Industry Analysis

What are Some Insights that Make Up the Current Customer Profile for Convenience Stores in the U.S.?


Demand for more amenities and convenience are some insights that make up the current customer profile for convenience stores in the U.S.

1. Demand for More Amenities

  • Unlike the previous crop of customers for convenience stores, today’s consumers seek stores with more amenities such as T.V.s, Wi-Fi, appealing décor, welcoming, a comfortable design and a family-friendly atmosphere. The new consumers comprise a younger demographic. A survey recently indicated that a quarter of Millennials (26%) said they want T.V.s in convenience stores, while 21% said they would revisit convenience stores with T.V.
  • An article published by Statista shows that more convenience stores in the U.S. prioritize foodservice amenities in 2020 by operator size. For instance, 76% of large C-store operators in the U.S. have added microwave ovens in their stores for customer use, while 64% of small convenience stores have added microwave ovens to be used by customers.
  • New consumers are also looking for convenience stores incorporating innovation, which has put retailers under pressure to make significant changes to appeal to the new customers. More chains are reinventing themselves to keep up with millennial consumers and stay in business. Innovation does not necessarily include introducing new products but new ways of doing things, such as payments. Recent studies indicate that 43% of high-income Millennials would visit a convenience store that has payment apps.

2. Convenience

  • New customers are looking for convenience in convenience stores. Today, nearly two out of three (64%) of American consumers live 5 minutes away from a convenience store. Even smaller towns have incorporated convenience stores as 86% of Americans living in the countryside say that convenience stores are only 10 minutes away.
  • An article published by Forbes provides that the new breed of consumers today “want it all, and they want it now.” In this case, proximity to home is the number one factor over price or selection. More studies show that 16% of Millennials are shopping nearby convenience stores daily, which is 5% points higher than any other generation.
  • New customers today are also looking for efficiency, especially in the foodservice operations, representing the biggest opportunity for convenience stores. The new breed of customers seems to be favoring or leaning more towards convenience stores that have consolidated their operations. Thus, these stores incorporate technology systems that can connect valuable data and business intelligence to provide efficiency and impact profitability.

COVID-19 Effects on Convenience Stores

Racism and financial struggles are some COVID-19 aftermaths that have impacted convenience store shoppers, especially Hispanics, to shop less in convenience stores.

1. Racism Discouraged Hispanics from Convenience Store Shopping

  • Before the COVID-19 outbreak, Hispanic consumers were rapidly becoming the multicultural majority as they are blending cultures while creating their own identity. Convenience stores were attracting high-concentrations of Hispanics, particularly the younger consumers, making the highest daily and monthly shoppers of convenience stores compared to other ethnicities.
  • After the coronavirus outbreak, however, the Hispanic demographic has moved to online purchases, especially after 10,000 meatpacking workers, most of them Hispanic, contracted coronavirus in the U.S. As a result, most Hispanics experienced racism even in convenience stores because they were presumed to have coronavirus turning them to online shopping.
  • Hispanics make up 34% of America’s population, yet they recorded a 67% mark of all known COVID-19 positive cases. More research indicates that Hispanics have had a 479.4 per 10,000 people infection rate, four times higher than the white American population. These rates have affected the Hispanic community on many fronts, including the accessibility of convenience stores.

2. Financial Struggles

  • Financial struggles have also seen Hispanics shop less from convenience stores. After the coronavirus broke out, more Latinos struggled to get enough food to feed their families. The food insecurity among this minority group saw them shy away from convenience stores. Studies indicate that 16% of Hispanics were impacted by the coronavirus outbreak, especially after many businesses were shut down.
  • Before COVID-19, 16.8% of Hispanic households in the U.S. were already food insecure. When the pandemic hit the U.S., this number shot 47% of Hispanic households with children, and recent data indicates that this number continues to rise.
  • The economic fallout from the coronavirus pandemic has continued to affect the Hispanic demographic financially. Millions of Hispanic families were recovering from losing 66% of their household wealth, thus lagging behind their white peers. Such setbacks have continued to affect this community on many fronts, including their frequency in convenience stores.

