Midyear Category Data Report 2013
As weather, gas prices and consumer finances muffle c-store sales, innovation shines through.
In 2012, the narrative was mildwinter, hot summer. For 2013, acold winter and mild summer havewreaked their own havoc on c-store salesin the fi rst half of the year.
According to figures from IRI, Chicago,c-store unit sales slipped 1.4% anddollar sales were flat during the past year.This compares to multi-outlet unit salesgrowth of 0.4% and dollar sales growthof 2.1%.
“The convenience-store channel willbe challenged by several factors in the second half of the year,” says Susan Viamari,editor of IRI’s Times & Trends newsletter.“Right now, a major influencer of consumer purchase behavior is gas prices.”Gas prices are currently up, on average 5% vs. a year ago, according to AAA FuelGauge. IRI’s MarketPulse survey indicates that this shift is prompting some majorchanges in how consumers shop for CPG products, with 44% of consumers reducing spending on groceries.
According to the survey:
57% of consumers will make fewer, larger trips.
52% will switch spending to stores that are closer to home.
30% will switch spending to discountor club stores, even if it means driving 15 to 20 minutes.
It’s a sobering backdrop for CSP’sMidyear Category Data Report, which in the following pages provides a statusreport on the biggest in-store sales generators, featuring data and insights from IRI, McLane Co. Inc. and others. Whilethe largest percentage declines in unit sales were batteries (-12%), frozen pizza(-9%) and fresh bread and rolls (-8%),further down the ranking were some true c-store heavies. For example, gum, responsible for nearly $520 million insales year to date ending June 16, 2013,saw its unit sales fall 8%. Bakery snacks, responsible for nearly $274 million, lost8% in unit sales as the Hostess bankruptcy worked through the sweet-snacks category. And then there’s the decline of the top 50 subcategories frozen novelties(-7%), milk (-7%), internal analgesics(-5%) and carbonated beverages (CSDs)(-5%).
But as always, there were some category bright spots.
According to IRI, 19 of the 50 largest c-store subcategories have seen unit sales grow during the past year, with the most significant growth in electronic cigarettes, up 197%. This is followed by top 50 subcategories such as frozen appetizers and snack rolls, up 32%; canned juices, up 27%; miscellaneous snacks—think trail mixes and chocolate-covered snacks—up16%; and wine, up 13%.
From calendar year 2009 through March 2013, promotional support and distribution trends looked very similar in c-storevs. industry average level trends, says Viamari: “Price-per-unittrends in the category show the convenience channel deflating slightly more quickly vs. the industry average.”Many trends are at play, she says, including conservativebehaviors—trimming “unnecessary” items—increasing prices and shrinking space allotment for nonalcohol beverages to make room for alcohol beverages. From a macro perspective, Viamari does see growth potential in food.
“A trend that has had and will continue to have a huge impact on c-stores is on-the-go eating,” she says. The research fi rm’s annual snack trends research finds that 45% of consumers are actively seeking snacks that can be eaten on the go, a 5-point increase from 2009.
The research also finds that one-quarter of consumers regularly eat snacks instead of meals because they are on the go.“On-the-go eating has really changed the way that consumers think about food and beverages,” says Viamari. “Consumers are looking for ways to fuel up without slowing down.” She cites new products in new forms such as Buddy Fruits, a squeezable fruit, and new ingredients making their way into familiar products, such as Silk Fruit & Protein beverages, which combine juice with soy protein.
“C-store marketers must ensure that their assortment reflects an understanding of this trend and, in fact, provides solutions that help consumers meet their eating goals,” says Viamari, “whether that be nutrition, indulgence, convenience or some combination thereof—without slowing down.”