ALEXANDRIA, Va. — Expanded assortments of healthy snack and drink options drove positive revenue growth for convenience store retailers in the first six months of the year, according to a survey by NACS, the Association for Convenience & Fueling.
More than three in four (79 percent) convenience retailers said in-store sales increased over the first six months of the year compared to the same time last year, and more than half (56 percent) said their fuel sales increased compared to last year, according to the quarterly NACS Retailer Sentiment Survey.
Conversely, only 7 percent of retailers said that in-store sales declined and only 19 percent said fuels sales declined.
C-stores sell nearly 80 percent of the fuel purchased in the United States and conduct an estimated 165 million transactions a day, making the industry a good indicator for trends related to travel and consumer spending, according to NACS.
The focus on fresh and healthy items is helping to boost sales, according to the survey, and retailers plan to dedicate more sales space to the items. Retailers cited the addition or expansion of the following items in their stores:
- Health bars: 45 percent of retailers added or significantly expanded over the first half of 2018
- Fresh fruit/vegetables: 41 percent of retailers added or significantly expanded over the first half of 2018
- Packaged salads: 37 percent of retailers added or significantly expanded over the first half of 2018
- Nuts/trail mix: 35 percent of retailers added or significantly expanded over the first half of 2018
Retailers expanded healthy and fresh options in 2018
Health bars (45 percent)
Fresh fruit/vegetables (41 percent)
Packaged salads (37 percent)
Nuts/trail mix (35 percent)
Tulsa, Okla.-based Muskogee Creek Nation Travel Plazas noted healthy snacks is driving in-store sales, according to NACS, which added the alternative snacks category, driven by protein- and energy-rich items, is one of the faster growing categories in the convenience retailing industry.
At J.R.'s Country Stores, based in Pueblo, Colo., foodservice is expected to draw customers — a trend carrying over from last year.
According to NACS, foodservice powered in-store growth for U.S. convenience stores with 22.5 percent of in-store sales and 33.9 percent of gross profit dollars. Prepared food accounted for 69 percent of total foodservice sales.
In the survey, retailers also cited their core offer of delivering value and choice for consumers, whether for healthy or indulgent food and beverage options.
"Fresh salads and smoothies, along with burgers and fries, seem to be the big winners so far in 2018 — the full spectrum of pleasure food vs. healthy options," said Dennis McCartney at Landhope Farms, based in Kennett Square, Pa.
Healthier options are also hitting the cold vault. The survey found that retailers are devoting more cooler space to lower-calorie and lower-sugar beverages options, especially waters.
Notably, during the first six months of 2018:
- 54 percent of retailers said they added flavored/enhanced waters; and
- 52 percent of retailers said they added regular bottled water.
As NACS noted, water also figures prominently in sales growth, with 46 percent of retailers expecting more still bottled water sales to increase and 42 percent expecting sparkling bottled water sales to increase.
In addition to in-store offers, retailers said sales growth will be fueled by generally low gas prices, warm summer weather and strong consumer confidence. With these factors in place, retailer confidence has increased, with a record 86 percent of convenience retailers indicating they are optimistic about their business prospects over the third quarter, up three points from last quarter and tied for the highest measured since NACS debuted the retailer sentiment survey in 2015.
Convenience retailers also are optimistic on a broader economic level. Approximately three in four retailers are optimistic about the economy and the convenience store industry.
The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their businesses, the industry and the economy. A total of 74-member companies, representing a cumulative 2,106 stores, participated in the July 2018 survey.