CHICAGO -- As retailers participated in the CSP 2018 Outlook Survey, they did so against a supercharged economic backdrop:
- The growth rate of the United States’ gross domestic product—a key measure of economic activity—hit 4.1% in the most recent quarter, according to the U.S. Department of Commerce. This was the fastest pace in nearly four years.
- Consumer sentiment hit an 18-year high, according to The Conference Board’s Consumer Confidence Index.
- The average wage of the American worker grew 2.9% over the past year as of August 2018—the best growth in annual private wage since 2009, according to the Bureau of Labor Statistics.
But despite the high consumer sentiment and growth in wages, c-store retailers reported seeing fewer customers through their doors. In the 2018 Outlook Survey, 59% of operators reported store foot traffic was flat or down from 2017.
“We’ve had declining customer counts, although our average spend has been higher,” says Mark Samuels, vice president of retail operations for the Dash In c-store chain of The Wills Group, La Plata, Md. “It’s almost been a one-for-one offset: a 3% drop in customer counts, with a 3% to 4% increase in average check.”
How do you anticipate your total 2018 sales will compare to 2017?
Source: CSP 2018 Outlook Survey
Another Outlook Survey participant who considers the state of business “good” is also seeing this retail stalemate.
“Sales are up, some based on price increases, but units are up as well,” he says. “The downside that makes [business] not excellent is transactions are flat.”
“We’ve had declining customer counts, although our average spend has been higher.”
C-store foot traffic has declined in recent years, according to industry data. How has your store foot traffic performed in 2018 vs 2017?
Source: CSP 2018 Outlook Survey
Samuels cites a few possible reasons for the lower foot traffic: Consumers are making fewer trips to c-stores as smoking declines and fuel economy grows; weather in Dash In’s Mid-Atlantic market of Maryland, Virginia and Delaware was rainy this summer; and competition. In Dash In’s area, dollar stores are bringing the hurt.
Samuels, like the majority of Outlook Survey participants, does expect higher sales and better business conditions in 2019. There’s the current strong economy, which he believes will continue. And to drive foot traffic, Dash In is focusing on its social media and two growth-driving categories: foodservice and e-cigarettes.
What do you expect will happen to business conditions next year?
Source: CSP 2018 Outlook Survey
Next: Working Through Labor Woes
Click here to read the complete Outlook Survey report.
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