While convenience stores experienced growth in 2023—up 2.2% from the prior year in in-store sales—most of this growth has been driven by persistent inflation, according to a report from PDI Technologies and GasBuddy.
The report uses data from PDI and GasBuddy, which PDI acquired in 2021, and covers c-store sales trends, consumer mindsets, insights for retailers and consumer packaged goods (CPG) brands and more.
When it came to sales growth and inflation, PDI found spend per basket was up 3.9% and average price per unit was up 4.1% in 2023. But store trips were down 1.7% and units per basket were nearly flat—down 0.1%. This is creating concerns about foundational long-term growth, the report said, because some consumers are responding to higher prices by making fewer trips or purchasing fewer items.
“To create more sustainable growth, retailers need to strengthen their business fundamentals, such as increasing average basket size or creating more trips,” PDI said.
Retailers must have a plan for all types of shoppers, the report said, and it’s critical to adapt to different consumer missions and mindsets throughout the day. For example, packaged beverages and foodservice tend to drive morning trips while cigarettes and beer purchases often drive afternoon trips. Fuel remains the biggest overall trip driver throughout the day, though.
From 9 to 11 a.m., c-stores should focus on efficiency shoppers, by doing things like combining packaged beverages and foodservice offers. From noon to 4 p.m., focus on inspirational shoppers, PDI said, and combine beer and foodservice offers.
Here are four other areas c-store retailers can focus on, according to the report.
- Convert Visitors From Pump to Store: Because fuel stops are the top drivers for c-store trips, it’s important to entice fuel shoppers into the store. Most pump-to-store conversions occur during the morning and afternoon rush hours. Top categories in pump-to-store converted baskets are packaged beverages (in 39% of baskets) followed by beer (in 19% of baskets.)
- Tap Into CPG-Funded Promotions: Consumers are searching for more value, even with discretionary purchase, as inflation remains relatively high. Convenience retailers can leverage CPG-funded promotions as a cost-effective way to attract new customers, the report said. To leverage this, retailers must understand their customers better and provide the data that shows why CPGs will be making a wise investment in their promotions, PDI said.
- Grow Sales With Curated Assortments: C-stores must have the right product mix. In 2023, three key categories have experienced especially high growth in c-stores: alternative snacks (like jerky and protein bars), liquor and wine, PDI said. “The most innovative c-store chains are the ones that continually test new products and adjust their product mix to keep things fresh,” the report said.
- Make a Case for Beer: Premium and imported beer collectively make up half of beer category sales, but imported beer is experiencing much higher year-over-year growth—10.8% to 1.4%, PDI said. Although lower in market share, cheladas, or beer cocktails, and flavored malt beverages, like hard lemonades, spiked teas and more, represent two up-and-coming subcategories, it said.
PDI Technologies, Alpharetta, Georgia, serves more than 200,000 locations worldwide with solutions like the Fuel Rewards program and GasBuddy. The report was based off of GasBuddy consumer survey data from more than 15,000 convenience retail consumers across all key U.S. geographic locations.