Six months ago, who would have predicted that a virus would sweep the globe, forcing the closure of schools, restaurants and workplaces across Canada for months? Convenience stores, exempt from closure, quickly proved their worth as essential businesses. With an increasingly diversified product offering and a strong place in the community, research shows consumers are counting on c-stores for the usual fare, as well as household staples usually associated with drug stores and supermarkets.
Hoping that the worst of the crisis is over, attention is turning to recovery, and what the world will look like post-crisis. With new norms like social distancing, consumers are likely to rethink how they want to shop. The onus will be on c-store owners to adapt.
Contactless payment innovations will need to be accelerated. And pre-COVID planograms and customer flow maps may no longer work as well as they once did. Russell Large, senior business development manager in Ontario for Continental Store Fixture Group (and former vice president of retail services for Hugh Large & Associates Inc.), charts how the industry can evolve from the pandemic.
What concerns have you been hearing from c-store operators about the coronavirus?
RL: I’ve been fielding calls left and right from district managers and independents. They want to know what they should be doing now to stay afloat, how they can help customers through the pandemic and how to make sure stores are ready for customers when they come back in droves.
How significant of an impact will the pandemic ultimately have on the industry?
RL: Huge. Frictionless payment technology over the past few years has been driven largely by millennials. Now there is a whole other reason why people are going to be interested in it, from “tap and pay” service and pre-order and locker pick-up to mobile app payment. C-store operators who have already made investments in this technology are now way ahead of the curve.
With the rise of social distancing, should c-store owners be rethinking their floor plans?
RL: What is going to become really important is the store entrance. Automatic door systems will need to be the norm, and the entrance area will be nice and wide and offer a clean line to the cashier counter. It will also be more important for customers to feel like they can move around the store without jamming up against one other. That might mean instead of having four gondolas, you have three. The devil is going to be in the details.
Do you think Plexiglas barriers between cashiers and customers will become the norm?
RL: You are seeing grocery stores install sneeze guards because of the coronavirus: I get why they are doing it. However, if convenience stores put Plexiglas in the whole front cash area, they are losing sight of an important part of the experience for customers. It is important for customers to feel connected and be able to socialize with staff. I hope down the line, when it is safe to do so, we will see these types of barriers come down.
At the height of the crisis, we saw supermarkets selling out of cleaning and hygiene products, like hand sanitizer and bathroom tissue. Is this an area for c-stores to further explore?
RL: Good retailers change their merchandise mix on the fly. I suspect those c-stores who were able to stock-up on those items will continue to get traction and even expand the category in their stores, because it has great margins. It also shows that you are not just out to sell gum, meat sticks and slushies, although those are all good.
How else did product demand change during the pandemic?
RL: A guy up the street from me owns a couple of Circle Ks and he was selling more milk and dairy products than ever before because customers didn’t want to go into a big grocer. And he was clever about it by reducing his pricing on some items. It showed that he cares and isn’t just out to gauge people, but he still reaped the benefits on the backend since he moved so much more volume.
It is heartening to hear stories in the industry of Canadian c-store operators who weren’t being predatory in their pricing.
RL: The guy at Circle K was also giving out little courtesy packs of tissue to customers. You don’t have to be a parasite for your business to benefit at this time. People are going to remember the retailers who tried to help, and that goodwill they’ve built up will be theirs to lose.
How are independents going to fare through this?
RL: From a business point of view, you look at the light at the end of the tunnel and hope it is not a train and that things are going to get better. The independent guys with deep pockets are going to fare well because they are entrepreneurial and make investments for the future. A guy in Stratford, Ont. spent three weeks renovating his entire c-store. He has a Shell and still provided fuel through tap and pay and a payment window, but you could’t go inside the store because he was tearing up the floor. His renovation plan is based on what he has learned over the past few weeks that would make the experience even more convenient and easier for people.
What advice do you have for distributors?
RL: When your good customers are going through a crisis, it isn’t time to chase their business and ask about their planogram. It is time to get personal. Ask them, “Are you OK? How is the family?” Have a laugh about trying to find toilet paper. They might not need to order anything from you right then, but it is important to continue these relationships. When the situation gets better, and it will, everyone can then move forward together.
A version of this article appears in the May/June issue of Convenience Stores News Canada.