Convenience Store News

JAN 2017

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50 Convenience Store News | JANUARY 2017 | WWW.CSNEWS.COM Business Forecast 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 Non-chocolate candy, meanwhile, will have flat unit- volume growth and increase 4.5 percent in dollar sales per store, according to the Forecast Study projections. Mints are predicted to have a better year, with 0.5-percent growth in unit volume compared to an estimated 2.3-percent decline for 2016. Also after a flat 2016, dollar sales of mints are forecasted to see growth of 1.2 percent. Gum faces a rockier 2017, with an expected 1-percent increase in unit volume but a 0.8-percent decrease in dollar sales. SNACKS If the snacks business could be defined by convenience store retailers in one word, it would be "hot," accord- ing to this year's CSNews Forecast Study. Widely viewed as an afternoon indulgence, salty snacks — which includes potato chips, tortilla chips, pretzels, ready-to-eat popcorn, nuts and seeds — expe- rienced 4.3-percent growth in total industry dollar sales in 2016 (estimated). This metric is forecasted to increase 5.7 percent in 2017. On a per-store basis, unit volume is forecasted to rise, however at a slower pace; by 2.8 percent in the upcoming year vs. an even 2 percent in 2016. Popularity of potato chips and price hikes in salty snacks are anticipated to drive a boost in dollar sales per store, by 5 percent. Still, this isn't as strong as the growth experienced in 2015, when salty snack dollar sales reached 5.5-percent growth — the largest growth over the three-year period. In the alternative snacks segment, there's continuing good news. This segment has seen significant growth over the past few years as consumers search for more whole- some between-meal fillers and portable, on-the-go snacks. In 2017, the alternative snacks category — encompassing meat snacks and health, energy, protein and granola bars — is predicted to grow by 4.7 percent in industry dollar sales, according to CSNews projections. C-store operators are optimistic about their salty and alternative snack prospects for the upcoming months. In the salty snacks arena, 73.5 percent of retailers surveyed expect their dollar sales per store to increase. There's sim- ilar sentiment for alternative snacks, with 71.4 percent of retailers foreseeing sales growth thanks to the rising inter- est in healthy eating in America, popularity of jerky, and consumers opting for healthier alternatives. GROCERY As more convenience stores offer an expanded selec- tion, grocery items are becoming more noticeable to just under the 2.2 percent predicted last year. According to the CSNews Forecast Study projec- tions, however, 2017 could potentially be bittersweet for the candy category despite retailer optimism. Dollar sales per store are forecasted to grow 1.7 per- cent, a slight uptick from the estimated 1.1-percent growth of 2016. Unit volume per store, though, is expected to see a slight decline of 0.3 percent, marking very little change from the estimated 0.7-percent drop of 2016. This slowdown in unit volume may be due to changes in the way U.S. consumers approach their diets, some c-store operators speculate. "Sugar is really becoming a big influence on healthy thinking," said one retailer. Chocolate candy is expected to decline in both unit volume and dollar sales, continuing a multi-year downward trend. Unit volume of chocolate is expected to fall 1.9 percent in 2017, albeit this is an improve- ment over the estimated 2.3 percent it dropped in 2016 and 7.1-percent decline in 2015. Dollar sales per store are forecasted to decrease 0.2 percent, piggy- backing on an estimated 0.5-percent decrease in 2016. Industry Forecast: Candy (% change) 2017 2016 2015 Retailer Forecast: Candy 57.1% 42.9% Source: Convenience Store News Market Research, 2017 Net change: 1.9% 2017 sales per store will: Increase Decrease Stay the same 2.5% 1.7% 3.6% 1.8% -0.3% 1.1% -0.7% -3.1% 2.7%

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