Published on: April 8, 2009The National Association of Convenience Stores (NACS) is out with its annual state of the industry survey, offering he following nuggets of data:
• “Overall convenience store industry profits rose 54 percent in 2008 to reach $5.2 billion, reversing a two-year decline where profits dropped 42 percent over that period.”
• “Industry sales jumped 8.1 percent to reach $624.1 billion, with both motor fuels sales (up 10.1 percent to $450.2 billion) and in-store sales (up 3.2 percent to $173.9 billion) showing growth.”
• “The growth of in-store sales defied the overall trend in U.S. retail sales, which fell 0.6 percent based on U.S. Department of Commerce data. It also came despite a rare decline in the number of convenience stores. For only the third time in the past 15 years, the industry store count dropped – 1.0 percent to 144,875 – as many stores closed because of the punishing economic conditions.”
• “Credit card fees continue to be the industry’s top pain point, surging another 10.5 percent in 2008 to reach a record $8.4 billion – nearly three times the level just five years ago.”
• “The industry saw a modest 0.8 percent gain in number of employees, which rose to 1.73 million. Annual turnover numbers were even more impressive. For non managers, annual turnover was down to 109.0 percent; turnover for managers was down to 29.0 percent.”
- KC's View:
- This last piece of information is fascinating in all sorts of ways, not least because it is incredibly hard for me to imagine running a business where employee turnover is 109 percent annually – and that is considered an “impressive” improvement!
It may be a sign of something – like improved customer service – that the number of employees working for c-stores is going up as the number of c-stores is decreasing. It also could reflect an improved ability on the part of many c-stores to compete across a broader number of categories.
One other note from the NACS report intrigues me – the fact that roughly 33 percent of the industry’s sales and 16 percent of its gross profit dollars still come from tobacco products of various kinds. That’s got to be close to an untenable position now that it is looking more likely than ever that the Food and Drug Administration (FDA) could be given the authority to regulate the tobacco industry, and US smoking rates continue to drop (though it amazes me that 20 percent of the US adult population continues to engage in a habit designed to kill them).