Tracking C-Store Sales Thru COVID-19

By Bill Scott, President of StoreReport, LLC and Andrea Scott, PhD (Disclaimer. The views, thoughts, and opinions I am expressing in this article are mine, and not those of the United States Department of Defense (DoD), Department of the Army, the Corps of Engineers, or any other DoD components).

Every convenience store owner is probably interested in knowing the effects of the COVID-19 outbreak on sales. Below is a brief analysis of one set of data from January 1, 2020 to May 18, 2020 in south-central Mississippi. The actual percentages would be slightly different for different parts of the country but the general trends and conclusions would be similar for any convenience store across the country because the same preventive measures were applied in all states during the same time period.

The chart above shows changes in fuel gallons sold (orange line represented by the vertical axis on the left) and non-fuel units sold (blue line represented by the vertical axis on the right). We have created the chart to demonstrate the TRENDS between gallons sold from the pumps and items sold inside the store. The day number of the year, appear as the numbers '1 - 139' on the horizontal axis at the bottom of the graph, so Day 1 would be 1/1/2020 and Day 139, 5/20/2020, etc.

During the first two months of 2020, sales of fuel and groceries increased by 8-20% every Friday comparing to Thursday’s sales. A similar trend with a little more significant increase (10-25%) is seen for Mondays comparing to Sundays. However, at the end of February, COVID-19 changed everything, and the number of items sold (units of inventory and gallons of fuel) started increasing much more significantly for about two weeks (especially on Mondays and Fridays by 6% in fuel gallons sold and 15% in non-fuel items sold, refer to Day 59 ( February 28) though Day 73 (March 13) in the chart above).

February 28 was the highest sales day of non-fuel items and second highest in fuel in comparison to any other day from January 1, to April 30. It was an indication of greater surprises that were about to come into play.

From February 28 forward, the above described trend of increased sales continued. On March 13, the Trump Administration issued new guidance regarding "stay-at-home" and the entire nation started preparing for war with the COVID -19 virus. This stay-at-home order had a huge effect on fuel sales because people rushed to the stores to fill their tanks, as is well demonstrated by the highest increase (see day Day 73 in the chart above). Groceries were affected less. On Monday, March 16, Day 76, (the day when many companies had to close or began doing their business virtually), fuel sales started going down rapidly.

On March 23, Day 83, just a week after the stay-at-home order, the gallons of fuel sold was merely two-thirds as compared to March 16 (a decrease of almost 35%). Sales of groceries also decreased, but only by 10%. By this time the fuel price was $0.20 less per gallon than two weeks before, but prices did not affect the gallons of fuel sold.

The whole time, sales of both groceries and fuel (in units and gallons) are closely aligned, and the trend is that fuel gallons sell about two times in quantity more than non-fuel items.

However, the fact that fuel sold much less than groceries decreased the gap between the amounts of fuel and groceries sold (1.5-1.8 times more). This trend remained through the end of data (May 18, Day 139) and that same trend is expected to continue under the same circumstances even after May 18.

After the shelter-at-home order ended in Mississippi on April 20, Day 111, fuel sales began increasing by 10-20%, so it looks like we are getting closer to mimicking the environment before the COVID-19 crisis started - getting closer to old “normal.” During the entire time period (January 1 - May 20), grocery sales were more steady than fuel sales despite a significant decrease in fuel price-per-gallon.

Summary: With fuel gallons selling much less than groceries, it would have been very beneficial for convenience store companies to focus strategies on how to increase non-fuel sales even more, because obviously people were buying. People were not driving as much, staying at home (not eating in restaurants) and buying more food. It might be interesting to watch for new signs of the economy re-opening to predict how much fuel and groceries will be sold and possibly start ordering based on the new trend.

The analysis above shows that fuel and non-fuel sales follow the same pattern unless something unexpected, similar to the COVID-19 crisis occurs, with stay-at-home orders, which affect more fuel sales than grocery sales by about 5-25%.

Therefore, it is important to perform data analysis daily to predict changes in trends and purchase/sell/change prices accordingly.

A slightly different view of the same data with fuel gallons sold in orange and non-fuel items sold in blue demonstrates that people were buying less fuel but spending more time inside the stores. It also indicates very good news - that at least in Mississippi where this study was made, things seem to be getting closer to normal.

I would be curious to know if you find the same circumstances in other areas of the country and what you think the answer to the question about convenience stores being able to survive during a crisis without fuel sales might be. We will analyze new data to provide answer to this question in our next article. Feel free to send your comments and questions to [email protected].

(c) 2020 StoreReport LLC, All Rights Reserved

Join us on LinkedIn