As Americans return to work and school, ballgames, concerts and vacations, revenue in U.S. convenience stores has increased by leaps and bounds. In July, year-over-year foodservice sales grew just shy of 15%, driving a 3.8% increase in inside sales, while fuel sales skyrocketed 52.1%.
Looking at 2021’s performance against the last “normal” year of 2019, sales also have strengthened. Fuel sales in July 2021 increased 17.8%, and inside sales rose 16.2% compared with 2019.
It’s all about what a retailer can take to the bank, though. Although sales are strong, direct store operating expenses (DSOE) are rising at a fast pace. In July 2021, total DSOE rose 16.0%. At the 2020 NACS State of the Industry Virtual Experience, Charlie McIlvaine, CEO of Coen Markets, and Chuck Maggelet, CEO of Maverik, warned their fellow retailers of impending increases in expenses. It’s clear they nailed that prediction.
July data from the CSX database reveal that three of the largest expenses in terms of dollars have surged since 2019.
- A challenging labor environment has caused retailers to spend more for personnel. Wages and benefits indexed at 118 vs. July 2019.
- Many retailers put off repairs in 2020, and that expense line grew in 2021. Repairs and maintenance indexed at 105, compared with 2019.
- When fuel prices and transactions fell in 2020, reduced credit card swipe fees were the silver lining. As most expected, card fees have returned with a vengeance in 2021. July’s average card fees of $9,910 per store indexed at 117 vs. 2019.
In total, these three expense lines have added just under $6,000 per month to the average store’s DSOE total. Retail members, if you are not comparing your operating expenses to a benchmark like the NACS State of the Industry Report, it’s time to obtain a digital license.