TEMPLE, Texas — The largest distributor to the convenience-store industry turned its annual McLane National Trade Show into a digital event this month, inviting retail customers to “a virtual experience designed for real-world profits” Oct. 21 and 22.
The event allowed attendees to meet with supplier representatives, learn about new products and hear from industry leaders on how the c-store industry has come through the pandemic and how they expect key categories to perform into the future.
Here are highlights from the event as collected by CSP Daily News editors ...
C-stores hold their own
How much has the pandemic challenged sales in convenience stores? Teresa Voelter, product director of private label for McLane, offered this analysis.
“In 2019, convenience [sales] was up 3.3%. In March [when the pandemic hit], there wasn’t any growth, she said, citing IRI data during the tradeshow. “That primarily had to do with stores closing and the lockdowns that we were experiencing across the country.”
Things turned around more recently, she said. “In April through June, sales are up again about 3.5%, so we can see that the convenience-store environment is continuing to increase.”
While the grocery channel grew double digits during these time periods, unsurprisingly, it was ecommerce that was the real winner as consumers turned to online ordering and delivery for many products. Ecommerce sales platforms grew sales 61.8% in March. “A lot of that had to do with stores closing, and a lot of it had to do with limited stock that was in stores,” Voelter said, “Then you can see since April, that is not slowing down. That platform is up 82.9% [from April through June]. So we anticipate that trend will keep growing.”
Pick-up and drive-thru blossom
Thanks to social distancing, a full 69% of retailers of any channel have a pick-up option, as well as a drive-thru lane, according to Deon Johnson, vice president of technology and software for McLane. Johnson also shared data suggesting that 76% of consumers would rather stay in their car vs. entering a store—and that was before the COVID-19 lockdowns began.
Cigarettes show resilience
Convenience-store sales of cigarettes have turned in a much better year than expected at its onset, according to Greg Tradup, product director for cigarettes, tobacco, vape and CBD at McLane.
Pre-COVID-19, c-store cigarette sales were expected to decline between 4% and 6% for the year. That was later revised to a 2% to 3.5% decline, Tradup said during a webinar for the McLane National Tradeshow.
C-stores, though, have shown only 1.4% declines, according to the c-store distributor’s carton data through August 2020.
“That just shows that consumers are going to c-stores to purchase cigarettes,” Tradup said.
Betting on dispensed beverages
Dispensed beverages have been one of the hardest hit foodservice categories during the pandemic, according to Chad Dewberry, foodservice product director for McLane. The distributor’s dispensed-beverage portfolio dropped 40% in total volume between late March and mid-April as the pandemic took hold, and although numbers climbed by double digits in May and June, McLane still hasn’t reached its seasonal norm, Dewberry said.
“Like everyone, we were geared up for a great spring break that just never happened this year,” he said. “But we have seen steady growth, so as more and more [operators] across the country turn their fountains back on and as consumers return to their day-to-day activities, we expect to see that volume pick back up.”
Food SKU rationalization
The pandemic has drastically changed the SKU rationalization process for c-store foodservice, Dewberry said. Specifically, many retailers focused on core items and cut the size of their menus due to manufacturing delays and slow foot traffic.
“If you’ve got eight items on your roller grill and 90% of your sales are on four of those items, you’re probably going to want to take some of those lower SKUs off to protect that waste line and reduce your costs,” he said.
Expanding private label
In 2019, private-label sales grew 4% over the prior year, according to McLane’s Voelter. “Post-COVID, however, private label has grown 14.6% or $4.9 billion in the first quarter alone,” she said. “It was up 19.2% in dollar share and 13% of unit share.
“Estimates, according to PLMA, Nielsen and Daymon, show sales will reach $183 billion in 2020. That is almost 34% increase.”
On the event’s virtual tradeshow floor, McLane debuted several new and improved private-label products as part of its Consumer Value Products (CVP) brand. These included health and beauty care products such as deodorant, dental floss and hair brush, household items such as bleach, paper plates, a variety of umbrellas (pictured) and a cork screw, and cellular accessories, such as brightly colored charger cables and ear bids.
Through McLane Grocery and McLane Foodservice, Temple, Texas-based McLane Co. operates more than 80 distribution centers and one of the nation’s largest private fleets. The company buys, sells and delivers more than 50,000 consumer products to nearly 110,000 U.S. locations. Additionally, McLane provides alcohol beverage distribution through its subsidiary, Empire Distributors Inc.