Alexandria, VA — Despite pandemic-related challenges throughout the year, 66 percent of convenience retailers report their in-store sales were higher in 2021 than in 2020, with only 16 percent noting in-store sales decreased, according to a recent survey of NACS retailer members. Industry suppliers were equally positive about sales: 63 percent of NACS supplier members report that sales to convenience retailers were higher in 2021 relative to 2020; only 9 percent note their sales were lower.
Suppliers also are very optimistic about 2022, according to the survey results, with 75 percent reporting sales in the c-store channel will increase in 2022 and 71 percent noting they will invest more in the channel this year and just 3 percent will invest less. This marks the second strong year of suppliers investing in the c-store channel: A year ago, 63 percent of supplier members said they would boost their investment in the channel.
NACS also reports convenience retailers are optimistic about prospects in 2022 with 51 percent expecting strong sales in the first quarter. Part of the optimism could be related to new or expanded offerings, notes the trade association, reporting 41 percent say they will offer frictionless/cashier-less checkout and 30 percent say they will offer app-based ordering/payment.
Suppliers credit continuing partnerships within the channel for growing sales, with 62 percent reporting they formed new relationships with retailers, which likely helped expand opportunities: 35 percent of suppliers say they increased SKUs in the channel and 31 percent say they entered new categories where they did not have a presence.
Convenience stores contribute more than $1 billion annually to charities and retailers say that the local connection is important. Retailers say the top community groups for the industry to focus on are local schools (cited by 53 percent) and first responders (50 percent).
Not surprisingly, the top two issues facing both retailers and suppliers are labor challenges and supply-chain reliability.
Overall, 56 percent of suppliers are facing labor challenges, and the top three affecting their business are:
- Lack of production/front-line employees (cited by 62 percent of suppliers)
- Offering competitive wages (51 percent)
- Driver shortage (31 percent)
Most suppliers say that they are facing supply-chain challenges because of the truck driver shortage and inflationary pressures (each cited by 36 percent of suppliers). Suppliers also note it’s going to take time for the supply chain to return to normal: 36 percent of suppliers say that won’t happen until the second half of 2022 and 35 percent say it won’t happen until the first half of 2023.
Retailers say they expect both challenges to linger well into or beyond 2022: 40 percent say supply-chain disruptions will no longer be a significant challenge in in the second half of 2022, while 7 percent say they will never return to pre-pandemic normalcy. They are even less optimistic about the labor challenges: 24 percent say the labor shortage will no longer be a significant challenge in first half 2023. Nearly one in three retailers (32 percent) say the labor challenge “always will be a problem.”
Retailers cited solutions to overcome labor challenges such as offering higher pay, flexible scheduling, referral bonuses and spending more time on the hiring process.
Industry suppliers say several trends that emerged in 2021 will continue, including the growth of healthy options in stores, the expansion of delivery options and greater usage of mobile apps for ordering.