Industry Report 2019: Don't Let the Sunny Numbers Fool You
Behind the hoopla of another robust year of industry sales and profit growth is the sobering fact that in-store sales — an important barometer on the health of the convenience store industry — were up a paltry 1.6 percent in 2018, as both in-store and motor fuel transactions were down for the second year in a row. On top of that, sales growth in foodservice — one of the key growth categories for c-stores for the past decade — continued to slow, rising only 2.4 percent.
Total convenience store industry sales rose 7.3 percent in 2018 to $661.4 billion, the highest total revenue since 2014, according to the 44th annual Convenience Store News Industry Report, the longest-running, continuously published annual report on the financial performance of the convenience retail channel.
The channel’s success last year, though, was really based on robust motor fuel prices and margins. The average sales price per gallon rose 10.8 percent to $2.80 per gallon, and gross margin cents per gallon increased 7.8 percent to 25.5 cents.
Higher gasoline prices drove motor fuel sales to a 10.7 percent increase last year, to $432 billion, the industry's highest gas sales since 2014. Meanwhile, gallons sold were flat (down 0.1 percent) as better fuel economy vehicles require fewer fill-ups.
Foodservice sales (including hot, cold and frozen dispensed beverages and prepared food) totaled $37.9 billion last year. The 2.4 percent increase fell below last year's 3 percent gain, and even further beneath the 6.6 percent and 7.1 percent gains of 2016 and 2015, respectively.
Merchandise sales totaled $191.5 billion last year. The 1.4 percent gain was less than the previous year's 2.1 percent increase, and even less than the 3.8 percent and 4.9 percent gains of 2016 and 2015, respectively.
In 2018, the number of in-store transactions per week fell 1.4 percent to an average of 3,244, and motor fuel transactions declined 1 percent to 2,327 per week. The average in-store transaction amount did increase, however, to $8.83, up from $8.60 in 2017, and the average motor fuel transaction increased.
Click below to download the full 2019 Convenience Store News Industry Report.