What Will 2023 DSOE Data Show?

Participants in the NACS State of the Industry Summit will get the first look at the latest operating expense data.

March 20, 2024

One of the key data points from the NACS State of the Industry Report® is direct store operating expenses (DSOE).

These expenses have been growing at a faster rate than inside gross profit dollars for more years than most retailers would like. In 2022, DSOE growth outpaced inside gross profit dollar growth in 9 of 12 months.

In 2022, nearly all large operating expenses experienced double-digit growth year over year, including the two largest expense lines: Wages and benefits and card fees. Combined, these two metrics added $13.9 billion in expenses against the industry’s top line, according to the NACS State of the Industry Report® of 2022 Data.

Two DSOE line items grew at double-digit rates in 2022: Repairs and maintenance, the third largest DSOE contributor in 2022, saw a 13.7% increase, while utilities saw a 16% increase.

Overall, DSOE is a challenging line item for convenience store operators. In this chart from NACS Magazine, we see that card fees rose 27.6% in 2022 to an average of $12,236 per store, per month, largely due to higher prices (fuel and inside merchandise), more transactions and more customers using cards as their preferred payment method.

It’s vital that retailers understand and act on the data, transforming it into insights for their business. As Lori Stillman, NACS vice president of research and education, wrote in a Convenience Corner blog post:

Put data into the hands of the teams driving your business at all levels. It is the force multiplier that turns ordinary performance into extraordinary results. We’re seeing the organizations that embrace the data-driven mindset become the superheroes of our industry.

What Will 2024 Bring?

Chris Rapanick, managing director of NACS research, shared during a NACS Show education session that DSOE growth slowed in the first half of 2023, although DSOE was still growing at double digits.

Retailers can see the full picture of 2023 data at the 2024 NACS State of the Industry Summit.