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Near Ninety and Still Innovating

March 3, 2020

The convenience store industry began in 1927 when Southland Ice Company began selling milk, bread, and eggs from an ice house in south Dallas, Texas to supplement slow ice sales during the winter months. The staples were so well received by their customers and sales so good, they kept selling staples year round and adding additional items to the assortment. From those humble beginnings 89 years ago that were focused on the provision of staples, the convenience store industry has experienced many evolutionary changes and that evolution continues today. Waves of changes over the first decades of the industry broadened the appeal of c-stores beyond the traditional male customer buying soda, cigarettes or beer. With the addition of gasoline pumps in the 1960s and fast food in the 1970s, and the further more recent refinement of meals-on-the-go, the convenience store became more of destination food stop. Today’s consumers are increasingly living in a world of 24/7 real-time access to a broad range of goods and services delivered through an ever-broadening platform of devices and interfaces. Even with the constant omni-channel access to goods (and prices), there will always be a need for last minute or emergency purchases and a willingness to pay a premium for convenience. However, being the store of last resort does not portend a robust future for the c-store industry.

In today’s hectic world, there continues to be a need for quick and easy purchases and the type of “run in, run out” transaction offered by convenience stores. Nonetheless, the industry must compensate for declining revenues and margins from traditional categories such as alcoholic beverages or gasoline. Some futurists (and some visionary convenience store companies) predict that healthier foods will become a more fundamental offering. Consumers demand to know what they eat and they seek clean food sources of energy with readily understood labels indicating origin and ingredients. This move into healthy and often organic foods means that convenience store supply chains will need to go beyond the provision of daily deliveries of fresh food to the stores.

Which convenience store chain will be recognized for game-changing and disruptive innovation? Lists of the world’s most innovative companies in 2016 are dominated by companies such as Apple, Amazon, Uber, or Airbnb. Could a future list of the world’s most innovative retail companies feature a c-store industry representative? Can we conceive of a 7-Eleven, Sheetz, Wawa, QuikTrip, Cumberland Farms, or Maverik joining retailers like CVS and Target that are today recognized for innovation? Will one of those companies embrace new technology, implement well run and lean processes, emphasize speed, or explore adjacent markets in such a revolutionary way that a Forbes or Fast Company list of the most innovative retailers contains a convenience store representative? This author believes that this nonagenarian industry is capable of revolutionary change and joining the ranks of the most innovative companies.