CHICAGO — Cars hate the winter. Leaving a vehicle unattended in zero-degree weather for a few days may kill its battery, leading consumers to purchase booster cables. While this is a headache for drivers, it’s a blessing for convenience-store owners.
“Sixty [percent] to 75% of winter seasonal automotive products are sold between the months of October and December,” said Tom LaManna, vice president of merchandising services for Convenience Valet, Glendale Heights, Ill. “These products spike during the winter season, especially in regions that get snow.”
Automotive treatment products reached nearly $331 million in total c-store sales last year, a 6.3% increase from 2017, according to c-store data for the 52-week period ending Dec. 30, 2018, from IRI, Chicago. This is a significant increase for a category that has remained somewhat stagnant in recent years: Its compound annual growth rate (CAGR) has decreased 1.4% since 2016, according to data from Nielsen Convenience and IRI.
But winter is officially only three months out of the year, which may leave retailers pondering what else is causing the surge in sales in automotive products—and how they can channel these trends in c-stores.
Here are six reasons why automotive products are surging in c-stores …
Cars are lasting longer and, as a result, owners are buying more automotive products to care for their vehicles, said Adrienne Smith, merchandising manager for McLane Co., Temple, Texas. Older vehicles need top-offs of automotive fluids—such as power steering fluid, brake fluid and oil—more than newer cars, she said.
“Consumers are looking for ways to help older cars run efficiently, better and longer,” Smith said.
The surge in automotive sales goes beyond aging vehicles. LaManna points out that car manufacturers are producing more vehicles that require diesel fuel, such as SUVs and trucks, which has helped sales of diesel exhaust fluid (DEF) surge in c-stores.
For example, Peak BlueDEF, manufactured by Old World Industries, Northbrook, Ill., was the top-selling automotive product in convenience stores in 2018, according to IRI. The product surpassed $64 million in total c-store sales, a 19.5% increase from 2017, and grew 15.6% in c-store unit sales compared to the previous year, hitting nearly $4.7 million, according to IRI. Performance additives such as DEF, along with motor oils, are Convenience Valet’s top-selling automotive products in c-stores today, LaManna said.
It’s not just big-name brands that are succeeding. Smith said c-store retailers are increasingly carrying private-label automotive products to increase their margins and value for consumers. This shows in the data, too: Private-label automotive treatment products hit nearly $11 million in total c-store sales last year, a 5.5% increase from 2017, according to IRI.
Marty Glick, vice president of sales for Harold Levinson Associates LLC (HLA), New York, agrees with Smith. He said consumers aren’t as brand-loyal as they used to be and instead are looking for value in private label. HLA has its own private-label item in Winner’s Circle, a motor oil, brake fluid and engine oil brand. Winner’s Circle, as well as other private-label automotive brands, are priced lower than national brands that consumers may not be able to afford, Glick said.
“Private-label and midgrade automotive products will grow in c-stores,” he said.
While motor oils and fluids are traditionally the top automotive sellers in c-stores, accessory products in this category have grown as well. Over the past five years, booster cables and tire gauges have experienced CAGRs of 8.3% and 4% in c-stores, respectively, according to data from Lil’ Drug Store Products, Cedar Rapids, Iowa. These rank atop Lil’ Drug’s top-selling automotive products, even higher than motor oils and fuels, said Doug Marquardt, director of marketing for Lil’ Drug. The automotive category’s flat growth in previous years sparked Lil’ Drug to upgrade the quality and price of its booster cables and tire gauges in 2017, which increased profits in the long term, said Marquardt.
“Customers who have emergencies will pay $15 for booster cables when they need them,” he said. “When people need something for their car, they’ll seek it out, because they don’t have much of a choice.”
Automotive products are planned immediate purchases, meaning consumers often seek them out during an emergency or when they run out of something. Because of this, they are usually stocked near the back of the store as basket builders instead of impulse buys, Marquardt said.
LaManna of Convenience Valet agreed. “Consumers generally don’t come to this section to shop for next week,” he said. “They have an immediate need right then and there.”
Offering a variety of brands within those categories is essential to merchandising automotive products, said Glick of HLA. The company offers four brands of motor oil to increase variety on shelves, including Winner’s Circle and Mobile 1. Glick suggests retailers have a plan-o-gram that consists of 90% chemical products, such as motor oil, and 10% accessories, such as booster cables and air fresheners. However, he advises retailers not to overstock the latter.
“Some stores sell up to 60 flavors of air fresheners, and that’s a waste of space,” he said. “Retailers should use that space for more chemicals and oils and sell only six to eight SKUs of air fresheners.”