Convenience Store News

JAN 2017

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44 Convenience Store News | JANUARY 2017 | WWW.CSNEWS.COM Business Forecast the slightly higher 2017 per-gallon prices that are pro- jected, national and c-store sales of gasoline should see a rise dollar-wise. C-store sales are forecasted to be $382.2 billion, while national sales are forecasted at $471.3 billion. The c-store dollar figure for 2017 equates to a 10.9-percent improvement vs. a year ago. 2016 estimated dollar sales fell by 11.7 percent compared to 2015. Based on this positive forecast, it makes sense that c-store retailers surveyed are more optimistic on the fuels category than they were a year ago. More than six in 10 operators expect their per-store fuel volume to increase in 2017 (up from 52.9 percent of retailers a year ago). Lower prices, new technologies at the pump, and new payment methods are among the top reasons c-store retailers give for why they are bullish on the fuels category. TOBACCO There's no denying that tobacco retailing experienced a positive 2015. The numbers tell the story — ciga- rette industry unit volume grew 1.1 percent and unit volume per store ticked up 0.2 percent during that 12-month timeframe. But, as tobacco industry insiders predicted, the cigarette segment will return to normal levels when the final numbers for 2016 are crunched. CSNews estimates industry unit volume will see a nearly flat 0.2-percent increase and unit volume per store will dip 0.5 percent. The forecast for 2017 calls for cigarette industry unit volume to remain flat and unit volume per store to continue on a downward trend, decreasing by another 0.6 percent. A majority of convenience retailers are not expect- ing a repeat performance of 2015 any time soon. Only about a third say their cigarette sales per store will increase in 2017 — an equal amount to the percentage of retailers who say they per-store cigarette sales will decrease. Then, there's 37.1 percent of retailers who anticipate their business will remain the same. Tax increases — especially California's recently approved $2-per-pack levy increase — are among the issues retailers expect to have the biggest impact on the segment this year. Less usage, fewer smokers and an increase in vapor users are also expected to hit ciga- rette numbers. The other tobacco products (OTP) category, on the other hand, continues to perform well for convenience store retailers, with expected 2017 growth to be only slightly off from 2015. According to the research, 2017 2016 2015 Retailer Forecast: Cigarettes Retailer Forecast: Other Tobacco Products 31.4% 48.6% 31.4% 14.3% 37.2% 37.1% Source: Convenience Store News Market Research, 2017 Source: Convenience Store News Market Research, 2017 Net change: -0.6% Net change: 4.6% 2017 sales per store will: 2017 sales per store will: Increase Increase Decrease Decrease Stay the same Stay the same Industry Forecast: Other Tobacco Products (% change) Industry Dollar Sales Dollar Sales per Store Unit Volume per Store 2015 figures are actual; 2016 are estimated based on nine months; 2017 are forecasted Source: Convenience Store News Market Research, 2017 3.8% 6.1% 6.8% 5.2% 5.3% 6.0% 6.8% 6.8% 7.7% Industry Forecast: Cigarettes (% change) 2017 2016 2015 Industry unit volume 0.0% 0.2% 1.1% Unit volume per store -0.6% -0.5% 0.2% 2015 figures are actual; 2016 are estimated based on nine months; 2017 are forecasted Source: Convenience Store News Market Research, 2017

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