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    More Products, Lower Prices Could Increase Profits for C-Stores

    Research from Bain & Co. offers advice to retailers.

    BOSTON -- With items priced 24 percent higher than mass discounters, 18 percent higher than drugstores and 10 percent higher than traditional grocery outlets, convenience stores have preyed on the time-starved consumer without realizing how it's hurting their long-term profits, claims a new consumer survey from Boston-based consulting firm Bain & Co.

    Today's on-the-go consumers will help feed convenience stores' sales growth by 30 percent over the next five years, amounting to an estimated $151 billion by 2010, according to the study.

    The study also identified four factors that would cause consumers to shop c-stores more often: a wider product selection (15 percent of consumers); less expensive products (10 percent); easier-to-navigate aisles (12 percent), and higher-quality products (3 percent).

    Bain's survey of 600 consumers also discovered that the convenience store shopper could be persuaded to buy products, such as health and beauty, household and personal care, outside of the most popular product categories.

    HBC sales in c-stores were up 26 percent from 1998 to 2003, though 72 percent of the consumers surveyed do not purchase health and beauty products from c-stores. However, nearly 80 percent said they would be willing to purchase health and beauty products; 70 percent said lower prices would sway their decision.

    The survey found that on average, 40 percent of consumers' purchasing decisions were influenced by lower prices.

    This research is counterintuitive to actual practice, since convenience stores have traditionally been less focused on price and more focused on convenience. With more focus on pricing and promotion, the cash register will ring more often and attract more customers.

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