CHICAGO — Fuel customer conversion rates—that is, retailers' success in getting gasoline customers to visit the connected convenience store—hit their lowest level in at least two years in February.
A February Technomic survey of convenience-store consumers shows 51% of fuel customers reported entering the c-store every time or nearly every time, according to Technomic's C-Store Market Brief.
“This is the lowest rate since I’ve been tracking this data,” said Technomic Principal Donna Hood Crecca during CSP’s C-Store Foodservice Forum in Chicago. Technomic is CSP’s Chicago-based sister research firm.
Surprisingly, Crecca said, the decline in customer conversion comes even as multiple measures show positive trends in the economy and consumer confidence. Specifically, she pointed to record-low unemployment rates, positive job creation, growing salaries and consumer confidence hitting a record-high index of 129.
“Consumers are, in general, feeling pretty good,” Crecca said at the Foodservice Forum. “When we see these types of positive indicators, typically we see strong growth for foodservice. Turns out for early 2019, we’re not seeing that. Traffic is softening.”
Multiple dynamics are at work in keeping foot traffic down, she said, including …
Amazon, Instacart, DoorDash and other services have given consumers the ability to order merchandise such as food and beverages and have them delivered within days or even hours. “This removes the need to leave the house,” she said.
One of the casualties of e-commerce has been the shuttering of major retail stores, both stand-alone and in malls. This means fewer consumer outings, resulting in fewer c-store stops due to fewer shopping excursions.
Dollar stores have emerged as significant competitors to c-stores, going after customers purchasing tobacco, alcohol and immediate consumables. Also, the grocery channel is looking to its store perimeter to provide convenience and offset contraction in the center of the store.
The smoking rate has hit its lowest level in decades at 14%, according to recent data from the Centers for Disease Control and Prevention. Historically, smokers are among the most frequent c-store patrons, Crecca said.
Hybrid vehicles are one factor, but so is improved mileage among vehicles once considered gas guzzlers.
“There’s not one reason; it’s myriad reasons,” Crecca said, “and it’s probably going to remain challenged for some time to come.”
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