Rising Prices Drive Shoppers to Alternative Gas Retailers

Rising Prices Drive Shoppers to Alternative Gas Retailers
July 08, 2008

Alternative gasoline retailers, including supercenters, supermarkets and warehouse clubs, are cutting into the convenience store industry's gasoline shopper base, according to TNS Retail Forward. A recent TNS Retail Forward ShopperScape survey revealed that one-third of shoppers are buying most of their gasoline at alternative outlets, up from 22 percent three years ago. Alternative gasoline retailers now capture an estimated 13 percent of U.S. gasoline sales, and TNS Retail Forward projects this figure will grow to 16 percent to 17 percent by 2012. "Continued high gasoline prices are making alternative players' cents-off promotions very attractive," said Jennifer Halterman, senior consultant with TNS Retail Forward. "As a result, we expect more shoppers to take advantage of the increasing number of fuel-reward programs. Aggressive fuel-reward programs combined with the convenience of one-stop shopping makes it no surprise that more shoppers are filling up at these alternative outlets." Halterman also said that campaigns that tie fuel rewards to high-margin purchases, such as private brands, non-grocery general merchandise items or in-store services, will be critical going forward. Convenience stores must also reduce reliance on gasoline and focus efforts inside their stores, while also paying attention to the growing number of small-store food concepts rising on the scene. "Convenience will remain key," she said. "However, adding destination appeal with unique product offerings, innovative marketing and new service offers will help drive traffic, retain shoppers and increase profitability."