Convenience Retailing Bounces Back

SAN FRANCISCO — There's no doubt the convenience-store industry took a hit from the coronavirus pandemic that struck the United States in first-quarter 2020 and continues to hang on to varying degrees across the country.

The biggest shock was to gasoline sales as consumers were ordered to shelter at home. But two significant trends outlined in data firm Skupos’ latest blog post, suggest the industry is recovering well:

1. Fuel sales show evidence of recovering nicely.
2. In the four months since the pandemic was declared a national emergency, the industry has actually seen an increase in in-store sales.

“While we saw changes starting in March, we’ve also seen evidence of why c-stores have often been touted as recession-proof,” Skupos said.

Here is a look at several key revenue areas from Q1 and Q2 of this year based on Skupos data …

Average weekly fuel revenue per store took a major dip amidst nationwide shut downs in mid-March. Fuel started crashing the week of March 8, dropping by 47% to its bottom the week of April 6 when fuel and in-store sales nearly hit the same level for the first time this year, according to Skupos. In comparison, in 2019, fuel sales accounted for around 70% of average weekly revenue per store. During this same time frame in 2020, fuel sales accounted for roughly half of average weekly revenue per store, the report said.

"The sharp decline in dollar fuel sales was the result of the one-two punch of decreases in travel due to stay-at-home orders combined with gas prices hitting a 20-year low," Skupos said. "In-store revenue took a significantly smaller hit to top-line revenue, dropping by only 5% during the 30 days directly after nationwide shut downs. By the end of June, in-store revenue was up 37% from this year’s low the week of March 22."

With consumer purchase behaviors shifting amidst the pandemic, March and April saw minimal in-store growth year over year (YOY). However, as people grew more accustomed to measures put in place to combat COVID-19, in-store sales bounced back, and even showed year-over-year growth.

"Monthly in-store revenue per store was up 11% and 13% year over year in May and June, respectively, indicating that customers returned to c-stores in full force," Skupos said.

While gasoline gallons have turned around in the past three months, fuel has yet to recover and reach 2019 volumes. The peak decline in volume occurred in April during the height of stay-at-home orders, when volumes were down 35% from the year prior. As states began to open back up and restrictions were lifted, volume steadily increased throughout the second quarter with June ending down only 11%.

"This gradual recovery is expected, considering retailers typically see increased volumes during the summer," Skupos said. "And although our summer might look a little different this year, consumers are still interested in getting away, just within driving distance. Surveys have indicated that while flight bookings are down as much as 90%, lodging bookings are down significantly less, which means fuel volumes will continue to rise."

Across all fuel types, average weekly gallon sales per store plummeted the month after the national health emergency was announced on March 13. As restrictions eased across the country, gallon volumes have increased gradually to pre-stay-at-home levels as consumers have begun traveling again and driving to work more frequently; however, volume is still down year over year, which indicates that a portion of the population remains cautious about traveling.

Monthly in-store revenue from AB InBev (shown) and MolsonCoors products saw modest year-over-year increases in first-quarter 2020. As COVID-19 shut down many bars and restaurants this spring, the second quarter saw higher monthly gains, with peak year-over-year increases from both companies occurring in May. And it’s not just convenience retail that has seen this shift; in-store alcohol sales have increased across all retail formats and are expected to continue to grow as consumers shift their consumption habits.

In an exclusive partnership with Skupos, CSP Daily News is reporting the data firm's pandemic-related insights on a weekly basis. Click here to review all the insights.

San Francisco-based Skupos drives revenue growth and operational efficiency across all segments of the retail industry through the collection of billions of transactions every year. More than 13,000 primarily small, independent chains across the United States rely on Skupos’ platform to provide actionable insights that enable brands, distributors and retailers to increase sales volume and employee productivity.