Cover Story: State of the Industry 2014
Stats show strides amid struggling customer base, big-box threat, ebbing foodservice momentum
While the industry backpedaled somewhat in 2013, petroleum and convenience-store retailers maintained strong sales and profit figures despite numerous competitive and demand-rooted challenges that will only get worse in the years ahead, according to key presenters and preliminary numbers released at this year’s NACS State of the Industry (SOI) Summit.
The statistic clearly indicative of this continuing buildup was NACS’ inside-sales number: It passed the $200-billion threshold to hit $204.0 billion in 2013, up from $199.3 the year before.
“It’s quite an accomplishment,” said Glenn Plumby, SOI presenter and vice president of operations for Speedway LLC, Enon, Ohio. “It’s something we need to happen when we see the competitive nature of our business changing.”
Using data provided by 200 firms representing 27,000 stores, the preliminary SOI data showed store count up 1.4% over the previous year, coming in at about 151,000 locations across the United States.
Inside sales were up 2.4%, slightly better than 2012, which was 2.2% above 2011 levels. Overall sales—inside and forecourt—were actually down 0.7%, but Plumby dismissed any concern, attributing it to the falling price of gasoline in that time frame. In 2012, the industry achieved $700 billion in total sales; in 2013, that number fell back to $695 million.
The 11th annual summit, held in partnership with CSP Business Media in the Chicago suburb of Rosemont, Ill., attracted 244 retailers and more than 400 attendees overall to review trends and benchmark against their own figures.
Plumby helped attendees by assessing many statistics over the course of his presentation, showing comparable numbers against those of cross-channel competitors, disparities between regions and insights into categories such as foodservice that seem to be losing valuable momentum. But he also addressed important trends outside the numbers that retailers need to consider going forward:
▶ Core consumer struggles: Blue-collar males, the industry’s bread-and-butter demographic, are treading water financially. Plumby suggested that c-store retailers continue to address that segment’s needs but take active steps to lure new customer groups such as females and millennials.
▶ Operating below foodservice potential: In addition to showing how the industry’s momentum with foodservice appears to be flagging, Plumby pointed out that quick-service restaurants continue to dominate and that c-stores need to do more to claim market share.
▶ Big-box trends: Mass merchants are evolving into smaller formats, Plumby said, and in some cases they’re clearly entering convenience retail.
▶ Online threats: Citing Seattle-based Amazon as a clear threat, Plumby said retailers need to consider the disruptive effects of online and mobile shopping.
▶ Industry strengths: Plumby emphasized that the industry is not down for the count. As a destination for grab-and-go snacks, drinks and food, the c-store channel maintains its stronghold on the quick purchase. “In the last five years, the percent of product consumed after an hour of purchase has gone [from 79.8%] to 83.5%,” he said. “It’s something other channels will have a difficult time replicating.”