CHICAGO – The convenience store industry had record sales of
$700.3 billion in 2012, with in-store sales increasing 2.2% to reach a record
$199.3 billion and motor fuels sales increasing 2.9% to a record $501.0 billion,
according to figures released today by NACS.
The industry’s 2012 numbers were announced at the NACS State
of the Industry Summit, a two-day conference that reviews and analyzes the industry’s
key economic indicators.
The industry’s overall sales reflected real growth per
store, with sales outpacing the 0.7% increase in convenience stores in 2012, according
to the NACS/Nielsen Convenience Industry Store Count released in January 2012.
In-store sales growth was driven by double-digit sales gains
in several subcategories: alternative snacks, which include meat snacks and
health, energy and protein bars (12.2%), liquor, a relatively small subcategory
(11.6%), cold dispensed beverages (11.3%) and sweet snacks (10.3%).
Beyond sales, convenience stores are an important part of
the economy. They employed 1.84 million people and generated $171 billion in
federal, state and local taxes in 2012. Overall, convenience stores sales represent
4.5% – or one out of every 22 dollars – of the entire $15.68 trillion U.S. gross
“These numbers demonstrate that Americans turn to us for their daily needs,” said NACS Chairman Dave Carpenter, president and CEO of J.D. Carpenter Companies Inc. “We are a vital part of Americans' daily lives and the U.S. economy. We also continue to innovate and deliver on our promise of providing fast, one-stop shopping to consumers, whether they are on the road or in their communities.”
Convenience store pretax profits reached a record $7.2
billion in 2012, but taken as a percent of total sales, profits only moved from
1.027% to 1.028% of total sales.
Motor fuels continued to drive sales dollars, but in-store
sales drove profit dollars. Overall, 71.5% of total sales were motor fuels, but
motor fuels only accounted for 35.0% of profit dollars. Motor fuels gross
margins decreased from 18.2 cents to 17.8 cents per gallon before expenses, and
also dipped on a percentage basis, falling from 5.23% to 4.94%, the lowest that
they have been on a percentage basis in decades.
While sales and profits were strong, there are concerns for
the convenience retailing industry. Total credit and debit card fees hit a
record $11.2 billion and surpassed overall convenience store industry profits
for the seventh straight year. Overall, card fees increased 1.5%, a much slower
pace than the double-digit increases that were routine the past decade. Passage
and implementation of new debit card swipe fees limits played a significant
role in reducing escalating card fees. However, card fees still were
significant. Just looking at motor fuels sales, credit and debit card fees
added 5.1 cents to every gallon of gasoline sold at convenience stores in 2012.
Beyond card fees, several other expense lines saw increases, led by health
insurance costs, which rose 6.3%.
The industry’s bifurcation also continues, with a
considerable difference between top quartile and bottom quartile performers.
Top quartile performers had hot dispensed profits that were 4.4 times greater
than those of the bottom quartile, prepared food profits 2.4 times greater than
the bottom quartile, cold dispensed profits 2.3 times greater than the bottom
quartile and packaged beverage sales that were 2.3 times greater than the
Of greater concern to all retailers, there was a major
difference in sales and profits by quarter. First quarter sales and profits
were considerably better than those of any other quarter, while fourth quarter
sales and profits lagged behind the other quarters. Weather likely was a major
factor in the sales and profits variations. The first quarter of 2012 was
unusually warm and dry, which is conductive to growing on-the-go sales, while
the fourth quarter had much poorer weather and significant storms in densely
populated areas, most notably Hurricane Sandy.
Here’s how in-store sales were broken down in 2012:
(cigarettes and OTP): 40.7% of in-store sales
(prepared and commissary food; hot, cold and dispensed beverages): 15.8%
beverages (soda, alternative beverages, sports drinks, juices, water, teas, etc.): 14.7%
of the store (candy; sweet, salty and alternative snacks): 10.4%
Meanwhile, foodservice was the category that drove profits,
accounting for 27.1% of gross profit dollars. While tobacco products
constituted 40.7% of in-store revenue dollars, they accounted for only 21.0% of
gross margin dollars. Packaged beverages were third, accounting for 18.8% of
gross profit dollars.
The industry’s 2012 metrics are based on the NACS State of
the Industry survey powered by its wholly owned subsidiary CSX, the industry’s
largest online database of financial and operating data. Complete data and
analysis will be released in June in the NACS
State of the Industry Report of 2012 Data.