Convenience Stores Hit Record In-Store Sales in 2013

CHICAGO, April 2, 2014 /PRNewswire-USNewswire/ -- U.S. convenience stores reached record in-store sales in 2013, with sales climbing 2.4% to $204 billion. Combined with motor fuels sales of $491.5 billion, overall convenience store sales were $695.5 billion, according to figures released today by the National Association of Convenience Stores (NACS).

The industry's 2013 numbers were announced at the NACS State of the Industry Summit, a two-day conference that reviews and analyzes the industry's key economic indicators.

The convenience store industry's in-store sales have seen rapid growth over the last decade, as consumers seek out more food and beverages on the go. In-store sales in 2013 were led by continued growth in foodservice (2.4%), driven by prepared food and commissary.

Motor fuels sales also hit new highs on a per-gallon basis, with 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 gas prices led to an overall 2.1% decrease in fuels sales.

Although the industry again realized strong sales, store-operating costs increased at a faster rate 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 foodservice, which requires more labor to manage.

The link between fuels and convenience retailing continues to grow. Overall, 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 U.S. convenience store count increased to 151,282 stores as of December 31, 2013, a 1.4% increase (2,062 stores) from the year prior.

Convenience stores also account for 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/supercenter (37,459 stores) and dollar stores (24,853 stores).

Beyond sales, convenience stores are an important part of the economy. They employed 2.2 million people and generated $174.5 billion in federal, state and local taxes in 2013. Overall, convenience stores sales represent 4.0% — or one out of every 25 dollars — of the entire $17.4 trillion U.S. gross domestic product.

"Our industry numbers demonstrate that convenience and fuel retailing continues to grow, despite economic and retail environment challenges," said NACS Chairman Brad Call, vice president of adventure culture at Maverik Inc. "These numbers show that we continue to meet the needs of our diverse consumers throughout the United States."

Motor fuels continued to drive revenue dollars, but in-store sales drove profit dollars. Overall, 70.7% of total sales were motor fuels, but motor fuels only accounted for 35.6% of profit dollars. Motor fuels gross margins were 18.5 cents per gallon before expenses, or 5.3%.

Here's how in-store sales were broken down in 2013:

• Tobacco (cigarettes and other tobacco products): 37.0% of in-store sales
• Foodservice (prepared and commissary food; hot, cold and dispensed beverages): 18.0%
• Packaged beverages (soda, alternative beverages, sports drinks, juices, water, teas, etc.): 15.5%
• Center of the store (candy; sweet, salty and alternative snacks): 9.9%
• Beer: 7.9%
• Other: 11.7%

Meanwhile, foodservice was the category that drove profits, accounting for 29.1% of gross profit dollars. Packaged beverages were second, accounting for 19.6% of gross profit dollars. While tobacco products constituted 37.0% of in-store revenue dollars, they accounted for only 18.7% of gross margin dollars.

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.

SOURCE National Association of Convenience Stores