Strong First Quarter Buoys C-store Retailers’ Optimism About Q2

ALEXANDRIA, Va. — Despite harsh winter weather throughout the country for the first quarter of 2015, convenience store sales were strong. These results are leading c-store operators to be quite optimistic about second-quarter sales, according to the latest Retailer Sentiment Survey released by NACS, the Association for Convenience & Fuel Retailing.

Nearly nine out of 10 c-store retailers (86 percent) said they are optimistic about their business in the second quarter, an increase of four percentage points compared to the first quarter of 2015. Only 8 percent of retailers expressed pessimism about second-quarter sales.

A total of 100 NACS member companies participated in the survey, representing 2,519 c-stores.

Retailers have reason to be optimistic. More than two-thirds (69 percent) said their merchandise sales rose in the first quarter of 2015 vs. the same time period in 2014. Forty-five percent of respondents to the NACS Retailer Sentiment Survey said their gasoline sales increased year over year.

“Lower fuel prices have a positive effect on sales,” said Mark Sidebottom with MWS Enterprises Inc. of East Amherst, N.Y.

Charlie Rose with Charlie's Chocolate and Cravings in St. Paul, Minn., added that the c-store business model is sound. “In a rapidly changing economic environment, no other industry responds to consumers’ needs better than we do," he said.

For some time, c-store retailers have been focusing on foodservice items to boost both sales and profit margins. According to the latest survey, 63 percent of respondents said they are optimistic about their ability to compete with quick-service restaurants, compared to 8 percent who expressed pessimism.

“We are very involved in food,” said Greg Darby of Little General Stores in Darby, W.V.

“We will expand our fresh food offerings,” added Tom Price with Shaka’s in Idaho Falls, Idaho.

Overall, c-store retailers cited three factors that could grow sales in the second quarter: low gas prices (cited by 30 percent), better weather (29 percent) and a continued emphasis on fresh food (19 percent).

“If street fuel prices continue to decline, I think people are going to drive more and spend more of that discretionary income that’s become available. At least, that’s what we hope,” said Dennis McCartney of Landhope Farms in Kennett Square, Pa.

However, retailers are slightly less optimistic about the c-store industry overall and the economy compared to their own business prospects. Eighty percent of survey respondents are optimistic about the overall c-store retailing industry, while 70 percent said they are optimistic about the economy.

Alexandria-based NACS was founded in 1961. It has 2,100 retail and 1,600 supplier member companies that do business in nearly 50 countries.