Convenience store sales hit record $204B

U.S. convenience stores continued on an upward trajectory, reaching record in-store sales of $204 billion in 2013.

The industry's 2013 numbers were announced at the NACS State of the Industry Summit, a two-day conference that reviews and analyzes the industry's key economic indicators.

Sales for the retail channel climbed 2.4 percent for the year. Combined with motor fuels sales of $491.5 billion, overall convenience store sales were $695.5 billion, according to figures released today by the National Association of Convenience Stores (NACS).

The convenience store industry's in-store sales have seen rapid growth over the last decade, as shoppers seek out more food and beverages on the go. In-store sales in 2013 were led by continued growth in foodservice (2.4 percent), driven by prepared food and commissary.

Foodservice accounts for 18 percent of channel sales, packaged beverages for 15.5 percent, center store items for nearly 10 percent, beer for 7.9 percent and tobacco for 37 percent. Foodservice was the category that drove profits, accounting for 29.1 percent of gross profit dollars.

In spite of strong sales, store-operating costs increased at a faster rate than sales and led to a decrease in industry pretax profits, which fell from $7.2 billion in 2012 to $7.1 billion in 2013.

The biggest increase in costs was wages and payroll taxes. The industry saw a dramatic 19.5 percent increase in employees, a function of the industry's continuing embrace of foodservice, which requires more labor to manage.

The link between fuels and convenience retailing continues to grow. Overall, 83.7 percent of convenience stores (126,658 total) sell motor fuels, a 2.7 percent increase (3,369 stores) over 2013, according to the 2014 NACS/Nielsen Convenience Industry Store Count. The U.S. convenience store count increased 1.4 percent in 2013 from the prior year.

In case anyone wondered why Walmart would open its Walmart to Go convenience store, the formats account for 34.3 percent of all retail outlets in the U.S., according to Nielsen. This is significantly higher than the total of other retail channels including drugstores (41,378 stores), supermarkets/supercenters (37,459 stores) and dollar stores (24,853 stores).

For more:
-See this NACS press release

Related stories:
Best Buy, 7-Eleven disable NFC
Walmart debuts first Walmart To Go convenience store
Kroger to add an additional market, focus on urban-format stores  
Walmart steps up small store growth, reports dismal Q4 earnings
Can RadioShack re-invent itself, again?