Price Increases Are Last Year’s Problem

January 18, 2023

Consumers are recoiling from higher prices, and with easing costs, many companies are stopping the higher-price cycle.

ALEXANDRIA, Va.—Companies are beginning to ease up on price increases, and it could be another sign that inflation in the U.S. is waning, reports the Wall Street Journal.

Many companies made substantial price increases to their products throughout 2022 in response to record-high fuel costs, as well as increased cost for ingredients, parts and labor. But as fuel prices ease and supply-chain issues begin to sort out, these costs are beginning to fall.

For product manufacturers, 2023 is the year of cost cutting, Mark Malo, a consultant and former executive at Clorox, told the Journal. On average, expenses should be flat as shipping rates fall, he said, but labor and other costs remain high for some products.

Conagra Brands indicated that it’s done increasing the cost for its products, which include Slim Jim and David seeds, after raising prices by 17% in the latest quarter and 10% in the previous two quarters. The company’s sales volumes decreased by 8.4% in the quarter ended November 27, and Conagra partially blamed the slip in sales on shoppers recoiling from the price increases.

Likewise, Constellation Brands plans to implement smaller price increases after the company saw sales slow after higher-than-usual price increases in October. And T-shirt company Chummy Tees raised the cost of its T-shirts by about $4 in 2020, according to founder Josh Neuman, but the company has since lowered the prices back to original levels after sales fell.

“The consumer’s mind-set has changed,” Neuman told the Journal. “They want to save money and raising prices is not an option for me in 2023, even though many of my costs are still elevated.”

The Journal reports that some companies raised prices not only because of increased costs for themselves but in anticipation of rising costs, which in turn, caused inflation to rise. A study by economists at the Federal Reserve Bank of Kansas City found that higher margins were a major driver of inflation in 2021.

Andrew Glover, a senior economist at the Federal Reserve Bank of Kansas City, told the Journal that he doesn’t expect prices to fall this year, but he anticipates that the pace of increase will continue to slow.

However, there are additional reasons why inflation is still high and could remain elevated, including China’s reopening, which could boost global demand for commodities and energy, as well as a tight labor market in the U.S. Inflation is down to 6.5%, falling from its peak of 9.1% in June, but it’s still well above the Federal Reserve’s target of 2%.

“We welcome these better inflation reports,” Fed Chairman Jerome Powell said last month. “But I think we’re realistic about the broader project.”

Meanwhile, top company executives are prepping for a global recession, albeit a mild and short one, according to a survey by the Conference Board, and they expect growth to return by late 2023 or the first half of 2024.

Source: NACS

Lines Between C-Stores and QSRs Blur

Or they’re nonexistent, as c-stores up the ante on delivering quality food and convenience.


October 28, 2022

ALEXANDRIA, Va.—Convenience stores could be taking market share from quick-serve restaurants (QSR), reports Forbes. Food sales at c-stores have increased to over 20%, according to new research from Cardlytics, and the industry’s share of food sales has increased from 18.42% to 21.39% since 2019.

Cardlytics says c-stores have the advantage for foodservice options due to quicker prep time, more variety and short wait times. The average wait at a QSR is about seven minutes, but it’s only four minutes on average to get your food at a convenience store.

According to NACS State of the Industry data, foodservice accounted for 22.5% of in-store sales in 2021—significantly higher than the 16.8% reported a decade ago. Foodservice now makes up 35.5% of in-store gross profits, compared to 29.2% in 2011. Also, a robust foodservice offer was the greatest predictor of in-store profit; stores in the top decile for in-store store operating profit have foodservice gross profits that were seven times those in the bottom decile.

“At least some of those gains seem to be coming from the QSR category, intensifying an already competitive space,” suggests Forbes.

Forbes writes that the convenience factor is an influencing reason on the industry’s increased market share in food sales. “As c-stores upgrade their foodservice offerings to be on par with QSRs, consumers may be more likely to choose the option that is most convenient for them,” writes Forbes. “Speed is one factor, but so is location (consider that 7-Eleven footprint) and additional offerings, like gas or beer. For the latter, the scale will always tip in c-stores’ favor.”

