Peter Tedeshi points out that while retailers can’t control all challenges facing the industry in 2013, there are many they can begin to influence.
Peter Tedeschi, president and CEO, Tedeschi Food Shops Inc., CSD’s Convenience Store Chain of the Year, closed out the NACS State of the Industry (SOI) Summit on Thursday, April 11, with a recap of the challenges facing the retail industry in the year ahead, and “What’s Keeping Me Up at Night.”
Tedeschi pointed to the three categories of challenges facing c-store retailers:
- Things we can’t control.
- Things we can’t control but can influence.
- Things we can control but that scare the hell out of us.
Among those challenges c-store can’t control include the economy, the price of cigarettes and the deteriorating demand for gas. Bubba, the core c-store customer, has been most impacted by the economy, which in turn means that Bubba’s purchasing habits are changing. Today, Bubba is eating healthier and is the No. 1 lottery customer, but he has less money to spend. Retailers need to adapt to the changing lifestyles of their customer, as well as reach out to an expanded customer base.
Among those things retailer can’t control but can influence are healthcare costs, efforts toward unionization and increased taxation. Retailers are wise to stay on top of Obamacare paperwork to avoid excess fines and penalties. Other challenges c-store retailers can influence are burdensome taxes. NACS Day On The Hill is an important event for operators to get involved with in order to help educate Congress on the impact of swipe fees, fuels liability, menu labeling, tobacco, mobile commerce and retail security, among other concerns facing the industry.
Other frustrations include the vilification of the convenience store industry. Public policy makers are quick to point fingers at c-stores as carrying an offering that causes obesity; the purveyors of death (tobacco); peddlers of gambling (lottery); and the source of drunk driving (alcohol), Tedeschi lamented. What’s more, dirty stores drive perceptions that c-stores have safety issues and carry crime issues into the neighborhood. But, Tedeshi noted, retailers can change these perceptions within the community with careful messaging, through community outreach and even volunteer and charity events within the area to repaint public perception of the store.
Also coming down the pipeline, mobile commerce is expected to grow to $31 billion by 2016. C-store retailers would be wise to play ahead for this inevitability and continue to stand up to MasterCard and Visa. “If we have Visa and MasterCard making the rules, we’ll never get out of the water,” Tedeschi said.
The bright spot however, is that there are many challenges that c-stores can control. There is a need for the convenience store industry to evolve and remain relevant and competitive. “What do you need to do to change your company? It starts with a message that your people believe in,” Tedeshi said. Retailers today would be wise to expand their reach beyond Bubba, and strive to serve everyone. Females want clean, safe stores with healthy offerings, and everyone is looking for foodservice. Tedeshi pointed out however, that foodservice can mean something different at each of your stores. At one store it might be a full offering, while another might do well with just a coffee bar. “A great quality foodservice program makes you a destination,” Tedeshi noted.
Lastly, retailers need to start turning their attention to the needs of Millenials, who want to communicate via Facebook, Twitter, and other mobile platforms. “You need to be there,” Tedeschi said.
Facing the challenges that can be influenced or controlled head on, can position your store for success in the year ahead.