Reimagining the convenience store

A Promising Investment Opportunity?

Here is a viable scenario that is based on recent trends (e.g., Macro Demographic Changes, Lifestyle Shifts, Technological Tends, New Business Models, and Intensified Competitive Dynamics):

Reimagining the convenience store. C-stores are uniquely positioned to exploit new demands for convenience and increasing urbanization. They’re already closer to con­sumers than any other type of physical store, but there are still opportunities to improve the experience and assortment.

First, margins and consumer loyalty can be improved by growing private-label offerings beyond packaged goods. C-stores are already starting to more closely resemble quick-serve restaurants in their offerings. For example, Casey’s General Stores recently started offer­ing fresh pizza.

But there is still tremendous opportunity to expand c-store private-label offerings to in­clude more general merchandise, transform­ing c-stores into one-stop shops for modern urban consumers. For example, 7-Select at 7-Eleven in the U.S. includes more than 250 food items from donuts to frozen pizza. But in Taiwan, 7-Select also includes a much wider assortment of general merchandise, including clothing, laundry detergent and light bulbs. And the strategy is paying off, with 7-Eleven’s operator in Taiwan reporting a 27% increase in net income in the third quarter.

And new technologies can also help make the c-store shopping experience easier and faster. For example, retailers could deploy RFID tags to let consumers check them­selves out. Or, U.S. c-stores could take a page from Tesco’s book and build virtual stores. Finally, online ordering and in-store pickup would help make the experience even easier and give first adopters an incredible compet­itive advantage. Retailers to watch: 7-Eleven, Alimentation Couche-Tard, Pantry, Casey’s General Stores and Wawa.

We have worked with all of these players, and know them intimately.

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