NACS survey: Convenience store retailers expect the robust sales in 2015 to continue into the first quarter of 2016

​ALEXANDRIA, VA, 2016-1-5 — /EPR Retail News/ — Convenience store retailers expect the robust sales in 2015 to continue into the first quarter of 2016, according to the results of a survey released today by the National Association of Convenience Stores (NACS).

Retailers said that overall sales in 2015 were strong, with more than three in four (78%) reporting an increase in foodservice sales and nearly two in three (64%) reporting an increase in fuel gallons sold.

Nearly 8 in 10 convenience store retailers (78%) said that they are optimistic about their business for the first quarter of 2016, compared to only 6% who are pessimistic.

Lower Gas Prices, More Fresh Food Grow 2015 Sales
“People seem to have a bit more money available—maybe due to lower gas prices—and are buying more inside the stores,” said Richard Parry with Aloha Petroleum (Honolulu, HI).

“Customers are willing to spend more inside the store after spending less money at the pump,” said Stephen Lair with Harrison, AR-based Petromark Inc., which operates White Oak Station stores.

“The price of fuel seems to have helped with inside sales,” said Herb Hargraves with Jacobs Entertainment (Lafayette, LA), who added that customers are more willing to purchase additional items inside the stores, including higher-ticket items such as sportsman coolers and even $399 hoverboards for the holiday season.

A proprietary food rollout has helped grow sales at Anderson, IN-based Ricker’s convenience stores. “We’ve seen sales growth inside our stores after adding foodservice—and it has had a halo effect on other in-store items,” said Jay Ricker.

Stores also grew sales by offering a variety of better-for-you items. Nearly two in three retailers (65%) say that sales of better-for-you items increased.

“We had a significant increase in selling healthy foods,” said Jeff Armbruster with Armbruster Energy Stores (Grafton, OH).  At Marshall, MI-based Walter-Dimmick Petroleum, better-for-you beverages, especially water, had strong sales, according to Michael LeBerteaux.

Grab-and-go food items helped drive sales in 2015, according to Gregory Cobb with Freedom Oil LLC (Warsaw, IN).

Trends for 2016
Retailers are also bullish on the convenience store industry’s business prospects. More than three in four retailers (78%) said they are optimistic about the convenience store industry, an increase from 73% last year.

Retailers expect to see continued demand for healthy items in stores. James Lynch, with Burley, ID-based Triple S Oil, expects better-for-you foods sales to grow, especially in the first quarter following New Year’s resolutions.

Breakfast is also a positive growth opportunity for convenience stores in 2016, according to Dee Dhaliwal, with Dhaliwal & Associates (Pleasanton, CA).

While retailers are optimistic about 2016, they also have a number of concerns, especially related to labor. More than two in five retailers (41%) said that labor issues are a threat to their business in 2016. With tight labor markets and pushes to increase the minimum wage in many areas, meeting the demand for more prepared food programs, which require more employees on the payroll, will be challenging.

“With our low unemployment rate, the labor pool has become a puddle,” said Kim Robello with Minit Stop in Kahului, HI. “Employment is near full capacity in the Minneapolis market and is causing serious issues related to a stable workforce,” added Steve Williams, with Bobby & Steve’s Auto World (Minneapolis, MN).

Distribution issues are also a concern for retailers who seek to grow their foodservice offer, including Lisa Dell’Alba, with Square One Markets (Bethlehem, PA).

While competition is always a concern for retailers—47% of retailers said that competition from other convenience retailers was the biggest threat to their business, while 33% cited competition from other channels—the biggest threat in 2016 is over regulation and legislation, cited by 61%.

What factors will most influence sales? Four broad factors emerged from the survey: gas prices (cited by 33%), the economy (15%), the weather (14%) and the embrace of better-for-you items (10%).

“If gas prices stay low, inside sales will be strong,” said John Long, with Dyno’s Convenience Stores (Spencer, IA).

Even with a variety of external factors, it will likely be internal strategies that drive success in 2016. “Those who have successfully found their visions for the future will continue to make large strides and rally their teams behind them. Our success will depend on our ability to adapt to new trends and deliver a truly different experience than other competing retailers,” said Lonnie McQuirter with Lovingsons Service Center (Minneapolis, MN).

The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their business, the industry and the economy as a whole. A total of 100 member companies, representing a cumulative 1,248 stores, participated in the survey.

