With the COVID-19 pandemic’s unique impact on convenience store retailers, it’s been difficult over the past couple of years to predict even the next quarter — let alone begin investing in long-term business strategies. But the industry has not only started to level out in 2022, it’s actually starting to look up, largely thanks to c-store operators’ willingness to innovate and adapt to consumers’ changing habits.
Now it’s time to start looking ahead and ask, “What is the future of convenience stores?” The future is bright — and also rife with big changes, from the growth of sustainability practices to the integration of cutting-edge technologies. Below, we outline a few of the must-watch convenience store trends for the year to come.
The Top C-Store Trends for 2023
In the coming year and beyond, the difference between meeting revenue benchmarks and truly thriving will depend on making decisions that serve the new ways that customers prefer to engage with their local c-stores, as well as implementing changes in compliance with new state and federal clean energy regulations. Here are some ideas to consider adopting for your own convenience store business:
1. Elevate the Customer Experience
One of the greatest attractions convenience stores offer is, well, just how convenient they actually are. In order to capitalize on this advantage, c-store operators should continue to study and cater to consumers’ post-COVID shopping expectations.
This will be especially important moving forward, as many restaurants and retail stores during the pandemic shifted their own business models to serve customers’ demands for better speed, quality, variety, and more. As a result, c-stores are being forced to provide a whole new level of convenience.
This means making every visit as smooth and easy as possible, in every product and experience category, from increasing contactless purchase options (at the pump and through apps, for example) and offering curbside pick-up to ensuring shelves are well-stocked with high-demand items and bathrooms are clean.
2. Expand Healthy Food Offerings
During the pandemic, convenience stores were considered essential businesses. People came to rely on their local c-stores for basic household, fridge, and pantry staples. Locations that did best responded to this need by expanding their food offerings to include more groceries, ready-to-go meals, and healthier options. This ensured they could meet the needs of all local shoppers as an accessible one-stop-shop for any snack or meal, or even the week’s groceries. Adding or expanding the range of healthy and fresh foods available can eliminate the need for customers to visit multiple locations to meet all of their everyday needs.
3. Support Electric Vehicle Growth
Of the 152,720 convenience stores operating in the U.S. in 2020, nearly 122,000 sold fuel. However, with the passing of the 2022 Inflation Reduction Act (IRA), which among other provisions, incentivizes the adoption of electric vehicles (EVs) through uncapped tax credits, unprecedented change is headed for the traditional fuel industry and those markets that support it.
Anticipating a surge in EVs on the road, convenience stores should look to add chargers to power these vehicles. The good news is the Alternative Fuel Infrastructure Tax Credit is available to businesses for EV charger hardware and EV charger installation costs.
Clean energy reform will also see further growth as it’s legislated at the state level. California has already passed Advanced Clean Cars II, which pursues 100 percent zero-emission vehicle sales by 2035. 14 other states, which together make up 40 percent of new car sales, are expected to soon follow suit. Being among the first sites to offer charging stations for these vehicles could go a long way in boosting revenue opportunities as well as earning customer loyalty from EV drivers.
4. Practice Smart Energy Management
As essential as installing EV charging infrastructure may be, most convenience store operators already struggle with managing energy consumption — with the average c-store using around 15–20 kWh of electricity per square foot per year — and EV chargers will only place higher demand on the energy grid. Add to that the rising costs of energy, and demand side management is quickly becoming one of the most important trends among convenience store retailers.
Thankfully, while energy costs are going up, the cost of “smart” technologies for energy management is going down as they become more widely available. Energy management systems (EMS) are increasingly used for monitoring and controlling energy consumption in units such as refrigeration, hot bars, and other food and beverage equipment. For example, City’s Spark+ energy management platform, which senses anomalies in temperature, can alert facilities managers to leakage and other malfunctions, allowing for immediate action, ensuring that energy consumption is tightly managed.
IoT frameworks, through the use of a network of sensors placed on equipment that collect data and feed it back to a central cloud, can give c-store facilities managers central control over assets and leverage the power of data to increase energy efficiency.
Facilities management companies who specialize in tech-supported energy management solutions can be a valuable resource when it comes to choosing the best systems for cost efficiency and ease of adoption – not just in support of your current infrastructure, but to support plans and goals for the future. City FM’s holistic energy management solutions typically reduce energy consumption by 50% or more.
Big-picture outlook: Is the convenience store industry growing?
Before you make sweeping changes to your business model or invest in some of these opportunities, it’s good to know that, growing at an average of 3.1% per year in 2017-2022, the outlook for the convenience store industry is promising for the years ahead. Due to factors like population growth, urban expansion, and continued consumer demand for convenience signaling steady demand, the industry is expected to see a compound annual growth rate of 5.6% from 2022 to 2028.
The one potential risk is increasing competition within this market, valued at $2.12 trillion globally as of 2021. That’s why it’s essential to stay on top of convenience store trends such as the ones above — committing to customer-centricity and showcasing sustainability leadership, while also ensuring growth and profitability.