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CSP Magazine

SOI Data 2016: Expenses and Productivity

While the c-store industry has had an “incredible” past two years, it is also not immune from a “perfect storm” of poor business conditions: declining transactions and shrinking fuel margins but increasing DSOE.

With this in mind, Andy Jones, president and CEO of Sprint Food Stores, Augusta, Ga., urged retailers to concentrate on what they can control in 2016: growing merchandise and foodservice sales. Fortunately, a review of 2015 sales and profit figures for the top in-store categories reveals several opportunities for doing just that.


Expenses

Direct-store operating expenses (DSOE) rose again in 2015, with health insurance, wages and other benefits driving the increase.

Direct-store operating expenses

Item2015 expense*PCYA**
Wages and benefits$26,2977.3%
Credit-card charges$6,595(11.5%)
Utilities$3,3701.2%
Repairs and maintenance$3,4686.9%
Supplies$1,6484.3%
Total DSOE$48,7863.0%
Facility expense$11,7437.6%
Total DSOE and facility expense
$60,5283.8%

Wages and Benefits Breakdown

Item2015 Expense*PCYA**
Wages$21,3927.4%
Health insurance$1,99412.5%
Payroll taxes$1,9541.8%
Other benefits$1,3718.0%
Workers’ compensation$534(10.4%)
Total$26,2977.3%

3.0% - Increase in direct-store operating expenses in 2015


Same-Firm Productivity*

Top-quartile retailers enjoyed significantly lower nonmanager and manager turnover than other quartiles in 2015, while driving higher in-store gross profits.

Break-even cents per gallon (CPG) was more than 10 CPG lower for top-quartile operators than those in the lowest quartile.

Labor Productivity

 Top quartileSecond quartileThird quartileBottom quartile
In-store sales per labor hour$93.35$96.20$77.95$80.05
In-store gross-profit dollars per labor hour$32.50$28.69$22.86$23.07
Labor cost per hour$15.21$15.90$13.05$14.86
Nonmanagers’ annual turnover73.9%104.0%115.9%97.6%
Managers’ annual turnover17.7%24.6%32.0%22.5%

Facility Productivity

 Top quartileBottom quartileDifference
Gallons sold222,805109,4152.0X
Merchandise sales$169,420$86,8632.0X
Foodservice sales$59,768$13,7304.4X
In-store gross-margin %33.7%28.8%4.9 points
Cigarette gross-margin %12.3%12.2%0.1 point
Average square feet3,5332,7881.3X
In-store sales per square foot$64.30$35.991.8X

Capital Productivity

 Tope quartileBottom quartileDifference
Store operating profit$42,314$4,9778.5X
Store operating profit per square foot$11.98$1.796.7X
Break-even CPG8.2018.34(10.14)
EBITDA***$41,198$5,7187.2X
EBITDARL****$48,396$11,8604.1X
Net profit margin (pretax/sales)4.31%0.07%4.24 points
ROCE*****15.27%1.96%13.31 points

* Per store per month | ** Percent change from a year ago |*** Earnings before interest, taxes, depreciation and amortization | **** Earnings before interest, taxes, depreciation and amortization with rents and leases added back in | ***** Return on capital employed | Source: NACS preliminary data. Final data to appear in the NACS® State of the Industry Report of 2015 Data.

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