Which categories offer c-stores the best private label opportunities?

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Selling private label products can help convenience stores attract younger and more loyal customers while improving their margins and brand, but targeting the right categories and developing winning products requires strategy and careful analysis to effectively reap the benefits, industry experts say.

While shoppers may associate private label goods more with big box retailers or grocers, c-stores are increasingly getting in on the action. Large chains such as Love’s Travel Stops & Country Stores, Casey’s General Stores and Wawa have all made waves in the private label space in recent years.

These products allow c-stores to compete with national brands on value, differentiation and margin at a time when shoppers are more intentional about price, yet still expect quality, said Sally Lyons Wyatt, global executive vice president and chief advisor of Circana’s consumer goods and foodservice insights division.

Private label products perform best when they offer a compelling value proposition versus national brands, have a higher margin potential for retailers and are clearly tied to the store’s brand, she noted.

When done right, retailers can build store-brand products that are distinct and trusted and compete with national brands on quality, innovation and value, said Peggy Davies, president of the Private Label Manufacturers Association.

“Own brands are no longer a defensive strategy,” said Davies. “It’s become a growth engine and a brand-building tool for today’s convenience retailers.”

The range of private label products offered by c-stores can vary wildly. Many retailers don’t sell any store brands, while others are reaching 30% of items sold in some stores and plan to one day reach 40% to 50% penetration, said Isaac Krakovsky, consulting retail sector leader at EY Americas.

Seize on the beverage boom

While the right product selection will vary from company to company, a few categories offer particularly interesting opportunities for convenience retailers to explore.

Energy drinks are high opportunity private label categories for c-stores, said Wyatt. These beverages are top traffic drivers for c-stores. In addition, shoppers are open to experimenting with different flavors and formats, and th drinks are priced so that there’s room for credible alternatives, she said.

Private label energy drinks work best when they are clearly differentiated from brand names in value or drinking experience, when the beverage feels intentional and not generic to the customer, and when it’s integrated into a cooler strategy that doesn’t crowd it with premium brands, said Wyatt.