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Analysis: What Happened to C-Store Trips?

5 issues changing the way consumers shop

CHICAGO -- Before Andy Jones, president and CEO of Sprint Food Stores, Augusta, Ga., and a speaker during the 2018 NACS State of the Industry Summit, dug into the industry’s key performance benchmarks, he addressed what has left retailers uneasy for the past year: trips.

Overall, the c-store industry has experienced a decline of one trip per person per week since 2014. “Even if we increase the market-basket spend, we can’t make up the entire spend from this lost trip,” Jones said.

The greater retail industry is even worse off. “Even in key holiday quarters over the last few years, [consumers] have dropped nearly three trips on average,” he said. “The trend is also heavily driven by younger consumers, particularly millennials, who are fundamentally shopping differently than previous generations.” Millennials make 96 retail trips per year, vs. all consumers at 119, according to Nielsen.

This decline in trips comes despite some strong economic tailwinds, including low unemployment, low gas prices and low interest rates. Consumer confidence is soaring at a 17-year high.

“With all of these tailwinds, we should have crushed 2017,” said Jones.

NACS does not believe any one factor is tripping up trips. Instead, it suspects that five key factors are at play:

  • Growth in e-commerce.
  • Aggressive tactics from quick-service restaurants.
  • Financial stagnation for lower-income households.
  • A 13% increase in fuel prices vs. 2016.
  • The political climate for Hispanic consumers.

Of course, e-commerce is the disruptor most on retailers’ minds. Jones pointed out that just because immediate consumables aren’t core e-commerce categories, fewer people shopping at big boxes and malls means fewer people on the road altogether.

“All seems OK in the brick-and-mortar universe,” he said. “Over the last 10 years, we’ve had consistent gains of 4% across the board. ... However, look how online sales have grown. Its growth is more than four times that of brick-and-mortar.”

For e-commerce’s biggest player, Amazon, net retail margins trended upward to 16.3%, while Walmart’s are shrinking and c-store margins are flat.

Quick-service restaurants, meanwhile, have experienced similar traffic declines. They’ve responded with aggressive tactics on value-priced items, beverages and morning opportunities—all strategies that play squarely in c-stores’ wheelhouses.

Here's a look at how those changes affected store traffic in 2017.

 

 

-10%

Decline in visits from 2015 to 2017 among Hispanic shoppers who buy food at c-stores

 

= 5 trips per year

Source: NACS Convenience Tracking Program, Nielsen, U.S. Census Bureau


5 Reasons for Trip Declines

1. A 13% increase in fuel prices

2. Financial woes for lower-income households

3. Growth in e-commerce

4. Political climate for Hispanics

5. Aggressive tactics from quick-service restaurants

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