Fuels’ contribution to total sales was more than 75% in the first half of 2022, and its gross profit contribution was almost 44%. Then, in the first half of 2023, fuels’ contributions declined by four and two points respectively.
This year's numbers are close to what they were in 2021, the year with the best benchmark to use since COVID is 2021, said Chris Rapanick, managing director of NACS Research during a 2023 NACS Show education session.
But a few years ago, NACS decided not to combine benchmark data of inside retail and fuel anymore because “we want to show you how profitable your store would be if you weren’t selling fuel,” said Rapanick.
Although inside transactions grew marginally, up 1.1%, inside store operating profit performance decreased 11% in the first half of 2023.
The top categories for inside sales transactions in the first half of 2023 were merchandise and foodservice. Although merchandise was up 6.3% in total transactions in the first half of 2023 compared to 2022, when accounting for inflation, it is nearly flat, said Rapanick. And foodservice, up 15.5% in the same period, is dropped to about 5.5 points by inflation, according to the NACS CSX Convenience Benchmarking Database.
While these increases are affected by inflation, they are still positive numbers; however, all together, total transactions were down 4.4%.
“We had been on a pretty good run post COVID,” said Rapanick. “Of course, back in 2022, we saw that [inside sales] really were a product of … folks doing transactions at the pump a lot more frequently. Pump transactions were way up last year. Inside transactions were about flat, so what we really want to do as retailers is grow the inside pump transaction business. We like pump transactions because it gets us the opportunity to convert, but at the end of the day, we really want people to come inside and buy something.”
The top ten inside sales categories based on sales are candy, up 17.1% (first half of 2023 vs. first half of 2022); salty snacks, up 15.4%; packaged beverages, up 13.2%; packaged sweet snacks, up 12.3%; other tobacco products, up 9.1%; alternative snacks, up 4.9%; milk, up 2.5%; beer, up 1.1%; general merchandise, up 0.5%; and the only declining top ten category—cigarettes, down 3.3%.
“Each of these top five categories are outpacing growth for that rate of inflation,” he said. “All of these guys are winning. These are probably what is driving the growth in gross profit dollars in your stores.”
When it comes to gross margins, the top categories are milk, up 4.4 points; packaged beverages, up 2.4 points; and other tobacco products, up 2.1 points.
NACS was founded in 1961 as the National Association of Convenience Stores. The NACS Show runs through Friday, Oct. 5, in Atlanta.