Single Store Owner

JUN 2016

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30 / Convenience Store News for the Single Store Owner / JUNE 2016 Operations W hile both single stores and c-store chains had a solid year in terms of overall prof- its in 2015, there was one Achilles heel industrywide: direct- store operating expenses. Reaching an average of $536,118 per store in 2015, direct-store operating ex- penses experienced a 4.1-percent increase compared to the prior year. These every- day expenditures now account for 13.46 percent of per-store sales, compared to 11 percent in 2014. Much of the added expense last year came from wages, which jumped by near- ly $18,000 per store to $264,185. Wages now equate to more than 43 percent of a store's profits, on average. With several states and local municipalities gung-ho on increasing their minimum wages to as high as $15 per hour, it is unlikely wage relief is in sight for single-store operators. There was one bright spot in the ex- pense area last year: credit card fees. This line item declined by an average of $1,207 per store, or 1.6 percent, to $73,167 per store industrywide. More positives came in terms of trans- actions. Armed with more discretionary income due to lower fuel prices, c-store retailers enjoyed an increase in in-store transactions per week, the average basket ring per in-store transaction, motor fuel transactions per week, and average gal- lons per transaction. Shifting gears to property size, the sales area, non-sales area, total store size and total property size all increased in 2015 vs. prior years, but only by a small amount. Everyday Expenditures Keep Rising Direct-store operating expenses surpass 13 percent of total sales per store DOLLARS AS A PERCENT AS A PERCENT OF PER STORE OF PROFITS TOTAL SALES PER STORE Wages $264,185 43.14% 6.63% Payroll taxes 15,106 2.47 0.38 Workers compensation 10,621 1.73 0.27 Health insurance 24,598 4.02 0.62 Other benefits 6,024 0.98 0.15 Labor subtotal $320,534 52.34% 8.05% Credit card fees 73,167 11.95 1.84 All other direct-store operating expenses 142,416 23.26 3.58 TOTAL $536,118 87.54% 13.46% Source: Convenience Store News Market Research, 2016 2015 2014 2013 In-store transactions per week 3,291 3,280 3,273 Motor fuel transactions per week 2,544 2,529 2,533 Average in-store transaction $8.22 $7.95 $7.85 Average motor fuel transaction $23.70 $30.46 $31.21 Average gallons per transaction 9.2 8.9 8.8 Source: Convenience Store News Market Research, 2016 Direct-Store Operating Expenses Wages shot up in 2015, rising by $17,791 per store to $264,185. With many states and municipalities considering a higher minimum wage, this line item is likely to keep increasing. Transactions Lower fuel prices translate into greater discretionary income and this helped drive more in-store transactions per week at c-stores last year. Sales area 2,411 Non-sales area 822 Total store size 3,233 Total property size 27,749 Source: Convenience Store News Market Research, 2016 C-Store Square Footage Despite some c-store operators building larger-format stores, the total store size in terms of square footage only ticked up slightly in 2015. 2015

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