Pandemic takes toll on convenience store industry

Only one-third of convenience store operators expect to achieve favorable business results this year, compared with nearly 76 percent a year earlier, says an annual industry development report by the China Chain Store & Franchise Association.

"Rent and labor costs are creating operating pressure for convenience store owners and coronavirus restrictions have dented foot traffic at physical stores," the study points out.

Facing challenges from both external and internal factors, convenience stores should enhance key competencies to renew business, it suggests.

More than 83 percent of store operators surveyed for the report opened new outlets and reported sales growth in the past year.

As many as 86 percent of operators suffered revenue drops in the first quarter, but by the end of May all of their stores were open and operational. 

About half of operators expect fierce market competition, down from 84 percent a year ago as the pandemic forced out weaker players, while only 20 percent say there's still market potential for expansion or new entrants. 

More than 85 percent of store operators plan to add online shopping and 67 percent intend to offer delivery services.