There were many category bright spots in 2015, and some new challengers for the biggest drivers of in-store sales and profits. For example, on a trailing three-year basis, salty snacks have overtaken OTP in gross-profit-dollar growth and has matched it in sales growth, according to CSX data.
Other top in-store categories—packaged beverages, candy, beer and even cigarettes—have trended upward in sales over the past three years. And after years of declining cigarette gross profits, cigarettes finally posted slight growth in 2015, up 0.5% per store per month, according to preliminary NACS SOI figures.
Foodservice, while placing a distant second to cigarettes in share of in-store sales, was the clear leader in gross-profit dollars.
“Foodservice is only 20.8% of sales but it’s a whopping 33.7% of inside gross-profit-dollar contribution. That’s huge,” said Andy Jones, president and CEO of Sprint Food Stores, Augusta, Ga. “So it’s easy to see why it’s so important as a means to drive profitability.” Foodservice supplied more than twice the in-store profits of all of the tobacco subcategories combined in 2015.
Outside of foodservice, the next big in-store profit driver is packaged beverages, with 18.8% of gross-profit dollars in 2015. “We sold a lot of cigarettes and grew gross-profit dollars in that category,” Jones said, “but packaged beverages put a lot of money in the bank.”
Digging deeper within the categories shows other areas where c-store retailers were able to pad their bottom lines.
In-Store Sales Trends
Foodservice in 2015 supplied just more than one-fifth of in-store sales but more than one-third of in-store gross profits, according to NACS. Outside of foodservice, packaged beverages brought in the most gross-profit dollars.
Top Gross-Margin Earners
| Category | Profit dollars* | Gross-margin percentage | Gross profit % change |
|---|---|---|---|
| Packaged beverages | $9,651 | 40.42% | 8.4% |
| Cigarettes | $6,740 | 13.38% | 0.5% |
| Beer | $2,900 | 19.55% | 3.5% |
| Salty snacks | $2,799 | 39.12% | 9.9% |
| Candy | $2,169 | 47.66% | 2.4% |
| OTP | $2,124 | 28.14% | 4.3% |
| Alternative snacks | $1,581 | 45.00% | 12.1% |
| Sweet snacks | $1,087 | 37.63% | 8.1% |
| General merchandise | $951 | 38.82% | 5.2% |
| Milk | $921 | 30.26% | 10.2% |
Source: NACS preliminary data. Final data to appear in the NACS® State of the Industry Report of 2015 Data. | * Per store per month | ** Percent change from a year ago
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