According to research by Bluedot, almost 60% of consumers believe that convenience stores are on par with QSRs. Seventy percent of consumers go into the convenience stores before or after buying gas, and over half of customers buys snacks, while 20% buy grocery items and 16% get alcoholic beverages.

The lines between c-stores and QSRs have been blurring for years, says Forbes, and in some instances, the line does not exist. Forbes points to Sheetz, Wawa and 7-Eleven, which offer drive-thru and pickup, and they are far from the only convenience stores that offer these services.

7-Eleven has been opening its Evolution stores with outdoor patios to accompany its foodservice offerings, including its Laredo Taco Company concept. The stores also offer self-serve espresso machines, as well as delivery services from Grubhub, DoorDash and the like, “further penetrating into QSR territory.” (NACS’ Ideas 2 Go video series visited 7-Eleven’s Evolution Store in Dallas. See why customers who visit an Evolution store quickly recognize the food- and beverage-forward experience 7-Eleven is cultivating.)

Of course, 7-Eleven is one of many convenience stores revolutionizing the foodservice game. Check out more in the NACS Ideas 2 Go video series. In “Think Like a Restauranteur” in the October issue of NACS Magazine, convenience store foodservice pros share their views on what makes for a successful foodservice business. Also not to miss, “Competing With QSRs” in the May issue.

For those new to convenience foodservice, check out the NACS Certified Convenience Foodservice Management Online Training Series powered by NACS eTraining partner Ready Training Online. Retail operators can now earn a Certified Convenience Foodservice Management (CCFM) designation by completing a 10-course online training series which tackles the key aspects of developing and growing a successful foodservice offer.

Source: NACS

C-Store Loyalty Members Spend 38% More Than Nonmembers

A new report also finds that millennials are the future of loyalty programs.

NEWTON, Mass.—Loyalty programs are linked to an 18-30% increase in visits and spends at restaurants and c-stores, according to Paytronix Systems Annual Loyalty Report 2022. The report also finds that between 5 and 17% of overall business revenue is driven by the most loyal 2 to 3% of customers, and that younger members are driving a generational shift in age and spend across loyalty programs. 

Looking at convenience stores, loyalty members annually spend 38% more on average, and the report found fuel visits increased by 8% in 2021 when a customer is a loyalty member. Also, the most loyal c-store customers are visiting businesses one or more times per day.

According to the report, there were 16% less loyalty members in 2021 versus 2019, and the 56+ age segment declined the most in terms of loyalty customers. However, Paytronix found that there are now more members in the 36–45 age segment than in the 46–55 segment.

About a third of c-store loyalty customers are fuel-only purchasers, while 12% only buy in-store items, leaving 55% of loyalty members who buy both. However, Paytronix finds that a small percentage of loyalty members make a big difference. At convenience stores, the top 8-10% of loyalty members visit an average of 32 times a month—more than once a day—and four times as often as the next highest tier. These 8-10% of loyalty members are responsible for about 40% of visits, averaging more than one a day.

Although c-store loyalty members purchased less fuel per visit last year, they bought more fuel overall, showing an increase in store trips. Both their spend per check and spend per year increased across all categories.

Spend per check rose by about 25% from 2020 to 2021, mostly attributed to fuel and in-store product price increases. Fuel-only customers visit c-stores 2-3 times per month, Paytronix found, but they have the highest spend per check at nearly $40. In-store customers, on the other hand, lifted their average spend by about $5 per check. Looking at annual spend, c-store loyalty members increased their spend per year by nearly 40%.

“We are seeing more convenience stores position themselves as a destination for items beyond fuel by
associating their brand with specialty items such as coffee or ice cream,” wrote Lee Barnes, chief data officer at Paytronix, in the report.

Other key takeaways include:

A New Spending Record: In 2021, loyalty spending hit the highest level on record, demonstrating that even with rising inflation, loyalty programs are a valuable source of revenue, says Paytronix. Casual dining, fast-casual, ice cream/snack/coffee and Mexican/sandwich concepts all saw the highest annual spend per guest of any year for which Paytronix has data.

