General Merchandise, Specific Margins

Retailers can use the general merchandise category to generate interest and surprise customers.

November 15, 2023

Picture a c-store with displays near the front entrance that change with the seasons. In the winter, stocking hats, ice scrapers and hand warmers hug the front window. In the summer, sunglasses, sun hats and sunscreen beckon shoppers to stock up and stay cool in the heat. Items that change with the seasons have seen growth within the general merchandise category, according to Jayme Gough, NACS research analyst. “However, overall general merchandise sales are way down as needs for COVID-specific safety products like sanitizer, gloves and masks continue to decrease.”

General merchandise accounted for 1.30% of in-store sales in 2022, contributing 1.67% to the inside gross margin, according to the 2022 NACS State of the Industry (SOI) data. The category averaged $2,961 sales per store, per month, a drop of 13.1% year over year. While general merchandise is an overall small in-store category, the category averaged margins of 44.09% last year.

“General merchandise as a whole is down because of the decrease in pandemic-related products, which had helped push up sales in 2020 and 2021,” said Gough. “However, retailers who use the category to introduce new products to consumers and capture those seasonal impulse sales should continue to see good results with higher rings.”

With 14 subcategories, it’s truly a section with a little bit for everyone. “The general merchandise category is an easy way for us to boost basket size and offer our customers more things to buy,” said Jody Van Regenmorter, one of the owners of Oak Street Station in Inwood, Iowa.

Selling Seasons

The seasonal subcategory, including items like firewood and road salt, grabbed 10.7% of the category’s sales in 2022, according to the NACS SOI data. More broadly, items that change with the seasons lifted the category overall. “Seasonal-themed gifts and impulse items have been consistent hot ticket items for us,” said Ross Dantonio, chief creative officer for Smith Co. Distributing, which works with convenience stores and other retailers. “Seasonal merchandise capitalizes on holiday and summer travel, too.”

At Oak Street Station, seasons-based general merchandise does well for the store. For example, in the summer, Van Regenmorter stocks firewood, propane tanks, bait and fishing lures and coolers, while in the colder months, Van Regenmorter brings in winter hats and gloves plus hand and foot warmers.

“We also try to have something related to kids, so for the winter, we’ve sold the stocking hats with animal ears and claws, while in the summer, we offer furry animal backpacks,” she said, adding that kid-oriented items sell extremely well. She also contracts with a local florist to offer fresh flowers around major holidays like Valentine’s Day and Mother’s Day, which have been popular with customers.

At Filling Co. Gas & Grub’s three locations in Virginia, seasonal items are hot. “We often sell through our seasonal items fast,” said manager Jordan Rubino.

Other general merchandise subcategories also have seasonal options. For example, the BIC pocket lighter has many seasonal designs, like for Halloween and the winter holidays. “C-store consumers love these seasonal offerings,” said Shweta Chawla, channel development manager for BIC Consumer Products.

Several years ago, Ty Inc.’s Beanie Babies began offering seasonal plushies. For example, pink, heart-stamped bears for Valentine’s Day, a bear in a pumpkin costume for Halloween or bears with Santa hats for Christmas. “We sprinkle our holiday offerings in with our everyday product on our permanent store display,” said Peter Olbrys, vice president of convenience/gas division for Ty Inc. “Having seasonal options makes the overall display pop and catches the eye of customers.”

Check out the latest issue of NACS Magazine to continue learning about how the general merchandise category can elevate your margins.