Feeling the Pinch

Escalating gas prices are hurting inside sales, c-store ops say

Mitch Morrison, Vice President of Retailer Relations

NEW YORK -- With the price of regular unleaded gasoline retailing from $3.60 to well over $4 a gallon across the nation, more convenience operators are reporting a noticeable slip in store activity.

For the first time, the quarterly UBS/CSP Daily News Tobacco Survey asked retailers to assess what if any effect increasing fuel prices have had on store performance. Specifically, it asked, "Are rising gas prices impacting your sales and overall traffic into your stores?"

The response was a resounding yes. Nearly 70% of the 53 companies, representing more than 10,000 stores, said continued spikes at the forecourt has cut into in-store spend.

"It takes more money for gas," one retailer said. "People don't have it for other things."

Another added, "Less discretionary income, less likely to purchase merchandise."

And a third surmised, "More money in the tank means less money to spend in the store."

While the survey is not scientific, it does represent a sentiment being echoed among mom-and-pop and chain operations across the convenience channel. That said, just as c-stores largely escaped the harshest hits of the country's economic recession, here too many operators say inside operations have not been severely impacted by the weekly increases at the fuel island.

"Not yet," one merchant said. "We continue to have strong customer count growth.

"I am surprised. But they aren't" affecting store sales, a second operator said.

Based on the responses, it seemed markets where gasoline prices have topped $4/gl have been hit the hardest. Said one West Coast player: "How could it not when a gallon costs almost as much as a pack in California. Our sales could be higher if gas price was not an issue for our customers."

For more on the most recent UBS/CSP Daily News see Related Content below, or click here.

Mitch Morrison Winsight CSP By Mitch Morrison, Vice President of Retailer Relations
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