High gas prices are taking their toll on sales at convenience stores.
Fifty-nine percent of convenience store retailers said their customer traffic has decreased in stores during the past three months, according to the results of a survey by NACS.
Convenience stores, which sell an estimated 80% of the fuel purchased in the U.S., rely on in-store sales, not fuel sales, to drive profits. But high gas prices are hurting customer traffic in stores and “basket” size. Forty-nine percent of all retailers reported that customers who are coming inside the store are buying less compared to three months ago when gas prices were $1.50 a gallon lower.
In addition, retailers expressed concerns that elevated gas prices could also depress sales over the traditionally busy summer-drive season. Fifty-three percent said they expect sales to be lower this summer than last summer, with only 25% anticipating increased sales.
Convenience retailers said they are looking to reduce expenses, chief among them credit card fees, which average more than 10 cents per gallon, and pass along savings to price-conscious customers. More than one in four (29%) of retailers surveyed said they are offering cash discounts at the pump, and 31% are offering discounts for those who pay by app.
If there is some good news for retailers it’s that consumers aren’t blaming them as much as they used to for higher prices. Thirty-seven percent of retailers said consumers understand that higher gas prices are caused by factors outside of the retailers’ control, compared to 35% who said that consumers blame retailers for higher prices.
The U.S. Energy Information Administration reports that only 5% of the cost of gas in May (the latest data available) is because of “distribution and marketing,” which includes the retail markup on fuel. And only 25% of retailers said they have experienced higher levels of gas theft compared to a year ago.
“While sales and traffic have slowed as gas prices climbed, retailers continue to seek out innovative ways to provide value at the pump and inside the store to help their customers extend their paychecks and weather this period of inflated costs,” said Jeff Lenard, NACS VP of strategic industry initiatives.
The Q3 2022 NACS Pulse Survey was conducted in June by NACS Research. A total of 53 retailer member companies representing 3,023 stores participated in the survey.