Convenience Store Decisions, July 2017

CStoreDecisions ecisions com CATEGORYMANAGERS NOTEBOOK Set for the Beverage Season C stores hope consumers choose to beat summers heat with cold and frozen beverage offerings By Anne Baye Ericksen Contributing Editor T WENTY TWO YEARS AGO 7 ELEVEN rolled out Operation Chill The community outreach program partners the national c store chain with law enforcement agencies to solicit goodwill via Slurpee citations Over the past two decades more than 19 million coupons for free Slurpees have been handed out to children who of cers caught in the act of doing something good This summer approximately 1000 law enforcement agencies have been supplied with more than 133 million Slurpee coupons Positive community presence pays off year round however summertime promotions have become particularly important for convenience stores when it comes to the cold and frozen beverage category Not only does the category boast delectable pro t margins but is a perfect go to for U S consumers during the travel season between Memorial Day and Labor Day According to a National Association of Convenience Stores NACS survey nearly 30 of consumers thought theyd do more driving in June an 11 percentage point increase over 2016 numbers C store operators depend on summer temperatures to entice people with cold and frozen dispensed beverages An overwhelming majority of retailers house beverage centers with soda dispensers as a focal point Plus more than 70 of retailers serve frozen beverages according to more NACS data The warmer weather and the events that come with it draw more people out of their homes and onto the road said Steven Montgomery president of b2b Solutions LLC a Lake Forest Ill based consulting rm That coupled with an increasing desire for a refreshing beverage that naturally increases during warmer weather drives sales of cold and frozen beverages However beverage sales from Memorial Day weekend came in weaker than anticipated The 4 5 increase reported by Wells Fargo Securities was slightly depressed compared with last years summer kickoff holiday boost Sales are down compared to last year which was the highly promoted 50th anniversary of 7 Elevens Slurpee and included the introduction of exciting new flavors said Ray Zeiher category manager for Alon Brands part of 7 Eleven Inc Alon based in Dallas operates more than 300 stores in Texas and New Mexico Despite the seasons soft opening c store owners and operators remain positive about all beverage sales for the next few months NACS reports that 80 of retailers are optimistic that in store sales this summer will show improvement over last year Additionally 43 of c store owners and managers believe cold and frozen fountain beverage sales will increase during the summer season CARBONATED COMPETITION Not surprisingly more retailers continue to gear up for the anticipated spike in customers demand for cold drinks Overall units are growing slightly We have over 200 locations with Coca Cola Freestyle machines and have seen good growth in those stores said Joe Brum eld category manager dispensed beverages for CST Brands Part of Alimentation Couche Tard Inc San Antonio based CST Brands operates 1178 retail sites in nine states including the Corner Store convenience chain In many ways convenience stores always have been a drink destination Dispensed drinks fall within the foodservice category which according to the NACS 2016 State of the Industry report represents more than one in every ve in store purchases During the summer however cold and frozen beverages assume greater pro t potential As a 42 Convenience Store Decisions l July 2017