According to the latest research by Numerator, consumers are spending 59% more in Gas & Convenience stores than they were a year ago driven by a 34% increase in spend per trip. While Gas price increases are certainly increasing consumer spending at Convenience stores, in-store prices are also on the rise. Food (+8%) and Beverages (+11%) are leading Convenience Retail Price Inflation as consumers pay more both at the pump and in-store.
Disappearing Loyalty & Promotion Offers
Convenience retailers offer deals such as Buy 2 for $5 else 1 for $2.99 as a way to reward shoppers. These discounts offered shoppers ways to save money on everyday purchases or when traveling. Looking at a basket of common Convenience items 11.8% of items were on promotion in the average week last year. Today, only 7.4% of these items are on promotion in the average week, a decline of -38%. Promotions are down across the board with commonly purchased items like Coke (-40%), Gatorade (-40%) and Monster (-34%) all declining significantly.
Convenience Retail Price Inflation
When looking for a quick snack or household item consumers often choose between a Convenience and Drug store. The price/value equation of this decision is changing. Convenience retailers are increasing prices faster than Drug on core Snacks and Beverages.
As a result, Convenience is still priced significantly below Drug on Milk and Cigarettes but higher on Private Label Water. Many other items at Convenience stores are priced +-4 to Drug.
For Convenience retailers price increases of +10% on key items like Gatorade, Donuts, Snickers and Monster can be scary. On top of price increases, promotion declines are making it harder to win with the loyal Convenience shopper. Now more than ever Convenience retailers needs to identify their Price Image Drivers. By identifying these key items that truly drive trips Convenience retailers can optimize their prices in the face of vendor cost increases. These optimized prices increase margin, accelerate revenue growth and drive more trips. Engage3’s Price Image Management platform enables Convenience retailers with a comprehensive real-time view of competitive in-store and fuel prices and uses advanced data science to identify the optimal price changes.