DECATUR, Ala. — Several years ago, Narayan “Nari” Baddam decided to pump more merchandising power into his bottled wine department. He saw modest success. But when the COVID-19 pandemic forced shelter-at-home orders one year ago, the strategy proved to be a downright masterstroke.
The co-owner of two convenience stores—2,400-square-foot Danville Park Shell and 1,800-square-foot unbranded Fuel Zone, both in Decatur, Ala.—saw wine sales spike 50% through most of 2020, accounting for 30% of Danville Park’s overall in-store sales. Undoubtedly, people consumed a significant amount of liquor during the pandemic.
And Baddam was ready to provide selection and competitive price through the likes of Capriccio, Stella Rosa, Woodbridge by Robert Mondavi and Sutter Home Winery brands. “People started buying the $30 to $40 bottles we offer,” says Baddam, who exclusively runs Danville Park Shell while his cousin, Singi Reddy, operates Fuel Zone a few miles away.
“I buy wine by the case, so I am able to offer attractive price points. When we expanded wine a couple years ago, we did so despite the fact this community isn’t necessarily known for its preference for wine,” says Baddam, who has been in the c-store business since 2005.
Back then, Baddam decided to pick a lane—and that lane said, “Push wine merchandising further through hard work.” One rationalization was that on a per-square-mile basis, there was a dearth of retailers who emphasized wine, with only a Publix supermarket and Walmart proving as viable competitors.
That opened the door for Baddam and Reddy to take ownership of the category.
Picking a Lane
Doing business in Decatur, located about 25 miles southwest of Huntsville and 85 miles north of Birmingham, allowed the retailers to market the Shell site as a community neighborhood store and the Fuel Zone as a highway-focused location.
Similar to most retailers in 2020, the two stores struggled for fuel volume, losing 50% in gallons at the outset, while volume inched up gradually following Memorial Day, and then incrementally during the second half of the year. And as gallons fell, Baddam said the two stores failed to enjoy a higher profit margin experience that other retailers did before street prices fell back.
The operator did see in-store sales grow mightily, led by wine and other comfort categories, such as snacks and e-cigarettes. Two factors contributed to solid in-store sales: Baddam owns a small strip mall next to the Shell, where he leases space to a hair salon, insurance agency, mattress retailer and mortgage company. He can cherry-pick easy business from these stores’ existing and would-be customers.
Secondly, local schools, malls and fitness centers mostly remained open for business. He also has a medical center nearby, which helped contribute to higher sustained sales of personal protection equipment.
“We kept our employees and customers safe with our social distancing measures, including plastic sneeze guards at several positions,” says Baddam, who has five employees at Danville Park Shell while Reddy manages four at Fuel Zone. “I always tried to stay on top of how employees were feeling during their shifts. I gave out bonuses, as well, which amounted to one paycheck.”
Three months into 2021, both Baddam and Reddy hoping to build a solid customer base as the pandemic dissipates, using its wine selection as a destination purchase and a gateway to spark impulse sales.
“We put a lot of work into a category—wine—that didn’t have a lot of potential in this area at one time. But we worked hard to make it a draw with customers,” says Baddam.
C-store retailers have reported a mixed report card across categories during COVID-19 due to customer tendency shifts, as well as supply-chain issues. Here’s a brief status breakdown of categories at Danville Park Shell:
- Confection: Like many retailers, Baddam said candy sales languished in 2020, though he found success with popular brands such as Snickers and Payday.
- Tobacco: E-cigarette sales carried the category, as supply issues tamped down potential sales for various cigar and cigarillo brands.
- Fuel: Monthly gallons were slashed in half at the outset of the pandemic but rebounded gradually as the year progressed.
- Meat snacks: Big bag jerky sales dominated, led by Slim Jim.
- Beer: Baddam saw supply shortages caused by an aluminum-can production shortfall. But beer sales still rose 15% from the year prior.
- Enhanced products: Protein drinks and bars were solid due to customers who frequented a nearly fitness center, which remained open more often than not throughout 2020 due to relaxed state and local shutdown orders.