CHICAGO -- On a macro level, real income is at an all-time high, which is increasing optimism overall, says David Nelson, professor of macroeconomics at Western Washington University, Bellingham, Wash. Although wages are stagnant—increasing a mere 2.7% annually, according to the U.S. Department of Labor—the fact that consumers can now make up to $15 an hour in various markets has them feeling good, he says.
How do you feel about your financial situation?
Source: CSP 2018 Outlook Survey
However, not all consumers are necessarily optimistic about their economic outlook. That includes many in the lower-income bracket, the bread and butter of the c-store customer base.
CSP conducted an exclusive survey with GasBuddy of members of its fuel-price app in late September, asking them for their economic sentiment. This uncertainty is especially acute among consumers whose household income is less than $35,000. When asked how they felt about their current financial situation, more than 40% who made $25,000 to $35,000 said they felt uncomfortable. This number leapt to more than 45% for those making $25,000 or less. And when asked how they’ll fare financially within the coming year—better off, worse or the same—more than 18% of the lowest-income consumers said they didn’t know.
Uncertainty isn’t as drastic in well-off consumers. Less than 3% of those who make $150,000 to $200,000 were uncertain.
“[These numbers] demonstrate that economic outlook is heavily dependent upon one’s income,” says Frank Beard, analyst for convenience-store trends for Boston-based GasBuddy. “Perhaps more than anything, a sense of stability and certainty is correlated with income.”
One year from now, do you think you'll be better off financially, worse or about the same?
Source: CSP 2018 Outlook Survey
Different household incomes result in different shopping sentiments. Beard says understanding these consumer segments and their specific needs can help c-store retailers increase business.
Which retailers and delivery services do you use for groceries at least once a month?
Source: CSP 2018 Outlook Survey
“Retailers must be aware of who their customers are and have an approach that targets people in these different income brackets,” he says. “They should think about how they package and sell food as a cost benefit and how they’re reaching consumers on marketing and advertising strategies.”
“Perhaps more than anything, a sense of stability and certainty is correlated with income.”
In the same GasBuddy survey, c-stores tied with online ordering when consumers were asked which channel they use for groceries at least once a month. The number suggests that c-store retailers have only so much time to figure out their approach.
Next: Suppliers Eye Delivery Costs
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