Inside the Market Basket of the C-Store Lottery Buyer



image

The following is an excerpt from CSP Daily News

Gas, tobacco and cold beverages may be what get customers in the door. But don?t discount good old-fashioned luck in the form of lottery scratch-off and computer-generated tickets. They represent a consistent revenue stream for convenience operators, generating about $8,000 in sales weekly and 9% of total convenience sales, according to Management Science Associates (MSA).

"Lottery remains a very reliable source of revenue that sells itself," says Don Burke, senior vice president of MSA, Pittsburgh. "It?s a category consumers rely on being able to purchase at a convenience store."

But lottery is more than merely consistent; data suggests that it?s also complementary in building the market basket. Ninety-five percent of lottery buyers purchase at least one extra item inside the c-store, and the overall basket ring by these lottery customers averages $10.35, according to NACS. In comparison, those not buying lottery spend $6.29.

Curious which goods get rung up most often with lottery? Recent SwiftIQ findings shared at the 2017 NACS State of the Industry Summit point to 10 categories:

  • Newspapers (112% more likely to be purchased with lottery)
  • Bakery items (68%)
  • Coffee (59%)
  • Cigarettes (60%)
  • Soda (56%)
  • Bottled water (50%)
  • Prepared food (50%)
  • Pizza slice (48%)
  • Energy drinks (41%)
  • Gasoline (27%)


So is lottery the primary purchase driver, or a reactive afterthought? It depends on the size of the windfall. "Lottery is typically an impulsive, add-on purchase to some of the staples and destination items that drive consumers to a convenience store, like fuel and cigarettes," Burke says.

But the dynamics change when the payout does. "The state lottery and multistate games are very dependent on the jackpots," says Steve Montgomery, president of b2b Solutions LLC, Lake Forest, Ill. "When those jackpots get to a certain size, sales increase at a rapid rate. I think this is due to non-lottery players deciding to play."

Burke concurs: "It is proven that when lottery jackpots increase, so does convenience-store traffic. That fact suggests that higher lottery amounts become a destination vs. an impulse transaction."

Read Erik J. Martin's full article here.