DALLAS - 7-Eleven has seen an improvement in impulse buys of soft drinks and candy, Bloomberg News reports. Both Coca-Cola Co. and PepsiCo Inc. found volume drops at convenience stores decelerated last quarter for the first time in 12 months. Hershey Co.??s first quarter candy sales in convenience stores jumped 6 percent.
"We??re definitely seeing improving trends," said Dennis Phelps, senior director of beverages for 7-Eleven Inc. "Maybe customers feel a little better about letting go of some money."
Candy and soft drinks usually bring in higher profit margins for manufacturers. The Consumer Edge Research LLC found that dollar sales (sans cigarettes) at U.S. convenience stores increased 0.5 percent in March following a 1.3 percent drop during the previous 52 weeks. (For more on convenience store candy trends and sales, see the May NACS Magazine "Category Close-Up")
"We saw a pick-up in consumer discretionary spending, which resulted in improved sales for impulse purchases in convenience stores," said Bill Pecoriello, CEO of Consumer Edge.
Coke and Pepsi see "encouraging" volume trends for beverages at U.S. convenience stores sustained into the second quarter. Snacks also demonstrated a positive reversal in the first quarter, said John Compton, CEO of Americas Foods for Purchase.
"I would characterize it as improving," he said during an April investors conference call. "It has a ways to go as the unemployment numbers need to improve and the overall economy needs to improve."
While the economy impacted consumer spending last year, U.S. customer counts at 7-Eleven stores declined less in the first quarter and may register an increase in the second quarter.
Last month, packaged beverages will likely "have one of the best months we??ve had in over a year," said Phelps. Hershey also experienced volume return to convenience stores.
"There??s no question about it, we??re seeing better sales," said Mike Thornbrugh, QuikTrip Corp. spokesman. "It??s not as much as we??d like but they??re still spending."
A few weeks ago at the NACS State of the Industry Summit, NACS revealed that U.S. convenience store in-store sales grew 4.9 percent in 2009, one of the lone bright spots in a battered U.S. economy that saw overall retail sales drop 7.0 percent.
Overall, convenience store sales in 2009 were $511.1 billion, accounting for 3.5 percent of the total U.S. Gross Domestic Product ?" one of every 28 dollars spent in 2009. Industry profits fell 7.6 percent to $4.8 billion, but were still the fourth largest in the industry??s history.
Complete information, trends and analysis will be featured in the upcoming NACS State of the Industry Report of 2009 Data. Pre-order your copy today!