Convenience stores are something of a lucky outlier in the retail world at the moment. Despite overall gains in foot traffic last year, traditional retail stores are facing new headwinds and buckling under economic pressures. High-profile closures and bankruptcies, coupled with newly emerging supply chain uncertainty and tanking consumer sentiment, have rocked the industry, leaving retail leaders rightfully on edge.
Many convenience stores, on the other hand, are enjoying unprecedented demand, with chains expanding rapidly and making strategic consolidations to strengthen their business. They owe much of this success to the fact that the way consumers engage with c-stores is changing. Many c-stores are focusing more on diverse food and beverage offerings, making them an accessible alternative to fast food and quick service restaurants. They may also be profiting from a commuter resurgence as more white-collar companies bring their employees back to the office full-time, with most Americans commuting by car.
On the surface, high demand is a good problem to have — but a rush of business will do more harm than good if a c-store is unequipped to meet it.
Convenience stores face three major labor challenges that could prevent them from taking advantage of their in-demand status: unoptimized staffing, employee burnout and disengagement, and a lack of career opportunities for team members. Fortunately, with the right technology and tactics, c-store leaders can transform these challenges into opportunities.
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Challenge #1: Unoptimized Staffing
Perhaps the most obvious labor challenge associated with high demand is understaffing. When there are insufficient team members on the floor to keep up with customer needs, the result is a poor experience for everyone: employees are stretched thin, customers are left unsatisfied and the possibility of business risks like inventory shrink heightens.
Of course, every customer-facing establishment is prone to the occasional understaffed shift. But the key word here is occasional. The long-term effects of chronic understaffing can deeply damage a c-store’s bottom line – not to mention its reputation.
Attracting and retaining talent is crucial to preventing understaffing. However, when demand spikes suddenly, many c-stores will have to make do with what they have until they can bolster their staff.
C-store operators can optimize their current labor force – and create the flexible, consistent scheduling conditions that will attract new team members – by reinventing their scheduling processes with AI. With AI-driven scheduling, managers can automatically generate and distribute the optimal schedule to meet demand. By instantly aligning employees’ availability with accurate demand projections, AI scheduling tools remove the guesswork from schedule creation and reduce the likelihood of understaffed shifts.
They also save managers time, which can be redirected to training team members to prepare for a busy period and deliver better service. When over half of managers are spending three hours or more on scheduling each week, the savings accumulate quickly.
Tools also are evolving to allow managers to schedule shifts based on employees’ productivity. With AI systems tracking productivity metrics, such as their efficiency in using the register or the time it takes to restock a section of the store, employers receive a full profile of employees’ productivity that can be used to schedule them for the right shifts.
Those who manage hourly workers see real potential for AI to help them optimize shifts and save resources. However, according to a new survey from Legion, only 11% of them are actually scheduling using AI tools. If c-store leaders can bridge this adoption gap, they’ll set themselves up for success during both surges and lulls in demand.
Labor efficiency will be crucial in the months ahead. While c-stores are holding firm for now, today’s high-cost retail environment could transform market conditions virtually overnight. Being able to make quick adjustments to optimize labor will ultimately keep costs down and make c-stores more resilient in the face of change.
Challenge #2: Employee Burnout and Disengagement
Understaffing is far from the only labor-related factor causing hourly employees to disconnect from their jobs. A lack of flexibility, unfair or disorganized scheduling practices, poor benefits, poor work-life balance and financial uncertainty all contribute to low well-being that’s burning workers to the ends of their wicks. Add in the stress of a volatile economic environment and even the most successful c-stores could end up contending with an unstable workforce.
It’s widely known that burnout leads to poor business outcomes, including decreased quality of service, employee absenteeism, and lower productivity. At a time when every shift counts, c-stores can’t afford a staff of burned out employees.
The Legion survey shows “schedule flexibility” is the top factor that would persuade hourly employees to take a new job. Moreover, those who say flexibility matters cite mental and physical health as their top reason for this belief. Fortunately for c-store leaders, the same scheduling technologies and practices that enable their businesses to meet demand fluctuations can also provide this much-desired flexibility.
Expansion is an ideal time to reconfigure labor practices and technologies. As c-stores grow to meet evolving demand, they have an opportunity to make a more flexible work experience while simultaneously improving labor efficiency.
Challenge #3: Lack of Career Opportunities
As your store grows, so should your people. Today’s employees crave opportunities for real career development with meaningful work. As that same Legion survey found, managers say that opportunities for career growth are the #1 benefit of most interest to prospective hourly employees they interview.
A surge in demand offers a chance for employees to prove themselves – but only if they have the proper support. Therefore, it’s of critical importance to reduce the administrative overhead managers are tasked with so they can focus on coaching and training employees. Giving managers the time to develop a skilled and competent workforce will ultimately drive greater value for the business.
Scheduling employees with certain skills during shifts that acutely require them is another way to foster growth – and another way that AI is transforming labor management. This could look like scheduling highly experienced employees to work during predicted periods of heightened demand, but also pairing seasoned managers with new employees to help them learn the ropes during a slower shift. This way, new employees can get crucial opportunities for training without compromising the store’s ability to meet demand.
While c-stores are standing in a rare bright spot, the future isn’t certain. C-store leaders should take advantage of the invigorated demand they’re experiencing today to ensure their stability tomorrow. Solving common labor challenges will produce a more efficient, satisfied workforce, reducing operational waste while creating opportunities for c-store employees to engage in more meaningful work.
C-store leaders must act now to capitalize on demand. Addressing labor challenges with tech-enabled strategies will improve workforce satisfaction and retention, increase operational efficiency and prepare businesses for potential market volatility.
Michael Spataro is the SVP of Partnerships and Employee Value Solutions at Legion Technologies, an innovator in workforce management. His expertise lies with workforce management strategic planning across multiple business sectors with an emphasis on retail. He is considered a thought leader in the workforce management space, with a detailed understanding of workforce management and the changing dynamics of the workforce.
