US convenience stores enjoyed a 16th straight year of record in-store sales in 2018. But fewer visits makes the right marketing crucial.
This is the message from the National Association of Convenience Stores (NACS) State of the Industry report. NACS describes the report as one of “the convenience and fuel-retailing industry’s premier benchmarks and key performance category insights”.
US convenience stores’ sales overall surged 8.9 per cent to US$654.3 billion ($917 billion). A 13.2 per cent increase in fuel sales, which account for 69.6 per cent of total sales, drove the surge. In-store sales rose 2.2 per cent to a record US$242.2 billion ($339 billion).
Overall, convenience stores sales make up 3.1 per cent of the US gross domestic product of US$20.5 trillion ($28.7 trillion).
What consumers are buying in-store
The overall merchandise sales groups as a percentage of overall merchandise sales are:
- Cigarettes: 31 per cent of in-store sales.
- Foodservice (prepared and commissary food; hot, cold and dispensed beverages): 22.6 per cent.
- Packaged beverages (carbonated soft drinks, energy drinks, water, sports drinks, juices and teas): 15.3 per cent.
- Centre of the store (salty, candy, packaged sweet snacks and alternative snacks): 10.4 per cent.
- Other tobacco products: 6.7 per cent.
- Beer: 6.3 per cent (12.4 per cent for stores selling beer).
- Other: 7.7 per cent.
Better engines, fewer trips
According to Andy Jones, NACS Vice Chair of Research and President/CEO of Sprint Food Stores Inc. in Augusta, Georgia, higher fuel prices contributed to the increase in overall industry sales.
Yet he added that consumers actually made fewer trips to convenience stores because of more efficient engine technology. This means convenience stores need to think carefully about their marketing strategies, especially as electric vehicles become more popular.
“Fuel sales were strong in 2018,” Mr Jones said. “But consumers were making fewer stops to refuel. This suggests that greater fuel efficiency in vehicles is translating to fewer trips per week to the convenience store.
“Using NACS research can help retailers track trips per transaction. They can then develop new marketing strategies to bring customers from the pump inside the store.”
NACS says convenience stores are the “destination of choice” for the 165 million US customers who visit their favourite location every day.
Consumers eat 83 per cent of the items they buy at convenience stores within an hour of buying them.