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2018 SOI: A Performance Review

How the top quartile continues to outcompete the poorest performers

CHICAGO -- A tale of two industries continued for another year: The industry’s top performers drastically outpaced those in the bottom 25% in 2017.

“If you compare the top quartile and bottom quartile, they are essentially running two totally different businesses,” said Andy Jones, president and CEO of Sprint Food Stores, Augusta, Ga., during the 2018 NACS State of the Industry (SOI) Summit.

“The top quartile is selling more fuel and more merchandise, they are making greater in-store margins and they are clearly dominating all quartiles in foodservice,” Jones continued. “If you have a bottom-quartile store across the street from a top-quartile store, there’s simply no way you can compete.”

Store Operational Productivity


Sources: NACS preliminary data. Final data to appear in the NACS State of the Industry Report of 2017 Data; CSX

A key indicator of the ongoing rift between the top and bottom players is breakeven cents per gallon (CPG)—an industry metric measuring profitability by the pennies a firm must make per gallon of fuel to pay for underlying expenses. In 2017, the top-quartile retailers had to make 8.60 CPG to break even; for the bottom 25% of performers, that breakeven rose to 20.21 CPG—a difference of nearly 12 cents.

While still a deep gap, it’s an improvement over last year’s preliminary SOI numbers, which saw the differential widen to a whopping 19.64-cent spread between the top and bottom players.

Overall, top-quartile performers took in more than four times the foodservice sales as bottom-quartile operators, or $50,206 per store per month vs. $11,863 per store per month, respectively.

The top and bottom performers also saw significant gaps in EBITDA (earnings before interest, taxes, depreciation and amortization, a 10.2x differential), store operating profit (a 9.1x differential) and EBITDARL (earnings before interest, taxes, depreciation, amortization, rentals and leases, with a 4.6x differential).

“They are putting five times more money in the bank per store,” Jones said.

The bottom quartile did show stronger numbers in people productivity, particularly against the middle quartiles. While nonmanager turnover for the top quartile was 74.7% and 98.8% for the bottom quartile, the second and third quartiles had 110.9% and 106.6% turnover, respectively. The second and third quartiles’ manager turnover was also worse, at 31.3% and 46.1%, respectively. Compare this to the top quartile, which experienced 17.4% manager turnover, and the bottom players, which saw 21.3%.

The top players blew everyone away with $34.34 in-store gross-profit dollars per labor hour. “They are making more gross profit per labor hour in excess of $10 than the bottom quartile,” Jones pointed out.

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