GPM Investments is increasingly leaning on six center store and cold-vault product segments to drive in-store sales.
The convenience retailer has dubbed beer, candy, packaged beverages and alternative, salty and packaged sweet snacks its “core destination categories,” using them to grow sales as cigarette purchases continue to decline and gasoline varies through seasonal periods and pricing trends.
“Our marketing and merchandising initiatives intentionally focus on our core destination categories,” said Arie Kotler, president and CEO of GPM parent company Arko Corp., during a recent second-quarter earnings call. “We measure our retail success on our ability to grow sales and profitability outside of cigarettes and in our core destination categories.”
Data presented during the call shows core destination categories represented 54.7% of merchandise gross profit in during the second quarter of 2023, up seven points from 47.3% share during the same period in 2020, when GPM established the core category strategy.
“As a result of our strategy as a percentage of total merchandise sales, core destination categories have increased from 38.4% to 44.6%,” Kotler said. During the same three-year period, “cigarettes have decreased from 38.2% to 29.6% of total merchandise sales. …
“We have executed on our strategy, growing merchandise sales and gross profit while decreasing our exposure to cigarettes.”
- GPM Investments ranks No. 6 on CSP’s 2023 Top 202 list of the largest c-store chains in the country.
Other related data points:
- The core-category gross profit grew 67.0% in second-quarter 2023 vs. second-quarter 2020. Conversely, gross profit dollars from cigarettes have increased 7.5%.
- Core-category sales in same stores grew 5.6% in second-quarter 2023 vs. the previous year.
Segment growth in same-store sales for the quarter:
- Candy: 12.2%
- Salty snacks: 11.7%
- Packaged sweet snacks: 7.3%
- Packaged beverages: 5.2%
- Alternative snacks: 3.9%
- Beer: 2.8%
“We work to ensure that our stores meet our assortment standard for these store destination categories and that we offer our customers the right assortment and value proposition. This reinforces my belief that we are doing the right thing by way of assortment and marketing. This is the Arko way,” Kotler said. “We are more committed than ever to driving long-term, sustainable inside sales growth, expanding margin and gross profit dollars, and we know there is a runway for earnings and growth.”
Based in Richmond, Virginia, Arko Corp. owns and operates numerous c-store brands, including Fas Mart, Shore Stop, Scotchman, BreadBox, Young's, Li'l Cricket, Next Door Store, Village Pantry, Apple Market, Jiffi Stop, Admiral, Roadrunner Markets, Jiffy Food Marts, E-Z Mart, 1 Stop, TownStar, ExpressStop and Handy Mart, among others.