Words matter. So said Jeff Lenard, vice president of strategic industry initiatives for NACS, at the closing session of this year’s summit. “We sell perishables out of what we call a ‘coffin’ cooler,” he said. Also, we sometimes make it hard for consumers to want to purchase fresh and healthy from a convenience store, he said.
Yet selling produce would be great for a retailer’s bottom line and more nutritious offerings would give the convenience industry a refreshed image. An image boost with a focus on freshness could help retailers as they approach zoning commissions and city councils, said Lenard, in an effort to get new stores opened or existing stores remodeled.
Getting fresh produce into stores is just one aspect of what’s being called the NACS reFresh initiative, which addresses ongoing industry perceptions by focusing on three distinct elements:
- Creating tools that address NIMBY (not in my backyard) issues by educating the public about the contributions convenience stores make to their communities.
- Sharing facts and data that demonstrate the evolution of the industry and corrects an outdated reputation.
- Forming partnerships/relationships with credible nutrition- and community-focused groups, such as the United Fresh Produce Association.
“ReFresh is the ideal name for the program because it addresses our path forward,” Lenard said. “It’s about refreshing our image and refreshing our offer while still providing refreshments of all kinds. The idea is to give retailers who want more options—whether fresh produce or healthy options—the tools to access the landscape and determine if it’s right for them.”
And the environment is definitely changing. In the 1950s, singles living alone made up just 9% of the population, while married couples with kids reached 55%. These days, singles living alone make up 20% of the population,
with married couples and kids just 28%. That changes the dynamics around the dinner table for sure, Lenard said.
More consumers are snacking and having a “fourth meal.” According to The Hartman Group’s “Eating Occasions Compass,” “Snacks are increasingly consumed as a fourth meal, especially with younger consumers. More than half of all eating occasions are snacking.”
All of which makes convenience key in delivering on consumers’ snacking and eating needs. During the week, customers don’t want to wander through aisles of endless pantry items; they increasingly want prepared foods and other quick options. With a greater focus on foodservice and fresh, convenience stores can capture the lion’s share of this convenience-seeking consumer.
And trends are helping to grow our industry’s sales, Lenard said. Millennials’ openness to convenience stores and the expansion of fresh foods into new venues (think Walmart and Costco) are helping to shape the new c-store landscape and surrounding perceptions. C-store food is no longer considered taboo. Even culinary icon Anthony Bourdain is on our side. On his list of 13 places to eat before you die: Joe’s Kansas City Bar-B-Que, located inside a Shamrock station in Kansas City, Kan.
In addition to promoting foodservice and healthy options, Lenard said, the industry can exploit our position as a channel for immediate consumption. According to NACS, 84% of all items sold in c-stores are for immediate consumption, meaning they are eaten within one hour after purchase.
And it is our gas consumers who are seeking these immediate-need snacks: Thirty-six percent of customers bought a drink with their fill-up and 33% bought a snack. (See chart on next page.) NACS data further shows that consumers continue to seek healthier options. A recent NACS consumer survey showed that 58% of consumers ages 18 to 34 said they purchased more healthy snacks in the past year.
Changing Perceptions
The growing public focus on fresh and healthy—and the hard work by convenience stores to offer more healthy options--is slowly starting to change the perception of the industry. “But we still have a ways to go,” said Lenard. One example he shared of changing perceptions came from 2010.
At the first-ever summit for the Partnership for a Healthier America, a nonpartisan, nonprofit led by health and childhood obesity experts, honorary chair first lady Michelle Obama, told attendees, “23.5 million Americans … live in food deserts [and they] wind up buying their groceries at the local gas station or convenience store, places that offer few, if any, healthy options.”
Not such a rosy picture of our industry back then, Lenard said. But he went on to share a quote from the first lady at the 2015 Partnership for a Healthier America Summit: “Even convenience stores are offering fresh fruits and vegetables,” she told the crowd, which included representatives from Sheetz and Kwik Trip as well as other c-stores that have joined the partnership.