Top-Tier Loyalty Members: Top loyalty guests overwhelmingly represent the highest spenders and the most frequent visitors, and they offer a lifeline during an economic downturn.

Generational Shift in Age and Spend: Millennials (36-55 age range) have an outsized percentage of spend, while the baby boomers (56+ segment) have an outsized percentage of visits. The largest untapped potential lies with Gen Z, (16-35 age range), as this group has the most guests who neither visit nor spend. Both the growth in spend for millennials and the shrinkage in spend for baby boomers indicate that millennials are the future of loyalty programs.

Rise of Snacking: Across all concepts, 2021 saw the highest annual spend per guest of any year for which Paytronix has data. The difference was often minimal, but the ice cream/snack/coffee segment proved an exception, as guests eagerly increased their spend by 20% between 2019 and 2021.

“The Paytronix Annual Loyalty Report shows that the potential of loyalty to build relationships between customers and their favorite brands has never been greater. Between the ongoing generational shift and the critical importance of the top tier of 2-3% of guests, it has become increasingly clear that growing cadres of loyal customers are vital for the health of brands. And the loyalty members of convenience stores who visit daily show the potential of loyalty customers to visit more often,” said Barnes in a statement.

NACS has published a free report on how convenience retailers can build loyalty program affinity beyond rewards and provides insights on c-store loyalty programs, shopper expectations, program engagement, personalization and program access/communication. Download the report: Driving Engagement From Convenience Retail Loyalty Programs.

NACS Magazine dove into loyalty programs and how they can provide convenience retailers with key consumer insights and a competitive edge, while NACS offered a free webinar that shows retailers how to improve their current loyalty program.

Source: NACS

Nothing General About It

Tailor your general merchandise categories to meet customers’ specific needs.


By: Sarah Hamaker | September, 2022

Walk into any convenience store and you’ll notice something different in each one. Some stores emphasize packaged beverages or the beer cave, while others focus on foodservice or grab-and-go, with offers often localized to a specific region. That attention to detail is most evident in how retailers stock their general merchandise category.

“General merchandise consists of everything from cellphone accessories to batteries to school office supplies,” said Jayme Gough, research manager, NACS. “In 2020, many retailers added COVID-19-related items, including masks and hand sanitizer, which boosted sales for the category starting in April 2020. Going into 2021, sales stayed high but dropped below 2019 levels starting in May as COVID-19 concerns continued to wane and consumers bought fewer masks and hand sanitizer.”

The Hub Convenience Stores stocked personal protective equipment early in the pandemic. “But here in North Dakota, they just weren’t in high demand,” said Jared Scheeler, owner of the five-unit chain based in Dickinson, North Dakota, and NACS chairman. “Even though we were prepared, we sold through 10% of our supply of PPE items, so we have no plans to proactively prepare for another wave of COVID.”

Last year, the general merchandise category grabbed 1.93% of inside-store sales, down from 2.06% in 2020, according to the NACS State of the Industry Report of 2021 Data. “This tracked with data showing sales dropping below 2020 monthly figures for all but four months of the year,” Gough said.

Average monthly sales per store fell 4.1% last year compared with 2020, hitting $4,646 per store for the general merchandise category, according to the NACS SOI Report of 2021 Data. Gross margins for the category rose 1.26 points in 2021 to average 44.90%, compared with 43.64% in 2020. “Despite this, gross profit declined 1.3% year over year, and average monthly gross profit per store for the category averaged $2,086,” Gough said.

Catchall Category

General merchandise has long been a category for items not fitting into other store sections. In 2021, the subcategory of “other general merchandise” was the biggest, capturing 47.2% of category sales for items like fans, candles, trash cans, personal protective equipment and flashlights, according to NACS SOI data.

“At The Hub, we’ve really focused on high-end flashlights and utility tools,” Scheeler said. “I continue to be surprised at how many sales we register for a $30 multipurpose flashlight. These are all incremental sales on top of what we’d typically expect at our stores.”

