Convenience Store Category Scorecard
State of the Industry numbers show wins with e-cigarettes, snacks, beer
CHICAGO -- Though cigarettes and gasoline continued along declining trend lines, the convenience industry declared victories in other key categories, including snacks, other tobacco products (OTP) and beer, as numbers from the annual NACS State of the Industry (SOI) Summit revealed this week.
Overall, dollar sales inside the store were up 2.2% at $133,286 per month in 2012 over 2011, while gross profit dollars rose 5.6% to $41,856, according to the annual SOI numbers provided by NACS.
Kevin Smartt, CEO of Kwik Chek Food Stores Inc., Bonham, Texas, walked the audience of about 300 attendees through a breakdown of 28 in-store categories, with all but six--publications, wine, cigarettes, dairy, edible and nonedible groceries--showing year-over-year sales increases.
Three of the top five categories in sales growth year-over-year were snacks--alternative snacks, sweet snacks and salty snacks, with liquor and cold dispensed beverages rounding out the list.
OTP in general rose 6.5%, with electronic cigarettes being a standout. As a subcategory, e-cigarettes grew by 100%, prompting NACS to pull it into its own category next year.
"Beer is back," Smartt said, noting how the category is selling more despite price increases. Premium, particularly premium lights, are dominating the channel.
Unfortunately, threats from cross-channel competition loom, particularly as drug and dollar stores move into key categories like beer and tobacco, he said.
Other noteworthy observations included the following:
- For the tobacco category, demand destruction in cigarettes continues, with regulation and taxation threats putting even more pressure on the larger category.
- OTP shows promise, skirting around no-smoking laws and seeing innovation with smokeless tobacco and e-cigarettes.
- Carbonated soft drinks remain the backbone of the packaged beverage picture, though volumes are falling.
- Functional beverages, such as drinks for post-exercise and therapeutic uses, are hot.
- With salty snacks, the migration to healthier options like nuts and dried fruit continues.
- Meat snacks dominate the alternative snack category.
The industry's 2012 metrics are based on the NACS State of the Industry survey powered by its wholly owned subsidiary CSX, the industry's largest online database of financial and operating data. Complete data and analysis will be released in June in the NACS State of the Industry Report of 2012 Data.
Founded in 1961 as the National Association of Convenience Stores, NACS is the international association for convenience and petroleum retailing. The U.S. convenience store industry, with more than 149,000 stores across the country, posted $700 billion in total sales in 2012, of which $501 billion were motor fuels sales. NACS has 2,100 retail and 1,600 supplier member companies, which do business in nearly 50 countries.