CHICAGO — Regional convenience-store retailers earned the highest scores among the 27 major chains that dunnhumby surveyed for its Retailer Preference Index (RPI) for the convenience channel. These retailers have the strongest combination of financial performance and consumer emotional connection, according to the customer data science firm's second annual ranking of the top retailers in the $654.3 billion U.S. convenience market.
The firm surveyed nearly 7,000 U.S. households. The highest-ranked chains, according to dunnhumby, are:
- QuikTrip (No. 11 in CSP’s 2019 Top 202 ranking of c-store chains by size)
- Wawa (No. 9)
- Sheetz (No. 14)
- Kwik Trip/Kwik Star (No. 13)
- RaceTrac (No. 16)
- Casey’s General Stores (No. 4)
- Maverik (No. 23)
“There is a raging battle for the stomach that is being fought not only by grocery retailers, fast-food restaurants and food delivery services, but also now by convenience stores. The convenience retailers winning today and substantially growing are catering to the time-starved consumer by offering not only groceries but also quality fresh and ready-to eat food,” said Jose Gomes, president of North America for dunnhumby, Chicago. “Instead of focusing on just winning loyalty or new customer acquisition, retailers need to focus on winning the customer and each customer mission together. The RPI can serve as a blueprint for retailers on how to deliver a compelling value proposition and retail experience that aligns with their customers’ needs.”
The overall RPI ranking evaluated retailer performance on five pillars: convenient quality, price, fresh and healthy, discounts and rewards and digital.
Key findings:
- Size really does matter. The biggest difference in c-store retailers from those at the top and bottom of the ranking is size. Smaller regional retailers outperform most of the national retailers by better adapting to the evolving needs of their customers.
- Focusing on fresh, healthy and ready-to-eat items are the biggest differentiators for top-performing retailers. The top four convenience retailer in the RPI—QuikTrip, Wawa, Sheetz and Kwik Trip—have made foodservice a priority and a key differentiator from other convenience stores. But by also focusing on fresh, they are positioning themselves to be able to steal trips from supermarkets and quick-service restaurants (QSRs).
- Cross-shopping is on the rise between the convenience, grocery, dollar, drug and QSR channels. Nearly 7 out of 10 convenience customers regularly shop each of the other channels each month. Category differences appear to somewhat buffer convenience from drug and the growing dollar channels.
- The best-performing retailers are excellent in retail basics. To be successful, retailers need to get the basics such as quality and store experience right first, then develop ready-to-eat and fresh areas and finally use digital methods and rewards to share and amplify store improvements.
- Store count and convenient locations are still relevant. Share of visit and consumer awareness data shows minimal difference between the top and bottom retailers. But the strength of the customer emotional connection and ability to convert awareness into purchase, along with key financial measures, suggest that even though store counts capture visits today, high store numbers are not enough for superior growth.
“The retailers that deliver a value proposition that aligns with their customer needs will be better positioned to grow a loyal customer base that is connected to more than just convenient locations,” Gomes said.
The second tier of retailers in dunnhumby’s survey included Turkey Hill (part of No. 8-ranked EG Group in CSP’s 2019 Top 202), Cumberland Farms (No. 15), Royal Farms (No. 37), GetGo (No. 28), Kum & Go (No. 18), Holiday Stationstores (part of No. 2-ranked Alimentation Couche-Tard) and Thorntons (No. 38).
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