By Bill Scott
As alluded to by Mel Hayne’s contribution, “Always A Good Read”, it seems to me like the majority of the convenience store industry is moving away from its original concept and turning into an upscale McDonald’s, Wendy’s, or Arby’s, with their convenience items destined for the junk pile.
To me, this is a huge mistake, and creating a hole in the environment that will add to the advantages of the Mom & Pops that make up 66% of the convenience market already. In other words, for the industry, as a whole, it is both a blessing and a curse.
When a customer is rushing from one appointment to another, or trying to get to Aunt Sally’s in time for Christmas dinner, the last thing they want to do is enter a busy parking lot, find a place to park, and wade through the lunch crowd to use the restroom and buy a soda and a bag of chips. What are we doing to “convenience?”
Fast Food Industry Becoming Saturated
The fact that most of the Mom & Pops cannot afford to completely redesign their stores as restaurants, may give them an overwhelming advantage in attracting the common convenience store consumer, and as the market continues to get crowded with an endless stream of restaurants that stock convenience items… what then?
As the ‘uniqueness’ wears off to becoming the ‘commonality’, these ‘late to the dance’ operators will be right back in the same position they are in now; except they will be even deeper in debt and have a lot more to lose. Running a restaurant takes a totally different mindset that operating a retail store. I don’t see the capabilities of the operators managing the larger and more complicated model.
Where is the reasoning that a retailer who continues to run one business horribly, will run a totally different kind of business perfectly?
Here’s an example: Recently, a forced-upgrade on our host computer to a new security update (due to the ‘Russian Hacker’ phenomenon that seems to have gripped the nation), all the hacking we have been hearing about, has caused some of our applications to just stop working. We have spent days buying expensive, new software to overcome these problems, when suddenly it dawned on me, ‘Why don’t we redirect the money from purchasing new software, to fixing the applications that have served us for years?’
This uncovers a relatively new frailty in the human psyche that tells us when something doesn’t work, just toss it out and buy something new.
For example, when is the last time you’ve seen someone fix a 30-year old refrigerator? It might just be needing a simple part that costs the consumer the part and a service call to set things right. But unless you’re poor, and your brother-in-law works at a repair shop, it will be picked up for scrap before the sun sets in the afternoon.
For some reason, the default choice is to toss the broken item out and buy the new, upgraded version at a time with the new item has already entered its ‘end-of-life’ stage, as evidenced by its bargain sales price.
Who takes their TV in for repair anymore when there is a larger, more up-to-date TV at Walmart for less than they paid for the broken one? The result has driven many companies to manufacture items with built-in planned obsolescence/failure times from the beginning. We have been cleverly manipulated to adapt to the new way of thinking, which has resulted in us paving new roads to the ‘poor-house’.
Put simply: manufacturers have taken advantage of this frailty and have all but eliminated repair and service companies entirely. Sometimes simply locating a freezer repairman takes more time and money than just buying a new one.
I think this has been happening to the convenience store industry since the late 90s. That’s why we have seen Mom & Pops going from owning 8% of the market to owning 66% of the market in only 17 years. Wow! How long will it be before we see NACS change it’s name to the ‘National Association of Fast Food and Convenience Stores”?
If convenience store operators would operate their stores correctly (and practically no one is these days), they would spend far less money, make more profit, and get the business that most of the celebrated chains are throwing away—mainly, the poor-old, all-but-forgotten “Convenience Business.”
Bill Scott is a c-store consultant, speaker, author and founder of StoreReport LLC.