​High Gas Prices Weakening Customer Traffic at C-stores

Nearly half of all retailers say customers coming inside the store are buying less vs. three months ago when gas was $1.50 less per gallon.
Inside a convenience store

ALEXANDRIA, Va. — High gas prices are taking their toll on sales at convenience stores.

Fifty-nine percent of convenience retailers say customer traffic has decreased in stores over the past three months, according to the Q3 2022 NACS Pulse SurveyC-stores sell an estimated 80 percent of fuel purchased in the United States; however, operators rely on in-store sales, not fuel sales, to drive profits.

But, as survey results revealed, high gas prices are impacting customer traffic in-store and basket size. Nearly half of all retailers (49 percent) said customers coming inside the store are buying less vs. three months ago when gas prices were $1.50 less per gallon.

Retailers also expressed concerns that elevated gas prices could depress sales over the traditionally busy summer-driving season. Fifty-three percent expect sales to be lower this summer vs. last summer, with only 25 percent anticipating increased sales.

To offset the impact, survey respondents reported that they are looking to reduce expenses. Chief among them is credit card fees, which average more than 10 cents per gallon, and pass along savings to price-conscious customers. Twenty-nine percent of retailers said they are offering cash discounts at the pump, as well, and 31 percent are offering discounts for those who pay via mobile app.

To provide more value to customers, some convenience retailers are offering greater fuel discounts tied to store purchases, like Baltimore-based High's, while Mickey Mart of Milan, Ohio, is offering more promotions and deals on in-store items.

Landhope Farms, based in Kennett Square, Pa., is offering discounts for both fuel and in-store items via mobile app purchases.

"Loyal customers want to be rewarded, and that's our aim during this time of immense inflation," said Dennis McCartney with Landhope Farms.

Additionally, Grafton, Ohio-based Armbruster Energy Store is expanding electronic coupon offers.

"Our belief has always been that your business must take advantage and embrace technology. Our customers love how we are ahead of the curve, technology wise," commented Jeff Armbruster of Armbruster Energy Store.

A bright spot for retailers is that customers aren't blaming them as much as they used to for higher gas prices. Thirty-seven percent of respondents said customers understand that higher gas prices are caused by factors outside of the retailers' control, compared to 35 percent who say that consumers blame retailers for higher prices.

The U.S. Energy Information Administration reported that only 5 percent of the cost of gas in May (the latest data available) is because of "Distribution and Marketing," which includes the retail markup on fuel. Only 25 percent of retailers report that they have experienced higher levels of gas theft compared to a year ago.

"While sales and traffic have slowed as gas prices climbed, retailers continue to seek out innovative ways to provide value at the pump and inside the store to help their customers extend their paychecks and weather this period of inflated costs," said Jeff Lenard, NACS vice president of strategic industry initiatives.

The Q3 2022 NACS Pulse Survey was conducted in June by NACS Research. A total of 53 retailer member companies representing 3,023 stores participated in the survey.

Alexandria-based NACS is a global trade association dedicated to advancing convenience and fuel retailing. It is a trusted adviser to retailer and supplier members from more than 50 countries.

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