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07/09/2021

Survey: Supply chain disruption affecting store construction/remodels

Marianne Wilson
Editor-in-Chief
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Supply chain disruption — including orders for store equipment and hardware — and filling open positions were major challenges for convenience stores in the second quarter, with no letup in sight.

Thirty-nine percent of c-store retailers said there were “significant” levels of disruption across the supply chain during the second quarter of 2021, and 86% reported that at least 10% of their orders were disrupted, according to two NACS surveys of U.S.-based convenience retailers and their supplier partners.

Compounding inventory second-quarter challenges, 76% of retailers said it was difficult to fill available positions. Only 2% of retailers surveyed said they did not face hiring challenges.

The supply chain disruptions included equipment: 79% of retailers said they experienced delays with store equipment/hardware deliveries this year. And 41% said they postponed store equipment orders or new store construction/remodel projects because of supply chain delays.

Beverages were another big challenge in the second quarter, with 72% of retailers reporting supply disruptions of packaged beverages and 67% reporting supply challenges with beer. Also, two in five industry suppliers (38%) said they faced “significant” levels of disruption for materials necessary to create their products.

Confidence among convenience retailers and suppliers that improvements are coming is low. Only 25% of retailers and 27% of suppliers said they were confident that supply disruptions will improve in the second half of the year.

Despite the challenges, in-store sales have rebounded to pre-pandemic levels at convenience stores, according to NACS CSX sales data ending April 2021. Fuel sales also have largely recovered. Finished gasoline supplied, which is tracked by the U.S. Energy Information Administration and is a proxy for supply, is only 1.8% lower the last two weeks of June 2021 than the same period in 2019.