NACS reports that hot dispensed sales at convenience stores fell 33.4% in 2020, again reflecting the drop in footfall amid stay-at-home orders and work-from-home schedules. C-stores in Canada, which experienced some of the longest lockdowns in the world, were also hit hard.
The grand reset
I’m old enough to remember the sound a pinball machine would make when you put one or two quarters in, or you succeeded in scoring enough points to earn a free game. That sound was the promise of a new start. The post-COVID economy will be a bit like that. The initial challenge for operators will be to get consumers out of their stay-at-home routine, and back into the mode of AFH consumption. Good news is that the pump is primed, and your customers are fixing to splurge.
A recent Bank of Canada Survey of Canadian Consumer Expectations revealed that, while incomes are expected to stay flat over the next 12 months, Canadian consumers are anticipating a spike in their spending. This gap between growth in wages and increased expected spending is unprecedented, fuelled by accumulated forced savings due to COVID restrictions. According to the survey, “(consumers) anticipated spending more than one-third of extra savings from the pandemic over the next two years.”
Connect with coffee
For convenience operators, coffee is a great way to re-engage with your customers. The question is, what is the best way to do that? The coffee category has many facets. Taste and experience are central, but consumers are increasingly paying attention to issues of sourcing transparency, sustainability, and the offering of non-dairy options like nut/oat milk. Younger consumers, a key c-store demographic group, are looking for something beyond marginally better drip-filter hot coffee.
Cold coffee offerings have the potential to heat up sales for convenience operators. Mintel/Lightspeed research in 2021 asked U.S. consumers, “Which offerings would motivate you to visit foodservice coffee/tea locations more often?” The top answer for Gen Z and Millennial respondents was “Larger selection of cold beverage options,” followed by “More indulgent flavoured drinks.”