U.S. convenience stores experienced a 15th straight year of record in-store sales and a 4th straight year of $10 billion-plus in pretax profits, according to newly released NACS State of the Industry data, the convenience and fuel retailing industry’s premier benchmarks and key performance category insights.
The industry’s numbers were announced during the NACS State of the Industry Summit, which takes place April 10-12 at the O’Hare Hyatt Regency in Chicago. More than 600 leading retail and supplier company representatives are at the industry’s top conference for benchmarking and analysis of retail trends.
Convenience stores sales overall surged 9.3% to $601.1 billion, led by a 14.9% increase in fuel sales. Convenience stores sales overall are 3.2% of the overall U.S. gross domestic product of $18.57 trillion (2016 data). Put another way, one of every 30.9 dollars spent in the country was spent at a convenience store in 2017, according to a NACS Online.
The sales increase at convenience stores in 2017 was largely because of higher gas prices in 2017 (up 12.8% to $2.38) and a 1.9% increase in gallons sold. Meanwhile, fuel gross margins in 2017 increased to 22.0 cents per gallon. Paired with increased sales volume overall, fuel gross profits increased 11.7% per store.
Convenience stores sell an estimated 80% of the fuel purchased in the country and while fuel sales account for 61% of sales dollars, fuels margins are still relatively slim and fuels only account for 38% of total profit dollars at convenience stores. Overall, convenience store profits were $10.4 billion, a 1.6% increase over 2016. The last time the convenience store industry reported negative profits was 1991.
In-store growth powered by foodservice
Meanwhile, in-store sales increased 1.7% to a record $237.0 billion. The last time the U.S. convenience store industry reported a decrease in in-store sales was 2002, when sales dropped 2.4%.
Foodservice, a broad category that mostly includes prepared food (69% of both category sales and profits) but also commissary foods and hot, cold and frozen dispensed beverages, continues to be a key focus for growth in the convenience store channel.
Foodservice sales overall in 2017 were $53.3 billion, accounting for 22.5% of in-store sales in 2017 and 33.9% of gross profit dollars. The category also was the biggest differentiator in terms of profits: top-quartile performers had prepared food sales that were 3.6 times greater than bottom-quartile stores; coffee sales at top performers were 5.2 times greater that than those of the bottom quartile.
Infographic Below for a visual Representation:
Source - Petrol Plaza
Image Credit - NACS