ARLINGTON, Va. -- A few months ago, Zulfiqar Ali added more groceries to the product mix at his 7-Eleven in Arlington, Va., after he noticed shoppers making multiple trips between the grocery shelves and the checkout counter, carrying cans of Goya black beans, Aunt Jemima pancake syrup and fresh fruit. On a recent evening, two elderly women who live nearby spent $150 on groceries. Ali has even expanded his stock of sugar, salt and cooking oil due to popular demand, he told The Washington Post.
"It was not like that before," said Ali, who has worked at the store for six years and owned [image-nocss] it for the past two. "Before, people just buy a couple of things and pay and leave."
Convenience and drug stores are siphoning away sales from traditional supermarkets as the weak economy and high gasoline prices force consumers to save more by driving less, said the report. They are stopping by not only for the quick quart of milk, but also for pantry items normally bought at the supermarket, and even for dinner. Some are using the stores to stretch their paychecks, buying what they need when they need it instead of stocking up.
At 7-Eleven stores in the Washington region, grocery sales were up 2% to 3% last month compared with last year, Tom Gerrity, director for processed foods, told the newspaper. Frozen food sales grew 7%, and ready-to-eat meals jumped 9%. Other regions across the country are seeing similar growth, with weekly spikes following paycheck cycles, he said.
"Some of the products that would typically be purchased at a supermarket or club store in bulk quantities, we're seeing more customers buy those products throughout the month at a 7-Eleven," said Gerrity.
According to trade publication Food World, 7-Eleven is among the top 10 grocery destinations in the Washington area, ranking ninth with annual sales of $469 million and 3.3% market share—ahead of chains such as Harris Teeter (10th) and Whole Foods (11th). CVS ranked fourth with $941 million in sales, excluding prescriptions, and 6.5% of the market. Giant dominates the region with $3.3 billion in sales and 23.2% market share. Safeway follows with $2.6 billion in sales and 18.3% of the market.
Part of the strong rankings are due to the sheer number of convenience and drug stores in the region: 7-Eleven has 416 and CVS has 190. Whole Foods and Harris Teeter together have just 32 stores. But as gasoline prices continue to nibble away at consumers' wallets, many are finding that they can get what they need closer to home, according to the report.
"It's a big number because convenience stores are everywhere," Jeff Metzger, publisher of Food World, told the paper. "They're trying to use the edge that they inherently have."
Convenience and drug stores have been ratcheting up the competition with traditional grocers over the past three years with expanded food offerings, Metzger added. CVS does not break out sales numbers for grocery, but general merchandise accounts for 15% of revenue, according to the company's latest annual report. CVS spokesperson Mike DeAngelis said the retailer does not position itself as a grocery destination, but does tailor merchandise to neighborhoods. "Where we see a need in a particular community, we make efforts to expand our selection of staple food items (bread, milk) as well as our convenience food assortments," he told the Post.
At Ali's 7-Eleven, grocery sales are up 6%, while chips grew 16% and take-home cookies and crackers skyrocketed 39%. Budget beers rose 15%. Customers are buying toilet paper, napkins, Ritz crackers and Sunkist soda, said the report.
"A trip to the gas station may be unavoidable, but now consumers are more likely to also pick up a quick meal or a snack at a [convenience store] and avoid another stop," Chicago-based consulting firm Technomic Inc. told the paper.
Still, a recent report by consumer behavior research firm TNS Retail Forward showed that the primary reason shoppers visited c-stores was to fill up their gas tanks. Grocery shopping ranked last. Among store merchandise, cigarettes and other tobacco products make up the bulk of sales, followed by bottled beverages and alcoholic drinks. "It's important to add destination appeal so that shoppers think of them not only as convenience," Jennifer Halterman, Retail Forward senior consultant, told the Post. "Adding that second layer can help them in the future."
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