NEW ORLEANS -- Sales were up, profits were down and credit card fees continued to spiral out of control, according to the industry's top-line 2006 numbers released at the NACS State of the Industry Summit in Partnership with CSP last week in New Orleans. But what does it all mean? Presenters provided answers in a wrap-up panel session.
It's important to know what's behind the numbers before you jump in, said panel moderator Richard Oneslager, CEO of Balmar Petroleum/First Hand Management LLC, Denver.
David Portalatin, director [image-nocss] of industry analysis at The NPD Group Inc., Port Washington, N.Y., suggested that convenience might not be enough. He noted that the industry's convenience factor will always be a consumer driver, but that consumers are gravitating towards other profit centers. This, in turn, presents great opportunities for retailers to optimize the value of in-store propositions.
As some retailers face the challenge of getting consumers inside the store to recognize convenience stores as a destination for foodservice, Portalatin noted that foodservice doesn't necessarily mean food prepared onsite. For example, he stressed the value of cross merchandising lunch items with packaged beverages and snacks as a solution to helping consumer create a complete meal.
Greg Parker, president of The Parker Cos., Savannah, Ga., suggested that retailers create an emotional connection among consumers that prepackaged foods are indeed fresh and have not been sitting on a shelf for three days. At his stores someone fixing prepared foods is near these items, reinforcing the company's fresh image.
Parker continued by asking the panelists whether consumers are seeing the value in renewable fuels such as E-85, and if they're willing to pay more for it. According to Portalatin, it may be an issue of what consumers say and actually do.
Meanwhile, Tom Kloza, publisher and chief analyst at Oil Price Information Services (OPIS), Wall, N.J., cited recent media coverage on ethanol and its impact on agriculture, noting that such stories on ethanol raising corn prices could create a backlash.
Making predictions for next year, State of the Industry Summit chairman Fran Duskiewicz, senior executive vice president of Nice N Easy Grocery Shoppes Inc., Canastota, N.Y., commented that next year we'll be talking about the industry's economic recovery, as well as the resurgence of cigarettes.
David Nelson, David Nelson, CSX LLC founding partner, suggested the industry should keep its eye on the packaged beverage, candy and salty snacks categories, while Kloza said he believes the dialogue will continue to focus fluctuating gasoline prices and high diesel prices.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.