Why is our Customer Count Declining?
Romy Singh, Vice Chairman, NCASEF | President, Eastern Virginia FOA
The U.S. convenience store count increased to a record high of 154,958 stores as of year-end December 31,2017, resulting in 423 additional stores and 0.3 percent increase year-over-year, according to the 2018 NACS/Nielsen Convenience Store Count data. Currently, every company is looking to expand their c-store business across the country. Neilson projects the strength and growth of c-stores will continue. However, this is not guaranteed due to the advancement of technology, growth of e-commerce, and competition through diversified channels.
There are many factors on why we continue to lose customers to our competitors, even though we have better prices in comparison to big box grocery stores and we have attempted to draw customers through discounted prices, such as the 50 cents coffee. One factor is that our current franchise model puts extra burden on the franchisee, such as with payroll. Wages continue to increase every year, which are directly impacting our customer service. The impact can be seen even at the corporate stores. Franchisees cannot afford the proper labor due to increased wages. Our competitors are taking advantage of this because they can afford a full staff and thereby can offer cleaner stores and better customer service.
Another reason for our declining customer count is that we are lacking a rewards program for our fuel stores. Our competitors are offering fuel rewards programs that, for example, give their customers 5-10 cents off per gallon of gas for every $50-$100 they spend on groceries. I believe if we offer a fuel rewards program we will attract more customers inside of our stores.
The physical plant and store image is another significant reason for the decrease in customer count. Most of our stores’ physical image seems to look like they are from the 1960s, and not like 2018. We need a new image that is modern and more attractive to millennials and to our core demographics.
In addition, our revenue-generating equipment being constantly down contributes to our declining customer counts. The equipment continues to wear and tear, break down, and sometimes results in a week to fix due to service providers not having parts on hand. This results in loss of sales and an unhappy guest experience.
Also, in our stores we have different color schemes, so there is no consistent image from store-to-store—in some of our stores the floor tiles have different colors and ceiling tiles are worn and old. The image of 7-Eleven stores needs to improve and adjust to look like we are in 2018.
All of the above reasons result in low morale among the franchisees— not many franchisees are excited anymore. Franchisees are working 65+ hours a week and are getting fatigued. They are being pressured by the field consultants to perform extra duties. Field consultants come every week and spend four hours with franchisees, which results in 208 hours annually. Instead, the consulting time needs to be reduced so franchisees can spend that saved time on the sales floor providing service to guests in order to increase sales and gross profit dollars. How can we boost the franchisee’s morale? We need the excitement and spirit back. Our franchisor must budget for capital spending to facelift our store image and invest in where the future is heading via technology and e-commerce. This will result in higher customer counts and more dollars to the franchisee’s bottom line to be able to afford the additional labor hours to provide cleaner stores and adequate customer service that our guests deserve.
Our franchisor and franchisees need to be united and work together. Let’s be “Us” again eliminate “We” and “Them.”