Not only has the COVID-19 pandemic disrupted daily life for customers, and with it their shopping habits and needs, but it’s also affecting their priorities when it comes to candy selection.
“It’s interesting, the moment mask-wearing became part of everyday life, the need and demand for fresh breath declines,” said Joe Bortner, category manager for center store at Rutter’s, which operates more than 75 c-stores in three states. “Mints and gum have been disrupted the most through COVID-19.”
That seems to be the consensus throughout the c-store industry. As people avoided workplaces and social settings, demand to freshen breath evaporated. Both Mondelēz International (maker of Trident and Stride) and Hershey (producer of Ice Breakers and Breath Savers) noted that business for gum and mints fell by at least 20% during the first quarter of this year.
According to IRI, a Chicago-based research firm, national c-store dollar sales for gum fell by more than 8% for the 52 weeks ending June 14, 2020, and nearly 12% for breath fresheners. Summer sales dropped further: 12.5% for gum and 16.8% for breath fresheners over the 52 weeks ending Aug. 9, 2020.
But some convenience stores are beginning to see a rebound as customers venture out following extended lockdowns.
“We saw at worst a 20% drop in volume at the end of spring but are starting to trend closer to our pre-COVID-19 numbers as store traffic picks back up,” said Lisa Ham, Yesway’s center store senior category manager. With a new headquarters in Fort Worth, Texas, Yesway’s c-store network spans 407 stores located in Iowa, Texas, New Mexico, Oklahoma, Kansas, Missouri, Nebraska, South Dakota and Wyoming — and includes the 304-store Allsup’s chain.
Candy Boost
While limited socialization popped profits on gum and mints, chocolate and candy still produced for retailers. In fact, the onset of COVID-19 may have boosted sales temporarily because consumers stocked up on sugary cravings before stay-at-home orders became official.
“Consumers appreciate and value chocolate and candy during these uncertain times because of their uncanny ability to boost moods and lighten perspectives,” said Carly Schildhaus, spokesperson for the National Confectioners Association.
“We’ve seen strong response to M&M’S (Fudge) Brownie flavor, Snickers White and Chocolate-Covered Payday. We’ve seen 61% in our display purchases this year, with innovation making up the bulk of the lift,” said David Hendrix Jr., who directs merchandising for Summerwood Partners. The Bryant, Ark.-based company includes 39 Big Red Stores.
“At the height of the stay-at-home orders, we saw a 41% increase in peg (candy) sales, which more than compensated for the loss in single serve,” noted Ham.
As the month dragged on, however, in-store traffic slowed. Although chocolate and non-chocolate candy each posted gains in dollar sales (1.5% and 3.7%, respectively, per IRI), unit sales in a year-to-year comparison for the 52 weeks ending Aug. 9, 2020, declined — all chocolate products dipped 5.7% and non-chocolate candy slipped 3.6%. Snack-size chocolates sustained the biggest hit, dropping more than 44%.
Mintel research suggested customers will continue viewing candy as an affordable pleasure over the next several months, but where they’ll shop for it matters most to c-stores, which in 2019 claimed 35.7% of all confectionary transactions per the National Association of Convenience Stores (NACS). A Top Data survey this summer revealed nearly 90% of respondents confirmed they intend to continue buying grocery and household items online after a coronavirus cure and/or vaccine.
In response to the pandemic and customers’ shift to online ordering, many c-store retailers are offering products for in-app and online shopping for delivery and curbside pickup.
Seasonal Considerations
Under these unprecedented circumstances, Halloween could be either a treat or trick for convenience stores this year. Candy-makers announced varying positions: Hershey stated it will shift some products to more “everyday” packaging, while Mars Wrigley is embracing the holiday with traditional Halloween-themed packaging for Skittles and M&M’S.
Retailers differ on seasonal marketing approaches this year, too.
“The candy companies have built holiday offerings into the yearly agreements; so, in some way, we are already locked in,” said Hendrix.
“We’ll still have some single-serve Halloween options as planned, but that will be the extent to our offers for the holiday,” added Ham.
Others still see the event full of potential, perhaps because novelty chocolate items cashed in during COVID-19. IRI reported novelty chocolate candy year-over-year unit sales soared by more than 85%.
“Halloween has always been a significant season for us,” noted Bortner. “I expect that to remain the same for 2020 with it being such a difficult year for so many.”
