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Hershey executives expressed confidence in the c-store channel recently when they told industry analysts Hershey's c-store business is very healthy, despite the country's economic downturn.
President and CEO David J. West told analysts he was encouraged by Hershey's results in c-stores. "Our latest c-store takeaway is some of our best that it’s been in a while," he noted.
Several factors are affecting business in the c-store channel, John P. Bilbrey, senior vice president, president Hershey North America, explained. "You do have the pay-at-the-pump issue where people are making more trips to the c-store, but putting less in the tank when they go there. One of the things we hear is there's still about the same level of traffic going into the store. You also have to remember that for most of our products, they are still very accessible, and so we think that's continued to help us there as well.
"One of the things that has helped us is we’ve increased our coverage of c stores," he continued. "The trend is [for Big Oil] stores to become franchise stores, and we used to be able to impact about 40,000 stores by going through a headquarters. That's changing and that whole channel is becoming more fragmented."
Hershey's dedicated retail coverage of a higher percentage of stores than it has had in the past has helped the company maintain c-store sales, he added. "Our average distribution levels on the right items are higher than they actually have been and that’s helped us overcome some of the headwinds that that channel could be facing. "