ó For hungry drivers like Whitney Scott, the current
below-average gas prices offer a measure of freedom.
local gas prices last spring hovered close to $4 a
gallon, drivers may have wanted to grab some snacks or
sodas after filling up the tank "but didnít
because gas was high," said Scott, who stopped
earlier this week at a Dallas 7-Eleven/Chevron station
to fill up her Chevy Equinox.
she said, toting a box of barbecued chicken wings from
the 7-Eleven, "they have the funds to freely get
what they want."
gas prices plunged in the second half of last year, as
fracking boosted U.S. shale oil production and the OPEC
oil cartel kept the spigot open.
experts say, drivers are taking the windfall saved at
the pump and spending it inside the nearest convenience
profit margins on a gallon of gas are so thin, sales of
drinks and merchandise are much more profitable for a
convenience store operator than fuel sales, the experts
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means potentially lower 2014 revenue, but stronger
margins for key convenience store players including
market leader Dallas-based 7-Eleven Inc. And it means
more sales of snacks and drinks from companies such as
PepsiCo Inc., parent to Plano-based Frito-Lay.
are seeing an uptick in sales," said Margaret
Chabris, director of communications for 7-Eleven.
"Gas sales, in-store sales and customer counts are
attributed much of the in-store increase to continued
efforts by the company to introduce higher-quality
store-brand items along with fresh foods that are priced
to be wallet friendly.
we also believe that customers have more money in their
pockets to spend with the lower price of gasoline,"
she said, adding that 80 percent of 7-Elevenís
customers buy something to eat and drink. "Our
private-brand products and pizza sales are on
far the largest convenience store chain in the nation,
7-Eleven has about 7,800 locations in the U.S.
Energy Transfer Partners, which owns the Stripes brand,
is another large player in the industry, according to
the Top 100 chart from Convenience Store News, a trade
operates more than 645 stores in Texas, New Mexico and
Oklahoma under the names Stripes and Sac-N-Pac.
on how those locations are doing were not immediately
Mobil, based in Irving, wrapped up the sale of its
convenience stores in 2013. There still are about 10,000
stations in the U.S. that operate using the Exxon and
Mobil brand names under licensing agreements, the
convenience stores in general, gas may bring consumers
onto the lot, but drinks lure them into the store. And
drinks, from Gatorade to craft beer, saw sales rise as
gas prices fell.
store patrons "go inside to get a beverage Ö
whether itís for a cup of coffee or a fountain
drink," said Jeff Lenard, vice president for
strategic industry initiatives with the Virginia-based
National Association of Convenience Stores. "And
while there Ö theyíll say ĎIíll get a snackí
also. Itís the beverage sales that you see mostly
increasing and the other items increase because of the
Herzog is a senior analyst with Wells Fargo Securities,
where the research department recently surveyed
retailers representing more than 15,000 U.S. convenience
on the survey results, she estimates that non-alcoholic
beverage sales gained nearly 6 percent in the fourth
quarter of 2014, compared with a year earlier. That
follows a 6.2 percent gain in beverage sales in the
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North Texas, the 2014 peak price for a regular gallon of
gas came in late April, according to GasBuddy.com. It
was at $3.701.
headed steadily south during the second half of the year
and bottomed out locally at $1.768 in mid-January, the
website said. Prices have started rising since then.
all about low gas prices, with 100 (percent) of our
contacts indicating lower gas prices had a favorable
impact on sales," Herzog said in the report.
and Plano-based Dr Pepper Snapple Group have not yet
reported financial results for the fourth quarter and
estimates PepsiCoís convenience store sales grew by
nearly 4 percent in the quarter, with Gatorade posting
particularly strong sales.
called market leader Cokeís performance solid, but
said Dr Pepper Snapple Groupís sales growth
"remains below its peers."
Fargo studied trends at convenience stores because over
time they have become the nationís filling stations.
all gas purchased by consumers in the U.S., roughly 80
percent flows from convenience store pumps, according to
Lenard of the trade association. Only 10 percent of
sales come from traditional service stations. The other
10 percent is sold at larger grocery and big box stores,
of the nearly 153,000 convenience stores in the U.S.,
more than 80 percent have gas pumps, he said.
average convenience store gets about 300 customers a day
at the pump, Lenard said, and about 35 percent of those
customers also fuel themselves.
lower gas prices "doesnít make you hungrier or
thirstier," he said. "It gives you permission
to go inside."
soda and bag of chips sold helps blunt the impact of
lower gas prices on the storeís profit and loss
likely that total C-store revenues (for 2014) will be
lower due to the lower gas prices," said Don Longo,
editorial director for Convenience Store News.
"However, in-store sales, merchandise and food
service combined, are likely to grow more than usual,
which will have a positive impact on bottom lines
because" of the higher profit margins.
2013, the most recent year available, motor fuels
accounted for 70.7 percent of total convenience store
sales but only 35.6 percent of profit dollars, according
to a report from the convenience store association.
consumers are looking at their own financials and
assessing what spending options the lower gas prices
makes the economy better when you donít have to worry
about gas prices being so ridiculous," said Dallas
resident Karmon Robinson, who took a break earlier this
week to refuel his Mercedes SUV.
allows you to get snacks when youíre hungry," he
said. "Now you can get maybe $7 (of gas) and pick
up some beef jerky or a Snickers or something."