C-store Retailers Optimistic About 2015

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C-store Retailers Optimistic About 2015

By Linda Lisanti, Convenience Store News - 12/22/2014

NATIONAL REPORT — Convenience store retailers are feeling pretty good about their business prospects for 2015.

Based on the results of Convenience Store News’ first-ever retailer forecast survey, c-store operators are entering the new year with a good deal of optimism. More than eight in 10 of those surveyed (86 percent) expect their average sales per store to increase next year over 2014, whereas only 8 percent expect a decline and 6 percent foresee their business being flat.

If convenience store retailers are right in their predictions, sales will increase by 3.7 percent next year (motor fuels and in-store combined) for the average convenience store.

For the first time, as part of its annual Industry Forecast Study, CSNews conducted a survey among convenience retailers to get their forecast for 2015. The survey, fielded in November, asked retailers to predict results for their average store sales in major categories and to 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 new year to increase sales and profitability. 

A total of 102 retailers participated in the survey. By company size, 26.3 percent were single-store operators; 25.2 percent represent chains with two to 10 stores; 16.2 percent have 11 to 50 stores; 10.1 percent have 51 to 200 stores; and 22.2 percent are from chains with more than 200 stores. By region, 32.4 percent are headquartered in the South, 30.4 percent are from the Midwest, 23.5 percent are in the Northeast and 13.7 percent hail from the West.

Despite the overall optimism, 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, which have been on the decline for many months, ranks No. 1 on retailers’ list. Nearly three-quarters of the survey respondents 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.”

Other top-of-mind issues are competition (cited by 60.8 percent), health care costs and regulation (51 percent), labor issues (37.3 percent), tobacco and electronic cigarette regulation (35.3 percent), healthy eating trends (21.6 percent) and demographic changes (13.7 percent).

“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.

For full results of the 13th annual Industry Forecast Study, including dollar and unit volume projections in key c-store product categories, look in the January issue of Convenience Store News.