A Full Stock of Optimism
On a broad scale, 2015 was an interesting year for the United States and with the presidential election in full swing now, 2016 promises to be every bit as exciting. The same can be said about the convenience store industry.
Based on the results of an outlook survey conducted in early November by the National Association for Business Economics, the average forecast for growth in 2016 is 2.6 percent, down slightly from 2.7 percent in its previous survey conducted in September.
The panel of 49 business economists expect the jobs market to continue strengthening this year, with the unemployment rate dropping to 4.7 percent by the end of 2016, down from 5 percent in mid-December. The experts lowered their earlier forecasts on a variety of measures of economic health, including housing starts and industrial production.
Looking further down the road, two-thirds of the business economists surveyed expect potential economic growth of between 2 percent and 2.5 percent over the next five years.
When it comes to the business of convenience and fuel retailing, at least one side of the equation is going into 2016 with an upbeat attitude. As part of this year’s Industry Forecast Study, Convenience Store News conducted its first-ever Supplier Forecast Study to complement the Retailer Forecast Study started last year. The majority of c-store suppliers and wholesalers that participated have a favorable outlook when it comes to the 2016 economic picture.
Notably, 41.7 percent hold a “very positive” view of the overall conditions of the U.S. economy, 28.6 percent hold a “positive” view and 10.4 percent hold a “slightly positive” view. On the other hand, only a combined 12.8 percent view the U.S. economy of 2016 negatively.
When asked about their particular product categories, the supply side of the convenience retailing chain does hedge its bets a little. While still overwhelmingly positive, those indicating they are very positive about their particular product category dipped to 35.5 percent, followed by 28.7 percent who are positive and 16.4 percent who are slightly positive.
No respondents from either the supplier or wholesaler communities said they are very negative on their product category, and only 6.5 percent said they’re slightly negative.
Stacking up the convenience channel against the other retail channels they serve, c-store suppliers and wholesalers gave convenience high marks for performance. A whopping 86.7 percent of respondents placed convenience in the positive column when asked to rate conditions in the retail channels where they work. This rating placed convenience squarely in front of all competing channels, with drug coming in second at a 65.4-percent positive rating.
The inaugural CSNews Supplier Forecast Study also asked participants to weigh in on what the key factors for their business’ success in 2016 will be. New product development, an uptick in consumer spending, and growth in store count were the top three factors cited.