Record Food and Merchandise Sales in U.S. Convenience Stores in 2018


Increase in gas prices, up 13.7% compared to $ 2.37 per gallon in 2017 to $ 2.69 per gallon in 2018, contributed to the increase in overall industry sales. Fuel margins, which have increased over the past five years, also increased in 2018, up 7.5% to 23.35 centimes per gallon, while gallons sold were down 0.4%.

“Fuel sales were strong in 2018, but consumers made fewer stops to refuel, suggesting that greater fuel efficiency in vehicles translates into fewer trips per week to the convenience store,” said Andy jones, Vice President of NACS Research and President / CEO of Sprint Food Stores Inc. at Augusta, Georgia. “Using NACS research can help retailers track trips by transaction and develop new marketing strategies to bring pump customers inside the store. “

Instantaneous

2017

2018

% Switch

Number of stores

154,958

153,237

(1.11)%

Internal sales (billions)

$ 237.0

$ 242.2

2.2%

Fuel sales (billions)

$ 364.1

$ 412.1

13.2%

Total sales (billions)

$ 601.1

$ 654.3

8.9%

Profit before taxes (in billions)

$ 10.4

$ 11.0

5.8%

Credit card fees (billions)

$ 10.1

$ 11.1

9.9%

Employees (millions)

2.38

2.36

(0.84)%

Fuel margin (cents per gallon)

21.73

23.35

7.5%

Net of credit card charges (cpg)

16.90

02/18

6.6%

(Sources: NACS State of the Industry data; number of NACS / Nielsen Convenience Industry stores 2019)

Foodservice drives growth and in-store strategies
Foodservice sales accounted for 22.6% of in-store sales, a category that continues to be a key area for the convenience store channel. Foodservices is a broad category that primarily encompasses prepared foods (69% of category sales and profits), as well as consumer foods and hot, cold and frozen beverages.

The growth of the restaurant business has also led to an increase in the size of the stores. Overall, the average convenience store is 3,230 square feet. But as the new stores feature touchscreen food ordering kiosks, add space for in-store seating and waiting areas, and incorporate an open kitchen design, the size of the new stores has grown to 4,991. in rural areas and 4,603 square feet in urban areas.

Cost of growth
The new business investments also lead to an increase in direct store operating expenses (DSOE), which includes salaries, payroll taxes, health insurance, card fees, higher than the industry’s overall profit before tax. for the first time since 2014 ($ 11.1 billion vs. $ 11.0 billion) —Public services, repairs / maintenance and supplies, as well as several other categories, including franchise fees and property taxes. For the third year in a row, DSOE exceeded gross margin dollars, a trend that continues to create challenges for convenience retailers.

“The cost of growth, whether it’s higher acquisition multiples, building new stores or upgrading older sites, has never been higher in our industry,” said Jones. For example, the average cost of building a new store has increased over the past five years from $ 5.6 million To $ 7 million. “These are business trends that convenience retailers should be prepared to tackle as they continue to evolve and grow their businesses. ”

Employment and wages
Beyond sales, convenience stores are an important part of the economy. The industry employed 2.36 million people in 2018, a slight decrease from 2.38 million in 2017. Part of this decline can be attributed to the slight decrease in the number of stores in the convenience store industry in the States. United reported in March 2019 (convenience.org/storecount).

Despite a tight labor market, the turnover of store associates increased from 121% in 2017 to 118% in 2018; however, retailers are also paying their employees more: wages have increased by 4.4% and the average salary for a store associate has risen to $ 10.74 per hour.

Performance Category
Convenience stores are the destination of choice for the 165 million U.S. shoppers who frequent their favorite haunt every day, and 83% of items purchased at a convenience store are consumed within an hour of purchase.

Here are the aggregate merchandise sales groups as a percentage of aggregate merchandise sales:

  • Cigarettes: 31% of in-store sales
  • Catering (prepared meals and stewards; hot, cold and distributed drinks): 22.6%
  • Packaged drinks (soft drinks, energy drinks, water, sports drinks, juices and teas): 15.3%
  • Store center (savory, confectionery, packaged sweet snacks and alternative snacks): 10.4%
  • Other tobacco products: 6.7%
  • Beer: 6.3% (12.4% for stores selling beer)
  • Other: 7.7%

The convenience retail industry data was announced during the NACS State of the Industry Summit, To take place 2-4 April at the O’Hare Hyatt Regency in Chicago. Over 600 representatives from leading retail companies and suppliers attend the industry’s leading conference for retail benchmarking and trend analysis.

The 2018 industry metrics are based on the NACS State of the Industry survey conducted by its wholly owned subsidiary CSX LLC, the industry’s largest online database of financial and operating data. The full data and analysis will be released in June in the State of the NACS Industry Report® 2018 data. The revenue-related metrics came from the recent publication State of the NACS Industry Compensation Report® 2018 data.

Download the infographic, “Strong sales for convenience stores.“(PDF)

NACS (convenience.org) advances the role of convenience stores as positive economic, social and philanthropic contributors to the communities they serve. The U.S. convenience store industry, with more than 153,000 stores selling fuel, food, and merchandise, serves more than 165 million customers a day, or half of the U.S. population, and achieves 11% sales. of total retail sales and foodservice in the United States. NACS has 1,900 retailers and 1,800 supplier members in over 50 countries.

SOURCE National Association of Convenience Stores

Related links

https://www.convenience.org