With the category having so many options, finding the right merchandise mix can be key to maximizing profits. “We stay in close contact with our convenience retail customers to discuss how our wide variety of products in the general merchandise category can work for them,” said Brian Cox, CEO, SurgePays, a technology and telecommunications company focused on underbanked and underserved communities.

“Convenience stores operate on a fraction of the footprint of other general merchandise retailers, with the majority of sales coming at the pump but the majority of profits coming from inside the store,” said Christine Vondran with BIC Consumer Products. “Therefore, it’s all about meeting the consumers’ needs, wants and desires at the point of purchase.”

BIC relies heavily on shopper marketing data, category management insights and syndicated data analysis to be a resource to help retail partners acquire a profitable merchandise mix for their locations. “With certain subcategories, such as HBC, stationery or automotive, it’s often not needed to have more than one SKU offering to meet the needs of the consumer,” Vondran said.

‘Tis the Season

Convenience stores make good use of the general merchandise category by stocking seasonal favorites. The second largest subcategory was seasonal last year, which had 9.5% of category sales in 2021, but that number is lower as a percentage of sales contribution year over year, according to NACS SOI data.

“Sunglasses and t-shirts are always popular in the summertime,” said Cox. The company keeps in close contact with its convenience retail customers to “ensure they have ready access to the season’s hot merchandise.”

Because North Dakota weather experiences extremes in all four seasons, The Hub Convenience Stores stock appropriate seasonal products. “Our stores sell an incredible amount of winter hats and gloves, hand and feet warmers, and winter automotive accessories,” Scheeler said. “In the summer, that transitions to the expected items like charcoal and lighter fluid but also to sun dresses and trendy hats.”

BIC has seen an evolution from seasonal to include holiday-specific merchandise. To meet that seasonal and holiday customization need, BIC has designed more than 100 different lighter series. “For instance, in addition to summer merchandise, consumers may also be encouraged to purchase Americana-inspired designs for Memorial Day, July Fourth and Labor Day,” Vondran said.

Accessorize Me

Telecommunications hardware (9.2% of sales) and propane exchanges (7.6%) were the next biggest subcategories, according to NACS SOI data. Sales of propane exchanges rose in 2020 because people were home and using their outdoor grills during the first year of the pandemic.

At The Hub, telecom hardware carries the general merchandise category. “We have a heavy selection of both lower-end and OEM-equivalent hardware, and sales continue to grow year over year,” Scheeler said. “We have plans to double down on telecom in the near future because of its popularity with our customers.”


"The lighter segment has seen more innovation in the last two years than it has seen in over 20 years." –Christine Vondran

Smoking accessories (7.5% of category sales) snagged the fifth-biggest slot last year, according to NACS SOI data. BIC works to keep its products interesting to consumers. “The lighter [segment] has seen more innovation in the last two years than it has seen in over 20 years,” said Vondran. For example, last year, BIC launched EZ Reach, a pocket lighter with an extended wand to keep thumbs away from the flame when lighting hard-to-reach spaces. To add to the momentum on EZ Reach, BIC added Djeep Lighters in July to its portfolio.

“When analyzing our general merchandise sales, our unit volume is dominated by smoking accessories,” Scheeler said. “BIC lighters make up seven of our top 10 general merchandise SKUs when measuring by unit volume.” The chain stocks a wide variety of lighters in countertop displays to snag impulse sales at checkout.

SurgePays partners with convenience stores on promotional materials. “For example, our prepaid card racks are easy to set up and provide marketing collateral to catch customer attention and lead to sales directly at the counter,” said Cox.

The Hub also has a small selection of branded merchandise, namely branded coffee and fountain mugs. “We’ve been fortunate to sell five figures’ worth of mugs in an average year at our five locations by focusing on quality, variety and purchasing in quantities that will allow for solid profit margins,” Scheeler said.