“Next year, I told the first lady’s people,” Lenard said, “we’ll get rid of the word 'even.’ ”
Yet while many convenience brands are engaging in the fresh and healthy space in an effort to appeal to changing consumer preferences, and by extension change the image of the industry, there’s still more to be done, Lenard said. NACS is here to help, he added, and the association has created several resources and guides to help convenience stores navigate the changing marketplace, all part of its reFresh initiative.
A new 26-page publication, created by NACS and the United Fresh Produce Association, has been released to help convenience store retailers determine if fresh fruits and vegetables are right for their stores, Lenard said. “Building the Business Case for Produce Sales at Convenience Stores” combines analysis of the industry and consumer trends with ideas for developing a produce program.
The reFresh initiative has also released the “Site Approval Toolkit,” which contains strategies for retailers seeking zoning approvals, as well as the “PR Toolkit,” which shares tools to help retailers launch their own publicity efforts in their communities.
In addition, “How Stores Work” addresses common industry issues to allow retailers to tell their stories in their communities. The reports are currently available at nacsonline.com/refresh.
CONTINUED: Positive Thinking & Data
Positive Thinking
In general, consumers’ focus on fresh is helping to translate into a positive outlook for retailers, among a few other influential factors, Lenard said. Lower fuel prices, a sound convenience business model and foodservice are also influencers, according to the results of recent NACS retailer sentiment survey (consisting of 100 NACS member companies, representing a cumulative 2,519 stores).
Nearly nine in 10 retailers (86%), according to the survey, say that they are optimistic about their business in the second quarter, an increase from 82% who expressed optimism in the first quarter, Lenard said. Much of the optimism stems from a strong first quarter. More than two in three (69%) retailers say that merchandise sales in the first quarter of 2015 were more than the first quarter of 2014. And 45% say that gasoline sales increased in the first quarter compared to the same period in 2014. More than one in three retailers (34%) say that consumers are spending the extra money from lower gas prices at their stores, and 29% say that consumers are driving more.
But retailers’ optimism also stems from a belief that the convenience retailing business model is sound, extending prominently from the industry’s growing foodservice offer.
Nearly two in three (63%) say that they are optimistic about their ability to compete with quick-service restaurants, compared to 8% who expressed pessimism.
While retailers are extremely optimistic about their own business prospects in the second quarter, they are slightly less optimistic about the convenience retailing industry (80%, down slightly from 83% in the first quarter) and the economy as a whole (70%, though that’s up from 63% in the first quarter).
Overall, retailers cited three factors that could grow sales in the second quarter: low gas prices (cited by 30%), better weather (29%) and a continued emphasis on fresh food (19%).
Retailers also say that sunnier skies and warmer weather should heat up sales. And that’s a sentiment that has been around for decades, Lenard concluded. “Everyone is smart over 90 degrees,” former NACS board member John Roscoe said in 1988.
Gas Customers Seek Snacks/Drinks*
| Action | Percentage of gasoline consumers |
| Paid for gas at the register | 42% |
| Bought a drink (coffee, fountain drink, can or bottle) | 36% |
| Bought a snack | 33% |
| Bought cigarettes | 24% |
| Bought lottery tickets | 22% |
| Used the bathroom | 17% |
| Bought beer/wine | 11% |
* Of the 35% who bought gasoline
Source: 2015 NACS consumer research
Healthier Options
Percentage who agree convenience stores are offering healthier, nutritious products/servings:
| Year | Percentage |
| 2015 | 61% |
| 2014 | 64% |
| 2013 | 55% |
Source: NACS consumer survey
But They Want More
Percentage who agree convenience stores need to do more to address health and wellness:
| Year | Percentage |
| 2015 | 70% |
| 2014 | 73% |
| 2013 | 66% |
Source: NACS consumer survey
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