During the first week of 2023, C-Store Dive made some bold predictions about trends we thought would shape the convenience store industry over the following 365 days.
Some of our takes, such as the industry’s increased focus on unique store designs and loyalty programs, were spot on, while others — looking at you, retail media networks — were a huge miss.
With a new year approaching, it’s time to reflect on what we got right and where we struck out. Here are our honest grades for the nine trends we thought would dominate the c-store landscape this year.
Prediction: Retail media will take off
Grade: F
As the industry dealt with high operating costs and an evolving digital landscape, retail media represented an opportunity for c-store operators to boost revenue by offering CPG companies and other vendors access to their first-party customer data. These vendors could then use that data to create and target relevant promotions, offers and other marketing content.
At the end of 2022, two of the biggest convenience retailers in the U.S., 7-Eleven and Casey’s General Stores, announced their entry into the retail media game. In our eyes, this marked the beginning of a trend that would dominate the c-store landscape the following year.
We couldn’t have been more wrong.
To date, 7-Eleven and Casey’s are still the only major c-store retailers that have gotten into this space. Companies like RaceTrac have said they’re in the discussion stages of maybe building a retail media network, but as of now, this trend appears to have completely stalled.
Prediction: C-stores will become places to hang out
Grade: B+
With electric vehicle charging continuing its emergence in the c-store space, retailers have needed — and will continue to need — ways to engage customers on site for longer periods of time as they charge their cars. Beyond that, retailers also need to give consumers a reason to choose their locations to charge their cars in the first place.
C-stores becoming a hangout destination was something we monitored towards the end of last year, and it surely continued in 2023. Whether it was through building bigger locations with more amenities or adding unique food items to their menus, retailers made their stores places where customers can eat, drink and spend time, in addition to filling up and grabbing a pack of smokes.
Prediction: Retailers will use AI to improve labor
Grade: A-
Labor has been and will continue to be a top challenge for c-store retailers. When heading into 2023, we predicted that more operators would tap into various technologies to improve their employee experiences and smooth their operations.
We were right. Companies like RaceTrac, Kum & Go and Phillips 66 began using self-cleaning robots in its stores this year, while Casey’s General Stores rolled out an AI-driven automated voice assistant to help take off-premise pizza orders and BP partnered with autopilot to automate some rote tasks.
Prediction: Digital loyalty is poised for a boom
Grade: A
Possibly our most accurate prediction of the year, digital loyalty became one of the major talking points in the c-store industry in 2023. Several retailers like Casey’s, Kum & Go, 7-Eleven and Circle K revamped their loyalty programs, while Dash In launched its program.
While there’s still work to be done when it comes to c-store loyalty participation, retailers got the message this year that a quality loyalty platform will help them reach more customers and increase revenue moving forward.
Prediction: EV charging will become more accessible for c-stores
Grade: B
Although EV charging remained one of the most discussed topics among c-store retailers this year, a large chunk of the industry is still hesitant to commit to electrification. And for retailers who’ve already tapped into the service, some have been challenged by factors like consumer adoption and profitability.
So while we were right that EV charging would continue to make its way into the c-store space — especially among the big players — we were off on its increased accessibility. Whether or not that improves in 2024 remains unknown.
Prediction: It’s all about delivery
Grade: B
It may not have dominated headlines as much as loyalty or M&A, but delivery was quietly one of the larger c-store trends of 2023 — something we accurately predicted
Although the Couche-Tard-backed delivery company Food Rocket ceased operations earlier this year, several other c-store chains upped their investments in delivery. Arko added app-based ordering for delivery to its fas Rewards program, Yesway made its well-known Allsup’s burritos available for online ordering and delivery, and Stewart’s Shops launched a coffee delivery subscription plan.
Prediction: C-store foodservice will focus on smaller portions, higher food quality
Grade: C
Here’s a trend where we were only half correct. While c-store retailers paid little attention to reducing the portion sizes of their food items, many upped the ingredients and overall quality of their offerings.
For example, Twice Daily launched its made-to-order menu earlier this year, which focuses on sandwiches like ham and cheese, turkey and cheese, Nashville hot chicken, turkey bacon and Adobo chicken. Meanwhile, Mississippi-based c-store retailer Sprint Mart opened a sit-down restaurant concept — Sadie’s Diner — inside its biggest store to date, offering items like omelets, salads, BLT sandwiches, meatloaf, pork chops and pot roast.
Prediction: New store format experiments will ramp up
Grade: A
Around this time last year, walk-up or fuel-less convenience stores were the main types of formats retailers had tested that were outside their traditional models. But heading into this year, we predicted that c-store operators would take the next step in store-format experimentation, and we were spot on.
Companies like Rutter’s and QuikTrip opened two-story locations this year, while Casey’s, RaceTrac and others went all-in on travel centers. Wawa even converted one of its locations in Philadelphia into a fully digital, shelfless store where items can only be purchased through its mobile app or via in-store touch screens.
Prediction: Inflation and the threat of recession will loom over the industry
Grade: B
Inflation loomed in the background of every c-store company in 2023. While challenging to deal with, some retailers were able to combat inflation and keep expenses down through various means, such as M&A and expanding their private label lines.
For example, 2023 was a great time for M&A since the resources and assets sellers gain through industry consolidation offset higher operating costs caused by inflation, Michael Headly, director for global business consulting firm AlixPartners, said in an interview earlier this year.
Meanwhile, brands like 7-Eleven, Casey’s, Circle K and TXB expanded their private label offerings. Many Americans chose to trade down from national to private label brands this year as a result of price sensitivity, Darren Seifer, food and beverage industry analyst for Circana, said in a previous interview.
