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ALEXANDRIA, Va. — NACS, The Association for Convenience & Fuel Retailing, revealed in a survey that more than four in five convenience store retailers (82 percent) are optimistic about their business prospects in the first three months of 2015.
The main reason for retailer optimism was the drop in gas prices during the second half of 2014. Today, gas prices are more than $1 lower than they were a year ago.
C-store retailers, which sell more than 80 percent of the gas purchased in the country, say consumers are spending their savings where they are buying fuel, according to the survey. Overall, 62 percent say customers are spending that extra savings inside the convenience store, and nearly three in four (73 percent) retailers say that they had higher merchandise sales ever in 2014.
Lower fuel prices lead to higher volume inside the store and at the pump, stated Stuart Everngam, The Gott Co. (Prince Frederick, Md.). Theron Soderlund, Country Corner (Eastsound, Wash.), added, “We are back to pre-recession sales numbers — and going up.”
Convenience retailers are especially optimistic about growing their in-store sales with nearly seven in ten (69 percent) saying they believe in opportunities to grow merchandise sales, and 58 percent saying there are opportunities to grow food sales in 2015.
Overall, 88 percent of convenience retailers say that offering prepared foods is important to their business in 2015. “Foodservice fits the immediate consumption and time-starved needs of our consumers. It is an obvious fit, as long as it is a quality offer,” said Sonja Hubbard, E-Z Mart (Texarkana, Texas).
Produce was noted as important to convenience retailers’ business in 2015, said 61 percent of retailers. They offered advice for how to grow produce sales and how to offer produce with frequent distribution.
“Like foodservice, produce is a labor-intensive category when it is done correctly. Variety and fresh offerings are critical to the category’s success,” said Don Rhoads, The Convenience Group (Vancouver, Wash.).
Retailers are also advised to stay committed to a program’s long-term success produce if they expect to succeed.
While retailers are optimistic about their business prospects in 2015, they are less optimistic about the overall economy. Only 62 percent of retailers say they are optimistic about the economy as a whole over the first quarter.
Convenience retailers noted several competitive advantages working in their favor for 2015. For example, servicing time-strapped consumers and retooling services quicker than in other retail channels, said Lonnie McQuirter, 36th & Lyndale BP (Minneapolis). “But we need to constantly be aware when opportunities present themselves to our industry.”
While retailers cite the value of convenience as a competitive advantage, they noted that retail execution remains critical.
“Stocking the right amount of the right product at the right price the right way is more critical than ever,” said Michael Maxfield, Big John’s (Abingdon, Va.).
Ultimately, retail success in 2015 may depend on gas prices. Although gas prices still remain relatively low, retailers expect to see if oil prices climb in 2015, the survey found.
The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their business, the industry and the economy as a whole. A total of 88 member companies participated in the Q1 2015 survey.