Convenience Store Sales Hit Record in 2013
CHICAGO -- U.S. convenience stores reached record sales in 2013 with revenues climbing 2.4% to $204 billion. Combined with motor fuels sales of $491.5 billion, total sales were $695.5 billion, the National Association of Convenience Stores reports.
The industry's in-store sales have seen rapid growth over the last decade, the trade group reports, attributing that growth to consumers buying more food and beverages on the go. In-store sales in 2013 were led by continued growth in food service (2.4%), driven by prepared food and commissary.
Sales of motor fuels also hit new highs on a per-gallon basis, sales climbing 0.9% to 132,029 gallons per store per month. While fuels sales per store increased on a unit basis, a 2.9% decrease in gasoline prices led to an overall 2.1% decrease in the sales of fuels.
Although the industry again realized strong sales, operating costs per store rose faster than sales and led to a decrease in industry pretax profits, which fell from $7.2 billion in 2012 to $7.1 billion in 2013.
The biggest increase in costs was wages and payroll taxes. The industry saw a dramatic 19.5% increase in employees, a function of the industry's continuing embrace of food service, which requires more labor to manage, the report found.
The link between fuels and convenience retailing continues to grow. Overall, some five of six, 83.7%, of convenience stores (126,658 total) sell motor fuels, a 2.7% increase (3,369 stores) over 2013, according to the 2014 NACS/Nielsen Convenience Industry Store Count. The number of U.S. convenience stores increased to 151,282 as of Dec. 31, a 1.4% increase (2,062 stores) from the year before.
Convenience stores constitute 34.3% of all retail outlets in the United States, according to Nielsen, which is significantly higher than the U.S. total of other retail channels including drugstores (41,378 stores), supermarket/supercenters (37,459 stores) and dollar stores (24,853 stores).
Last year, convenience stores employed 2.2 million people and generated $174.5 billion in federal, state and local taxes. Overall, convenience stores sales represent 4% -- or $1 out of every $25 -- of the $17.4 trillion gross domestic product. "Our industry numbers demonstrate that convenience and fuel retailing continues to grow, despite economic and retail environment challenges," said Brad Call, chairman of the trad group and vice president of adventure culture at Maverik Inc.
Here's how in-store sales were broken down in 2013:
- Tobacco (including cigarettes), 37% of in-store sales.
- Food service (prepared and commissary food; hot, cold and dispensed beverages), 18%.
- Packaged beverages (soda, alternative beverages, sports drinks, juices, water, teas), 15.5%.
- Center of the store (candy; sweet, salty and alternative snacks), 9.9%.
- Beer: 7.9%.
- Other: 11.7%.
Food service was the category that drove profits, accounting for 29.1% of gross profits. Packaged beverages were second, accounting for 19.6% of such profits. While tobacco products constituted 37% of in-store revenues, they accounted for only 18.7% of the gross margin.
The National Association of Convenience Stores, founded in 1961, has become the international association for convenience and fuel retailing with has 2,100 retail and 1,600 supplier member companies that do business in nearly 50 countries.
Published by The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our twice-monthly print edition and to our free daily email.