Convenience Store Decisions articles from July 2005

Convenience Store Decisions archives from July 2005

An education on every page.(Editor's Memo)
July 1, 2005... You learn a lot from piecing together something as ambitious as the Sales Trend Handbook. For instance, I never would have guessed that convenience stores sold $54.9 million worth of Yoo-Hoo chocolate drink for the 52 weeks ending March 20 of...

The big boom; explosive growth edges key minority groups closer to the majority. Learning to market to Hispanics, as well as teens and seniors, can unlock the door to profitability.(CUSTOMER)
July 1, 2005... Most teenagers today don't have to scour the seat cushions for spare change. Today's teens, in fact, have loot to spare--and they like to spend it. Teens (kids ages 12 to 17), at 25 million strong in 2004, constituted 8.5% of the total U.S....

Lots of company; dollar stores sell smokes. Big boxes pump up the gas volume. QSRs brew gourmet coffee. C-store retailers have become small fish in a pond now teeming with hungry predators.(COMPETITION)
July 1, 2005... All retailers great and small traffic in convenience, but many outside the convenience store channel have "kicked it up a notch or two." Key competitors are now stepping unapologetically on the c-store channel's toes with new formats or new...

Playing catch-up; retailers use technology to slash costs and better serve customers. Soon, they expect it to bring relief from rising credit-card processing costs.(TECHNOLOGY)
July 1, 2005... The convenience retailing industry is in the middle of its own little industrial revolution. Every week, technology providers issue news releases about successful installations or pilots of everything from biometrics and bill-payment kiosks to...

Healthy vs. hearty; name recognition and proven menus make branded programs very appealing. Now chains teeter between offering healthier items or biting into bigger, beefier portions.(BRANDED FAST FOOD)
July 1, 2005... According to the National Association of Convenience Stores 2004 State of the Industry Report, the most popular menu format for branded quick-service restaurants at convenience stores was sandwiches (3,682 restaurants affiliated with c-stores),...

Eyes for pies; while the low-carb craze didn't hurt the ready-to-eat pizza business, frozen pizzas could bite into sales. Experts encourage operators to be creative with familiar toppings, like chicken.(prefered topings)
July 1, 2005... Retail pizza sales totaled more than $33 billion in 2004, according to Leading Edge Reports. Pizza/Italian concepts are the fastest-growing segment in foodservice, and are predicted to stay in that position for the next five years, according to...

Fried with pride; most people claim to be eating healthier, but fried chicken remains one of the top-selling food items. Retailers taking steps to keep their offers fresh will likely profit.(CHICKEN)
July 1, 2005... Looks like chicken has some legs. Among those consumers following high-protein, low-carb diets, twice as many people reported eating more chicken than more beef or pork, according to a survey conducted by PKS Research Partners for the National...

Lighter fare; customers turn to the deli for healthier eating options. Retailers must differentiate their offers with sauces, salads and other add-ons.(DELI)
July 1, 2005... From indulgent to healthful; unheated, baked or grilled; on all sorts of bread varieties with all sorts of fillings; sandwiches easily adapt to the changing tastes of consumers. The sandwich category, which has traditionally been more closely...

Better baking; bakeries are challenged to find low-labor methods of producing better-for-you treats. While low-carb did some damage to sales last year, sugar-free and whole-grain items are making up for lost time.(BAKERY)
July 1, 2005... As in-store bakeries strive toward more consistent products and lower overall costs, they continue to turn from labor-intensive product preparation to frozen and thaw-and-sell products. A recent study indicates that 63% of participants are...

Pourable profits; customers' taste for gourmet coffee is being nurtured in some non-traditional channels. Retailers throughout the industry are upping the ante to win customer votes--and dollars.(DISPENSED BEVERAGES)
July 1, 2005... Gourmet coffee is now more than a $9 billion industry in the U.S., according to the Specialty Coffee Association of America. The National Coffee Association's 2004 National Coffee Drinking Trends report found that of consumers who said they had...

The price is right: after working out the kinks in 2004, premium-priced brands seem to have regained their moxie--winning back the ground ceded to deep discount brands.
July 1, 2005... Other than rising state excise taxes, higher price points, increased competition, continued threats of regulation and a slowly but steadily shrinking consumer base, 2004 was a pretty good year for the cigarette category. Of the top 10...

Burning up; "other" tobacco products continue to gain momentum. Flavored products in major segments of the category drive excitement, encourage trial and spur sales growth.(TOBACCO PRODUCTS)
July 1, 2005... New non-cigarette tobacco products introduced in 2004--most notably flavored items--should take a bow. In major segments of the "other" tobacco products category, flavors ranging from the fruity (apple and peach) to the exotic (pineapple and...

Sweet denial; as America wrestles with obesity and the dying down of the low-carb craze, the candy category has taken some hits. Chocolate is still a crowd favorite, but it was a better year for sugarless gum.(CANDY)
July 1, 2005... The National Confectioners Association (NCA) estimates chocolate sales reached $15.1 billion in 2004 (up 3.9%), while sales of non-chocolate confections saw only a slight increase of 1.6% to $7.8 billion in 2004. But the ever-growing concern...

Meaty sales; carb-heavy snacks took a hit last year, while meat snacks thrived thanks to a customer base fixated on high-protein foods. Portion-control packaging could help cookies and crackers recover.(increase in consumption of meat snacks)
July 1, 2005... Today's health-conscious consumers are looking for ways to snack healthier, which in turn drives sales of non-traditional snack items, according to Information Resources Inc. (IRI). Opportunities exist for healthy snack alternatives for both...

