For the convenience channel, 2016 is looking to be an up, up, up year.
“Overall, the convenience store channel is outperforming others, including grocery, drug and the industry average,” says Susan Viamari, vice president of thought leadership for IRI, Chicago. C-store unit sales rose more than 3% in the 52 weeks ending May 15, 2016, while dollar sales (not including foodservice) rose 5.6%, according to IRI data. Meanwhile, the retail industry average shows only a 0.7% lift in units and a 2.6% increase in dollar sales.
The strongest unit growth in the major instore categories is in packaged beverages, up 4.1%, and spirits and liquor. Units rose 3.9% in this time period.
Low gasoline prices are likely providing some tailwinds for c-stores. According to a Technomic survey, 30% of consumers say their c-store foodservice spending has grown over the past year as gas prices have fallen.
And that extra disposable income—approximately $700 per person in annual savings in 2015 alone—has encouraged consumers to upgrade to premium, higher-quality options within many of the categories, including cigarettes, alcohol beverages and candy. This trade-up is happening in branded products as well as private label, Viamari says. Value-priced products are also growing, but the middle tier is getting squeezed.
Tim Young, category marketing manager for candy, snacks and edible grocery for Newcomb Oil, Bardstown, Ky., is expecting a strong finish for 2016, and he is downright pumped for 2017. The chain, which has 76 FiveStar sites in Indiana and Kentucky, has seen strong same-store snack and candy sales so far this year.
Young doesn’t credit low gasoline prices directly for the sales growth. Rather, it’s the usual category manager’s blocking and tackling that is helping his categories pace ahead of their 2015 performance. “If you’re doing your due diligence, planning for the next year, have space allocations based on sales and growth, and making the right decisions to grow, it’s going to be a great year,” he says.
Read on for sales highlights and growth opportunities in the major in-store categories that can help you finish 2016 strong.
Top Movers: Up and Down
C-store sales, 24 weeks ending June 12, 2016
Among the largest 50 in-store categories by dollar sales (not including foodservice), the following saw the biggest rises and falls in unit sales during first-half 2016.
Sources: IRI | * Percent change from a year ago
View the full 2016 Category Management Handbook
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