Maybe it’s those terrible morning traffic jams to purchase hot brews at drive-thrus or waiting for people who fumble to pay by cash at self-serve checkout lines that are taking their toll. A growing number of consumers, conditioned by the ease of online purchasing, don’t have as much patience as before when it comes to shopping at brick-and-mortar stores. 

As people’s hectic lives and mobility return to pre-pandemic norms, convenience stores’ sales are rebounding and so is the optimism of operators in this retail channel.

“The outlook for the c-store business is very bright for next year,” observed Chuck Kronyak, retail category manager for United Dairy Farmers (UDF), a Cincinnati-based regional chain that operates a bakery supplying its c-stores with fresh donuts and other baked goods.

“People are always going to be heading somewhere from point A to point B, and more people are tired of being locked up in their houses,” he added. “We’re seeing more of a return to normal life with kids playing sports or folks getting back to their offices. We’re going to continue to see traffic growth in 2023, and we’re going to continue to see our customers finding that c-stores are a great place to find high-quality food and bakery products at an affordable price and great value. And c-stores can save time.”

The past three years haven’t been easy for the c-store industry, which has seen peaks and valleys as people went from lockdown to rebound and the price of gas fluctuated from around $2 a gallon to more than three times that amount. Now with rising costs, labor shortages and other economic issues testing their patience, c-store operators must go with the flow to succeed in these uncertain times.

“If we flex our assortment of products as the customers’ needs are changing and we continue to satisfy them with new ones that are on trend, we’re going to see more people come to our stores with increased frequency,” Mr. Kronyak said.

Overall, c-store shopping behavior has fundamentally shifted in several ways, noted Jeff Lenard, vice president, strategic industry initiatives, National Association of Convenience Stores (NACS). With about 20 million people working at home or with flexible schedules, he added, traffic patterns have changed with the early morning rush hour extending to mid-morning followed by another surge during mid-afternoon.

“Those are both excellent opportunities for bakery products,” Mr. Lenard said. “Both of those times are more suited for convenience stores because they sell speed. Most people are out of the store in 4 minutes or less. It’s about time and getting about your business.”

Meanwhile, soaring gas prices have more Americans stretching their precious dollars. While credit card users typically purchase by the gallon when they fill up, cash purchasers tend to pay by the dollar inside c-stores a couple of times a week. Mr. Lenard suggested targeting cash users, who account for 20% of gas sales, with value-added products and in-store promotions.

“We are feeling good about how consumers have returned, but they aren’t the same customers that they were in 2019,” Mr. Lenard said. “The big thing is to figure out, ‘Who are they now? Do they want more deliveries? Do they want to order via app? Is it a fundamental shift or a permanent shift?’ People expect more. They’re more impatient. There are some things that have changed.”

As a result, Mr. Kronyak said, c-stores must step up their game to lure more customers and to better compete against quick-service restaurants (QSR) with a wider array of breakfast, coffee, sandwich meals and other fresh and refrigerated food offerings.

“We need to be the fastest convenience store we can be,” he said. “While people are waiting in line at the drive-thru at a QSR, we can serve them much faster.”

Any consumer behavioral shifts will have a dramatic impact on bakers and snack makers and how they supply the c-store channel. According to NACS, c-stores make 160 million transactions a day, of which 30 million occur at the pump and account for 80% of the nation’s gas purchases.

In 2021, total industry sales reached $705.7 billion, of which $427.8 billion came from fuel and $277.9 billion from merchandise inside the store. Mr. Lenard noted total merchandise rose 6.4% last year, with a portion of that increase coming from price hikes. Traditionally, he said, about 80% of food items are sold for immediate consumption within the hour and often within minutes. Since the pandemic, people are using c-stores more as a quick grocery stop as well with purchases of pantry items like milk, a loaf of bread or canned goods.

NACS also reported sales of salty snacks grew 11.3% in 2021, while packaged sweet snacks popped up 14.3% and healthy/alternative snacks jumped 23.3%.

Utz Brands participates in all these categories with its Utz, Zapp’s, Boulder Canyon and Good Health brands, as well as its portfolio of regional brands, said Jessica Reese, vice president, small format channels, for the Hanover, Pa.-based snack producer.

“It’s especially important to make sure we’re engaging our customers in a fun way to bring energy between flavors and packaging and leveraging retail floor placements to generate incremental impulse purchases,” she said.

Most recently, for instance, Utz introduced Zapp’s Sinfully-Seasoned Pretzel Stix for the c-store market.

“We have fun flavors and fun packaging,” Ms. Reese said. “We have the new Zapp’s Jazzy Honey Mustard flavor and our Voodoo flavored Pretzel Stix that consumers are really excited about.”

NACS also noted the highly profitable prepared foods segment climbed 18.3% over the previous year.

“That sounds incredibly rosy, but in general, trips were down,” Mr. Lenard said. “There were fewer people coming into c-stores compared to 2019. The good news is the market basket is up.”

However, the total number of units slipped 1.5% to 148,026 stores in 2021, down from its peak of 154,000 units in 2018.

Still, that number is about the same as 2012, and considering the pandemic, Mr. Lenard said, “anything less than a minor loss is a major victory.”

This article is an excerpt from the November 2022 issue of Baking & Snack. To read the entire feature on Convenience Stores, click here.