CHICAGO -- The U.S. convenience-store industry experienced its 15th straight year of record in-store sales and its fourth straight year of more than $10 billion in pretax profits, according to newly released NACS State of the Industry data.
The industry’s numbers were announced this morning during the NACS State of the Industry Summit, which takes place April 10-12 at the Hyatt Regency O’Hare near Chicago. More than 600 leading retail and supplier company representatives are attending the industry’s top conference for benchmarking and analysis of retail trends.
|Industry snapshot||2017 total||% change|
|Inside sales||$237.0 billion||1.7%|
|Fuel sales||$364.1 billion||14.9%|
|Total sales||$601.1 billion||9.3%|
|Pretax profit||$10.4 billion||1.6%|
|U.S. store count||154,958||flat|
Sources: NACS State of the Industry Report® of 2017 Data; 2018 NACS/Nielsen Convenience Industry Store Count
Fuels Lead Sales and Profit Increases
Convenience-store sales overall surged 9.3% to $601.1 billion, led by a 14.9% increase in fuel sales. Store sales account for 3.2% of the overall U.S. gross domestic product of $18.57 trillion (2016 data). Put another way, one of every 30.9 dollars spent in the country was spent at a convenience store in 2017.
The sales increase at c-stores in 2017 was largely because of higher gas prices in 2017 (up 12.8% to $2.38 per gallon, on average) and a 1.9% increase in gallons sold. Meanwhile, fuel gross margins in 2017 increased to 22 cents per gallon. Paired with increased sales volume overall, fuel gross profits increased 11.7% per store.
Convenience stores sell an estimated 80% of the fuel purchased in the country and while fuel sales account for 61% of sales dollars, fuels margins are still relatively slim and fuels only account for 38% of total profit dollars at convenience stores.
Overall, c-store profits were $10.4 billion, a 1.6% increase over 2016.
Despite record in-store sales, direct-store operating expenses (DSOE)—encompassing wages, payroll taxes, healthcare insurance, card fees, utilities, repairs/maintenance and supplies, as well as several other categories such as franchise fees and property taxes—outpaced inside gross-profit dollars for the second consecutive year. This trend continues to create challenges for convenience retailers as they look to grow their businesses.
Beyond sales, convenience stores are an important part of the economy. The convenience and fuel retailing industry employed 2.48 million people in 2017, wages were up 8.3% and the average wage for a store associate increased to $10.19 per hour. Turnover for store associates was 115%, down from 133% in 2016 but a huge increase from the 73% that was reported in 2010 when unemployment was much higher because of the Great Recession. The rise is primarily due to tighter labor markets, resulting from being in the seventh year of economic recovery. Turnover for store managers was only 18%, down from 27% the year prior.
The industry’s 2017 metrics are based on the NACS State of the Industry survey powered by its wholly owned subsidiary CSX LLC, the industry’s largest online database of financial and operating data. Complete data and analysis will be released in June in the NACS State of the Industry Report® of 2017 Data. Metrics related to turnover were from the recently released NACS Compensation Report® of 2017 Data.
Alexandria, Va.-based NACS advances the role of convenience stores as positive economic, social and philanthropic contributors to the communities they serve.