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Convenience Stores - US - May 2009

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Market at a glance
In a fragmented channel, c-stores balance local knowledge with national scale
C-stores face different competitors in leading product categories
In-store sales linked to what happens at the gasoline pump
Tobacco still leads in-store, but slips in share
Foodservice plays an even more prominent strategic role
Other categories remain small, but opportunities for new services exist
Growth in Hispanic population likely to benefit c-stores
7-Eleven remains a dominant force in the industry
Big oil reducing number of stores
Shift to franchised/licensed stores continues
Well-established regional c-store players among the strongest brands
Ads focus on basic c-store values
Frequent shoppers are young and male
Perceptions of food are improving, but still room for improvement
INSIGHTS AND OPPORTUNITIES
Convenience stores continue to evolve
Foodservice becoming more important to sales and profits
Still room for improvement
Foodservice presents a range of strategic alternatives
Reaching out to teens presents opportunity for growth
INSPIRE INSIGHTS
 CORNER STORE
What it’s about
What we’ve seen
Implications
Figure 1: Interest in various new products/services at convenience stores, by race/Hispanic origin, January 2009
MARKET SIZE AND FORECAST
Key points
After years of strong growth, market slows considerably
Figure 2: U.S. sales of convenience stores, at current prices, 2003-13
Figure 3: U.S. sales of convenience stores, at inflation-adjusted prices, 2003-13
COMPETITIVE CONTEXT
In a fragmented channel, c-stores balance local knowledge and national scale
C-stores face different competitors in leading product categories
SEGMENT PERFORMANCE
Key points
Figure 4: U.S. sales of convenience stores, by segment, 2006 and 2008
SEGMENT PERFORMANCE—PETROLEUM
Key points
Gasoline dominates sales, but may be losing power
Figure 5: U.S. sales and forecast of petroleum through convenience stores, at current prices, 2003-13
SEGMENT PERFORMANCE—IN-STORE ITEMS
Key points
In-store sales linked to what happens at the gasoline pump
Figure 6: U.S. sales and forecast of in-store items at convenience stores, at current prices, 2003-13
Tobacco still leads but slips in share
Foodservice plays an even more prominent strategic role
Other categories remain small, but opportunities for new services exist
Figure 7: U.S. sales of in-store items in convenience stores, by sub-segment, 2006 and 2008
MARKET DRIVERS
Key points
Convenience stores cater to a driving nation
Figure 8: U.S. Vehicle miles by road system, 2004-08
Rising gasoline prices key to c-store sales increases
Figure 9: U.S. average price per gallon of gasoline, 2003-09
Growth in Hispanic consumers likely to benefit c-stores
Figure 10: Population, by race and Hispanic origin, 2003-13
Aging population may present a challenge for c-stores
Figure 11: U.S. population of adults aged 18 and over, by age group, 2003-13
LEADING COMPANIES
Key points
7-Eleven remains a dominant force in the industry
Big oil reducing number of stores
BP North America
Exxon Mobil
Shell
Chevron Texaco
The Pantry a dominant force in the Southeast
Figure 12: Number of U.S. stores and sales of leading convenience stores, by company, 2007 and 2008
Shift to franchised/licensed stores continues
Figure 13: Leading c-store operators, share of U.S. stores franchised or licensed, 2007 and 2008
BRAND QUALITIES
Key point
Well-established regional c-store players among the strongest brands
Figure 14: Select regional convenience store chains, by number of stores, 2008 sales, and states of operation
Spotlight: Wawa typical of strong regional c-store operations
Customer service
Fresh food
Connection to the community
INNOVATION AND INNOVATORS
Key points
Convenience stores continue to evolve
New Cumberland Farms prototype puts focus on fresh
Supermarket chains step up in convenience market
Sheetz breaks into in-store dining
Rutter’s Farm Stores score a hit with stir fry
ADVERTISING AND PROMOTION
Key points
Overview
7-Eleven targets a variety of promotional tactics at young male customers
Figure 15: 7-Eleven TV ad, 2008
Chains stress basic c-store values of convenience and variety of foods
Figure 16: Circle K ‘Built for speed’ TV ad, 2008
Figure 17: am/pm ‘Too much good stuff” TV ad, 2009
Figure 18: Kwik Trip Magic Box TV ad, 2009
Quality coffee also receives emphasis
Figure 19: Speedway Coffee TV ad, 2009
USAGE
 ADULTS
Older adults least likely to shop convenience stores
Figure 20: Incidence of visiting convenience stores, by age, July 2007-September 2008
Younger shoppers make more trips
