there’s room to increase frequency across segments and categories. Rather than focusing on one shopper opportunity, c-stores should develop longer-term roadmaps to develop, innovate, measure and refine strategies.

Alyssa Barrett is a customer marketing manager, convenience channel, for Rich Products, a family-owned food company with over 75 years of success. Rich’s offers foodservice solutions for every corner of a convenience store, including the bakery, pizza counter, grab-and-go items and beverages. C-store operators can review the detailed results of “The Future of Fresh Bakery” study by contacting a Rich Products representative.

Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.  

Source: Convenience Store News

C-store Operators Are Optimistic Beverage Sales Will Continue Upward Trend

However, the hard seltzer category is taking a hit, according to the latest “Beverage Bytes” survey.

NEW YORK — Beverage sales are picking up in the convenience channel, and retailers are optimistic that the trend will continue.

According to the Goldman Sachs second quarter “Beverage Bytes” survey, retailers expect beverage sales to increase approximately 6 percent this year, compared to approximately 5 percent previously. The survey represents roughly 36,000 retail locations or 24 percent of the convenience store channel.

[Read more: C-store Retailers Hold Cautious View of Beverage Sales]

Of particular note to retailers, according to Bonnie Herzog, Goldman Sachs senior financial analyst, is Constellation Brands Inc. — which is expected to see 11 percent year-over-year growth this year — and the energy drink category — which is expected to see double-digit growth this year.

However, retailers “remain concerned about broader economic pressures/fears of recession, impacts from cooler weather (in the second quarter) and negative impacts from the recent Bud Light controversy,” she said.

Anheuser-Busch’s Bud Light faced declining sales after a promotional post by Dylan Mulvaney, a transgender influencer, sparked controversy among consumers this spring.

The key takeaways from the second quarter “Beverage Bytes” survey include:

  • The pricing environment remains healthy/rational with the majority of retailers expecting incremental pricing by both nonalcoholic beverage manufacturers and brewers this year;
  • Beer promotional activity has increased in the last few months, particularly in the wake of the Bud Light controversy, as well as in nonalcoholic beverages. Goldman Sachs’ retailer contacts highlighted that manufacturers/brewers have started to promote more in an effort to stem volume pressures;
  • The big winners of incremental shelf/cooler space this year are energy drinks;
  • The hard seltzer category growth declined again in the second quarter and retailers’ are incrementally more negative with their outlook for the category; and
  • Out-of-stocks remain an issue in both alcoholic and nonalcoholic segments. Nonalcoholic beverage out-of-stocks getting incrementally better, but alcoholic beverage out-of-stocks appear to be worse.

Source: Convenience Store News

Private Label Sales Continue Upward Trends

The beverage category experienced the largest store brand dollar sales gain over the past 52 weeks.

NEW YORK — Private label sales continue to hit their stride.

For the first half of 2023, store brands again posted record sales and share — similar to the past 18 months, according to a report from the Private Label Manufacturers Association (PLMA). The success of store brands at the checkout includes outdistancing national brands in two key metrics.  

Store brand dollar sales across all U.S. retail outlets increased 8.2 percent vs. 5.1 percent for national brands year over year for the six-month period ending June 18, according to Circana data. That extends store brands’ powerful two-year run. Measured against the first six months of 2021, dollar sales during the same period this year improved by 16 percent, or roughly $17 billion ($91 billion in 2021 vs. $108 billion in 2023).  

Circana provides PLMA members and retailers with exclusive market insights and monthly sales data of hundreds of product categories and subcategories on the company’s Unify+ platform, a data visualization tool on plma.com

[Read more: Private Label Brands Continue Double-Digit Growth Trend]

In unit sales for the six months ended June 18, private brands were nominally even, down 0.5 percent, while national brands fell 3.4 percent. That gap may be lengthening, according to Circana. For the month of June alone, store brand units were off slightly at -0.6 percent and national brands dropped 5.1 percent. 

As a result of this performance, store brand dollar share rose to a record 18.8 percent for the half-year, while unit share rose to 20.5 percent, also a new high. Total store brand dollar sales for the first six months of this year were $108 billion and unit sales were 26.4 billion. Totals last year were $100 billion in dollar sales and 26.5 billion in unit sales.  

“These numbers may grow as student loan repayments resume and borrowers of all ages lean further into strategies to tighten household budgets, including adding more value-friendly store brand items to their grocery lists,” said Mary Ellen Lynch, principal at Circana. 

PLMA President Peggy Davies agreed that the headwinds of an uncertain economy weigh heavily on consumers’ minds. Plus, many marketers are holding on to recent inflation- and supply chain-related price hikes. 

Most importantly, store brands have benefitted from several years of unprecedented consumer trial, which research says is the industry’s best friend.  

