Candy Continues to Climb

Convenience retailers can rely on the candy category to consistently deliver profits.

October 13, 2023

(This article first appeared in the October issue of NACS Magazine.)

The candy category continues to be a sweet bet for convenience retailers. Candy posted a 51.84% gross margin last year, which was an increase of 1.27 points over 2021, according to the NACS State of the Industry (SOI) Report of 2022 Data. Gross profit was up 18.0% in 2022 over the prior year, and the category represented $4,103 in gross profit per store, per month and accounted for 5.00% of total inside gross margin.

With candy representing 3.55% of inside sales in 2022 (up 0.27 points from 2021), retailers saw an average of $7,914 in sales per store, per month in 2022—an increase of 15.1% from 2021, according to the SOI report.

“Candy was the No. 6 category in terms of gross margin contribution last year, and it’s easy to see why,” said Jayme Gough, research manager, NACS. “It’s a highly impulsive category, especially when consumers choose to indulge, making it a profitable basket builder.”

According to Joseph Bortner, senior category manager, Rutter’s, the candy category is “thriving” in the company’s 85 locations across the Mid-Atlantic.

“It’s thriving through a lot of the pricing changes that we’ve seen over the last 18 months, [and] we’re still seeing unit growth on the same-store basis,” he said. “King size is still the main driver, but we’ve seen the most growth out of gum and mint.”

The Pieces of Candy
Nearly all the candy subcategories experienced year-over-year sales and profit increases. The top four subcategories each experienced double-digit growth in both sales and gross profits.

The chocolate bars/packs subcategory is the largest sales contributor (37.4%) to the candy category, and trends within this subcategory are highly reflective of the category, according to Gough. Chocolate bars/packs sales per store increased 13.0% in 2022, averaging $2,961 on a monthly basis, and a gross margin increase of 1.21 points helped yield a gross profit increase of 15.8%, according to the NACS SOI report.

Chocolate bars dominate candy sales for Chicago-based Rmarts. “80% of our [candy] sales are the king-sized and regular-sized candy, and that’s really what’s holding up our numbers for sure,” said Dan Razowsky, director of operations and marketing, Rmarts, which has 13 stores in the Chicagoland area.

To continue reading about the candy boom, check out the October issue of NACS Magazine.