A General Future

With general merchandise, convenience retailers have a lot of room to branch out and try new items and products. “Though this category provides many opportunities for creativity, at the end of the day, it’s the necessities our customers continue to want,” Scheeler said. “We’ll focus on merchandising those items well, which include batteries, cellular hardware and smoking accessories, as well as take advantage of any seasonal opportunities that come our way.”

“The future of general merchandise, especially in convenience stores, is to maintain and grow the core, while bringing in new customers through innovation,” said Vondran. “The key will be to strike the right assortment balance in these two segments to satisfy the consumer but not carry more facings or items in the category than needed.”

Source: NACS

Sen. Marshall Visits Kansas QuikTrip, Talks Swipe Fees

The senator also hosted a roundtable discussing the bipartisan Credit Card Competition Act.

WICHITA Kan.—Merchants from across Kansas met with Senator Roger Marshall (R-KS) last Friday to emphasize how lack of competition over credit card processing drives up prices paid by consumers and thanked him for introducing the bipartisan Credit Card Competition Act.

Marshall hosted a roundtable with a number of Kansas retailers to discuss the bill he introduced, and the meeting was followed by a NACS In Store visit to a QuikTrip location where he worked behind the counter.

“It just amazes me, a convenience store like this one, is that they’re paying more for swipe fees than they are for utilities,” said Marshall during his QuikTrip visit, reports KAKE.com.

“Kansans and other Americans pay the highest ‘swipe’ fees in the industrialized world, and lack of competition is the reason why,” said Anna Ready Blom, NACS director of government relations and Merchants Payments Coalition Executive Committee member. “These fees drive up prices paid by consumers, and Visa and Mastercard have refused to hold off on increases despite raging inflation. This legislation is carefully crafted to apply only to giant Wall Street banks and would have no impact on community banks or credit unions in Kansas. Consumers’ credit card rewards would be protected since banks, not processing networks, issue those rewards. And security would be enhanced because independent networks have less fraud and networks backed by foreign governments like China’s Union Pay would be barred from entering the U.S. market,” she said.

“This bill is a win for everybody except the largest big-city banks that have profited off small businesses and consumers across America for far too long,” Blom said.

Blom was one of about 20 merchants and trade association executives who met with the Republican senator at the district office of the Dillons supermarket chain in Wichita. The roundtable included retailers, restaurants, grocers, convenience store owners and fuel merchants, among others.

Marshall and Senate Judiciary Committee Chairman Richard Durbin (D-Ill.) joined together last month to introduce the Credit Card Competition Act. The action came three months after Visa and Mastercard refused a request from the two senators and other members of Congress to withdraw an increase in fees that the lawmakers said would add to inflationary pressures.

The bill is aimed at swipe fees averaging more than 2% of the transaction that banks and payment networks like Visa and Mastercard charge merchants to process credit card transactions. Credit and debit card swipe fees have more than doubled over the past decade, soaring 25% last year alone to a record $137.8 billion. They are most merchants’ highest cost after labor and drive up consumer prices by about $900 a year for the average family.

Swipe fees remain one of the highest operating costs for convenience store retailers after labor, according to NACS State of the Industry data. In 2021, overall card fees paid by the convenience store industry were $13.5 billion, up 25.6% in 2021 versus 2020 ($10.7 billion), NACS SOI data indicate.

Visa and Mastercard, which control more than 80% of the credit card market, restrict processing to their own networks and set the fees the banks charge, prohibiting competition among those banks and blocking innovative independent payment networks that offer both lower fees and better security.

To address the issue, the legislation would require that credit cards issued by the nation’s largest banks be enabled to be processed over at least two unaffiliated networks—Visa or Mastercard plus an independent network such as NYCE, Star or Shazam. Domestic credit card networks like American Express or Discover could also be the second network, but not networks supported by foreign governments like China’s Union Pay. Merchants would be allowed to choose which of the two networks to use, meaning networks would have to compete on pricing, security and service.

The bill would apply only to financial institutions with at least $100 billion in assets—fewer than three dozen institutions nationwide but 90% of Visa and Mastercard credit card volume—and would have no impact on small community banks or small credit unions.

