Low gas prices are driving increases in convenience store sales both at the pump and inside the store, according to the results of a survey of convenience retailers released today by the National Association of Convenience Stores (NACS).

Two in three retailers (67%) say that in-store sales in the first quarter of 2016 were higher than the same period last year because of lower gas prices, and nearly three in five (59%) say that fuel sales were higher compared to the first quarter of 2015. Only 11% of retailers say that in-store sales were lower in the first quarter of 2016 compared to a year ago.

Retailers also feel good about their prospects for the second quarter. Three in four retailers (75%) say that they are optimistic about their own business prospects in the second quarter, compared to 68% who are optimistic about the convenience retailing industry’s prospects and 58% who are optimistic about the economy.

In each of the six quarters that NACS has conducted surveys, retailers have been most optimistic about their own business prospects and least optimistic about the overall economy.


Sales Expected to Increase as Weather Heats Up
Convenience store sales traditionally increase in the spring and summer as Americans spend more time travelling and enjoying the warmer weather outdoors. Retailers expect sales to increase over the strong numbers reported in 2015: Nearly four in five (78%) retailers expect sales this summer to surpass those last year, compared to only 6% who foresee reduced sales.

While drink sales surge in the warmer summer months, retailers are most optimistic about their food sales this summer. Nearly six in 10 (58%) say that sandwiches and meals will drive sales growth this summer, followed by 54% who cite packaged beverages (soda, water, juice, energy drinks) and 47% who cite fountain drinks. Retailers also expect strong sales increases for fruits and vegetables (including salads), cited by 30% of all retailers, and healthy packaged snacks, cited by 29%.

Retailers cited a number of reasons for their optimism. “Lower gas prices allow people to have more money to spend in our stores,” said Jamy Flory with Flory’s Corp. (Fishkill, NY).


Mickey Jamal with CPD Energy (New Paltz, NY) agreed, adding that the industry’s increased focus on quality foodservice programs is helping to increase sales.

An emphasis on hot prepared foods is expected to drive traffic at Dutchtown Tiger Mart stores (Baton Rouge, LA) said Elvin Simpson, while better-for-you snacks are growing sales at Diaz Market stores (Metairie, LA) said Giselle Eastlack.

“I have noticed an increased need to offer our guests ‘better-for-you’ snacking options,” said Herb Hargraves, with Cash Magic Truck Stops (Lafayette, LA). “Low-sugar [and low-] fat diets are driving additional sales to bottled water and healthy snacking options and I expect these sales to continue to grow.”

Other retailers are testing innovative new concepts. Encore convenience stores (Hoover, AL) now offer the Taiwanese tea-based drink “bubble teas” and a proprietary wine brand.

Warmer weather also was cited as a reason for retailer optimism. “Continuing warm trends encourage people to spend more time out of their houses. Many of our stores are seeing an influx of foot traffic because of the higher-than-normal temperatures,” said Lisa Dell’Alba with Square One Markets (Bethlehem, PA).

Concerns over the Political Climate
Despite the positive news, retailers raised one major concern that could dampen sales: the political climate.

“The rhetoric from the presidential race combined with the political climate will damper the mood of the economy due to the negative nature of the campaigns,” said John Strickland, with Wayne Oil Co. (Goldsboro, NC).

Kent Couch, with Stop & Go Mini Mart (Bend, OR) agreed, saying that the economy and “presidential fear” could impact sales growth.

Despite the negative political climate, retailers still like their prospects.

“I believe that low gas prices are going to start to rise but not enough to dissuade travel. We have seen consistent volume increases over 2015 and expect that to continue,” said Dennis McCartney with Landhope Farms Corp. (Kennett Square, PA).

The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their business, the industry and the economy as a whole. A total of 102 member companies, representing a cumulative 2,052 stores, participated in the March 2016 survey.