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At '09 Halfway Point, Candy, Snacks and OTP Drive C-store Sales

By Don Longo

NEW YORK -- Candy, salty snacks and other tobacco products (OTP) are proving to be the most recession-proof products in a convenience store, based on Nielsen figures for the 28-week period ended July 11.

At a little past this year’s halfway mark, dollar sales for OTP are up 7.4 percent at c-stores, compared to the comparable 28-week period ended July 12, 2008. Unit volume is also up 4 percent, making OTP the only major product category in Nielsen’s U.S. Scantrack Convenience service to report an increase in volume. The Scantrack service includes all manufacturer prepackaged items with UPC codes. Foodservice and fuel sales are not included.

Last year, for the full year, OTP sales were up 7.2 percent, according to the Convenience Store News 2009 Industry Report.

Within OTP, cigar sales are up 17.4 percent so far this year, and pipe/cigarette tobacco sales are up a whopping 36.1 percent. The increase was likely fueled by a consumer rush to buy tobacco products prior to the imposition of a new, federal excise tax hike April 1.

Candy and snacks are also proving to be recession-resistant at convenience stores. Total candy sales at c-stores are up 4.9 percent for the first half of the year (beating last year’s 3.9-percent increase) while salty snack sales are up 3.5 percent (compared to last year’s 4.4-percent rise).

Within candy, the largest segment—chocolate bars/packs—are up 5.2 percent, while the largest increase was registered by non-chocolate bars/packs, up 10.9 percent in sales. Gum, though, is up only 1.7 percent in dollar sales.

Within salty snacks, potato chips are up 10 percent for the first half of the year and packaged ready-to-eat popcorn is up 13 percent. Crackers, though, saw a 7.5-percent decline from the first half of 2008.

For more details on how the candy and snack business is performing, join CSNews for a live, interactive Web seminar Thursday, July 30. Sponsored by McLane Co., the Web seminar will take a deep look into what’s keeping confectionery and snacks robust despite the recession. You can register here.

Dollar sales in alternative snacks are up 2 percent for the 28 weeks ended July 11, compared to the comparable period in 2008, while total beer sales are up only 1 percent. However, the recession has been very good for budget beers, as the subcategory is up 9.5 percent in sales, and microbrews/craft beers, which are up 10.4 percent.

Among subcategories, the largest percentage dollar sales increase was posted by "liquid vitamins, supplements and energy shots"—up an astounding 120.5 percent compared with the first half of 2008.

The continuing pricing problems in the dairy industry resulted in some of the biggest dollar declines over the first six months of the year. Whole milk (down 15.2 percent), skim nonfat milk (down 13.9 percent), 2 percent milk (down 12.7 percent) registered the three deepest declines.

Sports drinks didn’t perform very well either, down 8.3 percent in dollar sales, as the entire packaged beverages category was down 1.3 percent. Surprisingly, alternative beverages (which includes once red-hot energy drinks) are down 2.1 percent from a year ago. Bottled water is down 5.2 percent and juice/juice drinks were down 1.9 percent.

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