Convenience stores have never been known as a prime venue for purchasing toilet paper and cleaning supplies. However, during a year without a retail playbook, these “hidden gems” attracted previously infrequent shoppers and boosted in-store sales for many convenience stores.

At the NACS State of the Industry Summit in April, Jake Vogel, director of category management and procurement at Kwik Trip Inc., shared how shoppers turned to convenience stores during the height of the 2020 coronavirus pandemic to meet their immediate needs in categories routinely shopped in other channels.

These hidden gems—products that are not top-selling categories for most stores—played an impressive role in total industry sales reaching a record $255.6 billion in 2020, despite fuel volatility and demand destruction and a near 14% drop in transactions compared to 2019.

Guests really focused on cleaning their homes and purchased these items in the larger sizes to extend their usage.

Pandemic Necessities

Immediate consumption and speed of service in convenience retail often means products like cleaning supplies, paper products and laundry care are deemphasized in marketing and planograms. This all changed by April 2020 as the industry embraced shoppers making pantry-loading trips for these products, which had left aisles of empty shelves in other retail channels.

Even as global supply issues caught up and panic buying calmed, consumers continued to buy products like toilet paper, paper towels and cleaning supplies because they were available—and convenience stores continued to benefit from this behavior. “People were panic buying so much that if they did find these products, they felt obligated to buy even if they didn’t need them,” he said.

NACS State of the Industry data found that paper towels, toilet paper and disposable dishware and cups boosted in-store sales as more people stayed home, cleaned and cooked more and shifted from indoor to outdoor gatherings. These changes in social behavior led to significant growth for key disposable items, said Vogel.

Households cleaned and did laundry more often throughout the pandemic, leading to more customers purchasing cleaning supplies in larger pack sizes in 2020 than prior years. Customers relied on c-stores for bleach, all-purpose cleaners and laundry detergent that grocery or mass merchandisers had run out of, which gave the channel an opportunity to fill the gap.

“Guests really focused on cleaning their homes and purchased these items in the larger sizes to extend their usage,” Vogel said, noting that some manufacturers did not have product available in the conventional c-store size. “They struggled to keep the pipelines full, so we took anything we could get. With constant pressure on all the channels for the fill-in trip, c-stores were prepared to meet the needs of customers looking for these essentials,” he said.

Convenience stores also experienced tremendous growth in the health and beauty care category, thanks to sales of masks and hand sanitizers. “As expected, items like hand sanitizer and masks in a variety of sizes and quantities showed sales that didn’t exist a year ago,” Vogel said, adding that these also provided customers a sense of safety while shopping in c-stores.

Although some pandemic necessities were paper products, the sales growth “didn’t necessarily translate to margin growth,” said Vogel, adding that some of the margin erosion “is likely tied to the availability of products due to demand and supply chain availability, and retailers took what was available just to keep their shelves full.”

The million-dollar question is how much inventory of these products is too much as retailers move toward a post-pandemic climate? “The sales will always likely be here, but they will never be what they were at the peak of the pandemic,” predicted Vogel.

Assortment Shifts

Kwik Trip, which self-distributes from its commissary in La Crosse, Wisconsin, to its Kwik Trip and Kwik Star stores daily, had “a leg up” on its competitors as supermarkets, club stores and drugstores experienced out-of-stocks,” shared Vogel. The situation created an opportunity for Kwik Trip to grow commodity sales because the company manages its supply chain end to end by producing and shipping to stores.

“We saw a sales increase on eggs, milk, butter, bread and fresh meat that escalated from doubling and tripling just overnight,” he said, adding that these sales trends continued for days as Kwik Trip replenished its stores. “We saw this as an opportunity for guests who historically didn’t shop our stores to create a habit because we were always in stock. We had product at a value price and on a consistent basis,” said Vogel.

Although commodities like butter, bread, eggs and deli meats saw historic increases throughout the pandemic, Vogel cautioned that adding more space to these emerging categories “is likely not fiscally responsible due to the margins being so tight, but having them represented in your store is always an opportunity.”

Meal prep and meal building were opportunities many retailers seized as more customers discovered what they had been missing by not frequenting their local convenience store: meal solutions. “This is an opportunity for guests to finally discover what we have available in our stores,” said Vogel.

Because manufacturers were only producing specific sizes of certain items to counter supply chain disruptions, during the peak of the pandemic there were noticeable sizing disparities related to conventional c-store items. For example, tortilla shells in 30-count packs, 16-ounce boxes of pasta and 80-ounce bags of grains wouldn’t typically find space on c-store shelves. “This is still relevant today as we continue to see disruption in the supply chain keeping these items in stock for our consumers,” said Vogel.

Large-size products for multiuse pantry items met the needs for customers looking for baking and meal solutions, especially families that prep three meals a day. Flour, cooking oil, soups/stews, bouillon, pancake mix and dried shelf-stable fruits and veggies experienced year-over-year sales growth in 2020.

And don’t forget the ketchup! Condiment sales were also strong, a signal that consumers were willing to shop convenience stores for meal pairings.

“All the additional SKUs we sell in our [Kwik Trip] stores showed significant growth this past year,” Vogel said, adding that these self-stable grocery items gave infrequent customers a reason to shop a c-store in a new way.

It’s taking what we’ve learned and applying it to future situations, like annualized seasonal weather occasions, that can impact us for short periods of time.

New Behaviors

Stay-at-home orders also created new consumer behaviors and in-store sales potential. Casual social outings at bars or restaurants or large family dinners transitioned to backyard gatherings where smaller groups could safely hang out.

“While this was happening, it created a shopping occurrence in convenience stores for huge sales growth on seasonal products like propane, firewood, insect repellent and household cleaning supplies,” said Vogel, suggesting that these items have sales potential moving forward because they do not have shelf-life challenges. “The risk is minimal to keep these products in stock and take advantage of impulse, short-notice sales because most of these items are spur-of-the-moment purchases,” he said. Then there’s the “I need it now” consumer, who was looking to purchase products like toilet cleaner and drainpipe cleaner quickly and at the nearest store. “If inventory of these products is kept in your assortment, a fill-in trip exists,” said Vogel.

“We need to be prepared to transition our stores fundamentally for a new target consumer,” Vogel suggested, noting that these new shoppers are coming out of the pandemic with a better understanding of the products sold in their local c-store. “We now have the opportunity to keep these new infrequent guests coming into our stores—that is our advantage over our competitors,” he said.

Speed of service is also an advantage convenience stores have over other channels. “Consumers want to get somewhere, shop it quickly and minimize any contact they have with people. This is our chance to outshine all our competitors,” said Vogel, adding that these customers “have never shopped our stores harder than they have now. We have an opportunity to keep them and give them reasons to stay instead of making excuses about how we can’t compete.”

Keep the Shine

The hidden gems of 2020 amplify the importance of a convenience retailer’s supply chain and recognizing opportunities that capture consumer demand for the next big thing.

“It’s taking what we’ve learned and applying it to future situations, like annualized seasonal weather occasions, that can impact us for short periods of time,” Vogel suggested, citing products like sidewalk salt for snow and ice storms and charcoal for backyard barbecues.

The second half of 2021 is proving that the stay-at-home trend of 2020 is continuing. “We’ve been discovered as a viable shopping experience,” Vogel said, noting that the opportunities for convenience retailers to sell daily essentials will help keep new customers coming back well into the future.