3. Convenience Store Drivers

Groceries and gas and auto supplies are some item convenience store shoppers are buying, while brand loyalty and in-store experiences are some of the reasons why shoppers prefer to shop at convenience stores in the U.S.

4. Groceries and Brand Loyalty

  • Survey shows that while American adults between the ages of 18 and 75 embrace online shopping, 82% of this demographic like to shop in convenience stores at least a month. Millennials and Gen Z have continued to dominate retail shopping in recent years. However, research indicates that Generation X and Baby Boomers are equally influential in shaping the convenience store shopping landscape. Generation X spends more money on food and wine, and will mostly shop based on quality, customization and convenience.
  • Generation X and Baby Boomers care about the in-store shopping experience and are mostly influenced by store circulars. More so, this demographic tends to be loyal to grocery brands and specific convenience stores. Once they like a grocery brand and a convenience store, they tend to stick by them for a long time. Generation X and Baby Boomers also develop brand loyalty based on word of mouth; 50% of these two demographics say that they rely on word of mouth before purchasing groceries from certain brands.
  • Unlike Millennials, Boomers are hesitant to buy groceries on a whim, as they treat each purchase as a commitment. More so, Boomers want to first understand the fine print before committing to making a purchase. To keep this demographic loyal, convenient store owners and grocery brands need to prove the real value of their product or service, and if it meets their needs, 77% of Boomers will purchase it.

5. In-store Experiences for Gas and Automotive Supplies

  • Gas and auto parts are some of the supplies that make up 60% of convenience store purchases. Industry experts provide that people across different ages and generations are attached to the in-store experience, particularly browsing through the aisles and picking supplies on their own.
  • Boomers, Generation X and Millennials enjoy in-store experiences as they come with additional perks such as store promotions, sales and coupons for items such as gas and auto supplies. These discounts have often led to impulse purchases, but Boomers and Generation X shoppers seem to be often focused on a shopping plan and stick to it. On the other hand, Millennials tend to run online research to get prepared before walking into a convenience store.
  • Convenience stores provide many experiences that keep Americans hooked to them. Besides giving consumers the tangible element, convenience stores also provide less probability or returns as customers can make the right purchases, especially when it comes to auto supplies.

New Measures for Convenience stores since COVID-19

Mergers and acquisitions, technology evolution and Curbside pickup, are some of the measures that convenience stores have instituted to optimize sales in response to the COVID-19 pandemic.

1. Mergers and Acquisitions

  • In the first quarter of 2020, convenience stores such as ExtraMile and Arco were put up for sale. Based in San Ramon, California, ExtraMile is a joint venture between Chevron USA Inc., and Jacksons Food Store Inc. As one of the largest convenience stores in the western U.S., with more than 900 stores, a merger or an acquisition would help to make even more sales during the coronavirus pandemic.
  • On July 2020, Chevron announced that it would acquire Noble Energy, an independent exploration and production company. Chevron valued the total of Noble’s value, including its debt, at $13 billion. Through this acquisition, Chevron would give Noble “low-cost, proved reserves and attractive undeveloped resources that will enhance an already advantaged upstream portfolio.”
  • In a statement, Chevron highlighted its interest in all of Noble’s assets in Israel and the U.S. shale fields. Admittedly, it was cheaper to acquire companies’ assets and valuations such as Noble’s during the pandemic and create opportunistic mergers.