Source: NACS

An Exclusive Offer

Private-label brands drive loyalty and raise c-stores’ image for fair prices.


By: Terri Allan | August, 2022

At Nouria Energy Stores in New England, sales of a product line introduced just four years ago are already outpacing center-store branded items. According to Kristine Modugno, director of category management at the 170-unit convenience store chain, year-over-year sales of the company’s private-label My Nouria line are growing at a double-digit rate, driven by new flavors, enhanced packaging and customer demand for quality items at a value price. While My Nouria offerings cross a variety of categories, snack items like the All-Dressed rippled potato chips, blueberry-covered pretzels and chocolate bars are among the products which customers particularly crave.

In Texas, meanwhile, sales of TXB-branded products reached more than $1 million last year, Benjamin Hoffmeyer, vice president, marketing and merchandising, TXB, reported. And with new private-label items scheduled to launch this year, sales could double in 2022, he said. “Many of our products are growing at a 50% to 60% rate thanks to their value proposition,” he noted. “Their quality is equal or better to that of national brands, while the price per ounce to the consumer is better than national labels.” And for TXB, with about 50 stores in Texas and Oklahoma, penny profits on its own-label products are improved versus that of leading brands.

TXB and Nouria are among a small but growing number of c-stores committed to advancing offerings and overall sales of private-label products. While largely the signature of grocery, drug and big-box stores, exclusive labels are emerging in the c-store channel despite some of the unique hurdles they bring to small footprint and fragmented operations. Convenience retailers already marketing private-label brands, along with vendors and channel advisers, see continued potential for the products, as well as the opportunity for the exclusive labels to help build c-stores’ reputation for fair prices. 

Booming Business

Private labels are a big business. According to NielsenIQ, private labels accounted for nearly 19% of total sales across U.S. grocery and drugstores, mass merchandisers and select dollar stores, warehouse clubs and military commissaries in 2021. While those sales represented a slight decline from 2020—when pandemic-driven buying resulted in a surge for private-label and branded products—today’s inflationary woes are expected to benefit store brands.


Private label isn’t just a value product at a cheap price anymore.

Private-label sales in c-stores, however,are dramatically underdeveloped compared to other outlets. According to Jason Zelinski, client director, convenience and growth accounts at NielsenIQ, private-label products make up only 2.4% of total sales in c-stores. But the good news is that sales in the convenience channel are growing at a fast clip—up 19% last year, Zelinski said—easily outpacing trends in other channels. Todd Maute, partner at CBX, which helps retailers develop private-label portfolios and counts Wawa among its clients, explained that the fragmented nature of c-stores is a big reason that the channel lags others when it comes to store brands. “With more than half of all c-stores independently owned, it’s difficult for those stores to meet the minimum volume requirement from manufacturers for private-label products,” he said. The absence of private labels at so many c-stores is unfortunate, Maute continued. “They’ve become expected in high-volume categories and help drive loyalty to stores.”

The pandemic, supply chain pressures and rising inflation have all helped increase demand for private-label merchandise. But they’ve also increased constraints on the manufacturing and distribution of store brands. Most recently, “the manufacturing community has been limiting the amount of private labels they’re producing,” Maute noted. “Some aren’t doing private labels at all.” Indeed, both Modugno and Hoffmeyer reported that their stores experienced shortages from private-label vendors earlier this year, but those constraints have eased in recent months.

Loyalty Driver

One of the biggest benefits of private-label products for c-stores is the customer loyalty they help develop. “When a c-store converts a customer to its private label, it forms an exclusive impression on the customer that the only place to get the item is their store, which can result in repeat trips and larger basket rings,” Zelinski said. Maute agreed, pointing to the reputation Wawa has earned for its exclusive coffee, which has made the retailer a destination for many consumers. Moreover, he sees “significant opportunity for c-stores to own categories like salty snacks if their private labels are sourced properly and quality exceeds expectations. Those types of products provide the opportunity to drive loyalty.”

