Two years ago, after the convenience store industry weathered pandemic-related lockdowns that wreaked havoc on sales and profits, I applauded c-stores for helping to keep the country’s economy afloat as the essential businesses they are. I expressed my opinion that the next focus of retailers should be safely managing and coping with the post-pandemic normal.
The results of Convenience Store News’ 2022 Industry Report show just how well the convenience channel managed and rebounded after a nearly two-year slog through the economic difficulties caused by COVID-19 and its subsequent wave of variants. Staying open for business wasn’t easy — between supply chain shortages and frequently changing public health guidelines, it was a constant struggle to adapt to changing circumstances.
The overall story told by the 2021 numbers is that the industry had a very good year. Total U.S. c-store sales grew by almost 25 percent, and most other key financial metrics matched those reported in 2018 and 2017 when the industry was flying high. Indeed, the c-store sales growth rate exceeded that of overall U.S. retail sales (up 17.9 percent), which Forbes described as one of the strongest years in retail history.
Motor fuel revenue and volume were up 40 percent and 8 percent, respectively. In-store sales hit a record high, and foodservice sales alone were up more than 20 percent, a tremendous bounce back after slumping by 10 percent during 2020. Gross profits rose 4.7 percent last year.
Those figures mean the industry did a wonderful job operating in the post-pandemic normal. But let’s not get too excited. All those terrific financial results did was get the industry back to where it was three years ago. There are still new crises to deal with, from skyrocketing oil prices to continued supply chain issues to labor shortages. Ponder these questions:
- How will higher gas prices impact in-store sales?
- How will skyrocketing inflation affect consumer spending?
- Does anyone think the rate of increases in labor costs and credit-card fees will slow in 2022?
- Will supply chain disruption continue into 2023, or perhaps beyond?
- What happens to fuel volume as prices rise and more Americans turn to electric vehicles?
And then, there’s the ever-present consumer challenge as customers expect more and more “convenience” in every aspect of their shopping experience.
Based on last year’s financial performance, it appears the convenience store industry is back on track. Next stop: unknown.