CStore Life Magazine

http://www.cstorelife.com/

 

May 2011

 

Gear up for the lucrative summer season!

Summer is the most profitable time of the year for many C-Stores.

 

In recent weeks the weather has been getting gradually better and summer will soon be upon us. Convenience store operators couldn’t be happier. Not only are the 100 days between early June and mid-September the warmest of the year, for much of the industry, they are also the most profitable.

 

Several trends align during summer months that make Canadians ideal convenience store customers says Sandra Phillips, a retail expert and author of Smart Shopping Montreal and Drive I-95: Exit by Exit Info, Maps, History and Trivia.

 

“Canadians spend much of the year cocooning inside their homes because of the cold weather,” says Phillips. “So when warmer times come, they just want to get outside. Yet while consumers don’t spend as much time in stores and malls during summer months, convenience stores that cater to their summer needs can do quite well.”

 

The current outlook is quite good says Emanuella Enenajor, an analyst with CIBC WorldMarkets. “The retail sector has been boosted by the broad economic recovery during the past year,” says Enenajor. “That growth is likely to continue throughout the summer and the rest of the year, though at a slightly slower pace than the big increases we saw last year.”

 

Best strategies depend on location

Ask C-Store retailers about how they adapt to the summer months and many of the changes they mention are instinctive. These range from making sure that ice machines are working, fridges are stocked with beer, soft drinks and energy beverages, and that stores are cleaned up for the busy season.

 

“Every single part of your store from the signage to the way that employees are dressed influences customer buying experiences,” says George Whalin, president of US-based Retail Management Consultants. “Something as simple as putting in a few posters of summer imagery can go a long way in making people feel a particular way. Inventory too plays a major role and should be revitalized with every major seasonal change. End-caps should naturally be stocked with summer related merchandize, but aisles should also be upgraded. This will give a fresher look to regular store customers.”

 

That said, once basics are taken care of, detailing the best summer strategies for convenience stores is hard, because no two are exactly alike. For example a gas bar outlet in a remote area that gets increased seasonal traffic from hunters and campers, will make different adaptations than one located besides a busy high-school, in a region where traffic plummets when the school shuts down between mid-June until fall.

 

“We are located on Lakeshore Road so we get a lot of customers during summer that head down to enjoy (Lake Ontario) and naturally we tailor our inventory towards them,” says Ravi Gurdita, the owner of Etobicoke-based Grenadier Convenience. “For example even though we are a small store and can’t afford to make major investments, we are thinking of installing a slush machine to cater to seasonal customers.”

 

Assess summer clientele changes

Experts say the best way to gage how stores can best prepare for the changing needs of a summer clientele is to study how its lifestyle patterns evolve during that season and to adapt product offerings accordingly. For example the fact that Canadians are outside a lot in the hot sun, implies increased demand for related supplies such as sunscreen, insect repellent, baseball visors, T-shirts and so on. Stocking the latest “fad” kid toys such as water-pistols or Frisbees may also be an option. 

 

Demand for tobacco products also shifts during summer months. Many smokers drastically reduce tobacco consumption during winter (smoking on a balcony in minus 20 degree January weather, is not that much fun). However the warm summer season means that smokers have more options, particularly in areas where smoking has not been banned outright. For example in some provinces, bars and restaurants have adapted to in-door smoking bans, by setting up outdoor terraces, which thrive during summer months.

 

Many convenience stores, particularly the major outlets, such as Alimentation Couche-Tard, Mac’s Convenience Stores, Petro-Canada, and outlets located in areas with heavy tourist traffic, have been tailoring offerings to summer clienteles for years. However smaller chains and owner-operated stores located in areas in which seasonal patterns do not appear to change much, can also benefit from assessing seasonal demand shifts.

 

The first challenge is to assess what those shifts are. One obvious way to do that is to visit other convenience stores and other retail outlets in the immediate region to see what changes they make when summer comes.

 

Another good idea is to ask existing employees if they notice any opportunities for building summer clienteles. Many store owners know their own customers so well, that they fall into traditional conversation patterns, many of which are unrelated to business. So polling clients for their input isn’t always easy.  However new employees, particularly seasonal workers that may have been hired to replace vacationing staff during previous summers, often have better antennae for this sort of thing. 

