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While the number of c-stores in the U.S. firmed up last year after a 1,400-store decline in 2008, the convenience industry experienced dollar or volume sales declines in most major product categories in 2009. The lone bright spot was the other tobacco products (OTP) category, while the candy and snacks categories saw dollar sales gains -- the latter two categories proving once again to be relatively recession-resistant.
The Convenience Store News FIRST LOOK report provides convenience store retailers with a first glimpse of industry dollar and volume sales changes in five major product categories, based on data provided exclusively to CSNews by The Nielsen Co. (CSNews is a division of Nielsen.)
The OTP category experienced a dollar sales increase of 9.1 percent as unit volume grew 5.5 percent last year. Candy sales were up 4.1 percent on a unit volume decline of 3.6 percent, and snacks increased dollar sales by 2.7 percent on a 4.2 percent volume drop.
Beer sales were relatively flat, with dollar sales up a scant 0.3 percent and a unit volume decline of 2.3 percent. The biggest loser last year was packaged beverages, where dollar sales declined 2.2 percent and unit volume fell 4.2 percent.
The packaged beverages category was hit hard by the recession last year. Alternative beverages (including energy drinks), once the fastest growing subcategory in the store, hit a wall -- going from a dollar sales growth of 9.8 percent in 2008 to a 1.1-percent drop in 2009. Bottled water, which also was up 1.3 percent in dollar sales in 2008, fell into the negative category last year with a 5.8-percent dollar decline. And sports drinks fell off a cliff -- dropping 10.2 percent in dollar sales after a 3-percent decline in 2008.
Interestingly, carbonated soft drinks, which has been in decline for several years, only fell 0.8 percent in dollar sales compared to an almost 2-percent decline in 2008.
Regionally, packaged beverages sales share was up slightly in the Northeast, Midwest and West, but the category's share in the South declined by more than one share point.
Consumers traded down in the beer category last year. Nielsen data shows premium, imports and super premium beer brands were all down in dollar sales and unit volume, while budget brands were up in both dollar and unit sales. Popular brands were also up in dollar sales on a slight decline in units.
On the positive side, microbrew beer sales growth held up pretty well despite the recession. Microbrews saw a 12-percent dollar sales increase in 2009, only slightly off the 14.1-percent dollar sales growth experienced the year before. Unit sales of microbrews were up a solid 10 percent last year.
Regionally, beer share was up in the Northeast and Midwest but down in the South and West.
Other Tobacco Products
Growth slowed in smokeless tobacco last year, from 6.2 percent in 2008 to only 1.2 percent in 2009. However, big gains were registered by cigars, up 22.5 percent and papers, 10.6 percent. Pipe/cigarette tobacco was up 31.7 percent in dollar sales but declined by 13.3 percent in unit volume.
Regionally, the greatest growth in OTP was seen in the Northeast, Midwest and West.
Chocolate maintained a 5-percent dollar sales growth pace and bagged/repacked pegged candy saw a 9.1-percent dollar sales gain last year. However, gum dollar sales were flat on a 7-percent unit volume decline.
Regionally, market share was flat in the Northeast and Midwest, down in the South and up in the West.
Last year was good for potato chips, which tacked a 10.1-percent dollar sales gain upon the 6.1-percent increase it registered in 2008. However, tortilla chips, nuts and seeds, and crackers all saw dollar sales declines, while pretzels were up 3.7 percent in dollar sales but down almost 3 percent in unit volume.
Packaged ready-to-eat popcorn generated the largest percentage gains in the category, up 17.3 percent last year in dollars and 8.2 percent in unit volume.
Regionally, sales followed trends in most other categories as the South region lost share and the Northeast, Midwest and West gained.
Meanwhile, energy shots -- the fastest-growing subcategory last year -- saw market share gains in the Northeast and Midwest, and alternative beverages -- dominated by energy drinks -- experienced share declines in the South.
An extended version of CSNews' FIRST LOOK, including unpublished data on the cigarette category, is available for sale at www.csnews.com.