Restaurants, Grocery Concerned with The Rapid Growth of C-Stores

With over $701 billion in total sales in the U.S. the convenience store industry continues to drive new store growth and total sale growth.  Today, regular readers of this blog know that most of the 151,650+ c-stores are owned by independent operators. However they are following the lead of the top 50 chains and quickly garnering customers and market share.  How?

The number one category in C-stores at roughly 37 percent of in-store sales were on tobacco (cigarettes and other tobacco products). The next highest was foodservice (prepared and commissary food; hot, cold and dispensed beverages) with 18 percent and packaged beverages (soda, alternative beverages, sports drinks, juices, water, teas, etc.) accounting for 15.5 percent. The center of the store (candy; sweet, salty and alternative snacks) was 9.9 percent and beer was 7.9 percent according to NACS.

Ready-2-Eat and Heat-N-Eat fresh food and foodservice was the category that drove profits, accounting for 29.1percent of gross profit dollars. Packaged beverages were second, accounting for 19.6 percent of gross profit dollars. While tobacco products constituted 37 percent of in-store revenue dollars, they accounted for only 18.7 percent of gross margin dollars.

Last year the convenience store industry’s in-store sales were led by continued growth in foodservice (2.4%), driven by prepared food and commissary. So, that means that C-store food last year grew by $16.8 Billion.  $16.8 Billion is the reason for the restaurant sector and grocery sector to be concerned about the growing threat from the C-store sector.

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