The document summarizes the results of a survey of 113 convenience retailers representing 10,510 stores. It finds that over half of retailers operate 1-10 stores, and foodservice and merchandise sales increased in 2010, though growth was modest. Retailers are most concerned about competitive threats from discounts and expanded offerings from other retailers. Many plan to enhance their foodservice and packaged goods in 2011 through new products and formats. Retailers are cautiously optimistic about their own prospects in 2011 but remain wary about broader economic trends.

1. 2011 CONVENIENCE RETAIL OUTLOOK
December 2010
Summary of Survey Results
117 South Cook Street #339
Barrington, Illinois 60010
phone: 847.722.2732
fax: 847.382.1801
Copyright © 2010 Balvor LLC. All Rights Reserved. davidbishop@balvor.com

2. Composition of Retailer Respondents
(Retailers completed online survey between 11/9/10 and 11/22/10)
Number of Stores Operated
(Percent of Retailers)
500+
Stores, 4%
201 - 500
Stores,
Top-Line Characteristics
11% # of retailers: 113
51 - 200
Stores, # of store represented: 10,510
10% 1-10 store operator share: 54%
1- 10
Stores,
54%
11 - 50
Stores,
21%
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 2

3. 2010 Dollar Sales Trends YTD - PCYA
(Weighted Average*)
4.2%
2.8%
Foodservice Merchandise
* Based on store count
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 3

4. 2010 Dollar Sales Trends YTD - PCYA
(Weighted Average* – Grouped by # of Stores Operated)
5.3%
5.1%
4.3%
3.7%
2.5%
2.3%
0.9% 1.0%
1- 10 11 - 50 51 - 200 201+
Foodservice Merchandise
* Based on store count
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 4

5. 2011 Competitive Threats – Level of Concern
(Percent of Retailers*)
Other convenience stores offering fuel discounts 24% 56%
Grocery stores partnering with specific convenience chains
27% 48%
to offer fuel discounts
Foodservice operators expanding into morning day-part 18% 44%
Drug stores selling beer in more locations 21% 33%
Drug stores offering commissary-driven fresh foods 9% 38%
Very Concerned Somewhat Concerned
* Ranked in descending order based on percent concerned.
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 5

6. Potential Changes to Dispensed Beverages in 2011
(Percent of Retailers*)
11%
No, Already Did in '10
25%
16% Somewhat Likely
38%
Extremely Likely
25% 11%
23%
18%
7%
6%
11%
15% 7%
14%
12%
10% 9%
7%
Raise retail prices on Upgrade hot Add iced coffee to Consider re- Adjust cup sizes Introduce a smaller
hot dispensed dispensed beverage the offering branding hot offered with cold cup size in hot
beverages equipment dispensed beverages dispensed beverages dispensed beveraes
* Ranked in descending order based on percent likely to change in 2011.
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 6

7. Potential Changes to Foodservice in 2011
(Percent of Retailers*)
9% No, Already Did in '10
Somewhat Likely
Extremely Likely
32%
13%
12%
10%
13% 3%
15% 17%
10%
13%
9% 9%
7%
4%
Expand range of Develop private-label Install a wholesaler, Change product Franchise with a
products on roller grill offerings fresh-food express case suppliers branded foodservice
concept
* Ranked in descending order based on percent likely to change in 2011.
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 7

8. Potential Changes to Packaged Merchandise in 2011
(Percent of Retailers*)
8%
6%
No, Already Did in '10
37% 36% Somewhat Likely
5%
Extremely Likely
31%
4%
22% 4%
4%
21% 14%
11%
8% 9%
7% 8%
5%
Add new product Leverage multi- Use more Reduce SKU counts Introduce new Introduce private
categories vendor displays manufacturer floor services label across
shipper displays categories
* Ranked in descending order based on percent likely to change in 2011.
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 8

9. Retailer Outlook for 2011
(Percent of Retailers*)
40%
58%
Somewhat Optimistic
Extremely Optimistic
44%
25%
14%
3%
Your Company Convenience Industry US Economy
* Ranked in descending order based on percent optimistic.
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 9

