US convenience stores experienced record in-store sales last year, led by strong growth in foodservice products. The industry’s overall metrics for 2015 were released at the NACS State of the Industry Summit, taking place April 11-13 in Chicago.
Convenience stores sell 80 per cent of the fuel bought in the country and a continued period of low gasoline prices caused the overall sales in the convenience and fuel retailing industry to decrease significantly, dropping 17.4 per cent. However, low gas prices and a recovering economy benefited retailers by driving more consumers inside stores. This resulted in total sales reaching a record $225.8 billion in 2015.
Overall, 69.2 per cent of total industry sales were motor fuels, but they only accounted for 39.5 per cent of profit dollars. Motor fuels continued to drive sales dollars, but in-store sales drove profitability.
Foodservice, a broad category that includes prepared and commissary foods, hot dispensed beverages and cold and frozen dispensed drinks, continues to be a key focus for growth in the US convenience store channel, contributing 20.8 per cent of in-store sales in 2015 and accounting for 33.7 per cent of gross profit dollars.
The top 10 in-store categories ranked by sales dollars represent about 80 per cent of all in-store sales. In 2015, nine out of 10 top in-store categories had positive sales and all 10 had positive gross profit dollar growth. Factors such as low fuel prices and more discretionary income in consumers’ wallets drove shoppers inside convenience stores with more money in their pockets to spend.
Snacking categories, including alternative snacks, salty snacks, candy and packaged sweet snacks, all had strong growth as some consumers, especially millennials, moved toward snacking and away from traditional meals. This is highlighted by the fact that, for the first time, alternative snacks, a category driven by protein- and energy-rich items, has landed in the top 10.
Here’s how in-store sales were broken down in 2015:
- Tobacco: 35.9 per cent of in-store sales.
- Foodservice: 20.8 per cent.
- Packaged beverages: 15.1 per cent.
- Centre of the store (candy; sweet, salty and alternative snacks): 10.7 per cent.
- Beer: 7.2 per cent.
- Other: 10.3 per cent.
Foodservice accounted for 33.7 per cent of gross profit dollars in 2015. Packaged beverages were second, accounting for 18.8 per cent of gross profit dollars. While tobacco products constituted 35.9 per cent of in-store sales dollars, they accounted for only 16.8 per cent of gross profit dollars.
