The "new (ab)normal"

How the 2020 novel Coronavirus could change our industry

The road to recovery will surely be a long one. Even if we manage to get back to growth levels seen between 2010 and 2020, between the end of the financial crisis and the start of the Covid-19 crisis, we will need years to get back to 2019 levels. 2019 employment levels may never be reached again, leaving a persistent scar on our society, GDP levels will need a few years to bounce back and market capitalization, or the value of our companies, will probably take even longer to return to pre-Covid-19 levels.

Much is being said about the “new normal”, the situation where we get accustomed to lockdowns, travel bans and social distancing. In this unprecedented time much firefighting is needed in order to keep companies afloat and businesses alive. Studies show that companies that quickly reallocate resources from one department to another, e.g. to put some fires out, achieve a 3.9% higher CAGR total return to shareholders. Acting quickly is key. And most probably will we be putting these fires out during the entire years of 2020 and 2021.

What comes after that can be called the “new (ab)normal”, a reality that will be much different from what we have today and will keep changing. Putting fires out is only serving the here and now, the “new normal, strategic planning serves the time beyond that”. Companies that focus only on firefighting, without allocating enough resources to strategic planning will most likely lose or go bust in the “new (ab)normal”. Studies show that companies that allow for consistent resource reallocation will achieve higher & less volatile returns.

Boiling it down to a simple equation, then our business is about “Who” (Retail landscape), “sells what” (Product landscape), “to whom” (Consumer landscape) and “how” (operations). With operations being impacted by technological disruptions, regulatory limitations and consumer expectations. In the past these areas shaped our industry through technology such as self-service-fueling and self-scanning, new categories like energy drinks or foodservice, new customer groups like GenX and Millennials or regulation on tobacco, alcohol and sugar.

Before Covid-19 our industry’s agenda was driven by “better-for-you foodservice”, labour regulation, the new nicotine or communal tables. Whilst most of these items will not go away, Covid-19 is shaping the new agenda in the new normal: home cooking, working from home, store hygiene, food safety, the green new deal or last mile competition.

How will a c-store look like in this new abnormal: Maybe more residential than commuter, maybe more grocery than foodservice, maybe more packaged than fresh, maybe more for later than for now and definitely more local, more sustainable and more community-engaged.

And fuel: well, the car seems to be en vogue again, public transport is out and the trend definitely is towards an alternative powertrain.

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Get your personal presentation of the NACS | Convenience Briefing (members only) and with it all the global insights, best practice & thought leadership on international fuel- and convenience retail. For more information contact Mark Wohltmann, Director NACS Europe.

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Mark your calendar

• NACS Show, October 11-14 2020, Las Vegas, USA, www.convenience.org/nacsshow
• NACS Convenience Summit Asia, March 2-4 2021, Bangkok, Thailand, www.convenience.org/csa
• NACS Convenience Summit Europe, June 1-3, 2021, Dublin, Ireland www.convenience.org/cse
• Exclusive for Retailer Members: Book your executive education program at Yale/Wharton/Kellogg/Cornell/MIT www.convenience.org/education