Trying to decide what you should sell in your store can be stressful. Cigarettes and alcohol sales have been a major factor in c-store sales over the last several years. Now with recent changes in government regulations make sure you are aware of what is happening and how it can affect your c-store this coming year.
Tobacco Talk
Tobacco products are still doing very well in the convenience industry. More specifically, cigarettes are currently the top selling category in c-stores with other tobacco products following closely behind in the number six spot[i]. Even with a rise in vapor products, government regulations are strictly controlling the sale and usage of smokeless products, “as the Food and Drug Administration's deeming rule settle in, vape shops — a chief competitor to c-stores in the vapor space — are under ‘arduous constraint'. A lot of them may not make it"[ii]. These regulations will help keep users loyal to traditional tobacco products and the c-stores that they typically purchase from.
Although there has been some tobacco push back in small towns, most c-stores have not been affected. Owners should be aware of anti-tobacco efforts such as raising the legal age to buy tobacco products to 21, banning flavored products, and restricting business permits to tobacco retailers[iii]. These sentiments are only being felt by a few, and many do not believe that these efforts will affect the tobacco industry at all. Even with cigarette sales coasting at normal levels, other tobacco products are filling any potential gaps. Alternative tobacco products are now one of the fastest growing categories in the convenience channel[iv].
C-stores truly have an encouraging future in tobacco sales all around, “with relatively low gas prices and high consumer confidence, there is no better time to be a convenience store retailer…with roughly 154,195 stores, there is no better time for tobacco to be in convenience”[v]. Owners should not worry about tobacco sales this year. Continue to offer a variety of cigarettes as well as other alternative tobacco products, keep your business in compliance with federal, state, and local laws, and rest assured that your tobacco product sales are not declining anytime soon.
Alcoholic Beverages for Every Generation
Over 66% of people are choosing to drink at home once per week instead of going out and spending more for their alcohol[vi]. This is a huge opportunity for c-stores who can offer their favorite beverages in a more convenient and affordable format. So the question remains: What are they buying? The biggest challenge for c-store owners is stocking the right kind of products. Each generation of customer has different preferences that you should be aware of.
Millennials are driven mainly by alcohol percentage, flavor, packaging, and innovation. Since 73% of younger consumers prefer beer to wine or spirits, you should be stocking a variety of new beer products with highly aesthetic packaging and high alcohol content to keep these consumers coming back[vii].
Unlike Millennials, Baby Boomers and Generation X are not as impressed by variety. They are largely driven by price point and beverage taste. They account for 42% of the wine category growth, which makes competitively priced wine beverages your best bet with these generations[viii].
Overall, alcohol sales in c-stores were strong in 2015, and continue to increase. Beer and wine categories continue to grow with new products and flavors being introduced each year[ix]. Stay informed about what beverages your customers want and keep your prices competitive, so that you continue to be the most convenient alcohol provider for your customers.
[i] http://www.csnews.com/product-categories/tobacco/backbar-holds-key-unlocking-c-store-profits?cc=5&utm_source=KnowledgeMarketing&utm_medium=1649957&utm_campaign=Convenience%20Store%20News%20dailyNews_01/31/2017&eid=364955247&bid=1649957
[ii] http://www.csnews.com/product-categories/tobacco/backbar-holds-key-unlocking-c-store-profits?cc=5&utm_source=KnowledgeMarketing&utm_medium=1649957&utm_campaign=Convenience%20Store%20News%20dailyNews_01/31/2017&eid=364955247&bid=1649957
[iii] http://www.csnews.com/product-categories/tobacco/2017-outlook-tobacco
[iv] http://www.csnews.com/product-categories/tobacco/backbar-holds-key-unlocking-c-store-profits?cc=5&utm_source=KnowledgeMarketing&utm_medium=1649957&utm_campaign=Convenience%20Store%20News%20dailyNews_01/31/2017&eid=364955247&bid=1649957
[v] http://www.csnews.com/product-categories/tobacco/backbar-holds-key-unlocking-c-store-profits?cc=5&utm_source=KnowledgeMarketing&utm_medium=1649957&utm_campaign=Convenience%20Store%20News%20dailyNews_01/31/2017&eid=364955247&bid=1649957
[vi] http://www.csnews.com/product-categories/beverages/millennials-boomers-gen-x-are-all-key-alcoholic-beverages
[vii] http://www.csnews.com/product-categories/beverages/millennials-boomers-gen-x-are-all-key-alcoholic-beverages
[viii] http://www.csnews.com/product-categories/beverages/millennials-boomers-gen-x-are-all-key-alcoholic-beverages
[ix] http://www.cspdailynews.com/category-data/cmh/packaged-beverages/packaged-beverages-alcohol-2016