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ALEXANDRIA, Va. — The first half of 2016 is set to go down in the record books as a strong six-month period for convenience store operators.
According to the quarterly Retailer Sentiment Survey, released by NACS, the Association for Convenience & Fuel Retailing, lower gas prices, as well as the continued addition of fresh and healthy food options led c-stores to have a banner first six months of the year. Seven in every 10 retailers said in-stores sales were higher in the first half of 2016 vs. the same period in 2015. A majority (54 percent) also said fuel sales were higher compared to the first half of 2015.
Conversely, only 8 percent of retailers said in-store sales were lower than the comparable 2015 period.
On the fresh-food front, 43 percent of c-store retailers surveyed by NACS stated they added more fresh fruits and vegetables this year; 39 percent have added more packaged salads; and 30 percent have added more cut fruits and vegetables. Overall, 85 percent of retailers say they sell fresh fruit or vegetables, an eight percentage-point increase vs. last year.
Foodservice — something that can provide sought-after high margins for c-store operators — continues to be an opportunity as well. Sixty-four percent of c-store retailers are confident they can compete with quick-service restaurants regarding foodservice, reported NACS.
All in all, c-store retailers are changing with the changing times, and their efforts have paid off.
“It’s not a matter of if we are going to evolve. It’s a requirement,” said Dennis McCarntey with Kennett Square, Pa.-based Landhope Farms Corp., which is currently investing in new foodservice equipment.
Bottled water sales were another specific area of strength. Nearly half of all retailers stated they have expanded their bottled water offerings and 59 percent say they increased their nutraceuticals and enhanced water selections. According to NACS, convenience stores sell approximately half of all single-serve bottled water purchases in the United States.
Based upon a strong six-month sales period to start the year, more than two-thirds of c-store retailers say they are optimistic about their own business prospects and nearly two-thirds (63 percent) are optimistic about the industry’s prospects.
WORDS OF CAUTION
This optimism, although strong, is a significant decline compared to one year ago, when 83 percent of respondents said they were optimistic about their own business prospects.
This drop in optimism is led by larger economic concerns. A slight minority of retailers (47 percent) now say they are optimistic about the overall U.S. economy vs. 61 percent one year ago. Government regulations, especially those targeting higher minimum wages, are of major concern to c-store retailers, reported NACS.
The downward trend in overall optimism can also be summed up in two words, according to Robin Gabriel with Hinsdale, Ill.-based Shell Food Mart: “The election.”
The NACS Retailer Consumer Sentiment Survey comprised a total of 110 member companies representing a total of 1,905 stores. The survey was conducted in June.
Alexandria-based NACS has 2,100 retail and 1,700 supplier member companies.