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WASHINGTON - The U.S. convenience store industry reported a 5.0 percent sales increase over those of 2000, climbing to a record $283 billion, despite a decline in motor fuels and in-store margins, according to data on the industry released today by the National Association of Convenience Stores. Higher sales in 2001 were driven by an increase in the number of stores in the U.S. and strong cigarette and motor fuels sales.
For the industry as a whole, profit before taxes plunged 24.6 percent to $3.45 billion. Profit per store dropped even more - 26.1 percent - to $28,300, the lowest figure since 1997. Shrinking margins were the major contributor to lower profits.
Just a year ago, in-store gross profit margins dropped below 30 percent for the first time since 1975. In 2001, that drop continued, as in-store gross margin dropped from 28.4 percent to 27.8 percent.
In addition, motor fuel gross profit margins shrank to 9.2 percent, the lowest in 10 years, when margins were also 9.2 percent. The last time margins dipped below that level was 1985, when they plummeted to 8.5 percent. As a result of the tighter margins for fuel, per gallon gross profit dropped 4.8 percent to 12.7 cents per gallon.
Much of the 5.0 percent increase in sales in 2001 is attributable to the 3.9 percent increase in store count, which now stands at 124,500 stores in the U.S. This increase is largely due to a "transitioning" of stores, as previously unreported stores adding the requisite product and service mix to fit the definition of a convenience store. Industry in-store sales increased 7.6 percent, on the strength of a 10.0 percent increase in merchandise sales. Foodservice sales dropped 8.0 percent. Meanwhile, motor fuels sales increased 3.4 percent to $171 billion.
The 2001 top 10 categories excluding gasoline, which together represented 88 percent of industry sales, were: cigarettes, packaged beverages, foodservice, beer, general merchandise, candy, fluid milk products, other tobacco, salty snacks, and publications.
The complete 70-plus-page NACS State of the Industry report will be published in June.