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It's All in the Numbers

One of the things that our readers have consistently told us is that research — both market and consumer — is extremely valuable to them, and it has always been our goal at Convenience Store News to provide the industry with the most relevant, reliable and actionable benchmarks. As a VNU company, we have access to the leaders in information marketing, such as ACNielsen, TDLinx, Scarborough Research, Claritas and Spectra Marketing, all in addition to our own hard-working market research department.

Our 30th annual Industry Report is a great example of the wealth of data we offer c-store operators. The four-part Industry Report kicked off in January with our third annual Industry Forecast Study; Part 2 was our look at "Markets of Opportunity" in our April 18 issue; and now we get down to the nuts and bolts of the convenience store industry with Parts 3 and 4, running in this and the May 30 issues.

A quick look at this year's report shows that as the motor fuel segment continued its price volatility, operators struggled to raise the profitability of in-store categories. Total convenience store sales rose to $396.2 billion, an 18.2 percent rise.

However, that top-line growth is somewhat deceiving. Much of this gain came from increasing motor fuel pricing, and the number doesn't take into consideration the higher cost of goods and runaway operating expenses (particularly escalating credit-card fees).

Gasoline continues to be a challenging category for the industry, making up 70 percent of sales and only 35 percent of gross profit dollars. Inside the store is where retailers' opportunity lies — and, indeed, operators are making a greater effort. Savvy retailers are embracing new product introductions and changing planograms more frequently to create customer awareness and interest and working at the store level to address local market needs. They are renewing interest in foodservice programs, perhaps the biggest point of differentiation inside the store.

In-store sales per store increased by 6.6 percent and operators posted a hard-won 10.8 percent increase in gross profit dollars. The flip side to that good news is that pre-tax profit per store declined 3 percent despite sales and gross profit gains. Although the overall in-store gross margin percent still fell below the magic 30 percent mark, it did improve slightly in the past year. For all the details, turn to Page 28.

This part of the CSNews Industry Report contains industry totals and category data (this year, for the first time, we are splitting in-depth reports on the top 10 categories over two issues). Convenience Store News's director of research, Debra Chanil, deserves special praise for her long hours of meticulous work in bringing the report to life. It provides the convenience store industry with the most accurate and granular category data and store census information available, and is loaded with relevant industry benchmarks that no retailer or supplier can do without. Part 4 will appear in our May 30 issue, and — in addition to more category coverage — will focus on motor fuels, financials, store development and a look at the Canadian c-store industry.

It's all in the numbers — now it's up to the industry to plan and respond.
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