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    2016 Results So Far Bode Well for C-store Industry: Part 3

    Tobacco is still bringing in the dough.

    By Don Longo, Convenience Store News

    NATIONAL REPORT — Merchandise sales at U.S. convenience stores were up 2.7 percent to about $95 billion for the first half of this year, an increase slightly less than the 3.2 percent achieved at last year’s mid-point; however, much better than the meager 1.6-percent gain of 2014.

    According to the annual Convenience Store News Mid-Year Report Card, cigarettes continued to lead the merchandise categories in total sales, ringing up about $34.6 billion in revenue for the first half of the year, an increase of 2.4 percent. That’s an improvement on the 1.4-percent bump at the halfway point a year ago.

    In percentage terms, other tobacco products (OTP) trailed only wine and liquor, with a 5.1-percent sales increase over the year-ago six-month period. OTP — which includes smokeless, cigars, papers, loose tobacco and electronic cigarettes — generated more than $5.7 billion in first-half revenue, or $36,651 per store. In the first half of 2015, OTP sales rose by only 4 percent.

    The biggest percentage increase in the cigarettes category was in subgeneric/private label brands, which were up 2.7 percent in sales dollars. The largest subcategory, premium brands, were up 2.5 percent, while branded discount was up 2.3 percent. Fourth-tier brands took a big hit once again, dropping by 13 percent, after a 14-percent decline in the year-ago half-year period.

    In OTP, smokeless tobacco remains the largest subcategory at $3.5 billion in half-year sales, an increase of 6.4 percent. This is an improvement from the 5.3-percent gain a year ago. Cigars grew by 6.6 percent to nearly $1.6 billion in sales during the first half of this year. That’s also an improvement over last year’s first-half increase of 5.6 percent.

    Electronic cigarettes continue to flounder. Sales of e-cigs fell by 4.1 percent to $450 million for the first half of 2016. That follows a 5-percent decline suffered during the first half of 2015.

    Click through the charts above to see more results.

    And stay tuned for Parts 4-6 of the 2016 Convenience Store News Mid-Year Report Card:
    Part 4: Packaged Beverages & Beer
    Part 5: Candy & Snacks
    Part 6: Prepared Foods & Dispensed Beverages

    By Don Longo, Convenience Store News
    • About Don Longo Don Longo is editorial director of EnsembleIQ's Convenience Store News. He has covered retailing for more than 30 years as a reporter, editor and publisher. Previously, he spearheaded the editorial efforts at a variety of business publications focused on mass, drug, grocery and specialty store retailing. Convenience Store News won American Business Media’s Jesse H. Neal Award for Best Issue of the Year in 2008 and 2012. Longo has won numerous other editorial awards over his career and is frequently quoted in the national and local news media on the subjects of retailing and consumer trends.

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