What Is a Convenience Store?
A convenience store is a retail outlet that sells a limited range of prepared and ready-to-eat foods, bottled and fountain beverages, household staples, tobacco products and periodicals. Convenience stores are typically small in size, are open extended hours, and, in most cases, are staffed by a relatively small team of cashiers, stock workers, and managers.
While there can be significant differences between individual convenience stores, these stores are stocked, located and designed for customers who are on the go and need to pick up just a few items. Because convenience stores are often open late at night, early in the morning and on holidays, many people also rely on them for emergency purchases of things like ice, milk, eggs or over-the-counter medicines when regular stores are closed.
Examples of convenience stores
Here are a few examples of different formats of convenience stores all around the world. Let us learn about them one by one.
The kiosk format of convenience stores is the most basic format of convenience stores. These stores are usually less than 800 square feet and provide little bit additional revenue other than the revenue generated by the gasoline sales. However, selling gasoline is always the priority of the store owner as the store owner is usually a petroleum marketer or an oil company. Therefore, the kiosk stores focus on fast-selling goods such as tobacco, snacks, beverages, and confectionaries.
These stores don’t provide any type of foodservice or sell grocery items. The stores earn only ten percent of their total revenue by confectionery of sale items and food items in stores at such locations. These stores provide parking only at the pump and the working hours of such stores largely depend on the location of the store and the inclination of the store owner. These stores don’t have regular customers. Most customers of these stores are usually people in transit or local people stopping to buy gasoline.
2. Mini Convenience store
The mini convenience stores are a little larger than the kiosk stores. This store format is usually 800 – 1200 square feet in size and is adopted popularly by oil companies, and the significant emphasis is given on the sales of gasoline. However, in mini convenience stores, the store sales make up a large portion of the total sales revenue generated by the store.
These stores sell a minimal selection of grocery items, and at the name of food services, these stores sell prepared sandwiches. These stores don’t provide separate parking other than the parking space provided at the pumps. Although very few mini-convenience stores also offer a modest striped parking space. These stores remain open for usually 18 hours to 24 hours. The frequent customers in such stores are the people stopping to buy gasoline. There are a few mini-stores (of same-store size) in urban areas that don’t sell gas and sell groceries and other essential items only.
3. Limited selection convenience stores:
Limited selection convenience stores fall in size range of 1500 – 2200 square feet. The convenience stores of these sizes are becoming quite popular, and their numbers are increasing. These stores are run often by oil companies, and because of their large size, they are converted into two-bay service stations.
The gasoline and store sales both are an essential part of the store sales and equally contribute to the profitability of the store. These stores are different from the kiosk and mini convenience stores as they offer a broad range of product mix and grocery items. However, these offerings are still less than the offerings provided by a traditional superstore.
These stores also offer a large number of food services such as hot dogs, burgers, popcorns, and nachos, etc. But it doesn’t mean that these services make a large portion of store customers. The gasoline customers still make up the central portion of the customer base of the store. Some limited selection convenience stores provide striped parking in some areas and provide service for 24 hours of a day.
4. Traditional convenience stores
The traditional convenience stores are the most common type of convenience store, and many original convenience stores fall under this category. The size of traditional convenience stores is usually 2400 – 2500 square feet. These stores offer quite a more extensive range of product mixes such as bakery, dairy, beverages, snack food, grocery, tobacco, confectionery goods, health and beauty products, prepared foods to go, frozen or fresh meat, gasoline, and various other items.
The traditional convenience stores usually provide approximately 5-12 parking spots and are easily accessible by pedestrians. These stores remain open as per the sales volume of the store and the location of the store. However, a large number of stores provide 24-hour services.
An extensive convenience store range usually owns traditional convenience stores. However, oil companies also build convenience stores in this size range.
5. Expanded convenience stores
The expanded convenience stores fall under the size range of 2800 to 3600 square feet. The highest growth is seen in this type of convenience store. Because of their large size, these stores have more shelving space and can accommodate many products. In addition to this, these stores also provide space for fast food operations and seating space for customers.
Because of the large size, these stores are taking advantage of the niche of supermarkets which are usually established in 40,000 square feet space. Several store chains are taking advantage of this “superette” approach. However, many store chains are adopting expanded convenience stores to increase their profit margin by including fast food services. As the profit of small services such as gasoline increases, the companies try to make fast food services as essential services.
These stores sell all the traditional convenience store products and usually serve for extended hours or 24 hours. Parking space is an integral part of these types of stores. Therefore, you will often find 10-20 parking spots in expanded convenience stores.
The regular customers of this type of convenience stores are not only gasoline buyers. But the sufficient parking space, sitting area, and a large number of grocery items attract different categories of customers such as senior citizens, women, college-going students, and mothers with young toddlers.
