Foodservice growth helped lift in-store sales for c-stores.
C-store retailers are reporting optimism for the year ahead after a positive 2018.
Both fuels gallons and in-store sales increased in 2018, according to U.S. convenience store owners surveyed by NACS, the trade association that represents the convenience retailing industry.
Overall, 84% of retailers say that in-store sales increased in 2018 and 62% report that fuels gallons sold increased.
Strong sales in 2018 are one reason for an increase in retailers’ optimism about business prospects for 2019: 85% of retailers are optimistic about their prospects for the first quarter, the highest measure of optimism for the first quarter in the past five years.
Above all, retailers say that the industry’s offer of convenience continues to resonate, especially with new offers like a mobile app for customers can order food for pickup at Win Win Fillin’ Station (City of Industry, Calif.) or home delivery at Timewise Food Stores (Houston, Texas).
Convenience stores sell nearly 80% of the fuel purchased in the U.S. and conduct an estimated 165 million transactions a day, making the industry a good indicator for trends related to travel and consumer spending.
The strong in-store sales were led by foodservice growth (68% of retailers say sales increased) and continued strong sales growth of better-for-you items (62% of retailers report sales increases).
Beverages were a big seller in 2018, with specialty beverages selling well at Compass Group North America’s stores (Charlotte, N.C.) and water and energy drinks pushing overall sales higher at Fast Break Stores (Klamath Falls, Ore.). Healthy food items drove sales at Romeoville Mobile (Lockport, Ill.) and fresh salads and other healthy options contributed to a strong year at Landhope Farms (Kennett Square, Pa).
Retailers didn’t paint as rosy of a picture about the overall economy: only 62% say that they are optimistic about the economy, the lowest percentage in 11 quarters.
Not unexpectedly, given the tight labor market, retailers say labor issues are the biggest threat to their businesses. Top concerns cited by retailers for 2019 are:
Labor issues (59%)
Economic concerns (41%)
Competition from other convenience stores (39%)
Competition from other formats (29%)
Potential decrease in driving/increase in gas prices (19%)
Despite concerns, retailers remain upbeat that 2019 may be a repeat of 2018 for sales—as long as the economy stays relatively strong.
“In a booming economy, I see things continuing to trend upward. We offer great food, great customer service and a clean environment in which to shop. Most of all, customers appreciate us,” said Gay Simpson, with Dutchtown Tiger Mart Inc. (Baton Rouge, La.).
The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their businesses, the industry and the economy. A total of 72 member companies, representing a cumulative 3,885 stores, participated in the December 2018 survey.