General Merchandise/HBC

Supply Disruptions a ‘Major Challenge’ for Convenience Retailers, Suppliers

Survey respondents say they expect disruption to continue
Photograph: Shutterstock

ALEXANDRIA, Va. — Product procurement throughout the supply chain was a major challenge for convenience stores and their supplier partners during second-quarter 2021, and they expect that challenge to continue throughout 2021, according to two new NACS surveys.

Two in five convenience retailers (39%) say there were “significant” levels of disruption across the supply chain during second-quarter 2021, and 86% report that at least 10% of their orders were disrupted.

Beverages were particularly a challenge in the quarter, with 72% of retailers reporting supply disruptions of packaged beverages and 67% reporting supply challenges with beer. Also, two in five industry suppliers (38%) said they faced “significant” levels of disruption for materials necessary to create their products.

Compounding inventory challenges in the quarter, three in four retailers (76%) say it was difficult to fill available positions. Only 2% of retailers surveyed said they did not face hiring challenges.

Supply chain disruptions also extended to equipment: 79% of retailers say they experienced delays with store equipment/hardware deliveries this year and 41% say they postponed store equipment orders or new store construction or remodeling projects because of supply chain delays.

Confidence is low among convenience retailers and suppliers that improvements are coming: Only 25% of retailers and 27% of suppliers are confident that supply disruptions will improve in the second half of the year.

Despite the challenges, in-store sales have rebounded to pre-pandemic levels at convenience stores, according to NACS CSX sales data ending April 2021. Fuel sales also have largely recovered. Finished gasoline supplied, which is tracked by the U.S. Energy Information Administration (EIA) and is a proxy for supply, is only 1.8% lower the last two weeks of June 2021 than the same period in 2019.

Disruptions throughout the supply channel also have led to a greater level of collaboration between convenience retailers and their suppliers: 66% of supplier companies say that their overall relationship with convenience retailers is better than a year ago and 44% say their level of partnership and collaboration with the convenience retailing channel is better than other channels.

“Our industry’s resilience has been on display throughout the pandemic and is even more apparent now as the economy continues to bounce back,” said NACS Chairman Kevin Smartt, who operates 48 Texas Born (TXB) and Kwik Chek stores across Texas and Oklahoma. “The value of convenience has never been higher, and the innovation within our channel to continually reinvent convenience to benefit our 165 million daily customers astonishes me. I look forward to a strong rest of 2021 and beyond.”

NACS Research conducted the NACS Retailer and Supplier Member Pulse Surveys in June 2021. Overall, 56 retailer members, representing a total of 1,497 stores, and 83 supplier member companies participated in the survey.

Founded in 1961 as the National Association of Convenience Stores, NACS is a trade association dedicated to advancing convenience and fuel retailing, The U.S. convenience store industry, with more than 150,000 stores nationwide selling fuel, food and merchandise, serves 165 million customers daily and had sales of $548 billion in 2020.

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