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C-Stores Feeling Groovy

Industry inside sales up 5.5% through June, CSX reports

NEW YORK -- Dick Meyer may have been sniffling and coughing on his birthday last week, but he was feeling rather bullish. And he wasn't alone. His fellow presenter, Peter Leavitt, was feeling equally upbeat about the convenience channel's performance this year.

The twoco-founder of benchmarking specialists CSX LLC, a division of NACS;and the senior vice president of sales marketing at McLane Co. Inc., respectivelythumbed through a litany of positive findings during the CSPNetwork CyberConference Program How's Business Q2: Are Your 2007 Trends Tracking [image-nocss] Better Than One Year Ago? The program was sponsored by McLane. (Click here to view an OnDemand replay of the session; free for retailers, $49 for wholesalers and suppliers.)

If we can keep tracking like that for rest of the year, we'll have a healthy year, Meyer said.

Among some of the highlights:

The convenience channel sits only behind mass merchandisers in year-to-date percentage sales growth. Through June, fuel margins are up, from 13.1 cents per gallon to 14.7 cpg. And there's more good news, said Meyer. Per-gallon margins hit nearly 17 cents in May and spiked to 18.5 cents in July based on their same firms' sample. The exciting thing about that, said Meyer, is we're still dealing with almost $3 selling price of fuel. Per-store, pre-tax profits soared by $900 per store per month, from $1,600 to $2,500, according to the CSX exclusive benchmarking database, which includes 81 firms representing nearly 4,000 stores for this timeframe.

And from McLane's own database, which tracks weekly wholesale shipments to 30,000 c-stores it serves.

OTP: There's a tremendous amount of activity in this category, said Leavitt, pointing to a 14.7% shipment increase through Sept. 8 vs. a year ago. This is a category that has shown consistently good, strong growth over the last few years, and we believe this positive sales trend will continue with all of the new products being introduced. Confection: Leavitt said the candy segment is showing nice movement, spurred by the gum segment, premium/gourmet candy and theatre candy, about which he said, We're finding these areas are showing some very strong category growth.

While both Meyer and Leavitt cited potential impediments such as a dramatic increase in the federal excise tax on tobacco, which is currently being debated in Congress, and the likely cost increases associated with the federal minimum-wage increase effective July 2007, the two remained optimistic that 2007 could be another strong year for the convenience channel provided, per Meyer, we remain focused on people productivity issues and making more informed marketing decisions.

We're very bullish on the balance of the year as it relates to the overall trends we are seeing, Leavitt said.

For a complete story of how the industry is performing through the mid-year point, watch for the December issue of CSP magazine.

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