So Far, So Good

The convenience store industry appears to be on track for a slightly improved performance over last year in both total sales and in-store sales, based on Convenience Store News? inaugural Mid-Year Report Card.

Based on mid-year numbers from Nielsen, government data and CSNews? own research analysis, total c-store sales were up 0.6 percent for the first six months of this year vs. The first six months of 2013. That small increase comes on the heels of flat total industry sales in full-year 2013, as previously reported in the CSNews 2014 Industry Report published in June.

In-store sales (including merchandise and foodservice) were up 2.3 percent for the first six months of this year. In-store sales grew by 2.1 percent in full-year 2013, trailing the more robust increase of 4.7 percent seen in 2012.

Like last year, motor fuel volume was up slightly (1.3 percent) as of the first half of this year, but dollar sales of fuel were essentially flat (down 0.2 percent) as the average sales price per gallon of $3.54 was slightly lower than the $3.59 per gallon reported for the first half of 2013.

CSNews was able to break down convenience industry sales on a regional basis. The South generated the largest increase in total sales for the first six months of this year (up 1.5 percent). It?s also the only region to show an increase in dollar sales of motor fuels.

The West, however, generated the strongest gain for in-store sales (up 3.7 percent for the first six months), followed by the South (2.8 percent) and the Midwest (2.3 percent).

Nationally, foodservice sales (including prepared food and hot, cold and frozen dispensed beverages) were up an estimated 6.2 percent during the first half of this year, nearly on pace with last year?s 6.5-percent full year sales gain. On a regional basis, the West (up 7.3 percent) and the South (up 7.2 percent) are ringing up the strongest foodservice increases this year, while the Northeast is lagging (up only 3.4 percent through the first half of the year).

On a sales-per-store basis, which eliminates the differences in store count by region that are reflected in the regional numbers, the West grew in-store sales the most (up 2.4 percent) in the first half of this year. Average sales per store in the South were up 2 percent.

For per-store foodservice sales, the South is leading the way, up 6.4 percent through the first six months, followed by the West (5.9 percent) and Midwest (5.5 percent).

Also on a sales-per-store basis, the best-performing categories inside the store as of the first six months of 2014 were: wine and liquor (up 9.1 percent), alternative snacks (7.7 percent), prepared food (6.9 percent) and salty snacks (4.9 percent).

The biggest percentage gain was registered by packaged sweet snacks ? the category was up 12 percent in per-store sales in the first half of 2014.

Below are national and regional first-half category breakouts on a per-store basis.

CIGARETTES

Through the first six months of 2014, cigarette sales were down 1.9 percent per store. Premium brands were down 1.7 percent, subgeneric/private label down 4.3 percent, branded discount down 1.6 percent and fourth-tier down 11.7 percent.

Regionally, on a sales-per-store basis, cigarettes are struggling the most in the Northeast (down 4 percent from last year?s comparable period). Declines in cigarette sales in the other three regions ranged from 1.2 percent to 1.6 percent.

PACKAGED BEVERAGES

Packaged beverages were up 3.8 percent per store through the first half of 2014. Carbonated soft drinks were flat, alternative beverages (including energy drinks) up 6.1 percent, juice/juice drinks up 0.2 percent, sports drinks up 8.3 percent, bottled water up 4.9 percent, iced tea (ready-to-drink) up 6 percent, and enhanced water up 4.2 percent.

Regionally, packaged beverage sales are strongest in the West (up 5.5 percent per store), followed by the South (4.5 percent) and Midwest (3.6 percent). Packaged beverage sales are soft in the Northeast (down 0.2 percent).

BEER/MALT BEVERAGES

Beer/malt beverages were up 1.5 percent per store in dollar sales after the first six months of this year. Premium brands were down 1.9 percent, budget brands down 7.7 percent, and popular brands down 4.2 percent. However, imports were up 11.4 percent, flavored malt beverages up 18.7 percent, super premium up 17 percent, malt liquor up 4.8 percent, and microbrews and craft beers ? the darling of the category ? were up a whopping 23.3 percent.

Regionally, the West leads the growth in beer/malt beverage sales with a 4.3-percent increase for 2014?s first half. Beer sales were up 1.9 percent and 1.2 percent in the Midwest and South, respectively. Northeast beer sales were down 1.9 percent through the first half of 2014.

OTHER TOBACCO PRODUCTS

Over the first six months of 2014, other tobacco products (OTP) were up 2.9 percent per store. Smokeless products were up 4.5 percent, cigars up 0.5 percent, and electronic cigarettes up 8.4 percent. Vapor products are not included in these totals.

Regionally, the Northeast is the place for OTP sales growth so far this year. OTP sales per store in this region were up 5.8 percent for the first six months. The Midwest clocked in at a 4.1-percent sales gain, with the West up 3.8 percent. The South trailed with a 1.3-percent gain.

CANDY

Candy sales were up 1.5 percent for the first half of the year. Most of the major candy subcategories were down: chocolate down 3.9 percent, non-chocolate down 6.8 percent, gum down 4.6 percent, and candy rolls/mints/drops down 3.3 percent. The bright spots were pegged/repackaged candy up 15.6 percent and novelties/seasonal up 7.6 percent.

Regionally, per-store candy sales for the first six months of 2014 across the country ranged from a 0.8-percent decline in the Northeast to a 2-percent gain in the South.

SALTY SNACKS

As of mid-year, salty snacks were up 4.9 percent. Potato chips were up 5.4 percent, tortilla/corn chips up 7.1 percent, nuts/seeds up 4.6 percent, and puffed cheese snacks up 5 percent.

Regionally, salty snack sales are popping in the West so far this year, with a 6.1-percent increase per store for the first six months. The South and Midwest also saw strong sales gains of 5.3 percent and 5.1 percent, respectively. Salty snack sales were a bit soggier in the Northeast, which only registered a 1.6-percent sales gain.

FOOD SERVICE

The first six months of the year saw sales of prepared food (prepared on- or off-site) increase by 6.9 percent per store. The South again led the way with an 8.2-percent increase per store for the first half, followed by the West (7.4 percent) and Midwest (7.1 percent). The Northeast trailed in prepared food sales growth at a 3.4-percent gain.

Hot dispensed beverages, which includes coffee, hot tea, cappuccino and espresso, were up 2.4 percent for first-half 2014, a nice turnaround from the 2.3-percent decline this category experienced in full-year 2013. Hot beverages were up 3.4 percent per store in the South and 3.1 percent in the West. In the Midwest, hot drinks were up 2.8 percent for the first half, but in the Northeast they were down 0.7 percent.

Cold dispensed beverages were up 1.9 percent per store, an improvement from the meager 0.5-percent increase of full-year 2013. Frozen dispensed beverages, however, were up only 0.9 percent, compared to flat sales for the full last year.

Per-store sales of cold dispensed beverages ranged from a 0.9-percent decline in the Northeast to a 2.9-percent gain in the West, while frozen beverages were up the most in the West (up 2 percent).