So, you’ve got the keys to your shiny new convenience store… but now you’re faced with the small problem of how to fill the shelves.
Fortunately for you, CoGoGo is here with our top tips for finding the right stock suppliers for your c-store business.
Firstly, decide on what margins you can afford…
Choosing your stock suppliers should start with deciding on what margins you can afford to stomach (and indeed afford). After all, c-stores operate with razor-thin margins (4.4% net profit, by some accounts), and they should therefore be at the forefront of every decision.
“Manufacturers need to know that we can no longer work on anything less than 30% [gross margin], especially with overheads rising,” said one retailer at a recent roundtable. “If I see a price-marked pack with a 23-25% margin I tend to shy away from it as it’s not worth it.”
Plus, in a cost-of-living crisis, it’s more important than ever for c-stores to focus on products with healthy enough margins to keep prices affordable: across a basket of nearly 4,000 items sold in both grocery and convenience stores, the same product costs, on average, 15% more in symbol or independent shops. In a time when families are being forced to choose between eating or heating, that 15% really adds up.
However, the margins that work for you will ultimately depend on your overheads and where you fit in the market—whether you’re serving lower-income communities or catering to the wealthy retired.
Secondly, decide on your product strategy…
Shoppers know they’ll pay slightly more for convenience, but today’s price-sensitive customer might need a bit more convincing. So, how do you build a product range that works for both your bottom line and your shoppers?
Staple items like crisps, snacks, and soft drinks still hold their own, but they need a bit more creativity—think promotions, exclusive products, or cross-category deals that keep shoppers coming back for those impulse buys.
Price-marked packs (PMPs) make up a significant chunk of the convenience market, but they’re not always the best performers. If PMPs aren’t drawing in new customers, it might be time to rethink your mix and focus on non-PMP options that give you better flexibility with pricing and margins.
It’s also worth keeping your eye on the latest developments in consumer behaviour and adapting accordingly. For example, did you know that, according to a recent survey, 66% of convenience store users would consider buying premium ready-to-cook products as a cheaper alternative to ordering a takeaway?
Option one: use a cash and carry
According to the ACS’ 2024 Local Shop Report, 15% of c-stores said that they get the majority of their products from a cash and carry, compared to 58% who get the majority of their products delivered.
Indeed, the cash and carry appears to have been on the wane for a while. Him data from a 2018 survey of 6,000 retailers and foodservice operators showed that the percentage of retailers relying on delivered wholesale for their main shopping mission jumped by 22 points, reaching 89% that year. Meanwhile, cash & carry saw growth primarily in top-up shopping, with “distress top-ups” surpassing main shopping as the second most popular mission.
Cash and carries certainly have their place: they typically don’t require a minimum order quantity and offer a wide range of products, allowing stores to purchase everything they need in one place. They also allow for emergency stock-ups when your shelves start to look bare. Indeed, ACS’ Local Shop Report reported that 14% use cash and carries and distributor deliveries equally.
However, they often come with less forgiving margins …
Option 2: partner with a distributor/distributors
Distributors can cut your product-hunting time in half, letting you focus on what you do best: running your store. Large distributors also often offer discounts that you won’t find at other wholesalers. With a solid relationship, you can snag deals like lower prices on your first order or buy-one-get-one offers.
Large knowledgeable distributors can also keep you in the loop on the latest consumer and c-store industry trends. They’ll give you the scoop on fresh arrivals before your competitors even know they exist, helping you stay ahead of the game.
How to choose your distributors
The UK has over 100,000 F&B distributors, each one specialising in different products and regional markets, so it’s important to narrow down the list.
Not all distributors carry what your convenience store needs, so start by listing the products you want to sell. Think about profitable items like dairy, toiletries, hot food, OTC meds, tobacco, alcohol, and especially non-alcoholic beverages. According to Statista, health and beauty care products have the highest gross profit at a 50% margin.
You’ll also need to think about the products that will drive footfall. Sales in c-stores are primarily concentrated in categories such as tobacco and e-cigarettes, chilled food, and soft drinks.
Next, narrow down distributors based on your location. You don’t want long delays, so prioritise local suppliers. Ask other business owners for recommendations or check with the Association of Convenience Stores.
Also, consider how fast and often you need products. Even if a distributor isn’t local, they should have a nearby warehouse and the capacity to deliver reliably.
You’ll also want to look at distributor reviews: reviews can give you insight into a distributor’s customer service and delivery quality. A few bad reviews? Not the end of the world. But if you see consistent complaints about late or damaged deliveries, that’s a big red flag.
Need help kick-starting your distributor search? Here’s a free tip on us. The top 11 food distributors in the UK are listed by GourmetPro as Bidfood UK, Brakes Group, Bestway Wholesale, Booker Group, JJ Food Service, Castell Howard Foods, Creed Foodservice, Henderson Foodservice, Philip Dennis Foodservice, Turner Price, and Savona Foodservice.
