Are convenience stores in for a big year in 2017?
Convenience store operators are feeling pretty good about their prospects in 2017, that according to the quarterly Retailer Sentiment Survey by NACS, the association for convenience and fuel retailing.
The optimism expressed by c-suite executives is the result of a combination of factors, including low fuel prices and improvements in foodservice operations that drove gains in 2016. Sixty-eight percent said sales of fuel had increased as lower prices at the pump brought more shoppers to their stores. The combination of more shoppers and better execution led to a jump in foodservice sales, with 63 percent reporting an increase last year.
C-stores also benefited from a greater emphasis on “better for you” foods such as fresh produce, health bars, nuts and yogurt. Sixty-three percent of those responding to the survey said sales of these products improved in 2017. Only one retailer who responded said “better for you” sales were down last year.
Optimism about the economy is way up among c-store retailers. Seventy-nine percent, a 26 percent leap from the previous quarter according to NACS, are optimistic about the country’s economic prospects.
Retailers report investments in technology, particularly those focused on loyalty and better customer experiences, are key to growing sales. Investments made in food and beverage equipment are also said to be producing positive returns for stores.
And yet c-store executives do have concerns. Fifty-five percent expressed unease about regulations and legislation. Labor has also become more of a worry for c-store management. Fifty-three percent said they are concerned about labor issues, up from only 41 percent a year ago.
Republican control of the executive and legislative branches of government in Washington may help ease some of the worry c-store executives have about regulations and labor. President-elect Donald Trump and GOP legislators have identified regulatory rollbacks as among their highest priorities.
Mr. Trump has also nominated Andy Puzder as his choice for labor secretary. Mr. Puzder, chief executive of CKE Restaurants Holdings, the parent company of the Carl’s Jr. and Hardee’s, has been a vocal critic of raising the federal minimum wage above $9 while pushing back against the Affordable Care Act and executive orders issued by President Obama seen as favoring employees over employers.
The NACS Retailer Sentiment Survey conducted in December included responses from 81 of the group’s member companies, representing 4,052 stores.
- Convenience Retailers Very Optimistic For 2017 – NACS
- Trump Picks Fast-Food Executive Andy Puzder as Nominee for Labor Secretary – The Wall Street Journal
DISCUSSION QUESTIONS: Will 2017 be a big year for convenience stores? What do you think are the keys to the industry achieving sustainable growth this year and beyond?