What describes the C-store, bodega, or corner store of the future?
The Food Institute, in their special March report — “Convenience Stores’ Evolution” — quoted Running Point and its chief investment officer, Michael Ashley Schulman, CFA on two of the “Four Keys to C-store Success,” [or three of the five keys, depending on how you count them😉]. The full report covers how convenience stores are adapting post-pandemic to new trends, an increasingly electric vehicle (EV) world, and cultural shifts as well as the following topics:
- C-stores Reach Next Level
- Four Keys to C-store Success
- PRIDE and Foxtrot – Not Your Typical Convenience Stores
- Case Study: How Stuckey’s Revived
- Evolution: Exclusivity, Automation, and Loyalty Programs
- Analytics and Mergers & Acquisitions
In an industry where speed and experience are everything, competition among convenience stores and with C-store substitutes is on fire🔥
C-stores must gain and maintain relevance to stay successful!
The successful C-store, bodega, or corner store of the future has to consider handiness of goods, automation of services, the 3 P’s of product, price, and place, and the additional psychological factors of want, impulse and exclusivity🔔
C-stores, which racked up over $650 billion in annual sales in the U.S., need not only be convenient in their location, but should be downright helpful for their clients and in a way that attracts new customers. Automation for contactless shopping, inventory stocking, and item delivery will be key to saving labor and tracking inventory. With better automation, and tighter inventory controls, one can carry a wider range of products and price points including well placed impulse items and new trendy items that are hard to find elsewhere🏪
Creating exclusivity is not contrary to the convenience model; it is essential.
Offering desirable health and beauty products, food, drinks, candy, pet goods, or items exclusive to your c-store brand also be a key differentiator for success; examples include 7-11’s Slurpee or Circle K’s recent partnership with Pepsi to exclusively offer Mtn Dew Purple Thunder. Exclusively branded food and drink concepts—pastries, bagels, charcuterie, fresh juices, espresso drinks, micro-brews, breakfast burritos, slushies—can also help differentiate the physical c-store from online quick delivery competitors like Gopuff in the U.S. and UK🛵
The international scene
In Europe, delivery services such as Bolt, Membo, and Getir directly compete with c-stores. Additionally, in many countries outside the U.S., convenience stores also face stiff competition from smaller footprint concepts backed by large supermarket chains. Examples include France’s Carrefour—the eight largest retailer in the world, operating in over 30 countries—which manages hypermarkets, supermarkets, convenience stores (e.g., Carrefour Express and Carrefour City), cash and carry stores, and both food and non-food e-commerce websites.
Quoted article excerpts are below:
Invest in automation: Convenience stores are increasingly utilizing mobile POS checkouts for items like grab-and-go snacks. Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors, also feels automation for inventory stocking will be key in the near-term, allowing retailers to save on labor “Automation for contactless shopping, inventory stocking, and item delivery will be key ,” said Schulman, a frequent keynote panelist at investment conferences. “With better automation, and tighter inventory controls, [C-stores] can carry a wider range of products and price points.”
Award loyalty: C-stores also need to offer exclusive products that reward frequent visitors, Schulman said, noting successful examples like Circle K’s recent partnership with Pepsi…. “Exclusively branded food and drink concepts,” Schulman said, “can help differentiate the physical C-store from online quick delivery competitors like Gopuff in the U.S.”
Appealing products: Michael Ashley Schulman,…suggests items that can set C-stores apart from the competition: breakfast burritos, fresh pastries, charcuterie, micro-brews, and smoothies.
Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Past performance is not indicative of future results. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-23-21