Will Electric Cars Harm the Beverage Industry?
Fewer drivers filling up at gas stations could trigger less impulse sales inside convenience stores.
WASHINGTON April 4, 2018; NACS Online reported that since electric vehicles don’t require fill-ups at gasoline stations, will that mean fewer impulse purchases from convenience stores? That’s what Morgan Stanley analysts recently wrote, specifically arguing that beverage sales would plummet as EV sales rise, the Washington Post reports.
But convenience store industry experts aren’t worried about EVs, given that widespread usage is probably decades in the future. More immediate concerns are the increased competition from other retailers and online businesses that want to sell convenience.
“Beverages drive sales, and beverages drive profits at convenience stores, so any competition that could reduce those sales and those profits is a concern,” said Jeff Lenard with NACS. “However, I think that stores will do what they always do: They’ll find a better way to compete.”
The Morgan Stanley report published last week did say that EVs only constitute a small percentage of vehicles in use today, but that could change in the near future. And if fewer drivers are stopping at gas stations for fuel, beverage sales—and beverage companies—could be negatively impacted. The analysts noted that Monster Beverages, which garners 63% of its U.S. sales from convenience stores and gas stations, would be most vulnerable to such a change.
Lenard pointed out that a NACS survey found that nearly half of all c-store customers stepped inside the store for a beverage. And until EVs are more plentiful on the roads, convenience stores won’t be impacted much at all.
That’s not to say that convenience stores aren’t worried about retaining customers—retailers work hard to stay relevant in today’s convenience-driven shopping environment. “Everyone is selling convenience,” Lenard said. “The good news is, the value of convenience has never been higher. … The bad news is that everyone realizes, and wants a piece.”