COVID-19 Casts Pale Over 2019 Industry Performance
It’s impossible for convenience store retailers to rejoice over their strong 2019 financial performance (click here to see our Industry Report) while the current COVID-19 pandemic rages on. The lockdowns that began in March have wracked havoc on c-store retailers’ first-half 2020 sales and profits.
The initial boom driven by panic-buying of basic essentials faded quickly after nationwide sheltering restrictions destroyed demand for fuel and depressed customer traffic inside the store. Foodservice, including fresh prepared food, fresh baked goods and hot and cold dispensed beverages, have particularly suffered.
There are small signs of optimism for the nation’s c-store retailers, however. According to Nielsen, c-store sales dollars rebounded sharply at the end of April. Beer, wine, liquor, cigarettes and other tobacco products, which performed strongly throughout the pandemic, were up even higher in sales for the week ended May 2. Struggling categories, like prepared food, salty snacks and candy, were still down for the week, but all showed modest improvement as their weekly declines were not as much as in the previous four weeks.
Across the country, governors are lifting restrictions. As the nation slowly starts reopening for business, fuel prices are beginning to rise. According to GasBuddy, an online fuel app, the most common gas price across the U.S. in mid-May was $1.89 per gallon, up 30 cents from the previous week. Demand continues to rebound as more states reopen. While many states will continue to see fuel price increases as more people go out and drive around, it could still take months before prices return to where they were prior to the lockdown, GasBuddy reports.
I personally see activity picking up, even in the downstate New York area that’s been the epicenter of the pandemic. There are more cars on the road and people on the street. Of course, caution is important — especially for the sick, elderly and other at-risk populations. But Americans need to carry on, even if that means wearing face masks and keeping a safe distance from others.
From the beginning of the pandemic, c-store retailers have acted quickly and decisively to protect the health and welfare of their employees and customers. Staying open hasn’t been easy. Between supply chain shortages and shifting public health guidelines, it’s been a constant struggle to adapt to the changing circumstances. That struggle will continue.
Convenience stores, and other essential businesses, have kept this country from descending into an even greater financial peril. Now, the focus must be on safely managing and coping with the new post-pandemic normal.