 

Another opportunity that C-Stores may be missing out on is taking advantage of the children’s outdoor sporting seasons. For example in Montreal’s West Island, kids’ soccer, softball and other sporting teams assign a “popsicle list” to each parent, detailing which ones are supposed to bring boxes of popsicles for the kids after each game.

 

However many C-Stores located near busy soccer fields don’t sell popsicles in bulk, which means that parents drive right by their outlets to the local supermarket to get stock. Many adults also change their physical activity patterns during the summer, for example by trading in their hockey gear for bicycle equipment. This in turn creates further opportunities for alert operators.

 

Catering to drivers

One of the biggest market niches that C-Store owners cater to during the summer months says Phillips is drivers. That’s particularly true of outlets attached to gas bars, which could be hit hard this year by falling volumes due to rising gas prices, which in turn will hurt ancillary sales. They will thus be under incredible pressure to compensate for falling gross margins by boosting productivity in other areas. That said, summer driving remains a big part of the Canadian was of life.

 

“Road conditions in Canada are terrible during the winter so many drives just put away their cars once the snow starts to fall,” says Phillips. “But when nicer weather comes, many are just itching to get back out on the road. That opens up a nice potential market for convenience stores located on key arteries.”

 

There are many ways to service driver clienteles, the most obvious of which are to stock convenience items they may need such as maps of the local town and region, and of course - driving supplies. Putting up advertisements for prominent local attractions on unused wall pace is also a good idea, as is boosting meal takeout and foodservice capabilities.

 

“You can only go so far by just selling summer “truck driver” food such as hot dogs and hamburgers,” says Phillips. “Many Canadian convenience stores remain overly focused on stocking “junk,” food and are not fully leveraging an overall trend towards better eating among a significant part of the population.”

 

Clean those bathrooms!

According to Phillips, another great investment that convenience store owners can make to better leverage their motorist customer base is to set up and maintain clean, user-friendly bathrooms. “Every year my husband and I drive from New Hampshire to Florida in order to update the Drive I-95: Exit by Exit Info. To do that we check out convenience stores at many of the 670 exits we visit,” says Phillips. “And you can see a clear difference in traffic in the outlets with well maintained bathroom facilities.”

 

Phillips’ logic is that anyone who has sat in a car for a couple of hours, away from the conveniences of home, will almost certainly have built up a thirst, or hunger or a desire for reading material that C-Stores provide. Any money they spend will almost certainly be more than the cost of a sheet of toilet paper. “Macdonald’s Restaurants pretty much built their business on their reputation for providing clean bathroom facilities at all their locations, anywhere in the world,” says Phillips. “There is no reason that C-Store owners can’t use a similar strategy.”

 

Phillips recommends that C-Store and gas bar bathrooms be kept clean with a written record on the wall of which employee last did the cleaning and what date that occurred. Investments in things such as adequate lighting and decorative elements such as wall art, will also generate a quick expected payback.

 

Hiring summer help

Another important thing the C-Store operators need think about when planning summer strategies is staffing requirements. Like much of the rest of the country, summer is a popular vacation time for much of the convenience store industry, including owners and managers. As a result, it’s important to prepare staffing schedules early to make sure that there are enough people on hand to cover missing personnel.

 

In single store businesses that employ just one or two regular employees, plus a few part-timers for night and weekend work, this can generally be done quite easily, by giving more hours to staff who want to work a little more. However C-Store owners that have busier outlets or who operate several stores need to get a little more sophisticated.

 

The good news is that hiring temporary summer help brings benefits that extend beyond the immediate work that they do. For one, with youth unemployment rates continuing to run at high levels in much of the country, student seasonal workers are likely to bring an extra dose of enthusiasm to the business. Temporary workers, because they are new to the business thus see it with fresh eyes are also an invaluable source of ideas and also form a good talent pool of potential full time employees.

 

Or course to take full advantage of the shifting summer demand trends, stores need to prepare early, likely staring right after they are clearing away their excess Easter merchandize. If customers are coming into your store asking if you sell pencil cases, and other school supplies (items which herald the start of the fall season) you have probably waited too long to get started.

 

 

Peter@peterdiekmeyer.com

 

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