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Founded in 1961 as the National Association of Convenience Stores, NACS (nacsonline.com) is the international association for convenience and fuel retailing. The U.S. convenience store industry, with more than 152,700 stores across the country, posted $696.1 billion in total sales in 2014, of which $482.6 billion were motor fuels sales. NACS has 2,100 retail and 1,600 supplier member companies, which do business in nearly 50 countries.

SOURCE: NACS

NACS survey: Convenience store retailers optimistic about their business prospects

ALEXANDRIA, VA, 2015-2-26 — /EPR Retail News/ — More than four in five convenience store retailers (82%) are optimistic about their business prospects in the first three months of 2015, according to the results of retailer sentiment survey released today by the National Association of Convenience Stores (NACS).

The drop in gas prices over the second half of 2014 was cited as a main reason for retailer optimism. Gas prices today are more than $1.00 per gallon lower than they were a year ago.

Convenience store retailers, which sell more than 80% of the gasoline purchased in the country, say that consumers are spending their savings where they are buying fuel. Overall, 62% say that customers are spending the extra savings from lower fuel prices inside the convenience store. Nearly three in four (73%) retailers say that they had higher merchandise sales in 2014.

“Lower fuel prices lead to higher volume inside the store and at the pump,” said Stuart Everngam, with The Gott Co. (Prince Frederick, MD). “We are back to pre-recession sales numbers — and going up,” added Theron Soderlund, with Country Corner (Eastsound, WA).

Convenience retailers are especially optimistic about growing their in-store sales. Nearly seven in ten (69%) believe in opportunities to grow merchandise sales and 58% say that there are opportunities to grow food sales in 2015.

Overall, 88% of convenience retailers say that offering prepared foods is important to their business in 2015. “Foodservice fits the immediate consumption and time-starved needs of our consumers. It is an obvious fit, as long as it is a quality offer,” said Sonja Hubbard, with E-Z Mart (Texarkana, TX).

“Consumers are looking for quick fresh and easy snacks or meals that can be consumed on the run,” added Julie Jackson with G&M Oil (Huntington Beach, CA).

“Prepared food is our industry’s future,” noted Tim Switzer, with Radiant Food Stores (Tampa, FL).

Produce also was cited as important to convenience retailers’ business in 2015, cited by 61% of retailers. “The trend is for fresh and better-for-you products,” said Giselle Eastlack, with Diaz Market (Metairie, LA).

Retailers also offered advice for how to grow produce sales. “Like foodservice, produce is a labor-intensive category when it is done correctly. Variety and fresh offerings are critical to the category’s success,” said Don Rhoads, with The Convenience Group (Vancouver, WA).

There also are challenges to offering produce, especially related to frequent distribution. “You must have nearly daily deliveries to maintain freshness,” added Ben Englefield, Duchess Shoppes (Heath, OH).

And, retailers need to be committed to the program’s long-term success produce if they expect to succeed. “If you are going to do it, then you better be married to it,” said Tony Huppert, with Team Oil Inc. (Spring Valley, WI).

While retailers are very optimistic about their specific business prospects, they are less optimistic about the overall economy. Only 62% of retailers say they are optimistic about the economy as a whole over the first quarter.

Convenience retailers noted several competitive advantages working in their favor for 2015. “We are in the unique position to service time-strapped consumers and retool ourselves much quicker than in other retail channels,” said Lonnie McQuirter, with the 36th & Lyndale BP (Minneapolis, MN). “But we need to constantly be aware when opportunities present themselves to our industry,” he cautioned.

While retailers cite the value of convenience as a competitive advantage, they also noted that retail execution remains critical. “Stocking the right amount of the right product at the right price the right way is more critical than ever,” said Michael Maxfield, with Big John’s (Abingdon, VA).

Ultimately, retail success in 2015 may depend upon gas prices. And while gas prices remain relatively low, retailers are also carefully looking to see if oil prices climb in 2015. “With the recent plunge, will they stay low and how will that help store sales and the economy in 2015?” asked Tom Robinson, with Rotten Robbie (Santa Clara, CA).

The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their business, the industry and the economy as a whole. A total of 88 member companies participated in the Q1 2015 survey.

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Founded in 1961 as the National Association of Convenience Stores, NACS (nacsonline.com) is the international association for convenience and fuel retailing. The U.S. convenience store industry, with more than 151,000 stores across the country, posted $696 billion in total sales in 2013, of which $491 billion were motor fuels sales. NACS has 2,100 retail and 1,600 supplier member companies, which do business in nearly 50 countries.