2016 Results So Far Bode Well for C-store Industry: Part 3

NATIONAL REPORT — Merchandise sales at U.S. convenience stores were up 2.7 percent to about $95 billion for the first half of this year, an increase slightly less than the 3.2 percent achieved at last year’s mid-point; however, much better than the meager 1.6-percent gain of 2014.

According to the annual Convenience Store News Mid-Year Report Card, cigarettes continued to lead the merchandise categories in total sales, ringing up about $34.6 billion in revenue for the first half of the year, an increase of 2.4 percent. That’s an improvement on the 1.4-percent bump at the halfway point a year ago.

In percentage terms, other tobacco products (OTP) trailed only wine and liquor, with a 5.1-percent sales increase over the year-ago six-month period. OTP — which includes smokeless, cigars, papers, loose tobacco and electronic cigarettes — generated more than $5.7 billion in first-half revenue, or $36,651 per store. In the first half of 2015, OTP sales rose by only 4 percent.

The biggest percentage increase in the cigarettes category was in subgeneric/private label brands, which were up 2.7 percent in sales dollars. The largest subcategory, premium brands, were up 2.5 percent, while branded discount was up 2.3 percent. Fourth-tier brands took a big hit once again, dropping by 13 percent, after a 14-percent decline in the year-ago half-year period.

In OTP, smokeless tobacco remains the largest subcategory at $3.5 billion in half-year sales, an increase of 6.4 percent. This is an improvement from the 5.3-percent gain a year ago. Cigars grew by 6.6 percent to nearly $1.6 billion in sales during the first half of this year. That’s also an improvement over last year’s first-half increase of 5.6 percent.

Electronic cigarettes continue to flounder. Sales of e-cigs fell by 4.1 percent to $450 million for the first half of 2016. That follows a 5-percent decline suffered during the first half of 2015.