[Read more: Private Label Sales Reach Nearly $229B in 2022] 

“Having opted for a store brand over the national brand for the first time, there’s a strong likelihood the shopper will stick with the store brand,” said Davies. “In addition, we are also seeing retailers doubling down on product innovation in food and nonfood to take advantage of the flow of new store brand customers.” 

Among the major departments that Circana tracks for PLMA, the beverage category experienced the largest store brand dollar sales gain over the past 52 weeks, up 19 percent, followed by general food and refrigerated (both ahead 16 percent), then frozen and general merchandise (both up 8 percent).

Home care (7 percent), beauty (5 percent) and health (3 percent) were also winners. In the two smallest departments, dollar sales in liquor were ahead by 20 percent, but in tobacco they fell 13 percent.  

Departmental unit sales followed much the same pattern. In the major sections, beverages led the pack, up 6 percent in store brand units, followed by refrigerated and general food (both up 5 percent), then home care (up 4 percent), health and general merchandise (both 2 percent). Frozen came in even and beauty shed 2 percent, while liquor was up 22 percent and tobacco was down 14 percent. 

The Private Label Manufacturers Association is a nonprofit trade organization founded in 1979 to promote the store brands industry. With executive offices in New York and International Council offices in Amsterdam, PLMA represents more than 4,500 member companies worldwide.

Source: Convenience Store News

New Data Finds Same-Store Sales Continue to Increase Year Over Year

Purchases of beverages, tobacco, candy and snacks contributed to higher basket rings.

NEWARK, N.J. — NRSInsights, a provider of sales data and analytics drawn from retail transactions processed through the National Retail Solutions (NRS) point-of-sale (POS) platform, found same-store sales increased 7.7 percent year over year (YOY) for the month of June.

As of June 30, 2023, the NRS retail network comprised approximately 25,200 terminals scanning purchases at independent retailers, including bodegas, convenience stores, liquor stores, grocers, and tobacco and sundries sellers nationwide, predominantly serving urban consumers.

[Read more: Food & Beverage Spending Drive Retail Sales Revenue]

Retail same-store sales highlights include:

  • Same-store sales increased 7.7 percent YOY (vs. June 2022). Average sales per calendar day for June increased 1.5 percent compared to May 2023.
  • Same-store sales in May 2023 increased 7.1 percent vs. May 2022. Average sales per calendar day in May increased 1 percent vs. April 2023.
  • For the three months ended June 30, 2023, same-store sales increased 6.2 percent compared to the three months ended June 30, 2022.
  • The number of items sold during June 2023 increased 7.3 percent compared to June 2022 and the number of items sold per calendar day increased 1 percent compared to May 2023.
  • The average number of transactions per store in June 2023 increased 4.3 percent compared to June 2022 and the average number of transactions per store increased 1.4 percent compared to May 2023.
  • A dollar-weighted average of prices for the top 500 items purchased in June 2023 increased 2.9 percent YOY, a slight decrease from the 3.2 percent YOY increase recorded in May 2023.

“Same-store sales by NRS retailers again increased robustly during June, rising 7.7 percent year-over-year, driven by both increased traffic and average ring per basket,” said Suzy Silliman, senior vice president, data strategy and sales at NRS. “Category growth leaders included prepared cocktails (both spirits and wine-based), tequila, smokeless tobacco, packaged cookies, energy drinks and sports drinks, as well as salty snack and candy categories.

“Our neighborhood retailers’ three-month rolling, year-over-year same-store sales increase of 6.2 percent continues to exceed the U.S. Commerce Department’s comparable retail same-store metric, likely because our sales overweight food, household essentials and other necessities compared to the broader retail marketplace,” she added.

The NRS average three-month moving average same-store sales has outpaced the U.S. Commerce Department’s Advance Monthly Retail Trade data excluding food services by 4.9 percentage points, on average.

The NRSInsights data have not been adjusted to reflect inflation, demographic distributions, seasonal buying patterns, item substitution, or other factors that may facilitate comparisons to other periods, to other same-store retail sales data, or to the U.S. Commerce Department’s retail data, NRS stated.

The NRSInsights monthly Same-Store Retail Sales Reports are intended to provide timely topline data reflective of sales at NRS’ network of independent, predominantly urban, retail stores.

Same-store data comparisons of June 2023 with June 2022 are derived from approximately 148 million transactions processed through the 14,284 stores on the NRS network that scanned transactions in both months. Same-store data comparisons of June 2023 with May 2023 are derived from approximately 204 million transactions processed through 20,883 stores.

[Read more: Convenience Store News Industry Report 2023: Reaching New Highs]

Same-store data comparisons for the three months ended June 30, 2023 with the year-ago three months are derived from approximately 416 million scanned transactions processed through the NRS network in both quarters.

The NRS network comprises approximately 25,200 active POS terminals operating in approximately 21,900 independent retail stores.

Source: Convenience Store News