NATIONAL REPORT — Expectation that the candy category will grow this year is down sharply from one year ago, according to the exclusive 2016 Convenience Store News Industry Forecast Study.
Only 46.2 percent of c-store retailers believe their candy sales will grow in 2016, down from the 60 percent who said the same last year. However, the number of retailers that expect their sales to stay the same jumped from 19.6 percent last year to 41 percent this year. Only 12.8 percent of retailers expect candy sales to decrease within the next 12 months.
Chain retailers hold a more favorable view of the category, as 46.2 percent of chain respondents anticipate a sales increase compared to only 33.3 percent of single-store owners.
"[There is] innovation, but nothing to really move the needle," one c-store operator remarked. "[The] value equation vs. other snacks is getting out of whack."
Retailers predict the net sales change will be 2.2 percent. According to the CSNews forecast projections, per-store unit volume growth will slow to 2 percent for total candy, gum and mints in 2016, down from the estimated 6.4-percent growth for 2015. However, dollar sales growth per store is forecasted to see a slight increase of 3.6 percent.
Chocolate is expected to have another year of declining unit volume at -2.9 percent. The good news is this decline will still represent an improvement from 2015's estimated -6.2 percent. Dollar sales are expected to remain flat year over year.
In contrast, while growth of non-chocolate is slowing, unit volume per store is still forecasted to increase 7.1 percent while dollar sales per store are forecast to increase 9.2 percent.
Meanwhile, the mints segment is forecasted to increase unit volume per store by less than 1 percent and dollar sales by 2.2 percent, both up from 2015 estimates. Unfortunately, gum is likely to see another rocky year of largely flat volume and dollar sales.
According to retailer feedback, the introduction of new products is expected to have an impact on the candy category in 2016, as will an increase in health awareness as consumers keep a closer eye on what they put into their bodies.
For full results of our 14th annual Forecast Study, including dollar and unit projections in other key c-store product categories, look in the January issue of Convenience Store News.