OAKBROOK TERRACE, Ill. -- Though a majority of convenience-store retailers reported a record year and foresee continued prosperity in 2016, not all respondents to the annual CSP Outlook Survey gave 2015 such rave reviews.
When asked to describe current business conditions, several retailers—most in the 1-to-20-store range—described conditions as flat, with many blaming increased competition and a sluggish economy on their inability to capture the profit increases others have.
Click here to see full results of the CSP 2015 Outlook Survey.
In this year’s Outlook Survey, a record 86.6% of retailers described current business conditions as “good” or “excellent.” The number for 2014 was equally impressive at 75.5%, though direct comparisons to past Outlook Surveys is not scientifically sound as the respondents differ. That said, the numbers do show distinct trends.
Positive signs first began appearing in the fall of 2014, when slowing demand and high production levels sent crude prices tumbling. NACS reported a 46% jump in industry profits overall for 2014 over 2013, with previous fluctuations in the single digits. Although 2015 may not prove as dramatic an increase, the sentiment among respondents to the Outlook Survey was undeniably upbeat.
In open-ended questions about current business conditions, some of the more upbeat comments included the following:
- “Consumer confidence is up, gas is down.”
- “We’re up about 6.5% over the prior year.”
- “People are spending money.”
- “We’re building six to nine new stores annually.”
- “Excellent for us—not saying the economy in general is excellent.”
- “Busy, busy.”
Retailers reporting either flat or negative conditions or concerns about the future said the following:
- “Performing well but [there’s] new competition nearby.”
- “The labor pool is not expanding.”
- “Gallons are flat to down.”
- “Business is flat.”
- “Even with gas prices so low, inside sales are not growing, and tobacco and snuffs are way down.”
- “Some growth, but we are not killing [it] either.”
- “Flat—too many big competitors.”
- “Still sluggish regarding personal income.”
- “Sales and gallons [are] flat [compared] to last year.”
Two areas that showed promise were gift-card sales and car wash. Click here for graphics on each.
Gift Cards Show Prepaid Promise
While retailers responding to CSP’s 2015 Outlook Survey are more likely to keep their prepaid sections the same going into the new year, gift cards stand out as a potential area for growth. Prepaid credit and debit, as well as prepaid wireless, are also areas of future growth.
Car Washes Make a Splash
Quite a number of Outlook Survey respondents (43.9%) do have car washes, with about a quarter saying that they intend to add new locations in 2016. In terms of developing their car-wash businesses, retailers picked “change pricing” (15.9%) and “launch new marketing effort” (11.4%) as areas they will focus on in 2016.