Foodservice

C-Store Sales Mix Sees Significant Shift

Merchandise gross profit dollar contribution down 10 percentage points since 2009, while foodservice up almost 5 points, Chris Rapanick of NACS says
Chris Rapanick, managing director, NACS research, speaks at the NACS Show on Oct. 7, 2024
Photograph by CSP Staff

There’s been a significant shift in the sales mix at conveniences stores in the last 15 years.

This insight comes from Chris Rapanick (pictured), managing director, NACS research, speaking on Breaking Down the Latest State of the Industry Data at the first day of the NACS Show in Las Vegas on Oct. 7.

Comparing data from 2009’s State of the Industry Summit to numbers today, Rapanick pointed out how trends in sales and gross profit contribution have shifted in the last several years.

He noted the total gross profit dollar contribution for the sales mix in 2009:

  • 47.7%: Merchandise
  • 32%: Fuels
  • 14.9%: Foodservice
  • 5.4%: Other income

In 2024, sales and gross profit contribution shifted:

  • 37%: Merchandise
  • 37.9%: Fuels
  • 19.5%: Foodservice
  • 5.6%: Other income

Gas and diesel margins have remained above 35 cents in the last five years, and store operating profit generation continued to climb as well in this period, he said.

While store operating profit generation continued to climb in the last five years, inside gross profits rarely surpassed direct-store operating profits in the last five years, Rapanick added.

Other Highlights

Revenue growth continued to slow as transaction counts remained depressed, he said. Foodservice was the brightest positive in terms of percent change, up 2.5% from the first half of 2023 to 2024’s first half. In this same time period, fuel sales were down 5.5% and cigarettes down 3.9%, with total transactions down 3.4%

“Inside gross profits drove total gross profit dollars as fuel margins declined,” he said, adding that data from Chicago-based NielsenIQ shows a continued decline in units sold.

Inflation continued to impact inside sales, he added, with merchandise sales down 0.1% from the first half of 2023 to that of 2024.

Rapanick also presented data showing how the top 10 merchandise categories’ sales have slowed. Data from the first half of 2023 to the first half of 2024 shows:

  • Cigarettes: Down 3.9%
  • Packaged beverages: Up 3.4%
  • Beer: Down 1.7%
  • Other tobacco products: Up 7.6%
  • Candy: Up 2.4%
  • Salty snacks: Up 1.8%
  • Milk: Down 6.6%
  • Ice cream: Up 1.6%
  • Alternative snacks: Up 1.3%
  • General merchandise: Down 3.6%
  • Total merchandise sales: Up 0.1%

Meanwhile, gross profit growth has outpaced revenue growth:

  • Cigarettes: Down 1.3%
  • Packaged beverages: Up 5.4%
  • Beer: Down 2.1%
  • Other tobacco products: Up 9%
  • Candy: Down 0.5%
  • Salty snacks: Up 2.6%
  • Milk: Up 1.9%
  • Ice cream: Up 1.1%
  • Alternative snacks: Up 2.8%
  • General merchandise: Down 2.5%
  • Total merchandise sales: Up 2.4%

Diving deeper into foodservice, sales growth leaned to prepared food, which grew 5.4% from the first half of 2023 to that of 2024, Rapanick said. Commissary was down 5.9% and hot dispensed beverages were down 5.7%.

Meanwhile, cold-dispensed beverages were up 1.5% and frozen dispensed beverages were up 11.2%. Overall, foodservice sales were up 3.9%.

Elsewhere, merchandise shrink accelerated, he said, with a 170% increase from July 2021 to June 2024.

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