2. Technology Evolution

  • Naturally, the coronavirus pandemic has permanently changed the patterns of consumer habits, which has brought an awakening to convenience store owners on the need to evolve the technology to stay relevant. A survey indicates that 64% of convenience store respondents admitted that they have had to update their technology to match the new consumer demands. More so, 81% of convenience store owners have realized that technology evolution has influenced decision-making and technology evolution can either hinder or propel these stores’ ability to match up to the new customer buying habits.
  • The dramatic shift to online purchases has also forced convenience stores to embrace technology evolution. Online shopping will continue even after the pandemic, and may grow at a rapid pace. Thus, convenience stores have been forced to update their technology approach to stay afloat amid the pandemic.
  • Gen X, Millennials and Gen Z are using apps to place orders. Over 40% of consumers across different generations in different parts of the U.S. said in a survey that online shopping is easier and convenient. Approximately 50% of consumers rely on technology to stay in touch with their favorite brands and stores. With these statistics, convenience stores have had every reason to update their technology approach to stay in touch with consumers.

3. Curbside Pick-up

  • A survey shows that giant market players such Dick’s Sporting Goods and Hudson’s Bay are embracing curbside pickup now more than ever. Smaller players such as Casper and b8ta are also catching up on curbside pickup to accommodate their clientele. Curbside pickup went up 208% in April 2020, from the past year, the same period, following the coronavirus outbreak.
  • Consumers in different parts of the U.S. have already started to re-adjust their shopping behavior due to the coronavirus pandemic. Curbside pickup has become a trend, and convenience store owners are adapting to these new changes as the intent to run contactless activities across the U.S. continues. Millennials and Gen Z form 79% of the demographic that has increased demand for curbside pickup.
  • Densely populated areas such as Chicago and Sacramento have seen a spike in online orders for groceries since the coronavirus pandemic broke out in the U.S. These spikes have seen convenience stores adjust organizing for curbside delivery for their customers.

Convenience Store Shoppers: Fill-In Trips

Since the COVID-19 outbreak, 52% of convenience stores in the U.S. reported a spike in grocery sales as consumers seek pantry items from local stores to meet their coronavirus needs. Baking staples, cleaning supplies, and fresh meat are some items that have witnessed a significant rise in demand at convenience stores.

Changing Shoppers Behavior in the U.S. Following the COVID-19 Outbreak

  • Following the outbreak of the COVID-19, the shopping habits of consumers in the U.S. have evolved with more consumers choosing to shop from convenience stores (c-stores).
  • Since mid-March, sales of household items such as “fresh meats, cleaning supplies, baking staples, and others” have significantly increased at c-stores as they were considered ‘essential businesses’ by the U.S. government during the lockdown and are located within 10 minutes to about 86% of American homes, especially in rural areas.
  • This is because they are located close to their homes with smaller crowds compared to large supermarkets or hypermarkets.
  • According to a survey by the National Association of Convenience Stores (NACS), since the COVID-19 outbreak, 52% of c-stores in the U.S. reported a spike in grocery sales as consumers seek pantry items from local c-stores to meet their coronavirus needs.
  • This trend is driven by millennials’ evolving “preference for ready-to-eat foods and making fewer trips to the grocery store” as established by a publication by CSP Daily News.
  • The survey by the NACS hinted that traditionally, 83% of all products sold at a c-store are for immediate consumption and are consumed within an hour. However, following the pandemic, c-stores in the U.S. are now providing items that could be taken home: “52% say they are adding more cleaning/toiletry items, 31% are emphasizing ready-to-heat meals and 28% are showcasing multi-pack/bulk items.”
  • Furthermore, the survey found that c-stores are cutting down on self-serve food services and restaurant functions with about 66% of stores closing public seating and dining areas, and 45% restricting “customer access to self-serve food services such as coffee, fountain drinks, bakery items, and roller grill.”
  • Finally, a Neilson report established that butter (+49.4%), eggs (+43.7%), dish care (+42%), margarine (+17.7%), and ice cream (+14.2%) are products that have witnessed significant growth in demand at c-stores following the pandemic.
Glenn is the Lead Operations Research Analyst at Simple Manifestation with experience in research, statistical data analysis and interview techniques. A holder of degree in Economics. A true specialist in quantitative and qualitative research.

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