Convenience Store News

JAN 2017

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SMALL OPERATOR 28 Convenience Store News | JANUARY 2017 | WWW.CSNEWS.COM rule extending the Food and Drug Administration's regulatory authority to other tobacco products includ- ing e-cigarettes and cigars — it's no surprise that these changes are weighing on retailers' minds. State excise tax increases are also top-of-mind for small operators, particularly voter approval of California's ballot measure to hike its state excise tax on cigarettes by $2 a pack. This is just one of several tobacco cost increases on the horizon. "The $2-per-pack tax rate on tobacco will reduce sales. The $1-per-hour minimum wage raise will increase labor costs. Fuel prices will impact everything if they increase," commented one respondent to the CSNews survey. TAKING THE INITIATIVE To drive their sales and profits up in 2017, convenience store retailers across the board seem to think alike. Small operators, like their larger brethren, are looking to increase business by offering more customer perks. For example, some respondents pointed to loyalty pro- grams and other customer appreciation incentives as efforts on tap for 2017. Others are exploring ways to increase their store selection, and considering offering a proprietary gas card. W hether you are a convenience store retailer with one location, 10 locations or hun- dreds of locations, many of the issues you face are the same. However, how you view the impact of these issues on your business differs. For instance, small operators (those operating one to 10 stores) are starting off 2017 slightly less optimistic than their larger counterparts. To take the pulse of the convenience store industry heading into 2017, Convenience Store News recently surveyed retailers across the convenience-channel spectrum on what they foresee for sales and profits in 2017. An overwhelming majority forecast an increase in sales this year; however, small operators are a little less confident. According to the survey, 73.3 percent of small operators expect to see an increase vs. 88.6 percent of total respondents. Conversely, roughly one-quarter of small operators (26.7 percent) believe their sales will stay the same, vs. 11.4 percent of total retailers. No respondents, regard- less of store count, predict their sales will decrease, reflecting the strength of the convenience store business. Looking at the issues that will have the biggest impact on sales and profitability for their c-stores in 2017, small oper- ators rank motor fuel prices (74.6 percent), labor issues (61.5 percent), healthy eating trends (46.2 percent), health care costs/regulations (38.5 percent), and tobacco and electronic cigarette regulations (30.8 percent) as their top five. With all the changes in tobacco regulations that came last year — notably, imple- mentation of the deeming Good Things, Small(er) Packages Small operators are feeling optimistic about 2017, but wary of the election's effect By Melissa Kress Increase Decrease Stay the same Do you expect your 2017 average sales per store to: 73.3% 26.7% NOTE: Results are based on small operator respondents, one to 10 stores Source: Convenience Store News Market Research, 2017 Net change: 4.9%

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