The 1st Tier - What are They Doing to Succeed?

1st Tier retailers clearly have achieved leadership in customer perception of the value proposition. They are either clearly above the market average on delivering time savings through a combination of Convenience/Speed and Frictionless Experiences or on delivering high Quality and great Product Variety.

Buc-ee’s secures their top ranking by being an outlier in their Quality and Product Variety. This more than offsets their competitive disadvantages in time savings with Convenience/Speed and Frictionless Transactions that rank at the bottom of the industry.

Sheetz and Wawa drive superior time savings, and they do this while also delivering superior Quality/Variety, solidifying their top 3 standing.

Retailers in the Bottom Tier don’t positively distinguish themselves on either of these two dimensions. Retailers in the second Tier achieve some leadership on either dimension, but the trade-off they are asking for between Quality/Variety and Time isn’t as compelling for shoppers. Either the better Quality/Variety isn’t strong enough to justify the worse time savings, or the better time savings comes too much at the expense of Quality/Variety.

Quality/Variety and Time Savings can be combined to form the Benefits that customers get from shopping in a chain. Examining the c-store landscape by retailer positioning on these Benefits versus the Affordability perceptions of these retailers further reveals industry lessons.

The message: superior Benefits outweigh superior Affordability. Many 2nd and 3rd Tercile retailers outperform the 1st Tercile in Affordability, but they lag the 1st Tier in growth and emotional connection. There are a few examples of c-store chains using superior Affordability as a path to growth: Walmart and Safeway in particular. While they don’t score as highly on the Benefits as many other Top Tier c-stores, they clearly outperform on Affordability. They are not just strong on gas savings, which of course is critical, but they are also strong on product price perception as well.

The general message overall for the industry though is that c-store customers first and foremost are frequenting the channel not for superior Affordability but instead for unique, high-Quality experiences and products and overall time savings, particularly through omnichannel experiences.