Welcome

As in many other retail businesses, technology has become a significant part of the growth in the convenience store industry and has changed our experience as consumers. Not long ago, “paying at the pump,” was something of a novelty, something you’d find at the occasional convenience store. Now, as it has become ubiquitous, convenience store retailers are looking for new ways to “increase efficiencies and reduce prices.”

As B2B (business-to-business) technologies and smart card advancements have become more accessible to medium to small businesses, technology spending is predicted to increase in the convenience store industry.

The National Association of Convenience Stores’ 2000 study outlined some of the technology trends within the industry:

Business-to-Consumer Trends:

• Smart Cards were accepted by 5.3% of stores in 2001, compared to 0.3% of stores in 1998. Pre-paid gas cards were accepted by 20% of stores.

• By 2003, Exxon-Mobil had over 6 million consumers using their smart card, Speedpass contact-less payment solution. They reported that consumers using Speedpass, generally spend 15% more than consumers paying in conventional ways.

• ATMs were available in 77.4% of all convenience stores in 2001, compared to 15% in 1993.

• “Pay at the pump” is now an option at over 65% of stores in 2000, up from only 37% in 1997.

Business-to-Business Trends:

• Convenience store chains are expected to save over $400 million dollars annually due to implementing technology standards for pricebook synchronization, product fulfillment, and financial settlement.

• The average investment required to open a convenience store (includes land, building, equipment, and inventory) is $1.83 million dollars in an urban setting, and $1.54 million dollars in a rural area (population under 50,000). Out of that total, 30% would go towards technology and equipment.

• Direct sales opportunities with customers is on the rise. The convenience store could serve as a possible Internet access point, as well as the pick-up point for online purchases.

Source: NACSTech, 2004 http://www.nacsonline.com/NACSTech/Home.htm

Source: RFID Journal “RFID Smart Cards Gain Ground,” http://www.rfidjournal.com/article/articleview/374/1/1/

- Carolyn Ellis

Industry Snapshot: Convenience Store

Despite increased competition from other retail venues, the convenience store industry has faired well over the last few years. Industry year over year sales increased by 16% in 2003, the best among all retailers. But conveniences stores are not without competitive pressures. The 1990s saw lots of consolidations and bankruptcies among the large chains as well as the exit of many independent convenience store operators. Today, competitive pressures come from the entry of hypermarts, drug stores and dollar stores into the consumer market for fuels and convenience items.

Take a look at our full industry report on convenience stores (PDF Format). If you areinterested in other industry snapshots, visit our SBDC Business Advisors Toolkit.

- Mike Cline

Links of Interest

National Association of Convenience Stores
Convenience Store News
Association of Convenience Store Managers

Did You Know?

We will be at the 2004 ASBDC Conference.

Judy Johnson will provide information about our services at the "First Timers" session from 11:00-12:30 on Monday. Mike Cline and Peter Morales will both be presenting on Wednesday. Mike will present "Fishing in a Sea of Information: Key Research Strategies for Finding the Information You Need." at 9:00 - 10:30 while Peter Morales will co-present with Reynaldo Cano of the San Antonio International Trade Center SBDC. Their topic is "Profiling Your Hispanic Consumer" and will be presented at 11:00-12:30. In addition to our training sessions, we will once again host a booth.

Please stop by and say hello and drop your card in a hat for the possibility of winning the book: Household Spending: Who Spends How Much on What. We look forward to seeing you in New Orleans!

Are You Paying Attention to
Demographic Trends?

According to American Demographics, womens' roles are more diverse and less strictly defined. Companies are now recognizing the priority among women to balance family and home life. This requires today's employers to offer family concious benefits and programs to attract and retain the best talent in their fields.

What do women want? A survey conducted by World WIT (Women in Technology), showed that 61% of working moms agreed that flexible schedules would be the most effective and most valuable tool in lightening their load. Fifteen percent felt that the ability to telecommute would be best, and 9% hoped for onsite daycare. Many of these concerns arose, in part, due to the attacks of September 11th, which resulted in many Americans discovering a renewed desire to restore and maintain connections with family and loved ones. Fortunately many companies did not let these desires go unnoticed.

The September 2004 issue of Working Mother Magazine highlights some of the most reasonable ways to accommodate the needs of working parents by offering "The Ultimate Guide to Flexibility." Sample policies include offering parents the morning off on the first day back to school; supporting nursing mothers by providing electric pumps, lactation consultants and private nursing rooms; and a program for moms who wish to stay at home for awhile and then opt back into the company. These women are given training and online access with the promise to return within five years.

These policies are not for large corporations alone. Most of the time, small business owners will suffer a greater loss if a prized employee decides she cannot successfully accomplish the balancing act.

For more information, see:
May 2004 issue of American Demographics
Working Mother Magazine
Work and Family Connection, a Work-Life Clearinghouse
Census Fact sheets on Women and the Labor Force:
http://www.census.gov/Press-Release/www/2003/cb03ff03.html
http://www.census.gov/Press-Release/www/releases/archives/facts_for_features_special_editions/002264.html

- Jessica Bybee-Dziedzic

Contact Us

SBDCNET
UTSA Institute for Economic Development
University of Texas at San Antonio
501 W. Durango Blvd.
San Antonio, TX 78207
http://sbdcnet.org/
sbdcnet@utsa.edu
800.689.1912