Direct store operating expenses, costs directly linked to core business operations, have been increasing at a rate that outpaces inside gross profit dollar growth, reports the National Association of Convenience Stores. This issue is top of mind going into 2024.
In 2022, the most significant operating expenses experienced double-digit growth year over year, including wages, benefits, and card fees. Combined, these metrics added $13.9 billion in expenses against the industry’s top line, according to the NACS State of the Industry Report of 2022 Data. Moreover, store maintenance and repairs increased by 13.7 percent, and utilities increased by 16 percent.
Over the same period, card fees rose 27.6 percent, due in large part to higher prices of fuel and inside merchandise, a larger volume of transactions, and more consumers preferring to use cards.
These hikes have contributed to the average inside operating profit decline of 50 percent to $111 per store, per month.
Chris Rapanick, managing director of NACS research, shared during a NACS Show education session, that direct store operating expenses growth slowed in the first half of 2023, although it was still growing at double digits. Despite the bleak outlook, this may be promising for store operators. Full Story
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