business news in context, analysis with attitude

by Kevin Coupe

CNBC picked up on a some new numbers put out by the National Association of Convenience Stores (NACS), which pointed out that “convenience stores experienced a 16th straight year of record in-store sales in 2018, with total sales surging 8.9% to $654.3 billion.”

Perhaps even more impressively, the industry continues to grow in fresh directions: “produce sales in convenient stores are now about $242 million per year … While this is still a fraction of the $3 billion in produce sold at grocery and big box stores annually, it demonstrates new opportunities for convenience store operators.”

Another bit of context: While c-stores saw sales go up almost nine percent last year, “growth among large North American grocery chains has been just 2%, according to a recent report by McKinsey,” which projects that “by 2026, $200 billion to $700 billion in grocery sales could move toward other nontraditional channels, like convenience stores.”

It wasn’t that long ago that the Food Marketing Institute (FMI) came out with its 2019 Power of Produce analysis, suggesting that while “produce is a big, profitable focus for food retailers,” the reality is that “the produce purchase is losing momentum to other channels, and younger shoppers are catalysts for this shift … While traditional grocery maintains a dominant lead in sales, a younger generation shows a greater propensity for supercenters and alternative channels, including online, dollar stores, convenience stores and farmers’ markets. In fact, only 34 percent of older Millennials identified a supermarket as their primary grocery store for produce.”

C-stores are making their move … they are aggressive and ambitious, and they seem to sense vulnerability.

This ought to be an Eye-Opener for traditional supermarkets.
KC's View: