Speeding Ahead: 6 Retail Trends That Are on the Fast Track in 2024

Convenience-stores will get bigger and grocery stores will get smaller. Record-breaking fuel profits won’t last forever. And the Super King size in candy is the new King size.

Click through to see six retail trends that are on the fast track in 2024 …

Convenience retailers will get bigger and grocery stores will get smaller in order to spur market share and profit growth. The Dom’s Kitchen and Foxtrot merger is groundbreaking. Smaller grocery stores have a higher gross margin due to fresh food and lower operating costs due to their size and use of commissaries. 

Convenience retailers have premium real estate and are aiming to be fresh food restaurants in an electric-vehicle (EV) future. Customers prefer smaller stores for top-up and convenience occasion shopping trips. It will be fascinating to watch which retailers attract new customers. Or will a new entrant like Dom’s Kitchen/Foxtrot reinvent both sectors?

Geographic boundaries used to be the norm amongst the Big Six food-first competitors Wawa, Sheetz, Kwik Trip, Maverik/Kum & Go, QuikTrip and Casey’s. In the past, it was as if there was a “wink-and-a-nod” agreement that they would not enter each other’s patches. That’s no longer the case with Wawa entering Ohio and Indiana, Kwik Trip entering Minnesota and Iowa, and Casey’s going organic everywhere with a metro city acquisition in Chicago and new investment in Texas.

National players like 7-Eleven and Circle K have been national for some time; they now will have more top-quartile competition given new build count of 50 to 100 new stores a year by the Big Six.

Record-breaking fuel profits are subsidizing the organic and inorganic growth in the convenience retailing sector. Fuel margins have increased 50% from four years ago. There are no new fuel competitors on the horizon due to the inevitability of EV.

In addition, the major oil companies who played the integrated margin game depending on whether there was more profit in refining or retail have by and large gotten out of the retail business. This might be the golden age, but it’s critical that convenience retailers reinvest this cash in refreshing their stores and innovating in new profit streams as these salad days will not last forever.

Starbucks has been the uncontested market leader in hot and cold made-to-order (MTO) beverages for some time. Convenience retailers have been a destination for self-serve beverages since the 1990s, but unit sales are in decline and they do not drive traffic like the good old days. McDonald’s CosMc’s is going to set the stage for the MTO beverage sector to explode. It’s time for convenience retailers to get just as serious about MTO beverages as fresh food. In fact, they may help you build your fresh food business faster. 

Building your membership base with +50% of customers regular use is a minimum standard. Ninety percent adoption is best in class. Most retailers in our sector are still dabbling in building their loyalty program and view it as a nice to have. As big players like Sheetz and Wawa enter new markets, competitors will quickly learn loyalty’s secret power, especially with fuel.

Special “sales” where loyalty customers will have limited-time discounts of 10-30 cents off per gallon or special price-point sales for $1.99 per gallon will drive trial and loyalty card enrollment to their stores and take customers from yours. 

Inflation may moderate in 2024, but the quest to increase sales while providing customers more value will continue. Grocery stores have had great success for some time in the snack and candy categories with bigger pack sizes but our sector has shied away.

Super King size is becoming the new king with almost two times more product than king size and a purchase price typically at $4.59. If your store’s sets are still predominantly regular size, you are missing out on top-line growth.

Polly Flinn is an innovator and a doer during her career at BP, Walmart, Castrol, Arco ampm and Giant Eagle/GetGo Market Cafe. If you want to discuss how to make sure your business is on the fast track for 2024 contact her at polly@flinnstonestrategies.com. Polly is the founder and principal of Flinnstone Strategies. Find her at www.flinnstonestrategies.com.