Enhanced margins are another asset for retailers. “Private-label brands eliminate layers of cost that national brands build into their price model for marketing and other expenses,” noted Teresa Voelter, private label director at McLane Co., whose Consumer Value Products subsidiary offers numerous nonexclusive CVP-branded private-label products to retailers. So not only do they provide savings for consumers, but “they offer a way for retailers to increase their profits and secure consumer loyalty,” she said. Hoffmeyer added that store brands can aid retailers in inventory control, particularly when out-of-stocks impact national brands, and also “help build your brand awareness and strengthen the connection with your consumers.”

Despite the advantages, private-label programs come with a host of challenges for c-stores. Minimum volume requirements from suppliers can make the offerings untenable for some retailers. “For small retailers, it can be difficult to hit the minimum order when working under a large contract,” said Mike Fogarty, founder and CEO of Choice Markets, an upscale c-store concept with three locations in Denver and another three on the way. “Sourcing and design can be difficult, too,” said the retailer, whose stores offer a full line of Choice-branded prepared foods and snacks. “They may not know how to find a manufacturer.” McLane’s Voelter noted that for c-stores not large enough to create their own brand, the CVP products can fill in. “They give retailers a strong offering that increases profit margins,” she said. Maute recommended that small c-store chains form co-ops for better buying power or work with local manufacturers on private-label products.

Space constraints are another hurdle. “Space in a c-store is the tightest of any channel, so each spot must be justified,” noted Zelinski. Nouria’s Modugno concurred. “With c-stores’ limited SKU environment and the important role that the national brands play, you need to have a solid strategy with your total assortment and the role of private brands in each category,” she said. With no national marketing support to rely on, Hoffmeyer added that c-stores need to ensure they can fund marketing efforts for their own brands.

Eye on Snacks

Among the merchandise categories where c-stores have ventured with their own labels are salty snacks, packaged sweet snacks, packaged beverages, prepared foods and automotive supplies. According to Zelinski, salty snacks and packaged sweet snacks show the biggest opportunity. In all channels, private-label salty snacks comprise 12% of category sales, but in c-stores, they only account for 2% of category sales, he noted. Private-label sweet snacks, meanwhile, contribute 28% to category sales across all outlets but only 8% of c-store category sales.


Private-label brands eliminate layers of cost that national brands build into their price model for marketing and other expenses. 

Nouria and TXB are looking to leverage those opportunities, as the New England chain recently expanded the My Nouria portfolio into packaged baked goods, while the Texas operator could add chips in the next year or two, Hoffmeyer said. TXB-branded packaged beverages, meanwhile, have been profitable for the company, he reported.

“We have better control upstream on cost of goods,” as compared to national brands, “and since TXB products are made in Texas, we save a ton on freight, which is key with heavy beverage cases,” the retailer noted. Mineral water, sports drinks and iced coffee drinks are also on the chain’s radar, he added.

At Choice Markets, prepared foods are produced at a commissary kitchen to the company’s specifications, while private-label nuts come from national suppliers, Fogarty said.

Deli salads and prepared meals are among the Choice brand’s most popular items, the retailer said, as “our customers trust our brand. They know it for its quality and that there’s thought behind the sourcing.” Fogarty added that more Choice-branded products are in the works and could include pastas, dressings, chips and dips.

Perception Shift

The increased availability of quality private-label merchandise can only help to build the reputation of c-stores for offering fair prices. “Private label adds a low-priced option to convenience store shelves,” remarked Zelinski. “This plays a role in shifting consumer perception, as shoppers often believe they’re paying a higher price for convenience.” Special promotions and features on private-label merchandise propel the shift even more, Modugno said. “When guests are in our store, we’re their frame of reference for pricing, so promotions are key,” she remarked.

Research and planning are also core components of a successful private-label program. “Be sure to do your research to offer high quality products in great packaging, with attributes that appeal to your consumer,” Voelter advised. “Private label isn’t just a value product at a cheap price anymore. The goal is to source and offer products that meet or exceed consumers’ expectations, tell a story and even make them proud to purchase.”