Figure 21: Number of visits to convenience stores in last 4 weeks, by age, July 2007-September 2008
Male shoppers visit more often
Figure 22: Number of visits to convenience stores in last 4 weeks, by gender, July 2007-September 2008
Average of $15 spent on last convenience store visit
Figure 23: Average amount spent on last convenience store visit, summary, January 2009
7-Eleven is most frequently shopped convenience store
Figure 24: Convenience stores shopped, January 2009
Young respondents buy a wider array of products
Figure 25: Products bought at convenience stores, by age, January 2009
Coffee is the draw for older adults
Figure 26: Food and drink items bought at convenience stores, by age, January 2009
Shoppers want to see more natural and organic foods
Figure 27: Interest in products/services at convenience stores, by age, January 2009
 TEENS
Three out of four teens shop convenience stores
Figure 28: Incidence of visiting convenience stores, by gender and age, July 2007-September 2008
Teens make more visits to convenience stores
Figure 29: Teenagers: Number of visits to convenience stores in last 4 weeks, by gender and age, July 2007-September 2008
7-Eleven is teens’ favorite too
Figure 30: Teenagers: convenience stores visited in last month, by store, July 2007-September 2008
ATTITUDES AND MOTIVATIONS
Women do their convenience store shopping when traveling
Figure 31: Attitudes and behaviors regarding convenience stores, by gender, January 2009
Older shoppers come for the coffee, but pass on the food
Figure 32: Attitudes and behaviors regarding convenience stores, by age, January 2009
Prices are the number one reason for not shopping convenience stores
Figure 33: Why convenience stores are not shopped, by gender, January 2009
RACE AND HISPANIC ORIGIN
Asian respondents much less likely to shop convenience stores
Figure 34: Incidence of visiting convenience stores, by race/ethnicity, July 2007-September 2008
Blacks and Hispanics are most frequent shoppers
Figure 35: Number of visits to convenience stores in last 4 weeks, by race/Hispanic origin, July 2007-September 2008
7-Eleven the overall favorite, but subtle differences appear by race/Hispanic origin
Figure 36: Convenience stores shopped most frequently, by race/Hispanic origin, January 2009
Convenience stores meet a wide array of needs for Hispanic shoppers
Figure 37: Products bought at convenience stores, by race/Hispanic origin, January 2009
Stores may consider healthier fare, but should keep junk food favorites
Figure 38: Food and drink items bought at convenience stores, by race/Hispanic origin, January 2009
Coffee tops coffee shops with Hispanic and black shoppers
Figure 39: Attitudes and behaviors regarding convenience stores, by race/Hispanic origin, January 2009
Black and Hispanic shoppers interested in a wider array of products/services at convenience stores
Figure 40: Interest in products/services at convenience stores, by race/Hispanic origin, January 2009
CUSTOM CONSUMER GROUPS
Race/Hispanic origin and age
Figure 41: Frequency of visiting convenience stores, by race/Hispanic origin and age, January 2009
Figure 42: Products bought at convenience stores, by race/Hispanic origin and age, January 2009
Figure 43: Interest in products/services at convenience stores, by race/Hispanic origin and age, January 2009
CLUSTER ANALYSIS
Introduction
Big Spenders
Who they are
Soft-drink and Gasoline Guzzlers
Who they are
Low-spending Road-trippers
Who they are
Cluster characteristics
Figure 44: Convenience store shopper clusters, January 2009
Figure 45: Frequency of visiting convenience stores, by convenience store shopper clusters, January 2009
Figure 46: Average amount spent on last convenience store visit, by convenience store shopper clusters, January 2009
Figure 47: Attitudes and behaviors regarding convenience stores, by convenience store shopper clusters, January 2009
Figure 48: Products bought at convenience stores, by convenience store shopper clusters, January 2009
Figure 49: Food and drink items bought at convenience stores, by convenience store shopper clusters, January 2009
Figure 50: Interest in products/services in convenience stores, by convenience store shopper clusters, January 2009
Cluster demographics
Figure 51: Convenience store shopper clusters, by gender, January 2009
Figure 52: Convenience store shopper clusters, by age, January 2009
Figure 53: Convenience store shopper clusters, by household income, January 2009
Figure 54: Convenience store shopper clusters, by race, January 2009
Figure 55: Convenience store shopper clusters, by Hispanic origin, January 2009
Cluster methodology
APPENDIX: TRADE ASSOCIATIONS

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