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Preparing for C-Store Life After COVID-19
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Preparing for C-Store Life After COVID-19

Why short memories and lack of patience will force a quick return to ‘normal’,

NEW YORK — As a longtime industry consultant no longer involved in the day-to-day operations of the convenience-store channel, I have the luxury of being able to view it from 30,000 feet. From that perspective, in reading the recent July issue of CSP magazine, I was surprised by what seems to be the unanimous view of c-store retailers that the coronavirus pandemic will somehow permanently change human nature and behavior. People will stay home more, shop more at convenience stores and less at supermarkets, be less inclined to congregate, demand more attention to hygiene, require prepared foods to be packaged, and so on.

In my view, however, the recent rush to return to bars and beaches with no separation as soon as states allowed it, belies these assumptions. People can’t wait to get back to normal and, while “normal” might be different than it was, it won’t be because people’s nature, desires, habits and preferences, which have evolved over many, many years, will have changed; it will be because of two things: the continuation of trends that were already happening before COVID-19 and the economic consequences of the virus.

A Contrarian View

Assuming that both a successful vaccine and a way of curing people who nevertheless contract the disease are developed within the next few months, so that COVID-19 becomes just another infection like the common cold or the flu, there will no doubt be a brief period during which some people, particularly older ones, are more cautious in their habits; however the public’s memory is very short, and masks, gloves, distancing, fear of infection by touch and sanitization will be, if not forgotten, relegated to the back of the mind and obscured by the relief of returning to life as usual.

What will change? Here are some things I anticipate:

  1. Interest in electric cars will grow. Why? Because they can be charged at home and, eventually, while in motion. What better way for the germ-conscious to avoid having to touch gasoline pump nozzles manhandled by dozens of others. This will reduce the ability for c-stores to count on cars stopping to fill up as a draw of customers, so the stores will have to become more important as destinations on their own.
  2. Online shopping, which has boomed through the pandemic, will continue to grow at a more rapid pace. Customers who have been shut in will have learned to fill more of their needs by this method. C-stores will have to find more ways to get into that game.
  3. Many of the retailers that have survived through the pandemic will be under financial stress, reducing their ability to expand or otherwise take advantage of the somewhat reduced competition.
  4. Expansion plans will also be hampered by delays in approval processes, resulting from the impact of the pandemic on administrative authorities.
  5. Supermarkets, which have done well during the crisis, will not easily surrender their fill-in shopping role, which has increasingly been abandoned by convenience stores over many years.
  6. Increased emphasis on in-store cleanliness will continue, driven more by management decisions and regulation than by customer pressure, which will quickly fade.

Devastation to Come

Other changes will be more wide-ranging. For example, while c-stores were deemed essential and allowed to stay open during the shutdown and thus have not fared too badly, there is likely to be huge devastation among the “nonessential’ retailers who were forced to close. Here in New York, every day I see for-rent signs on more and more stores required to close by emergency declarations. Some experts predict that as many as half of them will never reopen, and I am sure New York is not alone in that regard.

In addition, recent bankruptcies of major retailers like JC Penney, Neiman Marcus and Brooks Brothers–and the financial difficulties reported by companies like Macy’s and Nordstrom–are reported to be causing major shopping center operators to explore alternative uses for their sites, because they are losing both their anchor tenants and the important smaller tenants that they rely on to keep them fully rented. The devastation of bricks-and-mortar retailing was well underway before the coronavirus came along and supercharged it. While it is hard to predict how this overall diminution of retailing will affect c-stores, it will inevitably have some impact.

So what should c-store management be focusing on now? I think it is two things. First, do whatever it takes to get through the current coronavirus crisis, recognizing that it will not be over soon. Second, keep a focus on what made you successful in the first place. Now is not the time to make fundamental long-term changes. It is the time to stay the course, survive and prepare to adapt to the new normal, whatever that turns out to be.

See Also


Gerald Lewis is a semi-retired consultant who has served more than 300 convenience-store and oil companies at board level on five continents for over 40 years.

consumer trends
coronavirus

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