C-store operators already active with private labels have no plans to look back. “Private label not only provides our channel a means to give consumers a better value proposition but also a means to further strengthen our brands’ connections with consumers,” said Hoffmeyer. “It also allows our channel to offer differentiated products to our customers and an opportunity to drive new traffic. Private label will be a necessity for c-stores to compete with other channels who have had a head start on the private-label journey.”  

Catering to Truckers

While consumable products are among the most common private-label offerings in c-stores, Love’s Travel Stops makes a targeted effort to provide its own line of products for its large pool of professional drivers.

“We like to say that ‘Love’s Mobile to Go’ zone is like the Apple Store or Best Buy of the highway, and it shows by how popular those items are among all customers,” said Casey Creegan, manager of merchandising at the 600-location travel stop network. Merchandise ranges from items that appeal to casual drivers, such as phone chargers and headphones, to those of interest to truck drivers, like GPS devices and headsets. Additional products offered as part of the “Mobile to Go” set include the Portage line of travel bags and clothing and the Love’s-branded auto fluids line.

Love’s-branded snacks and drinks—such as bottled water, beef jerky and candy—are also popular with guests, noted Creegan, and products like sweet and salty snacks and juices show potential. But she added, “We see a lot of opportunity on the nonconsumable side for items that help get professional drivers and four-wheel customers back on the road quickly and safely.” 

Source: NACS

Consumers Seek Flavor Innovations When Snacking

Sweet and salty, spicy and sweet and tangy and salty flavor combos are the most popular.

ALEXANDRIA, Va.—Ingredient integrity and flavor exploration has the most influence on food and snack choices across all generations, according to the Frito-Lay 2022 Summer Snack Index. Forty-two percent of consumers stated they would choose flavor combinations such as sweet and spicy, or tangy and salty over familiar, regional flavors (21%), texture (21%) and international flavors (15%).

Thirty-five percent of consumers stated that innovative flavors are most likely to influence what they select, followed by recommendations (28%), brand recognition (21%), packaging (9%) and sustainability efforts (7%). Additionally, 40% of consumers are most excited to find a snack with a flavor they love but have never had in a snack product before. Given the choice, people are selecting innovative flavor combinations most often (59%), including sweet and salty, spicy and sweet and tangy and salty.

“During the summer, people explore new activities, new places and enjoy new flavors of snacks as they attend more outdoor gatherings,” said Mike Del Pozzo, chief customer officer, Frito-Lay North America. “While flavor continues to drive consumers’ food-purchasing behaviors, we know how a company behaves matters and that’s why I’m proud of Frito-Lay’s commitment to sustainability and community impact.”

Ninety percent of consumers who snack daily care deeply about the companies whose snacks they’re eating, according to Frito-Lay. Snack companies’ attention to sustainability practices (77%), community impact around food access (78%) and treatment of employees (87%) are among the top values driving purchasing decisions.

About two-thirds of consumers surveyed are more likely to purchase products that invest in local communities, and purchasing sustainable food products is important to 66% of consumers. Also, 74% of consumers are more interested in naturally sourced ingredients than production-related factors like recycled packaging, compostable packaging or products made with recycled water.

Frito-Lay reports that long-term eating habits are shifting. Almost everyone enjoys the social aspect of snacking (81%), but Gen Z and millennials are more likely to prefer to eat in solitude (45%). Millennials (19%), Gen Z (20%) and parents (20%) are slightly more likely than average to snack on-the-go.

Parents think ahead when it comes to snacking, with more than 2 in 5 of parents planning to buy or create individually packaged snacks in advance before traveling this summer. Also, parents are more likely than non-parents to replace meals with snacks several times per week or more (52%). Sixty percent of consumers are most excited to snack at outdoor gatherings with family and friends now that pandemic restrictions have lifted.

According to NACS State of the Industry data, salty snacks accounted for 4.36% of inside sales in convenience stores in 2021, an increase of 0.24 points from 2020, while gross margins for the category were 40.83%, nearly a point (0.93) higher than 2020. Learn more about how salty snacks fared in 2021 in the NACS State of the Industry Report of 2021 Data.

Source: NACS