Benefits of Lower Gas Prices Diminishing?
Retailer survey shows increased foot traffic, larger basket size are strongest wins
NEW YORK -- Lower retail gasoline prices led to increased foot traffic and larger basket size in convenience stores during the second quarter of 2015, according to a survey of c-store retailers.
The survey, conducted by Wells Fargo Securities, shows the “impact of higher disposable income” increased both foot traffic and basket size by 2.8%, slightly less growth than in the first quarter of the year.
“C-stores continue to benefit from macro tailwinds,” Wells Fargo analyst Bonnie Herzog concluded from the survey, which included input from a number of retailers representing more than 15,00 convenience stores across the country. “Store traffic and sales remain strong despite [the] recent rise in retail gas prices.”
Trading up to higher-grade fuel or premium product brands and more fuel purchased were less affected by lower gasoline prices (see chart below).
The gas-price increases in June did “not appear to be an impact [on traffic and sales] as we are still lower priced than last year,” one retailer said.
“The most affected categories with rising/falling gas prices are … tobacco, salty and alternative snacks, food and dispensed beverages,” said another retailer.
The survey, which included input about Independence Day weekend, shows weather for that weekend in general was wetter and colder than in 2014, but beverage sales—the primary focus of the survey—were up 6.3% in 2015 vs. up 5.2% for July 4th weekend 2014.