Convenience store sales at pre-pandemic levels; turnover highest since 2012
In-store convenience-stores sales reach a record high in 2021, although headwinds in labor and turnover continue.
That’s according to the newly released NACS State of the Industry data, which revealed that total in-store sales increased to a record $277.9 billion in 2021, The in-store increase in sales came despite a 1.5% decline in the number of convenience stores, which totaled 148,026 locations at the start of 2022.
Factoring in fuels sales of $427.8 billion, total convenience store sales reached $705.7 billion in 2021, meaning that overall sales were 3.1% of the total U.S. GDP of $23.0 trillion in 2021.
The average in-store basket size increased 6.3% in 2021 to $7.59 and has grown 22.4% over the past two years, making up for a 6.9% decrease in in-store transactions since 2019.
Labor Market Headwind
Total turnover for retail overall has increased and the convenience channel is no exception. The convenience store turnover rate was 150% in 2021 —the highest it has been since 2012, according to the NACS State of the Industry Compensation Report of 2021 Data, The full-time employee turnover rate was 119%. The part-time employee turnover rate was 182%.
Direct store operating expenses increased 14.3% in 2021 versus 2020. The largest contributor was wages and benefits ($71.7 billion), which was up 10.7% compared to 2020 ($64.8 billion) and up 17.1% compared to 2019 ($60.9 billion). Card fees, meanwhile, were up 25.6% in 2021 ($13.5 billion) versus 2020 ($10.7 billion).
Fuel Sales Close In on 2019 Levels
Convenience stores sell approximately 80% of the motor fuels purchased in the United States and saw a return to the pumps as more consumers and commuters hit the road again in 2021, although below pre-pandemic levels in 2019.
Total convenience store fuel sales increased 46.2% in 2021, reflecting both higher demand and higher gas prices, which averaged $3.02 a gallon in 2021, considerably higher than the average of $2.17 a gallon in 2020.
Food Service Bounces Back
Food service sales reflected the trend of convenience stores selling more restaurant-quality food. Food service, which includes prepared food, commissary, hot dispensed beverages, cold dispensed beverages and frozen dispensed beverages, saw sales grow 24.1% in 2021 and are 10.6% higher than 2019 levels.
Overall, food service accounted for 22.5% of in-store sales in 2021—significantly higher than the 16.8% reported a decade ago. The category now accounts for 35.5% of in-store gross profits, compared to 29.2% in 2011.
A robust foodservice offer was the greatest predictor of in-store profit, according to NACS. Stores in the top decile for in-store store operating profit have foodservice gross profits that were seven times those in the bottom decile.
“The sales and performance metrics show that our industry is resilient,” said Charlie McIlvaine, chairman and CEO of Canonsburg, Pennsylvania-based Coen Markets Inc. and a member of the NACS Board of Directors. “Our rapid adjustments to product assortment and the embrace of last-mile solutions allowed our industry to hold its own over the past few years, but to grow, especially market basket, is simply remarkable. While there are numerous headwinds facing retail in 2022, I am very optimistic about our channel’s future.”
NACS announced the industry’s operational and performance metrics today during the 2022 NACS State of the Industry Summit, the first in-person SOI Summit since 2019. Metrics looked at performance compared to the previous year and to 2019, which allowed comparisons to sales and trends before the pandemic.