Visual Merchandising and Store Design | VMSD.com

(September 2011) posted on Thu Sep 01, 2011

C-stores are being forced to upgrade and drop the 'smokes and Cokes' image as competition moves into their territory

By Steve Kaufman

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The big gulp you’re hearing these days is not from a 7-Eleven fountain drink. It’s from the management of 7-Eleven itself – and Wawa, Thorntons, Circle K, Cumberland Farms and all the other major convenience store players around the country.

The reason? Walmart is now threatening the convenience store sector with its newest concept, Walmart Express, a 15,000-square-foot blueprint that’s about a tenth of the size of a supercenter and with a primary focus on groceries. The company has publicly said it’s “excited” about this, and that means it will move fast and expand robustly.

“We have been hard at work on this format,” Walmart U.S. president and ceo Bill Simon told a Bank of America conference earlier this year.

The challenge isn’t coming only from Walmart, though. Target has also announced a smaller footprint in mostly urban locations. Most national supermarket chains are experimenting with smaller formats, as well. And drugstore chains have added freezer cases and specialty food sections that resemble nothing more than a convenience store format, all but burying the pharmacy department that once was their franchise.

The Silver Lining

As with most challenges, though, there are silver opportunities lining the clouds. For C-store operators, it’s a chance to become Q-stores – “Q” as in “quality.”

“C-stores will learn what everyone else has learned,” says Barb Fabing, executive vp and creative director for Arc Worldwide, the shopper marketing arm of the Leo Burnett Group (Chicago). “You can’t compete with Walmart on price. C-store operators are going to have to leverage their locations, hours, efficiency and a value formula that includes the quality of their offerings.”

Restrooms need to be Priority One, says Joseph Bona, president of the retail division at CBX, a New York-based branding and consulting firm. “There need to be enough of them, they need to be operational and clean as a whistle. A dirty restroom, and the entire experience is ruined.”

Freshness is the second priority. “With the rising price of gas, and surprisingly slim margins on fuel, C-store operators are realizing they need something else to offer,” notes Bona, “And that ‘something else’ does not simply mean beer, cigarettes and lottery tickets. There has to be the perception that inside is freshness, quality and variety as well as convenience – a reason to shop there with some frequency.”