ALEXANDRIA, VA – Continued low gas prices helped grow convenience store sales both at the pump and inside the store for the first nine months of 2015 and retailers are optimistic about prospects over the fourth quarter, according to the results of a retailer sentiment survey released today by NACS.
Nearly 8 in 10 convenience store retailers (79%) say that they are optimistic about their business for the fourth quarter of 2015, compared to only 8% who are pessimistic. While retailers are overwhelmingly optimistic about their business, overall optimism is down slightly from the second quarter (83%) and first quarter (86%).
Strong fuels sales and margins continue to drive retailer optimism. More than half of all retailers (59%) say that fuels sales so far in 2015 are stronger than the same period in 2014 and two in three (66%) say that fuels margins are stronger than in 2014. The convenience store industry sells an estimated 80% of the gas sold in the country.
A majority of retailers (57%) are also optimistic about the overall economy, but their optimism about the economy is down slightly from 61% last quarter.
Employment numbers are one reason for retailer optimism. “More people are working,” said Marc Strauch with Cameron Park Petroleum (Folsom, CA).
Both low gas prices and an improving economy are helping to drive in-store food sales, said Tommy Hunt with E-Z Stop Food Marts (Maryville, TN), leading the company to expand its coffee program.
Better-for-You Sales Are Up
Two in three retailers (67%) say that their food sales have increased in 2015 and nearly as many (63%) say that their “better-for-you” items are selling better this year.
“A lot of positive press around the business has drawn more eyes on our store and products,” said Lonnie McQuirter with Lonvigsons Service Center (Minneapolis, MN). He said that stronger relationships with the vendors who understand better-for-you items—including merchandising strategies—also have increased sales. The growth of better-for-you items also reflects more media attention to healthy eating. “We’re following this trend,” says Kim Robello with Minit Stop Markets (Kahului, HI), which introduced a number of new food items in 2015.
Meanwhile, fresh, hot-off-the-griddle breakfast sandwiches and grab-and-go food are driving strong sales at Freshfield Convenience Store (Johns Island, SC). “Our foodservice sales are up 14% this year and our breakfast sandwiches have drawn an additional 85 customers daily,” said Anthony Shupert.
Across the country, retailers are seeing opportunities to grow foodservice sales. “We have put more effort into building our foodservice and getting more better-for-you items in stores,” says Jeff Chase with Fast Break Stores (Klamath Falls, OR).
Marketing and Merchandising Driving Sales
In addition to stocking more fresh items, retailers are also aggressively marketing and merchandising them to create customer awareness and loyalty. E.E. Wine (Manassas, VA) offers deals on fruit to encourage purchases, says Carl Hitt. Walters-Dimmick Petroleum (Marshall, MI) is using open-air coolers to increase the visibility of sandwiches and grab-and-go items, says Mike LaBerteaux. Additional endcap racks and coolers are driving sales of salads, yogurt and other healthier items at YA Whitehills Chevron (Camp Verde, AZ), according to Keith Kaufmann. And for freshly prepared foodservice, Andy’s Corner (Tunnel Hill, GA), digital menu signage has helped grow sales, says Ankit Patel.
While convenience stores sales are strongest in the warmer summer months, many retailers are well positioned to continue strong sales over the last three months of the year. Palo Mini Mart (Palo, IA) will be expanding its novelty items, according to Jesse Grieder. The fall and holiday seasons are also expected to be good for business at Square One Markets (Bethlehem, PA), says Lisa Dell’Alba. Meanwhile, other stores thrive in the winter months. “We are tourism-based and snow brings the winter sports buffs,” says Penny Duprey with PJ Hyde & Son Inc. (Saranac Lake, NY).
Retailer Optimism Grows
Retailer optimism about the convenience retailing industry’s prospects increased, rising from 79% in the third quarter to 80% for the fourth quarter. A major reason for this optimism could be the upcoming NACS Show, the convenience and fueling industry’s biggest event. More than two in three (68%) retailers surveyed plan to attend the Oct. 11–14 conference and expo in Las Vegas where they will join 24,000 other attendees.
Greg Parker with Parker’s (Savannah, GA) cites the great education sessions and cool new products in the expo and Herb Hargraves with Jacobs Entertainment (Lafayette, LA) will focus on finding better healthy options that are quick for consumers on the 410,000-square-foot expo. John Shehadey with Shop-N-Go Inc. (Fresno, CA) said he is attending for overall industry knowledge. “Same as the last 25 years attending,” he added.
The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their business, the industry and the economy as a whole. A total of 102 member companies, representing a cumulative 1,777 stores, participated in the survey.