NEW YORK — To succeed in today’s environment, convenience store retailers need to focus on four winning strategies, according to a new report, "What Convenience Stores Should Know — and Do — in 2017," from consulting firm AlixPartners.
"The competitive landscape is growing more complex, presenting both challenges and opportunities for some c-store chains," according to the report from the New York-based firm. "C-stores are well-positioned to operate effectively in this landscape. After all, many have prime real estate locations, and their offerings cover multiple dayparts as well as other major categories such as fuel, which can add value even as a potential loss leader. But to succeed in the future, they’ll have to build on those advantages and adapt to the trends shaping their industry.”
The four winning strategies identified in the report are:
1. Enhanced execution of foodservice programs;
2. Improving the customer experience;
3. Pursuing organic and acquisition-based growth strategies; and
4. Developing comprehensive enterprise productivity programs.
In Part 1 of this series, we examined the first strategy: enhanced execution of foodservice programs. Part 2 delved into the second strategy: improving the customer experience. In Part 3, we explored the third strategy: building scale to support growth. Now, we turn our attention to the fourth and final strategy: developing enterprise productivity programs.
To boost productivity and profitability, convenience store operators should consider executing comprehensive enterprise-improvement strategies aimed at offsetting increases in operating expenses and protecting profitability, according to the report.
"In this day and age, retailers need to look at every dollar of cost as potential profit," John Benson, vice president of AlixPartners' restaurant, hospitality and leisure practice, and co-author of the report, told Convenience Store News.
Cost-management strategies should take into account not only direct cost categories such as foodservice, merchandise and fuel, but also indirect categories such as facilities, construction and equipment, and consumables, Benson advised.
Summarizing all four strategies, convenience stores need to keep striving for next-generation improvements by enhancing their execution of foodservice programs, improving the customer experience, building scale, and boosting overall enterprise performance.
"Hard work? Yes. But if they hope to sustain and sharpen their competitive edge in the long run, c-stores can't afford to shy away from the effort," the report concludes.
To view the full AlixPartners' c-store study, click here.