It's fair to say that 2020 was a miserable year for many retailers -- but not convenience stores. As essential retailers, these stores were generally allowed to remain open while other businesses had to shutter. That lack of interruption allowed convenience store sales to increase 1.5% in 2020.
The outlook for convenience stores is even brighter in 2021. As of September, a good 74% of convenience stores expect that 2021 year-end in-store sales will top 2020's numbers, as per the National Association of Convenience Stores. Only 11% expect their 2021 sales to fall below year-end 2020 sales.
But still, like other retailers, convenience stores are facing some challenges. Hiring challenges top the list, though that's not unique to convenience stores, but rather, a general issue in the broad labor market.
Image store: Getty Images.
However, in the coming months, certain factors could converge that make convenient stores less, well, convenient. For one thing, the weather is getting colder, and at a time when so many people are able to work remotely, some may shy away from the idea of picking up and leaving the house when it's so easy to have groceries and other essentials delivered to their door.
Furthermore, things have taken a notable turn for the worse on the COVID-19 front. At this point, cases are soaring on a national level, and the emergence of the omicron variant could set the stage for a very dangerous winter. Since convenience stores don't offer the same spacious aisles and room for distancing as major supermarkets, some customers may opt to stay away due to health concerns.
It's for this reason that convenience stores really need to be strategic going into 2022. And one move on their part could make for a solid year of sales.
Keeping up with consumer trends
Many consumers have taken to ordering groceries and goods online during the pandemic. And if convenience stores want to stay competitive, they'll need to prepare to offer that same option in the new year.
Of course, doing so will require an investment -- either in staff, equipment, or partnerships with delivery companies. And to be clear, teaming up with delivery services could heavily cut into convenience stores' profits. But it may be a necessary step to take at a time when consumers may be less motivated to leave the house and shop in person.
As a secondary offering, convenience stores can look into ramping up curbside pickup services. Though that doesn't offer the same level of ease as having goods delivered to customers' homes, it's a good way to address health and safety worries.
A solid income stream for commercial landlords
At a time when many retailers were shuttering left and right, convenience stores have served as a steady revenue stream for commercial landlords. And if they play their cards right, they'll buy themselves plenty of staying power in the new year.
That said, convenience stores may see their revenue decline early on in 2022 as companies delay office reopening plans and send in-office employees back to remote work. Offering up delivery services could be essential to their survival, so that's something real estate investors will no doubt want to see more of in the coming year.
