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NACS State of the Industry 2014

About three weeks ago I had the opportunity to attend the 2014 NACS SOI Summit held in Chicago.  It is an event sponsored by the National Association of Convenience Stores and CSP Magazine.  The annual Summit brings together the leaders of many of the country’s most progressive convenience retailers to hear about how the industry performed in 2013.   As with most NACS functions, it is a great way to meet people, catch up with old acquaintances, learn new information, and find tools to improve one’s retail operation.

I thought that I would take the opportunity in today’s post to bring you a few of the headlines that came out of the conference.  If you would like more in-depth information about the convenience channel I would recommend that you go to the NACS website (www.nacsonline.com) and look for the full report which should be available for purchase in June.

  • In 2013, US c-store sales hit a new record, increasing 2.4% over 2012 to $204 billion. When motor fuels sales of $491.5 billion are added, overall convenience store sales hit $695.5 billion.
  • The driver for in-store sales in 2013 was foodservice with an increase of 2.4%.
  • On a per gallon basis, motor fuels sales also set a new record with sales improving 0.9% to 132,029 gallons per store per month. However, even though fuel gallons per store increased on a per store basis, a 2.9% decrease in gas prices during 2013 caused a 2.1% decrease in fuel dollar sales.
  • Delving a little deeper into the numbers, store operating costs outpaced in-store sales and led to a fall in industry pretax profits from $7.2 billion in 2012 to $7.1 billion in 2013. The largest contributors to the increase in operating costs were wages and payroll taxes.
  • Due to the continued growth of food service the c-store sector saw a 19.5% increase in the number of employees since foodservice is a more labor intensive category.
  • According to the 2014 NACS/Nielsen Convenience Industry Store Count, the number of c-stores in the US increased to 151,282 (1.4% increase) of which 83.7% of them (126,658 total) sell motor fuels. That is a 2.7% increase over 2012.
  • The convenience store industry employs 2.2 million people and paid $174.5 billion in federal, state and local taxes in 2013. Overall, convenience stores sales represent 4.0% — or one out of every 25 dollars — of the entire $17.4 trillion U.S. gross domestic product.
  • In focusing on the bottom line, although fuel sales drove revenue dollars, in-store sales drove profit dollars. 70.7% of total c-store sales were motor fuels, but that category only accounted for 35.6% of profit dollars.  In 2013, fuel margins were 18.5 cents per gallon before expenses, or 5.3%.

According to NACS, in-store sales in 2013 broke out like this:

  • Tobacco (cigarettes and other tobacco products): 37.0%
  • Foodservice (prepared and commissary food; hot, cold and dispensed beverages): 18.0%
  • Packaged beverages (soda, alternative beverages, sports drinks, juices, water, teas, etc.): 15.5%
  • Center of the store (candy; sweet, salty and alternative snacks): 9.9%
  • Beer: 7.9%
  • Other: 11.7%

And, finally, gross profit dollars were split like this:

  • Foodservice: 29.1%
  • Packaged beverages: 19.6%
  • Tobacco products: 18.7%

Overall, it was a good year for the industry as a whole and the NACS SOI information provides us with the industry benchmarks we need to better operate our stores.