Single Store Owner

JAN-FEB 2016

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24 / Convenience Store News for the Single Store Owner / JANUARY/FEBRUARY 2016 COVER STORY the top factors that will affect sales at the forecourt during 2016. FOODSERVICE As the convenience store industry as a whole continues to evolve farther and farther away from its cokes-and-smokes past, foodservice remains a reliable growth opportunity for retailers. A whop- ping 87.5 percent of single-store operators expect their sales of foodservice, which includes prepared food and hot, cold and frozen dispensed beverages, to increase in 2016. The optimism these store owners feel is nearly universal, as no owners expect foodservice sales to decrease and only 12.5 percent believe their food- services sales will stay the same. Additionally, the net change in sales they forecast is a hearty 9.8 percent. Single stores, in fact, are more bullish on the foodservice category than chain retailers, of which 80.8 percent expect their company's foodservice sales to increase in this new year. Some single-store owners believe their food- service sales will increase because they have made investments in new equipment and now have the ability and capacity to offer customers more. At the same time, some note that the best results will come only from properly executing the foodservice pro- gram, not just ensuring one exists. The trends single-store retailers foresee having the biggest impact on foodservice in 2016 include the development of quality, healthier products and heat- and-take-home meal options. TOBACCO Our data shows a slight 0.7-percent rise in 2015 cigarette unit volume per store, with a total industry unit volume increase of 1.5 percent. The forecast for 2016 puts cigarettes on the plus side again in terms of unit volume, though not as much. Still, c-store operators are hoping this represents the start of a new positive trend, reversing years of steady volume declines. Notably, total industry unit volume dipped 1.9 percent in 2014. Despite the momentum, many single-store operators are keeping their 2016 expectations in check. The majority of respondents in the Single Store Owner Forecast Study predict their cigarette sales this year will decrease or stay the same — a combined 63.6 percent. Cigarette prices are expected to rise from increases in manufacturer list costs and taxes. The 2016 projec- tions call for the manufacturer list cost per carton to come in at $38.14 compared to $36.14 in 2014, with federal, state and local taxes reaching a combined $21.32 per carton. Industry Forecast: Other Tobacco Products (% change) Unit Volume per Store Dollar Sales per Store Industry Dollar Sales 2016 2015 2014 Source: Convenience Store News Industry Forecast Study, 2016 2014 figures are actual; 2015 are estimated based on nine months; 2016 are forecast. 4.6% 6.9% 5.7% 5.3% 4.6% 3.9% 6.5% 5.4% 4.8% Retailer Forecast: Other Tobacco Products Sales will increase Sales will decrease Net change: 3.5% Sales will stay the same 54.5% 27.3% 18.2% Source: Single Store Owner Retailer Forecast Study, 2016 Retailer Forecast: Foodservice Sales will increase Sales will decrease Net change: 9.8% Sales will stay the same 87.5% 12.5% Source: Single Store Owner Retailer Forecast Study, 2016

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