The convenience store market is anticipated to grow annually by 5.6% until 2028. This growth is attributed to factors such as longer operating hours and strategic locations near high-traffic areas, which attract customers who require quick access to essential items.
As the lines continue to blur between convenience stores, restaurants and other retailers encroaching on the convenience store space, retailers can expect both increased competition and new opportunities for revenue streams, according to Intouch Insight’s 2024 Convenience Store Trends Report.
As has been talked about for years, perhaps the biggest shift ahead is the evolving landscape of transportation fuels.
While gasoline remains the most purchased item in convenience stores, the rise of electric vehicles (EVs) is changing how customers refuel. Is your brand ready to meet the needs of tomorrow’s customers? A new generation of consumers is coming, and their habits and expectations are changing.
According to Intouch Insight, here are the three takeaways you need to know from this year’s report that focus on consumer motivation and building loyalty with customers:
- Consumers increasingly view convenience stores as a viable option for food over traditional fast-food restaurants. This trend is driven by improved food quality and variety. According to the Intouch Insights report, 56% of respondents now consider convenience stores a viable alternative to fast-food chains, marking an increase of 11% over the past two years.
- EV charging stations at convenience stores are becoming a significant factor for younger consumers. Specifically, 34% of consumers aged 18-44 say they would choose a retail location over another if it had an EV charging station, compared to just 14% of those 45 years of age or older. The report said it’s important to note that the preference for EV charging stations can vary significantly based on geographic location and other local factors.
- Cleanliness and store ambiance have gained importance among consumers. 53% consider cleanliness a crucial factor when choosing a convenience store, up from 43%last year. This increase of 10% highlights the growing expectation for a clean and pleasant shopping environment.
Gasoline remains the predominant purchase at convenience stores, accounting for 62% of their overall sales. However, a shift towards alternate fuels is coming.
Intouch Insight estimated that there are more than 40 million EVs registered globally, a more than sixfold increase since 2018. As the market adapts, convenience stores will find themselves increasingly competing in the fuel market not just with restaurants, drug stores and other retailers who have been implementing EV charging technology but also with other charging or fuel solutions entering the market.
To keep up with future demand, brands need to understand the shift in consumer preferences. To shed some light on the issue, Intouch polled consumers to see if they would be more likely to choose a retail location over another if it had an EV charging station. While the majority said no, there was a clear shift in preferences according to age among those who said yes. More than 40% of Gen-Z respondents aged 18-24 said they would choose a location with EV charging stations, compared to just 6% for those aged between 65-74.
As convenience store brands look to the future, new revenue streams are being explored. One such example is the continued growth in food options. With 78% of survey respondents reporting that they prefer to pay at the pump, brands need to find ways to drive customers in-store, and one way to do this is by offering made-to-order food options and coffee.
According to Intouch, 93% of consumers have tried freshly prepared foods from convenience stores, with sandwiches, wraps and paninis being particularly popular. This is a significant increase from 2022, when only 76% of consumers reported purchasing made-to-order meals in a survey of 1,460 respondents.
With the growth in restaurant-quality food options at convenience stores, the industry has moved well beyond roller-grill hot dogs and coffee urns. More than half of the consumers surveyed believe that the fresh food prepared at convenience stores offers good value for their money.
Elevating Personalization and Loyalty
By addressing the evolving expectations of different age groups and investing in mobile solutions, brands can create engaging shopping experiences that keep customers coming back. Embracing these strategies will ensure convenience stores meet and exceed consumer expectations, solidifying their position in a competitive market.
Bringing new streams of income and standing out from the competitors is essential. Still, Intouch warned operators must find a way not just to attract new customers but turn them into brand advocates who are repeat customers.
Combined with a convenient location and speed of service, mobile apps offer a connection to your customers.
Considering that Americans spend, on average, more than four hours a day on their phones, enhancing your mobile offerings can provide significant advantages.
Prioritizing Cleanliness and Store Appearance
To enhance customer experience, Intouch Insights found that operators should continue prioritizing store cleanliness alongside loyalty programs. This year, 53% of consumers consider cleanliness as the second most important factor in choosing a convenience store, up from 43% last year.
In a recent survey, nearly 48% of food consumers stated that they would avoid a restaurant if its parking lot had dim lighting. To enhance the customer experience, operators should consider LED lighting and prioritize store cleanliness alongside loyalty programs.
The enhancements to customer loyalty programs and the stores’ physical environment are essential to retaining customers. With most consumers valuing cleanliness, rewards programs and outstanding service, convenience stores are well-positioned to drive sales and encourage repeat visits. These efforts collectively contribute to a great shopping experience that differentiates a store in a competitive market.
Elie Y. Katz is the CEO and president of National Retail Solutions (NRS).
