Single Stores Stay Strong Amid Consolidation
NATIONAL REPORT — Like an army of Davids fighting off the Goliath multi-unit convenience store chains, the industry’s single-store owners finished 2014 on a strong note: racking up record high in-store sales, gross profits and pretax profits despite facing bigger and stronger chain competition.
In fact, in a year marked by numerous mega-mergers among some of the biggest chain names in c-store retailing, single stores actually increased their lead in store count over chains by 1,012 units, accounting for a record 96,318 single stores in operation in the United States last year.
Single-store owners, like their big chain rivals, benefitted from the sharp decline in fuel prices, which provided most c-store retailers with a pair of benefits that made 2014 a very good year. With fuel prices at their lowest level in years, consumers had more money in their pockets to spend on in-store merchandise, driving a 3.1-percent increase in in-store sales to a record $114.9 billion for single-store owners. Consumers also spent more on prepared food at c-stores, as single-store owners’ foodservice sales grew 5.9 percent last year, according to the 2015 Convenience Store News for the Single Store Owner Industry Report.
Those depressed fuel prices were accompanied by generous fuel margins, resulting in a 24.6-percent increase in fuel gross profits on a 2.2-percent volume gain at single stores. Lower prices also helped to stabilize falling gas consumption patterns. All of this pumped up single-store operators’ gross profits to a solid double-digit gain of 10.6 percent in 2014.
Thirty-seven percent of the 152,794 U.S. c-stores in operation last year were operated by chains of two stores or more, with the remaining 63 percent operated by single-store owners. The percentage of single-store owners has remained between 61.8 percent and 63 percent for the past decade, so it is apparent the consolidation that occurred was concentrated among the larger chains. Among the big mergers of the past year were Circle K parent Alimentation Couche-Tard Inc.’s purchase of The Pantry Inc.; Speedway LLC’s acquisition of Hess Corp.’s retail network; CST Brands’ buys of Lehigh Gas Partners and Nice N Easy Grocery Shoppes; and Energy Transfer Partners’ purchases of Susser Holdings Corp. and Aloha Petroleum Corp.
Total convenience store industry sales (including both chains and single stores) dropped slightly in 2014 to $704.5 billion, from $706.4 billion the previous year. Single stores mirrored the 0.3-percent decline, with total sales for single-store owners totaling $367.6 billion.
Industrywide, though, total merchandise and foodservice sales per store set a record high of $1,356,301 last year, a 1.6-percent increase. Single-store owners also set a record with average per-store merchandise and foodservice sales of $1,222,992.
Look in the June issue of Convenience Store News for the Single Store Owner for the full results of the exclusive 2015 Single Store Owner Industry Report.