SOI: 4 Categories That Drove C-Store Sales in 2017

By 
Steve Holtz, Editor in Chief, CSP Daily News

nacs

CHICAGO -- Inside sales in convenience stores increased 1.7% in 2017 to a record $237.0 billion, according to data unveiled today during the NACS State of the Industry Summit, which takes place April 10-12 at the O’Hare Hyatt Regency in Chicago.

Foodservice, a broad category that mostly includes prepared food (69% of both category sales and profits) but also commissary foods and hot, cold and frozen dispensed beverages, continues to be a key focus for growth in the convenience store channel.

Here's how overall merchandise sales groups performed as a percentage of overall merchandise sales:

  • Tobacco (cigarettes and OTP): 34.1% of in-store sales
  • Foodservice (prepared and commissary food; hot, cold and dispensed beverages): 22.5%
  • Packaged beverages (carbonated soft drinks, energy drinks, sports drinks, water, juices and teas): 15.8%
  • Center of the store (salty, candy, packaged sweet snacks and alternative snacks): 9.9%
  • Beer: 8.5% (12.4% for stores selling beer)
  • Other: 9.2%

Here's how the top categories broke down ...

Foodservice

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Foodservice sales overall in 2017 were $53.3 billion, accounting for 22.5% of in-store sales in 2017 and 33.9% of gross profit dollars. The category also was the biggest differentiator in terms of profits: top-quartile performers had prepared food sales that were 3.6 times greater than bottom-quartile stores; coffee sales at top performers were 5.2 times greater that than those of the bottom quartile.

Tobacco

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While tobacco products, including cigarettes, cumulatively were 34.1% of in-store sales dollars, they accounted for only 17.1% of gross profit dollars. Cigarette sales accounted for 28.6% of in-store sales dollars, a sharp decline from 36.9% in 2011. Meanwhile, the category other tobacco products (OTP) was a bright spot, with an 11.2% increase in sales dollars and an 9.2% increase in gross profit dollars.

Beverages

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Convenience stores sell 23.8% of packaged beverages in the United States according to Nielsen and saw a slight 0.4% sales increase in 2017. Packaged beverages (nonalcohol) accounted for 15.8% of revenue dollars and 20.1% of gross profit dollars. Within the category, enhanced water saw the strongest sales increase (9.1%); ready-to-drink iced teas (3.5%), alternative beverages (3.5%) and bottled water (0.6%) also posted sales increases, continuing the trend of consumers seeking more healthier and/or functional beverage options at convenience stores.

Snacks and candy

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Snacking categories all had sales growth, as salty snacks (up 5.6%), candy (up 2.6%) and alternative snacks (up 2.0%) all had strong growth as some consumers, especially millennials, moved toward snacking and away from traditional meals. This was the second consecutive year that alternative snacks, a category driven by protein- and energy-rich items, reached the top 10 in-store merchandise categories, signaling a growing desire by consumers for immediate/healthier snacking options.

The industry’s 2017 metrics are based on the NACS State of the Industry survey powered by its wholly owned subsidiary CSX LLC, 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 2017 Data. Metrics related to turnover were from the recently released NACS Compensation Report® of 2017 Data.

Alexandria, Va.-based NACS advances the role of convenience stores as positive economic, social and philanthropic contributors to the communities they serve.