U.S. Convenience Store Sales Show Strong Growth in 2010..

April 7, 2011 - CHICAGO -- Convenience store in-store sales grew 4.4% in 2010, reaching a record $190.4 billion, according to figures released today by NACS. Combined with $328.7 billion in motor fuels sales, total convenience store sales in 2010 were $575.6 billion, or one out of every 25 dollars of the overall $14.624 trillion U.S. gross domestic product.

The industry's 2010 numbers were announced in Chicago today, April 6th at the annual NACS State of the Industry Summit, a two-day conference that reviews and analyzes the industry's key economic indicators.

The 4.4% growth rate of convenience store in-store sales surpassed the growth rates of other competing channels, including warehouse stores/clubs (4.0%), restaurants (3.4%), drug stores (2.4%) and grocery stores (2.3%), based on U.S. Department of Commerce numbers.

Part of the sales growth can be attributed to an increase in stores. The number of U.S. c-stores grew 1.2% over the past year and stands at a record 146,341 stores, according to the NACS/Nielsen TDLinx 2011 Convenience Industry Store Count, released in January 2011.

Nearly three-quarters of in-store sales are from the top five categories:

1. Cigarettes (35.8% of in-store sales).
2. Packaged beverages (14.2%).
3. Foodservice (12.9%).
4. Beer (8.3%).
5. Other tobacco products (4.0%).

While motor fuels revenues are closely tied to price volatility, the 17.2% growth in motor fuels sales outpaced the overall 14.4% increase in prices in 2010, meaning that c-stores, which sell an estimated 80% of the country's motor fuels, also picked up some volume in 2010. Overall, 69.3% of total c-store sales dollars were from motor fuels. Even with an increase in motor fuels gross margins to 15.8 cents per gallon, motor fuels margins remain slim and motor fuels still only account for 26.4% of pretax profits at c-stores.

As a result of these strong sales, c-store pretax profits reached $6.5 billion in 2010, a remarkable turnaround from just 20 years ago, when the industry reported a loss of $220 million in 1990. As a percentage of total sales, pretax profits in 2010 were 1.1%.

"Our strong performance in 2010 shows that our convenience offer--especially one-stop shopping and speed of service for refreshments, food and fuel--continues to resonate with customers," said NACS vice chairman of research Fran Duskiewicz, senior executive vice president of Canastota, N.Y.-based Nice N Easy Grocery Shoppes.

Despite the strong sales and profit numbers, concerns remain for the industry, especially with credit-card and debit-card fees jumping a staggering 21.6% to hit a record $9 billion. Total credit- and debit-card fees surpassed overall c-store industry profits for the fifth straight year. As a percentage of overall sales, credit- and debit-card fees increased from 1.45% to 1.56% of total industry sales dollars, factoring in all forms of payment, including cash and check. Just looking at motor fuels sales, credit- and debit-card fees added 4.7 cents to every gallon of gasoline sold at c-stores in 2010.

In-store sales have shown significant growth at c-stores over the past decade, growing 82.9% since 2000. This year's in-store sales alone topped total sales--combined in-store and motor fuels sales--for every year through 1998.

Reference: Convenience Store Sales Show Strong Growth in 2010 Daily News