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Robust Sales Forecasted For First Quarter Of 2016

NACS consumer optimism

Last updated on June 13th, 2024 at 05:11 pm

Convenience store retailers expect the robust sales in 2015 to continue into the first quarter of 2016, according to the results of a survey released by the National Association of Convenience Stores (NACS).

Retailers said that overall sales in 2015 were strong, with more than three in four (78 percent) reporting an increase in foodservice sales and nearly two in three (64 percent) reporting an increase in fuel gallons sold. A total of 100 member companies, representing 1,248 stores, participated in the survey.

Nearly eight in 10 convenience store retailers (78 percent) said they are optimistic about their business for the first quarter of 2016, compared to only 6 percent who are pessimistic.

“People seem to have a bit more money available—maybe due to lower gas prices—and are buying more inside the stores,” said Richard Parry of Aloha Petroleum in Honolulu, Hawaii.

“The price of fuel seems to have helped with inside sales,” said Herb Hargraves of Jacobs Entertainment in Lafayette, Louisiana, adding that customers are more willing to purchase additional items inside the stores, including higher-ticket items such as sportsman coolers and even $399 hoverboards for the holiday season.

A proprietary food rollout has helped grow sales at Anderson, Indiana-based Ricker’s convenience stores.

“We’ve seen sales growth inside our stores after adding foodservice—and it has had a halo effect on other in-store items,” said Jay Ricker.

Stores also grew sales by offering a variety of better-for-you items. Nearly two in three retailers (65 percent) said that sales of better-for-you items increased.

Retailers also are bullish on the convenience store industry’s business prospects. More than three in four retailers (78 percent) said they are optimistic about the convenience store industry, an increase from 73 percent last year.

Retailers expect to see continued demand for healthy items in stores.

James Lynch of Burley, Idaho-based Triple S Oil expects better-for-you foods sales to grow, especially in the first quarter following New Year’s resolutions.

While retailers are optimistic about 2016, they also have a number of concerns, especially related to labor.

More than two in five retailers (41 percent) said that labor issues are a threat to their business in 2016. With tight labor markets and pushes to increase the minimum wage in many areas, meeting the demand for more prepared food programs, which require more employees on the payroll, will be challenging.

While competition is always a concern for retailers—47 percent of retailers said that competition from other convenience retailers was the biggest threat to their business, while 33 percent cited competition from other channels—the biggest threat in 2016 is over regulation and legislation, cited by 61 percent of respondents.

Four broad factors emerged from the survey: gas prices (cited by 33 percent), the economy (15 percent), the weather (14 percent) and the embrace of better-for-you items (10 percent).

“If gas prices stay low, inside sales will be strong,” said John Long of Dyno’s Convenience Stores in Spencer, Iowa.

About the author

Shelby Team

The Shelby Report delivers complete grocery news and supermarket insights nationwide through the distribution of five monthly regional print and digital editions. Serving the retail food trade since 1967, The Shelby Report is “Region Wise. Nationwide.”

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