SOI Data 2016: Expenses and Productivity
While the c-store industry has had an “incredible” past two years, it is also not immune from a “perfect storm” of poor business conditions: declining transactions and shrinking fuel margins but increasing DSOE.
With this in mind, Andy Jones, president and CEO of Sprint Food Stores, Augusta, Ga., urged retailers to concentrate on what they can control in 2016: growing merchandise and foodservice sales. Fortunately, a review of 2015 sales and profit figures for the top in-store categories reveals several opportunities for doing just that.
Direct-store operating expenses (DSOE) rose again in 2015, with health insurance, wages and other benefits driving the increase.
Direct-store operating expenses
|Wages and benefits||$26,297||7.3%|
|Repairs and maintenance||$3,468||6.9%|
Total DSOE and facility expense
Wages and Benefits Breakdown
3.0% - Increase in direct-store operating expenses in 2015
Top-quartile retailers enjoyed significantly lower nonmanager and manager turnover than other quartiles in 2015, while driving higher in-store gross profits.
Break-even cents per gallon (CPG) was more than 10 CPG lower for top-quartile operators than those in the lowest quartile.
|Top quartile||Second quartile||Third quartile||Bottom quartile|
|In-store sales per labor hour||$93.35||$96.20||$77.95||$80.05|
|In-store gross-profit dollars per labor hour||$32.50||$28.69||$22.86||$23.07|
|Labor cost per hour||$15.21||$15.90||$13.05||$14.86|
|Nonmanagers’ annual turnover||73.9%||104.0%||115.9%||97.6%|
|Managers’ annual turnover||17.7%||24.6%||32.0%||22.5%|
|Top quartile||Bottom quartile||Difference|
|In-store gross-margin %||33.7%||28.8%||4.9 points|
|Cigarette gross-margin %||12.3%||12.2%||0.1 point|
|Average square feet||3,533||2,788||1.3X|
|In-store sales per square foot||$64.30||$35.99||1.8X|
|Tope quartile||Bottom quartile||Difference|
|Store operating profit||$42,314||$4,977||8.5X|
|Store operating profit per square foot||$11.98||$1.79||6.7X|
|Net profit margin (pretax/sales)||4.31%||0.07%||4.24 points|
* Per store per month | ** Percent change from a year ago |*** Earnings before interest, taxes, depreciation and amortization | **** Earnings before interest, taxes, depreciation and amortization with rents and leases added back in | ***** Return on capital employed | Source: NACS preliminary data. Final data to appear in the NACS® State of the Industry Report of 2015 Data.