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NATIONAL REPORT — The convenience store industry’s single-store owners are starting off the new year with a good deal of optimism about how their businesses will fare in 2015. In fact, not one of the independent retailers surveyed by Convenience Store News for the Single Store Owner believe their total store sales (in-store and motor fuels combined) will decrease this year vs. 2014.
Buoyed by the lower gas prices Americans have been enjoying for the past several months — and the fact that pump prices are expected to remain low all this year — single-store owners anticipate their customers will be shopping more often and spending more when they do.
As one owner simply put it, “Cheaper fuel should mean greater inside sales.”
More than eight in 10 single-store owners surveyed said they expect their 2015 sales to increase over 2014, while the remainder expect their sales to stay the same. Interestingly, the industry’s single-store owners have a more favorable outlook than c-store chain operators, as 10.5 percent of the chains (two or more stores) surveyed expect their sales to decrease this year.
Nevertheless, chain operators are also overwhelmingly optimistic regarding their business prospects this year, with 86.8 percent of the chain retailers surveyed expecting their sales to increase year over year and 2.6 percent expecting their sales to stay the same.
These results are based on the first-ever Retailer Forecast Study conducted by Convenience Store News for the Single Store Owner and flagship publication Convenience Store News. The retailer study was designed to enhance the annual Industry Forecast Study, which provides dollar and unit volume projections in key c-store product categories. The Forecast Study is now in its 13th year.
The inaugural Retailer Forecast Study, fielded in November, asked retailers to predict results for their 2015 average store sales in major categories and provide reasons for their answers. They were also asked to rate issues that are expected to have a major impact on the industry, and share initiatives they intend to implement during the year to increase sales and profitability.
Despite the tremendous optimism displayed by both chain and single-store retailers in the convenience channel, there are several issues top of mind for c-store operators that could have a big impact on their sales and profitability in 2015. Motor fuel prices ranks No. 1.
Overall, nearly three-quarters of the retailer survey respondents (58.3 percent of single stores, 76.9 percent of chains) cited this as one of the top three issues they’ll be watching.
“Fuel margins are usually tight, but fuel is still the key driver for our industry,” said one retailer. Another commented: “The less fuel costs, the more the customers spend in the store.”
Competition, meanwhile, is the second-ranked issue of importance to both chain and single-store retailers (cited by 50 percent of single stores and 61.5 percent of chains).
“Channel lines are blurring and customers are finding it just as easy to go to drug, mass or grocery stores for immediate-consumption items that are typically offered at a better price [there],” one retailer said of the increasingly competitive retail marketplace.
Other top-of-mind issues for single stores are: labor issues (ranked third by single stores, fifth by chains); health care costs and regulation (ranked fourth by single stores, third by chains); and tobacco and electronic cigarette regulation (ranked fifth by single stores, fourth by chains).
For full results of the 13th annual Industry Forecast Study, look in the January issues of Convenience Store News and Convenience Store News for the Single Store Owner.