Winning and Losing C-Store Categories (July 2017)
By Steve Holtz on Jul. 27, 2017NEW YORK -- At a time when convenience-store traffic is challenged and dollar sales are flat, salty snacks came up the winner and carbonated soft drinks (CSDs) the loser in terms of in-store sales, according to the latest c-store channel report from analyst Bonnie Herzog.
"Overall, c-store sales performed in line with other channels for most categories but outperformed in snacks (based on strong PepsiCo pricing) and underperformed in CSDs for all major manufacturers," said Herzog, analyst for Wells Fargo Securities, New York.
Here's a look at how major product categories performed during the four-week period ending July 15, according to Nielsen c-store data ...
Cigarettes soft
Cigarette dollar sales decreased 1.8% during the recent four-week period on very weak volumes of 6.4% decreases (vs. a 5.1% unit-volume loss for the past 12 weeks), Herzog said. This came despite solid pricing growth of 5.0%.
Philip Morris cigarette dollar sales were down 4.2% (vs. down 1.2% for 12 weeks), dragged by weak volume (down 9.3% for four weeks vs. down 6.5% for 12 weeks), partly offset by a 5.5% boost in pricing. Reynolds American cigarette dollar sales were up 1.0% (vs. 0.8% growth for 12 weeks) on strong 5.7% pricing increases, which helped offset 4.5% volume declines. Smokeless tobacco dollar sales grew 2.8% vs. 3.5% over 12 weeks).
Beer recovers
In the beer category, including flavored malt beverages and cider, dollar sales during the four-week period were up 1.3%, a recovery from after 0.6% growth over the past 12 weeks and growth of 1.5% for 52 weeks. The improved growth was driven by 1.7% pricing increases partly offset by slight volume declines of 0.4%
Anheuser-Busch InBev dollar sales were down 2.1% (vs. down 2.8% for 12 weeks). MillerCoors dollar sales were down 2.0% (and down 2.8% for 12 weeks). Meanwhile, imported-beer heavyweight Constellation Brands outperformed again with sales up a strong 13.9% over the four-week period and 14.5% over 12 weeks, driven by average prices up by 1.3% and volume growth of 12.5%.
CSDs hurting
Declines in the sale of carbonated soft drinks (CSDs) continued and even accelerated durng the four-week period ending July 15. Total CSD dollar sales in c-stores were down 3.6% over four weeks, vs. down 3.3% for 12 weeks and down 1.3% for 52 weeks).
Coca-Cola Co.'s CSD dollar sales were down 0.7% (vs. down 0.1% for 12 weeks), dragged by volume decline of 4.4% and partly offset by a 3.9% increase in pricing. PepsiCo's CSD dollar sales were down 7.6% (the same over the past 12 weeks), dragged down by 8.9% volume declines and partially offset by a 1.4% increase in pricing. Dr Pepper Snapple Group’s CSD dollar sales were down 1.8% (vs. down 1.5% for 12 weeks) on a volume decline of 3.4% and a 1.7% average increase in pricing.
Energy struggles
The energy-drink category has recovered "slightly" but remains below long-term trends, Herzog said. Energy-drink dollar sales were up 2.0% for the four-week period ending July 15, compared to growth of 1.4% for the past 12 weeks and 2.2% for 52 weeks.
Red Bull sales were up 2.0% for the period (vs. 2.2% for 12 weeks) and Monster Energy sales (not including Mutant Monster, which is categorized with CSDs) were up 5.9% (vs. 3.4% for 12 weeks) in c-stores. Rockstar dollar sales decreased 2.6%.
Salty snacks lead the way
Salty-snack dollar sales increased 6.1% during the four-week period ending July 15, compared to growth of 5.8% for the past 12 weeks. The growth came on the back of price increases, which rose 6.6% on average, while unit sales were flat to down 0.5%.
PepsiCo’s Frito-Lay dollar sales were up a strong 8.6% (vs. up 8.0% for 12 weeks), driven by strong 9.0% pricing increases slightly offset by a 0.4% decline in volume sales.