ALEXANDRIA, Va. – Convenience retailer optimism picked up sharply as sales of both in-store items and motor fuels remained strong for the first nine months of the year, according to a survey of retailers released today by the National Association of Convenience Stores (NACS).
More than two in three convenience retailers (69%) say that in-store sales in the first nine months of 2016 were higher than the same period last year. And three in five (60%) say that motor fuels sales were higher compared to the nine months of 2015. Only 9% of retailers say that in-store sales were lower and only 14% say fuel sales were lower over the first nine months of 2016 compared to a year ago.
Strong convenience store sales also pushed retailer optimism higher. Nearly three in four (73%) convenience retailers say they are optimistic about their own business prospects in the fourth quarter, up from 68% who said they were optimistic last quarter.
New foodservice offers and the continued growth of craft beer—and growler—sales at convenience stores were cited as factors driving retailer optimism. Linda Herrera at Grand View General Store (Tetonia, ID) said the store’s fresh food offering is expected to drive sales, and Labrine Voutsinas at Bayshore Breeze Market & Grill (Dunedin, FL) said beer sales are expected to grow. And retailers are embracing technology to enhance the experience. Mark Nelson at Dyno’s Convenience Store (Spencer, IA) said they are expecting to increase consumer traffic with a new rewards program.
Retailers said that the holidays in the fourth quarter should help grow sales, as will the good weather and continued low oil prices—if they both happen.
Retailers were nearly as optimistic about the overall convenience store industry’s prospects. More than two in three (71%) say they are optimistic about the convenience retailing industry over the fourth quarter, up 8 points from the previous quarter. And a majority of retailers (53%) say they are optimistic about the overall U.S. economy, a 6-point jump from last quarter.
To no one’s surprise, the factor most cited as affecting sales in the fourth quarter was the upcoming election.
“Traditionally, consumer sentiment—and spending—decreases in the weeks before an election before rebounding,” said NACS Vice President of Strategic Industry Initiatives Jeff Lenard. “But retailers also expressed concerns about how the election will shape legislation and regulations related to their businesses.”
A number of retailers are finding ways to engage customers during the election season. 7-Eleven is once again conducting its 7-Election, encouraging consumers to pick the coffee cup that reflects their vote. The promotion has accurately predicted the past four presidential elections and current results reflect a dead heat for the 2016 election.
“We’re also using the election as a promotional opportunity,” said Dennis McCartney with Landhope Farms Corp. (Kennett Square, PA). “In this business, you have to capitalize on everything that surrounds you and your customers!”
The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their businesses, the industry and the economy as a whole. A total of 115 member companies, representing a cumulative 1,728 stores, participated in the September 2016 survey.