CHARLESTON, W.Va. – “Half
the population of the United States comes to a convenience store every day,”
said Henry Armour, president and CEO of NACS, during a recent Industry Update Luncheon in West
Virginia. Armour talked with the State Journal to discuss the industry and its
future.
The convenience store
industry registered record sales and transaction numbers even during the
recession, as it changes to accommodate a diverse clientele. One difference is
a renewed focus on foodservice and fountain drinks, which is growing as a
percentage of in-store sales from prepared food and beverages. Food now grabs
around a quarter of all in-store sales.
Overall, the future is
bright for this channel. “It probably is one of the most entrepreneurial retail
channels,” said Armour. “Because it is not the convenience store of the past.
It's the convenient retailing center of the future.”
One of the biggest
challenges facing the industry today is credit and debit interchange fees or
swipe fees. “It is absolutely — we think it is criminal — it is outrageous,”
said Armour. In 2012, the convenience store industry shelled out $11.2 billion
in swipe fees.
“The credit card companies
are making more than the operating companies,” he said. “It is the
second-largest expense in operating a convenience store, behind wages.”
Another challenge is the
“demand destruction” as consumers start to purchase more vehicles that are more
fuel-efficient. Also troubling convenience stores is the Obamacare,
which will push retailers to hiring more part-time rather than full-time
employees. “Many companies that had subsidized family premiums, they're doing
away with subsidized family premiums. They're doing away with any subsidization
of family coverage so they can afford the employee coverage,” said Armour.