Get carded; increased confidence in online shopping enhances the value of gift cards. Prepaid services help forge loyalties with unbanked patrons, while kiosks make c-stores more of a destination.(PREPAID SERVICES)
July 1, 2005... In 2005, consumers are expected to spend $172.4 billion online--a 22% jump from the $141.4 billion spent online in 2004, according to a survey conducted by Forrester Research. This trend of shopping right from the desktop has in turn led to an...

Profit potential; general merchandise appeals to customers needs. Retailers who dedicate space to people's "passions" or their more "practical" sides stand to make great margins on high rings.(GENERAL MERCHANDISE)
July 1, 2005... There are two schools of thought when it comes to the general merchandise category: passion and practicality. While the category represents only 2% of inside sales, non-traditional offerings provide higher profit margins and can help a c-store...

Primping is in: oral care and grooming products were big sellers in 2004, and surprisingly, teenage boys were the big spenders. The ladies are in the market for health products and vitamins.(HEALTH & BEAUTY CARE)
July 1, 2005... Oral care/breath freshening was a big money-making category in 2004. Portable oral care products in convenience stores rang up $109.8 million, with brand extensions like Trident White controlling the lion's share with $41.5 million. Out of the...

Short-term plans; shorter shopping trips show consumers are living in the "now." Even though consumers eat out more often, refrigerated deli meats are still on the menu.(GROCERY)
July 1, 2005... Consumers are picking up their groceries one day at a time, according to international food and consumer products company Unilever. The company tracked the shopping habits of 2,400 consumers and asked 900 to keep a detailed online diary of...

A flat note; diet soft drinks drive growth in a category that, at least for the past few years, has lived up to its name. Analysts and marketers remain bullish on reduced-sugar beverages.(Soft Drinks)
July 1, 2005... As a category, carbonated soft drinks (CSDs) kind of resembles an aging champion sumo wrestler: This now mature category has become so massive that it can no longer maneuver as quickly as its smaller, hungrier, more nimble competitors. In the...

RTD tea party; RID teas put a stranglehold on the c-store channel's No. 2 beverage position in 2004. Its grip could tighten as consumers better understand the benefits of drinking tea.(TEAS)
July 1, 2005... The British just might be onto something. Americans, too, appear convinced of the health benefits associated with drinking tea. Known for being rich in antioxidants that fight free radicals and prevent ailments like heart disease and cancer,...

Packing it in: even after the demise of the low-carb "revolution," light beers remain the darlings of the beer category. Innovations in flavors and packaging should boost sales in 2005.(BEER & WINE)
July 1, 2005... Last year, it seemed that beer consumers shopping the convenience channel just couldn't make up their minds. "To splurge, or not to splurge?" That was the question. Popular/budget beers and higher-priced imports both saw slight...

Go with the flow: retailers continue to get good performance out of their bottled water sets. New products--including functional value-adds and exotic flavors--will drive future sales.(BOTTLED WATER)
July 1, 2005... Even though bottled water grew almost imperceptibly as a percentage of convenience store cooler sales in 2004 (from 13.1% to 13.4%), the tide is by no means rolling out on the category. In truth, the "water level" (as in total U.S. category...

Get squeezed: recovering from the low-carb fad, juices and juice drinks stand to grow sales in light of increased scrutiny given to CSDs. A jolt could (eventually) come from organics.(JUICES)
July 1, 2005... Earlier this year, orange juice purveyors were thrilled to hear former Major League Baseball superstar Jose Canseco's bashing of a different kind of juice for a change. Perhaps no other segment of the packaged beverage category was more...

Adrenaline boost; energy/sports drinks provide a welcome kick in the pants to cooler sales. While strong brands dominate, rowdy start-ups threaten to rein in the energy segment's leader.(ISOTONICS & ENERGY DRINKS)
July 1, 2005... The cooler can be a surreal place. Take the energy drink segment as an example. The battle for shelf space among energy drinks sounds like a back-alley pro wrestling match gone horribly wrong: Red Bull does its best to gore Monster into...

Plain won't do: dairy customers want more for their money. Dairy beverages and ice cream have stronger flavors and added health benefits, while frozen pizza continues to claim RTE dollars.(DAIRY, ICE CREAM & FROZEN)
July 1, 2005... Fluidmilk sales are down, but flavored milks still get customers' dairy dollars. The industry is working with flavors new to many consumers, like tropical-type flavors (mango, papaya and guava) introduced primarily because of Hispanic...

Staying pumped; concerns over supply, competition and price volatility leave retailers vexed. Marketers whose survival is not tied to fuel margins are finding it easier to sleep at night.(MOTOR FUELS)
July 1, 2005... U.S. gasoline demand continues to rise, but supply hasn't caught up. In April 1983, there were 40 gallons of gasoline for every individual living in America, according to Oil Price Information Service (OPIS). Today, that number has dropped to...

Good neighbors; car washes are an ideal complement to a convenience store. Financial services kiosks and WiFi also attract customers, while distibution centers can provide added flexibility.(NEW PROFIT CENTERS)
July 1, 2005... Convenience stores and car washes make great bedfellows, especially as new and increasingly aggressive competitors toss their hats into the fuel-marketing ring--and retailers have grown wise to that fact. In 1998, just 2% of the c-store...