After years of picking up more treats, convenience store shoppers skipped a few snacks last year
Food has become a huge revenue stream for convenience stores in recent years.
In 2003, inside purchases of everything from cigarettes and magazines to hoagies and hot dogs made up $116 billion in sales for American convenience stores, while fuel accounted for two-thirds of overall revenue. By 2023, as our appetite to top up on more than just gas grew, inside sales hit $328 billion.
But new market research suggests that we might have had our fill, for now...
No thanks, I’m driving
With higher prices across pretty much everything and consumer confidence taking its biggest plunge in almost four years last month, Americans aren’t picking up snacks and smokes like they used to. That’s been hitting convenience stores hard, where sales are down by 4.3% for the year ending February 23, per market research firm Circana via The Wall Street Journal.
Earlier this year, we covered how convenience chains have been elevating their food offerings to take advantage of the boosted profit margins on pizza slices and fresh nuggets. Casey’s General Stores latest earnings, for instance, show that its margin on food was ~58%, while gas was close to 12% — which is why the new 7% drop in refrigerated product sales is pretty hard to stomach for sellers. Even some of the cheaper confectionery treats that cash-strapped shoppers turn to have slumped, with chocolate sales down 6%, too.
It’s not just convenience stores that are worried about customers diminishing snacking appetites, but the companies behind the products as well. As J.M. Smucker’s CEO explained, “Gas prices have been elevated and so people are just having a bit less extra discretionary change in their pocket,” which goes some way in explaining why the company is churning out new treats exclusively at convenience stores, like its limited-edition cherry Twinkies at 7-Eleven.
