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A new report from Retail Forward suggests that “progressive convenience store operators must work hard in the coming years to transform the box from a fuel and fill-in stop to one that is top of mind for immediate consumption and convenience-oriented service needs.”

“The competitive landscape, not to mention, consumer shopping and eating behavior, is changing drastically,” says Sandy Skrovan, Retail Forward Vice President and author of the report. “The convenience store industry cannot afford to remain complacent while the competition eats its lunch. Nor can it continue to rely on gasoline and tobacco to sustain its livelihood.”

According to the study, “Convenience stores enjoyed double-digit sales increases in the past two years largely due to spiking gasoline prices. Gasoline and cigarettes/tobacco continue to dominate the convenience store mix contributing to 78% of the sector’s sales in 2003.” Retail Forward forecasts sector sales “to grow at an average rate of 6% a year through 2008, much slower than the rapid pace of 12.6% a year experienced during the past five years.”

Skrovan says, “As more convenience stores transition away from a fuel and fill-in stop toward a grab-and-go model, the channel increasingly will go toe-to-toe with entrenched quick-serve restaurants. C-stores will need to increasingly leverage their core competency—convenience—to tap other immediate service needs of consumers currently filled by a variety of service-oriented establishments.”
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