Owners need to monitor the following risk areas to stay competitive in 2016:
Cybersecurity involves the need to comply with PCI standards to protect cardholder information.
This also includes skimming, in which devices are placed on pumps to steal credit card information. Procedures should be implemented to monitor the pumps and prevent and/or remove these devices.
- Social Media
Social technologies are increasingly becoming a part of everyday life. Incorporating social media communications into the business model can improve customer service and provide a low-cost alternative to traditional advertising.
- Volatility of Gas Prices
Decreases in gas prices nationwide have led to consumer confidence in the health of the economy, which will also benefit convenience stores with increased sales. However, the converse is true as well: should gas prices significantly increase again, then in-store purchases of snacks and drinks will drop. Additionally, Congress is looking at raising federal gas taxes to fund the nation’s aging highway projects.
- Mobile Technologies
More than half of all buying is expected to occur on mobile devices; therefore, having mobile applications is crucial to achieving success. In addition, these mobile applications will provide ways of saving money and reducing human error.
- Food Service Competition
Convenience stores that don’t invest in food services create the risk of losing out on business. The market for convenience store prepared meals is increasing as consumers desire diverse, affordable, convenient, and healthy food options. Convenience stores are uniquely positioned to meet this growing need if an adequate investment in food service is made.
- Wage Rates
The growing pressure to raise the federal minimum wage will increase the number of part-time workers, so businesses can keep the cost of labor low and avoid certain benefits. Additionally, there is a federal proposal that salaried individuals who earn less than approximately $50,000 per year be potentially eligible for overtime, which will impact convenience store managers and raise labor costs. This change to overtime pay should be in place by 2017.
- Regulation Compliance
There is an increase in regulations in a variety of categories, including e-cigarettes and other vapor products, diet drinks, energy drinks, and dietary supplements. Increased regulation may result in higher prices for those products or a ban on the products altogether. In addition, menu-labeling regulations taking place in 2016 will require increased menu-labeling that will likely cause consumers to avoid lower quality or less healthy food options, thus decreasing food sales. Convenience stores must also comply with regulations regarding sales of alcohol, tobacco, and lottery tickets or face serious fines and penalties.
- Asset Theft
A persistent threat to convenience stores is employee theft of cash from registers and customer theft of inventory from the shelves. Review and monitoring procedures should be implemented to prevent and detect these threats.
- Changing Demographics
The workforce and general population are becoming more ethnically diverse and growing older. Demographics will change dramatically in the future as people live and work longer and as the percentage of other cultures in the U.S. increases. This will affect how convenience stores operate internally and how they reach a much more diverse marketplace.
- Increased Fuel-Efficiency
Vehicles are becoming increasingly fuel efficient, which means fewer stops at gas stations to fill up the tank. This results in fewer opportunities for consumers to visit convenience stores and make purchases. The use of reward programs and other tools are needed to drive inside sales.
For more information, contact Bill Kohm at email@example.com or (859) 425-7625.