Single Store Owner

JUN 2016

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24 / Convenience Store News for the Single Store Owner / JUNE 2016 Cover Story Foodservice was again the second- largest category in sales, accounting for 15.59 percent of in-store sales for single-store owners. Within foodservice, prepared food sales rose 6.4 percent, hot dispensed beverages were up 2.5 per- cent, cold dispensed beverages jumped 10.2 percent, while frozen dispensed beverages saw a 3.6-percent gain. "The average consumer had about $700 in incremental disposable income vs. 2014 due to deflation in fuel prices," noted Jon Bratta, vice president of marketing for convenience distributor Core-Mark International Inc. "Foodser- vice again showed nice gains, as did the core categories, including cigarettes." The third-largest category is pack- aged beverages, which comprised 12.27 percent of in-store sales for single-store owners, driven by a 6.1-percent sales gain last year at single stores. Beer/malt beverages is next at 9.64 percent of in- store sales (a 0.8-percent sales gain over the previous year), followed by edible grocery (4.97 percent of sales, 4.2-per- cent increase), other tobacco products (4.73 percent of sales, 3.5-percent increase), candy/gum (3.24 percent of sales, 2.9-percent gain) and general merchandise (3.32 percent of sales, 2.6-percent gain). Among smaller categories, wine and liquor (up 7.3 percent in sales), Single SToreS (in billions) ToTal induSTry (in billions) 2015 2014 % Change 2015 2014 % Change Merchandise $100.8 $97.5 3.4% $179.5 $171.9 4.5% Foodservice $18.6 $17.4 6.9% $33.5 $31.2 7.1% ToTAL $119.4 $114.9 3.9% $213.0 $203.1 4.9% Source: Convenience Store News Market Research, 2016 Merchandise & Foodservice Sales foodservice sales at single stores grew by a robust 6.9 percent year over year. Single SToreS ToTal induSTry $ billionS % Change $ billionS % Change In-Store $30.113 4.3% $57.424 5.4% Motor Fuels $17.604 0.5% $35.400 0.6% ToTAL $47.717 2.9% $92.824 3.5% Source: Convenience Store News Market Research, 2016 Single SToreS ToTal induSTry groSS ProfiT Margin $ Per STore groSS ProfiT Margin $ Per STore In-Store 25.22% $317,016 25.58% $379,302 Motor Fuels 8.97% $239,729 9.08% $284,625 CoMBINeD 15.09% $502,342 15.40% $613,129 Source: Convenience Store News Market Research, 2016 Single SToreS ToTal induSTry PreTax ProfiT PreTax ProfiT PreTax ProfiT PreTax ProfiT in billionS Per STore in billionS Per STore 2015 $4.204 $44,258 $9.277 $61,277 2014 $4.047 $43,074 $8.968 $59,889 2013 $3.008 $32,477 $6.687 $45,365 Source: Convenience Store News Market Research, 2016 Gross Proft Dollars Gross proft in terms of dollars for single-store owners rose 2.9 percent. Gross Proft Margin Single stores trailed the overall industry in both gross proft margin and dollars per store. Pretax Profts Single-store owners generated more than $4.2 billion in pretax profts. Average pretax proft per store was more than $44,000. Both fgures trail industry averages, though. alternative snacks (up 7.7 percent) and packaged sweet snacks (up 8.4 percent) had stellar years. Other highlights of this year's Indus- try Report include some industrywide trends that also impacted single stores: • Credit card transaction fees de- clined last year from $74,374 per store in 2014 to $73,167 per store in 2015, or about 12 percent of store profits. • Total direct-store operating ex- penses, though, continued to rise — topping $536,000 per store in 2015, up from $515,000 the previ- ous year. The biggest operating expense culprits were wages and health insurance. • In-store transactions were the high- est in nine years, and the average in-store transaction hit a new high of $8.22. • Shrink held steady at about 1.44 percent of sales. "The biggest hurdle to c-store growth outside of the fundamental economic factors are the c-stores them- selves," noted Powell of Q1 Productions. "It is still a challenge to hire quality, dependable staff, keep up with wages "Foodservice has been one of the primary drivers of growth for c-stores, and 2015 proved that." —TiM Powell, Q1 ProduCTionS

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