Now that we're four years removed from the start of the COVID-19 pandemic, it's time to take stock of what's changed since then. For convenience stores, things are looking up as more people are shopping at c-stores than ever before. In fact, 2023 was the most significant year for sales, highlighting how consumers are eager to shop in person.
For operators, now is the best time to reinvest in their businesses and utilize equipment and technology to adapt to growing demand. While 2024 may see less growth than 2023, the industry doesn't show signs of slowing down.
Bouncing Back: Shopping Behaviors Post-Covid
Even before the pandemic was declared over, consumers were already trying to return to "normal." However, normal has become all about convenience for many people, as illustrated by the numbers generated in 2023.
What's most notable about the latest c-store report is that it shows a considerable increase in in-store sales. Not only are shoppers less worried about sharing space with others, but they also have more reasons to go inside and browse the aisles. As C-store merchandisers expand their offerings and diversify the types of foods and beverages they sell, customers are getting a better shopping experience.
Fuel sales also contributed to the overall number, increasing about 30 percent. Part of this was due to higher gas prices, but the number of gallons sold also increased by 1.6 percent. Even with a growing number of electric vehicles on the road, consumers still use their cars to commute and travel. Sometimes, road trips are still the most affordable option to see new places.
Skyrocketing Sales: A Record-Breaking Year
When looking at the numbers, it's clear that convenience stores are much more resilient to economic shifts than other retailers. The numbers also illustrate that customers value convenience and accessibility, particularly as stores sell more niche items.
Overall, the industry earned $814 billion in total sales, with $275 billion coming from in-store sales. The overall gross profit margin increased by 3.3 percent. While this increase wasn't as high as in 2021 (when it was around five percent), it's still remarkable and showcases the industry's health.
Behind the Numbers: Factors Driving In-Store Sales Growth
Although the C-store industry is posting record profits, operators must understand why their sales are increasing. This way, they can capitalize on new trends and continue growth and success into 2024 and beyond. Some main factors driving sales include convenience, broader foodservice selections, and more appealing in-store experiences.
Ease has always been a massive factor for c-store shoppers, as the stores provide quick and easy access to fuel, snacks, and beverages. However, as more consumers are busier than ever, they must take advantage of convenience stores more often. Sometimes, a c-store is the only way for someone to get food when crunched for time.
More stores are also embracing diverse foodservice options. For example, hot food was relatively scarce, but more operators were selling hot options like wings, pizza, tenders, and sandwiches. In some stores, customers can order quick-service meals, turning a C-store into a combination fast-casual restaurant.
A Glimpse into the Future: Federal Industries Convenience Store Solutions
As the industry grows, c-store merchandisers can take advantage by providing better equipment for customers to get what they need. For example, reach-in cooler displays can present items visually appealingly while making it more convenient to grab a specific item.
Grab-n-Go foods are also climbing in popularity, as fewer people have time to cook and prepare a full meal. Instead, grabbing a sandwich, salad, or other prepared dish from a display is much easier. Island displays are also gaining popularity as they offer 360 degrees of access, giving operators and customers more options.
Snacking is becoming an art form, and C-store merchandisers can help customers indulge their snacking habits. While more people choose snacks instead of full meals, many younger consumers create unique snacking combinations. Millennials and Gen Z customers typically want craveable items and dishes, so operators must allow them to experiment and become snacking savants.
Overall, as long as c-store operators can keep diversifying their product offerings and improving the layout and appearance of their stores, they can expect the sales surge to continue.
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