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ALEXANDRIA, Va. — Low gas prices are driving increases in convenience store sales, both at the pump and inside the store, according to the latest NACS Retailer Sentiment Survey.
NACS, the Association for Convenience and Fuel Retailing, found that two in three c-store retailers (67 percent) say in-store sales in the first quarter were higher than the same period last year due to lower gas prices, and three in five retailers (59 percent) say that fuel sales were higher compared to the first quarter of 2015.
On the flip side, only 11 percent of retailers say that in-stores sales were lower in the first quarter of 2016 vs. 2015.
Retailers also said they feel good about their prospects for the second quarter of 2016. Three in four retailers (75 percent) say they are optimistic about their own business prospects in the second quarter, vs. 68 percent who are optimistic about the convenience retailer industry's prospects and 58 percent who are optimistic about the economy.
As the Weather Heats Up, So Do Sales
As c-store sales traditionally increase in the spring and summer as Americans spend more time traveling, retailers say they expect sales to increase over strong 2015 numbers. Nearly four in five retailers (78 percent) expect sales this summer to surpass 2015, vs. 6 percent who foresee reduced sales.
While drink sales surge in the summer months, retailers are even more optimistic about their food sales this summer. Nearly six in 10 retailers (58 percent) say their sandwich and meals sales will increase this summer, as will packaged beverages (54 percent) and fountain drinks (47 percent).
Additionally, 30 percent of retailers expect to see strong sales increases for fruits and vegetables, including salads, and 29 percent cite expected increases in healthy packaged snacks.
Retailers cite a number of reasons for their optimism, the survey found.
"Lower gas prices allow people to have more money to spend in our stores," said Jamy Flory of Fishkill, N.Y.-based Flory’s Corp.
Mickey Jamal of New Paltz, N.Y.-based CPD Energy said the industry's increased focus on quality foodservice programs is helping to increase sales.
An emphasis on hot prepared foods is expected to drive traffic at Dutchtown Tiger Mart stores in Baton Rouge, La., Elvin Simpson commented, while better-for-you snacks are growing sales at Diaz Market stores in Metairie, La., Giselle Eastlack said.
"I have noticed an increased need to offer our guests 'better-for-you' snacking options," said Herb Hargraves of Cash Magic Truck Stops in Lafayette, La. "Low sugar [and low-] fat diets are driving additional sales to bottled water and healthy snacking options and I expect these sales to continue to grow."
Warmer weather was also cited as a reason for retailer optimism.
"Continuing warm trends encourage people to spend more time out of their houses. Many of our stores are seeing an influx of foot traffic because of the higher-than-normal temperatures," said Lisa Dell’Alba with Square One Markets in Bethlehem, Pa.
Political Climate Concerns
Despite positive views, some retailers raised one major concern that negatively affect sales: the political climate.
"The rhetoric from the presidential race combined with the political climate will damper the mood of the economy due to the negative nature of the campaigns," said John Strickland with Wayne Oil Co. of Goldsboro, N.C.
Kent Couch with Stop & Go Mini Mart in Bend. Ore., agreed by saying that the economy and "presidential fear" could impact sales growth.
On the other hand, other retailers remain optimistic with their prospects.
"I believe that low gas prices are going to start to rise but not enough to dissuade travel. We have seen consistent volume increases over 2015 and expect that to continue," said Dennis McCartney with Landhope Farms Corp. in Kennett Square, Pa.
The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their business, the industry and the economy as a whole. A total of 102 member companies, representing a cumulative 2,052 stores, participated in the March survey.