6. Hyper Convenience store
The typical size of hyper convenience stores falls under the range of 4000 – 5000 square feet. This type of convenience store is quite large. Because of its vast size, they usually offer a large number of convenience items in specific departments allocated for the items.
For example, in a hyper convenience store, you might find a bakery, fast-food section, sitting area, and a pharmacy all in one store. However, like other convenience stores, the gasoline stations are not essential for hyper convenience stores, but you will find many hyper convenience store owners also selling gasoline.
Because of the variety of services provided by such stores, it is evident that people will spend a significant amount of time in these stores. Therefore, these stores need to offer a substantial amount of parking space for their customers.
These stores provide services for extended hours but not for 24 hours a day. In addition to typical convenience store customers, these stores also attract senior citizens and families. In many places, these stores also serve the purpose of mini-truck stops which have a significant impact on the product mix sold by the store and its typical customer base.
Differences Between Convenience and Grocery Stores
Grocery and convenience stores have different missions. Grocery stores are a destination for consumers who need to purchase food and household products for both everyday use and special occasions. The wide selection of products and brands, as well as high inventory levels, allow consumers to shop the goods that their household may need for a significant period of time. Large, wheeled carts are available at the store entrance, with the anticipation that shoppers will fill them with enough food to last a household a week or more.
Convenience stores, on the other hand, meet the needs of shoppers who need one or two products right away. The lack of shopping carts, for example, speaks volumes about how convenience stores operate: There is no need for a cart, as most customers will only buy a few items and can easily carry them up to the cash register.
Store Size: Traditionally, convenience stores have what is known in the retail industry as a “small footprint.” The average convenience store size is around 2400 ft.² – whereas the average grocery store in the United States is around 45,000 ft.² It should be noted, however, that store sizes vary, and there is some evidence that U.S. grocery stores may be decreasing in size.
Store hours: Convenience stores are often open all day, every day, though some do close during late night and early morning hours. Still, one can usually expect these stores to be open very early in the morning and to close late at night. In addition, convenience stores are also frequently open on holidays.
While there are many supermarkets and big box stores that are themselves open 24 hours a day, many maintain more traditional retail hours, such as opening at 8 or 9 a.m. and closing at 9 or 10 p.m. Traditional grocers are also more likely to close, or to adopt a special schedule, on holidays.
Store staffing: Typically, grocery stores have multiple checkout lanes and registers, along with large staffs that include store and department managers, workers in specialty departments, such as the deli or meat counter, cashiers and stockroom workers.
Typically, convenience stores have small staffs and only one or two employees on duty at any one time. Although some stores may have more than one register at a shared checkout counter, many stores only need one register, as customers generally purchase only one or two items.
Location and parking: Convenience stores are often located on small lots or in storefronts in strip malls or in other types of commercial buildings. They are easily accessible by car and on foot. Parking lots are small, allowing patrons to exit their vehicles and head immediately into the store. Some convenience stores are attached to gas stations, which offers additional time savings.
Grocery stores often have much larger parking lots and may be part of a large cluster of retail stores. The large parking lots may require patrons to spend several minutes walking out and into the store.
Pricing: Convenience store prices are almost always higher than what a consumer would pay at a traditional grocery store. The premium pricing reflects the added value of being able to buy something quickly, although grocery stores command more loyalty from repeat and large volume customers due to their more competitive price points.
Product assortment: Convenience store product assortments are limited to items that people are likely to need while commuting, traveling, or when their household supply runs out. Grocery stores, on the other hand, tend to offer a wide range of products in all of their categories, including fresh foods, prepared foods, household products and personal care.
Brand and size diversity: It’s not unusual for traditional grocery stores to offer several brands within a very limited product category. For example, grocery store shelves often hold several different brands of peanut butter. Within each brand, there may be several types of peanut butter, such as creamy, crunchy, and no-added-sugar. These brand varieties may also be available in multiple sizes.
By contrast, a convenience store is likely to carry only one brand of creamy peanut butter. The same is true for other products, such as dish soap, shampoo or diapers.
Hot foods and prepared meals: Usually, convenience stores sell hot and ready-to-eat foods, such as hot dogs, nachos, pre-made sandwiches, and salads. In addition, stores often sell frozen entrees and snacks that can be reheated in the store’s microwave. Fountain drinks and hot coffee are also always available.
Over the past decade, the retail industry has undergone a massive sea-change in the United States, and around the world. Consumers are becoming more comfortable with home delivery of groceries, which may eventually contribute to smaller grocery store formats. Many consumers are also more health-conscious and are suspicious of prepared and processed foods in convenience stores. This has led to some stores to offer a healthier range of products, including more fresh fruit, vegetarian options and boutique snacks, such as vegetable chips or high-protein cookies.