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    C-store Labor Day Beverage Sales Soft

    Third-quarter sales were slightly more positive, according to Wells Fargo Securities.

    NEW YORK -- Beverage sales in convenience stores were relatively soft over the Labor Day weekend and in the third quarter, according to a new survey.

    A survey of beverage retailers representing tens of thousands of convenience store locations in the United States by Wells Fargo Securities LLC found that sales were up around 1.5 percent year over year during the three-day weekend, with sales up 2.7 percent for the third quarter.

    Overall the trend was positive with 50 percent of the respondents indicating beverage sales were better than the prior year. However, 33 percent indicated sales were flat and 17 percent indicated sales declined this Labor Day holiday, explained Bonnie Herzog, managing director, beverage, tobacco and consumer research at Wells Fargo Securities. The company's Fourth of July Beverage Buzz Survey found similar results, with 18 percent responding year over year declines, but 76 percent indicated beverage sales increased and 6 percent indicated sales were unchanged.

    "Our concern is that this trend could indicate some moderation in beverage sales trends over the past two months," she said.

    Higher prices were an underlying driver for Labor Day 2012 beverage sales growth, according to 73 percent of survey respondents. In addition, only 23 percent of respondents indicated higher volume as an underlying driver, while 50 percent of respondents indicated beverage volumes actually declined year over year, Herzog added.

    The Wells Fargo Securities survey also found that c-sore beverage promotions declined 0.5 percent during the Labor Day holiday on a year-over-year basis. More than 70 percent of respondents indicated promos were flat or decreased during Labor Day 2012. PepsiCo was the most promotional of our beverage companies and Monster Beverage Corp. also appeared to promote heavily.

    Beverage sales for the third quarter were slightly better, with 73 percent of respondents indicated that beverage sales increased year over year in the quarter, while only 6 percent of respondents indicated that beverage sales have declined. Sales growth was more modest than expected with 50 percent of respondents indicating beverage sales increasing 1 to 4 percent and 22 percent indicating beverage sales were flat, Herzog explained.

    "Based on these trends, we are somewhat more cautious about assuming that c-stores may offset any deceleration in take home beverage sales in Q3," she said.

    Herzog added that 94 percent of the survey respondents indicated that they are aware of plans by beverage manufacturers to implement additional price increases over next few months.

     

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