C-store sales fall nearly 14% in 2020 as fuel sales plunge

A steep decline in fuel sales amid the pandemic took a big toll on convenience store sales in 2020.

Total c-store transactions fell 13.9% to $548.2 billion last year as fuel sales plunged 26.1% to $292.6 billion amid the decline in leisure travel and the upswing in working at home, according to the NACS State of the Industry report. (C-stores sell roughly 80% of the fuel purchased in the United States.)  

Total in-store sales, however, increased 1.5% to a record $255.6 billion as customers shopped their local convenience stores to fulfill daily shopping needs. Basket sizes increased 18.4% compared with 2019. The average basket size was $7.34 in 2020 vs. $6.20 in 2019.

The in-store increase also came despite a 1.6% decline in the number of convenience stores, which totaled 150,274 stores at the start of 2021. Deep declines in transaction counts, particularly in April 2020, were mitigated with an upswing throughout the remainder of the year, particularly the fourth quarter when transaction counts approached those of previous years.

The report noted that credit card swipe fees remain one of the highest operating costs for convenience store retailers. Consumer preferences for more touch-free transactions and the coin circulation challenge in summer 2020 led to record debit and credit card usage at convenience stores. In 2020, 74.6% of all transactions were paid by plastic, and overall card fees paid by the convenience store industry were $10.7 billion.

According to NACS, the broad category of foodservice took a hit in 2020, dropping from 38.9% of the in-store gross profit dollar sales mix in 2019 to 34.5% due to pandemic restrictions and protocol adjustments. The foodservice category includes prepared food, commissary, hot dispensed beverages, cold dispensed beverages and frozen dispensed beverages.
 
Prepared food sales declined 7.4% in 2020, and as expected, the pandemic had a huge impact on self-serve beverages. Hot dispensed sales fell 33.4%, and cold dispensed beverages declined 7.9%, reflecting the drop in footfall amid stay-at-home orders and work-from-home schedules. 

Commissary (largely prepackaged foods) was the only foodservice category that generated sales growth during the second quarter of 2020, ended the year with a 13.3% category sales contribution. 

Other in-store growth came from alcohol and tobacco product sales, which saw an uptick in April 2020 that continued throughout the year.

The cigarette category saw a pandemic sales boost as consumers shifted to a “stock-up” mentality, representing 27.8% of in-store sales in 2020, an increase of nearly 1 percentage point (0.93 pts) from 2019.

“Our industry saw significant shifts in purchasing patterns in 2020 and these changes will likely accelerate in 2021, both in what products are sold and how they are purchased, especially as mobile ordering, home delivery, curbside pickup and contactless payment continue to gain in popularity,” said NACS vice chairman of research and technology Andy Jones, president and CEO of Sprint Food Stores.