Food Fiiiight! The 'Well Beings' vs. the 'Eat Drink & Be Merries'
Hale encourages retailers to find unexpected opportunities to attract convenience consumers
CHICAGO -- Todd Hale, Nielsen's vice president of consumer and shopper insights, had some good news and some bad news for retailers attending his "Understanding the Convenience Shopper" general session at this year's NACS State of the Industry Summit.
The good news: the convenience store shopper is driving sales growth and will continue to drive growth in the future. The bad news is other retailers are "messing with" the c-store business, from dollar stores going after tobacco sales to drug retailers getting into the foodservice game.
"How do you compete with (other) retailers in terms of their assortment and what's going on inside of their box in terms of how they connect with shoppers today and in the future?" Hale asked.
To help address this concern, he looked at some retail "hot buttons," many of which provide some unexpected opportunities for c-store operators to compete with outside channels and grow their business.
"An amazing occurrence is happening today around food and the fight over food," Hale said, referring to his Food Fight hot button. "You're messing with existing food retailers and non-food retailers are now messing with you when you think about all the fresh products that you can find in drug stores and dollar stores. You've even got clothing manufacturers like Tommy Bahamas opening up restaurants."
Nielsen's data shows that fresh prepared food sales are growing across all channels, particularly in grocery. Still, Hale has been impressed with c-store retailers like Canastota, N.Y.-based Nice 'N Easy, which has used the consumer interested in prepared food offerings to help grow its private-label business.
"The connection with food is interesting," he said. "It does help to build a nice equity with shoppers if you can do it well."
The demand for fresh food speaks to another hot button of Hale's: Health and Wellness.
"We have a segmentation scheme we use at Nielsen that comes from the National Marketing Institute that segments consumers into how engaged they are with health and wellness," said Hale. "It ranges from the 'well beings'--who are very engaged in making sure what goes in them is good for them and are also very green in how they live--to the 'eat drink and be merries,' who really could care less about being healthy."
Not surprisingly, it's those on the less-conscious side of this health-and-wellness spectrum that tend to shop at c-stores, but Hale said he believes the 'well beings' could present a very profitable opportunity for the channel.
"The people who are engaged in health and wellness spend a lot more and make a lot more trips," he said. "They're very important, but tend to make more trips to grocery and club."
The growing market of health-conscious consumers has driven retailers such as Dallas-based 7-Eleven to commit to offering healthier, fresher fare at their retail locations. This kind of commitment won't work for all retailers--different retailers will have to look at their shoppers to determine what kind of health-and-wellness mix will best drive profits in their locations.
"You have some flexibility here," Hale said. "Healthy options are something you can win with, but you need to judicious about where and how you do it."