CALGARY, Alberta — The merchandising team at Parkland USA sees center store as an opportunity to embrace sales data to come up with strategies to make the most out of the category.
One of the retailer’s strategies unique to center store is discovering new products from local vendors and strengthening stores by including products that the community loves.
“Sometimes you just take a stroll through a grocery store, and you'll see products in there that would be standard convenience-store fare,” said Jeff Bush, vice president of retail for the Calgary, Alberta-based retailer. “But then you think, ‘Wait, I haven’t seen this in a convenience store; what is this?’
The next step is doing research and considering who sells it, how it is manufactured and how it is packaged, said Bush.
“Sometimes it’s as simple as making a phone call to the company and just saying, ‘Hey, we’d love to come visit. We’re an operator in the area, and we’d love to sell your products,’” he said.
Being inquisitive with friends, family, customers and employees is another strategy for finding desired brands, Bush adds.
“A lot of people are trying a lot of things out there,” Bush said. “Somebody is going to tell you something about a type of jerky, some sandwich, some local candy or something that you should have in your store.”
Distribution can be a challenge, Bush said.
“Helping them to get into some major distributors, or even some of the local regional distributors, is something that we really help out with,” he said. “And something we make sure that they understand is what we expect our ordering velocity to be and how we can get them a smooth transition into a distributor.”
Center Store Trends
Bagged and nostalgic candy, chocolate snacks and large quantity meat snacks are among the trending center store food items, Bush said.
“In some of our stores, if you don't count tobacco, some of our top products are in the meat snack category,” he said.
Because Parkland caters to the transportation community, Bush said, delivery drivers and customers who have been on the road for long lengths of time come in for options that are more substantial than a quick snack. That makes in-between opportunities important for the chain.
Summer was a catalyst for larger quantity bags, but Bush said that less travel, the start of school and workflow in the colder months may change that.
“We'll start seeing a different shift into more variety packs or moving into smaller items and higher frequency visits,” said Bush.
“In some of our stores, if you don't count tobacco, some of our top products are in the meat snack category.”
Household Trends
Nonfood products in center store including household items and medication are doing well, said Bush.
“Some of our stores in the Midwest are located in rural areas, so we sort of function as that first stop before you have to make it out to a grocery store or a department store.”
With more people working from home, he said, “instead of making that trip out to a grocery store or a department store, they can hit our site for some of those mainstays, some paper towels, toilet paper, those sort of things.”
General merchandise trinkets such as fidget spinners have gone through their cycle, and Bush emphasizes the need to reduce those items when it’s time.
“I think, on the other side of the coin too, we're definitely seeing sort of more of the general merchandise stuff start to get more muted,” Bush said.
Challenges
Inflation, credit-card swipe fees and supply chain are the three biggest challenges for center store at Parkland, Bush said.
Pricing center store items correctly, especially during this time of inflation, is a priority for Parkland, said Bush, and the chain does so by pulling insights on current costs and expected cost changes as well as accumulating information on how other retailers are pricing product.
Parkland’s promotions, regional and companywide, help the chain combat challenges like inflation. Promotions include buy-one-get-one, twofers, cents off and more through in-aisle advertising. The team works to test new products and build customer awareness for certain items.
“It's not just driving traffic,” Bush said. “It's also driving value proposition. That's our main goal, because you can have what you think is a great price, but if it's not a valued proposition for the customer, then is it really a promotion?”
A deal must emphasize more than just the product.
“It's also about highlighting the value proposition of why the consumer should pick that product up from you, in your store, either as opposed to another product or as opposed to another store across the street, or another industry—dollar, or grocery.”
Swipe fees are a growing problem for the industry, with banks that issue Visa and Mastercard credit cards charging, on average, 2.25% of the purchase price when processed over Visa or Mastercard networks. C-store swipe fees totaled $14 billion in 2021—a 26% increase over 2020—and in the first half of 2022, swipe fees were up 33%.
“When you have a high velocity of products moving through your store, small rings and a high volume of transactions, those swipe fees really hurt,” said Bush.
Finally, he said, supply chain issues are preventing Parkland from maintaining some key items on shelves.
Merchandising
Parkland’s stores are merchandised based on space to sales, which means dividing the space to the store sales percent of share.
When it comes to mapping out displays, what really matters is making sure customers can get what they want quickly and easily, he said.
Bush said there is importance in “trying to get more spacing in the stores—giving that big, airy feeling—but also being able to give the product its due and give it center stage where it deserves to be.”
Implementing sight lines, gondolas to free up space, putting products on wings and not over-stacking or over-crowding shelves are Bush’s tactics.
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