Tuesday, September 27, 2016

Convenience Stores Are Fastest Growing Fresh Food Retailers

The Grocerant niche with Ready-2-Eat and Heat-N-Eat fresh food is booming and C-stores are leading the way.  C-stores in-store sales increased nearly 6% in 2015, convenience stores are now the fastest growing retail vertical according to Koupon data, which also found the vertical is now pulling in $600 billion annually. C-stores are picking up sales momentum as the $600 billion mark indicates more than 18% growth since 2010 when convenience stores brought in $190 billion in in-store sales
Recently NPD Group noted that Wawa and 7-Eleven are competing by appealing to millennials, who want the quality and fresh ingredients of fast-casual restaurants but are frugal and prefer not to wait in line at a C-store for fresh food.
The simple truth is Millennials love convenience, saving time, and money. That is good news for convenience stores seeking to enter or expand offerings within the grocerant niche offering Ready-2-Eat and Heat-N-Eat fresh prepared food.  How much do Millennials love C-stores, 85% are in a convenience stores at least once every seven days. Don’t discount the fact that Baby-Boomers are migrating to C-stores as well.  Some 60% of Baby-Boomers are once-a-week spenders within the C-store sector.
What are people buying in these stores - consumer packaged goods. The Koupon data found the average shopper spends $6.52 per trip and checks out with under 3 items. Tobacco tops the list of items purchased (36%), followed by food service (21%) and packaged beverages (15%).

Wawa’s Lori Bruce stated that “the chain caters to millennials' preference for customization through kiosk ordering and made-to-order sandwiches, along with its selection of grab-and-go fruit and veggie snacks packaged with dips.”

Convenience stores also more than double other retail outlets in sheer numbers - there are just over 154,000 convenience stores in the US compared to 51,000 supermarkets/centers, 41,000 drugstores, and 27,000 dollar stores. Recently 7-Eleven set a goal to double it number of stores in the US that would mean adding 10,000 new units to this over charged sector.

The Koupon data also revealed that "With the average attention span lasting only8 seconds, consumers are becoming more distracted every day, making it increasingly difficult for marketers to capture their attention. As a retail format preferred for its ability to save time, c-stores have an opportunity to deliver an experience that customers are looking for. Today, leading c-stores are launching initiatives to capture consumer attention and drive store traffic,"
The Koupons research also breaks down what shoppers are buying:
• 76% of women and 68% of men buy fresh foods
• 71% of women and 62% of men look for 'healthy' snack options
• 62% of women and 50% of men expect items to not have expired

Outside eyes can deliver top sales and bottom line profits.  Invite www.FoodserviceSolutions.us  to provide brand and product positioning assistance or a grocerant program assessment. Have you completed a Grocerant Scorecard? Contact: 253-759-7869 or Steve@FoodserviceSolutions.us

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