10. Retailer Outlook for 2011 – “Your Company”
(Percent of Retailers - Grouped by # of Stores Operated)
36% 36%
42%
41%
64% 64%
54%
29%
1- 10 11 - 50 51 - 200 201+
Extremely Optimistic Somewhat Optimistic
* Based on store count
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 10

11. Retailer Outlook for 2011
Classification of Comments Positive themes
(Percent of Retailers Responding) • Competitive positioning (delivering value in
more ways today)
• Customer service (focusing on better satisfying
needs of customers)
• Foodservice (becoming better at serving up a
quality lineup of fresh products)
Negative, • Economy (getting better – albeit slower than
30% expected)
Negative themes
Positive, • Competitive threats (discounting is helping
70% sales, but hurting profits)
• Economy (creating an on-going drag on
consumer spending)
• Supply-side inflation (higher input costs –
especially in foodservice)
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 11

12. Retailer Outlook for Company’s Prospects in 2011
(Percent of Retailers)
Somewhat Optimistic
Extremely Optimistic
42%
55%
36%
19%
Foodservice Merchandise
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 12

13. Retailer Outlook for Company’s Prospects in 2011
(Percent of Retailers - Grouped by # of Stores Operated)
Foodservice In-Store Merchandise
64%
27% 64%
42%
29% 54%
49%
64%
51%
50%
46%
36%
29%
25%
22%
10%
1- 10 11 - 50 51 - 200 201+ 1 - 10 11 - 50 51 - 200 201+
Extremely Optimistic Somewhat Optimistic Extremely Optimistic Somewhat Optimistic
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 13

14. 2011 Dollar Sales Targets – v. ‘10
(Weighted Average*)
5.1%
4.2%
Foodservice Merchandise
* Based on store count
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 14

15. 2011 Dollar Sales Targets – v. ‘10
(Percent of Retailers)
42%
36%
34%
30%
23%
20%
2% 2% 2%
4% 4% 1%
Up more than 6% Up 3 to 5.9% Flat to Up 2.9% Flat to Down 2.9% Down 3 to 5.9% Down more than 6%
Foodservice Merchandise
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 15

16. David Bishop
Managing Partner, Balvor LLC
Biography
David is the managing partner of Balvor LLC, which is a sales and marketing P: 847.722.2732
firm that provides consulting, sales support, research, and analytic services to
davidbishop@balvor.com
retailers, product suppliers, financial analyst and other organizations.
Balvor’s services support various food channels, covering both foodservice and
retail classes of trade. Public Accomplishments
David has helped many leading retailers evaluate new retail concepts, enhance White Papers
annual category planning processes, and develop new business support • Convenience Channel Opportunity: Insights for the Dairy Industry, Dairy
methods related to assortment rationalization, space allocations, or branding Management Inc., 2010.
strategies.
• Are Retailers Doing Enough? Preventing Underage Access to Tobacco at
He helps product suppliers improve their competitive positioning, trade Retail, Center for Responsible Tobacco Retailing, Inc., 2009.
programs, and category management capabilities by better understanding
what retailers’ value while also benchmarking versus peer companies. • Accelerating Cigar Profits Through an Increased Strategic Focus, John
Middleton Inc., 2008.
David also has extensive experience with activity-based costing, channel sales
• How to Succeed in Convenience Retail:A Practical Guide for Product
strategy, merchandising assessments, trade communication, and custom
Suppliers, NACS, 2007.
analytical support for both consumer packaged goods and foodservice
industries. Industry Research
Prior to founding Balvor in 2008, David spent 12 years at Willard Bishop in • SKU Rationalization Survey, NACS/Balvor, March 2010.
various positions, including most recently as partner. David began his career • Motor Fuels Retailer Survey, Balvor/NACS, January 2010.
with The Levy Restaurants in operations for new store concepts where he
focused on beverage and financial programs. • State of Foodservice, Convenience Store Decisions, 2008 - present.
• Tobacco Retail Survey, Convenience Store News, 2008 – present.
Current Industry Affiliations
• Convention and Events Committee, NACS, 2007 – present
• Supplier Advisory Board, Convenience Store Decisions, 2006 – present
• NACSPAC Member, 2008 - present
Copyright © 2010 Balvor LLC. All Rights Reserved. 16