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Supply, Marketing, Distribution, Transportation & Logistics News & Information
July 2017 Issue

NACS: Strong Convenience Store Sales Fuel Retailer Optimism

June 29, 2017 •

Convenience store sales grew during the first half of 2017, and retailers are even more optimistic about sales for the second half of the year, according to the results of the latest quarterly survey of convenience retailers released today by the National Association of Convenience Stores (NACS). 

 

Two in three convenience retailers (67%) said that in-store sales during the first half of 2017 were higher than the same period last year, compared to only 15% who reported a drop in sales. A majority (51%) also said that fuel sales are higher compared to the first half of 2016, compared to 18% who report a decline in gas sales.

 

Most retailers are even more optimistic about the future; 83% say that they are optimistic about their business prospects over the third quarter of 2017, the highest level recorded in the past eight quarters.

 

One of the biggest contributing factors to retailer optimism is the continued high level of consumer confidence. Nearly three in five (58%) drivers reported feeling optimistic about the U.S. economy, according to the June 2017 NACS Consumer Fuels Survey. Convenience stores sell 80% of the fuel purchased in the country.

 

Warmer summer weather and high consumer confidence were cited as reasons for optimism by Lisa Dell’Alba of Square One Markets (Bethlehem, Pennsylvania). Douglas Dean with South Pacific Petroleum Corp. (Tamuning, Guam) similarly cited consumer confidence as well as the extended period of low gas prices.

 

The convenience store industry’s movement toward embracing more fresh and prepared food is driving retailer optimism; 62% of retailers said that more opportunities to grow food sales is a reason for being optimistic about their business prospects. And 58% said they are optimistic about their ability to compete against quick-service restaurants.

 

Gate Petroleum Co. (Jacksonville, Florida) is focusing on foodservice and adding kitchens in new and larger store formats. Similarly, New Holland Exxon (New Holland, Pennsylvania) is emphasizing local ingredients with a focus on fresh food, as opposed to thaw-and-cook food. 

 

“Summertime is the selling season here in the Northwest when it comes to foodservice. We are continuing our hoagie promotion in 2017, and have added fresh fruit smoothies and built-to-order salads made fresh in front of the customer,” said Dennis McCartney with Landhope Farms (Kennett Square, Pennsylvania).

 

Convenience stores also are offering more healthier options. Nearly half (47%) of the retailers survey say they are stocking more fresh fruit than they were at six months ago. More than one in three retailers (35%) say they are stocking more packaged salads and one in four (29%) are stocking more cut fruit-vegetables.

 

Bonde’s Quick Mark (Cleveland, Wisconsin) is expanding its produce offer by providing fresh, locally grown farm produce. Cameron Park Petroleum (Folsom, California) is stocking more fresh items in its open-air refrigerator located near the store’s entrance for consumers to easily access on the go.

 

Retailers are adding more packaged healthy items, with 45% adding more health bars and 41% adding more nuts/trail mix over the past six months. Retailers are stocking more healthy beverage items since the beginning of the year: 70% are stocking more nutraceuticals/enhanced water, 60% are stocking more bottled water and 48% are stocking more low-calorie teas.

 

Ultimately, many of the changes in convenience store food programs are driven by the demographic most embracing convenience stores. “We are catering, in particular, to Millennials,” said Steve Loehr with Kwik Trip (La Crosse, Wisconsin).

 

The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their businesses, the industry and the economy as a whole. A total of 76 member companies, representing a cumulative 4,166 stores, participated in the June 2017 survey.

 

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