Andy Jones - convenience · Source: Nielsen Answers, January 2013 – December 2017, Total U.S. All...

Andy JonesPresident & CEOSprint Food StoresNACS Research Committee

The Numbers, Part I:Financial & Industry Overview

1. Another flurry of M&A

2. Low fuel prices = More gallons

3. More Gallons = More Inside

4. Cost and availability of labor

5. THIRD consecutive record year of profit

Tale of TwoIndustries

Billy’s Wrap Last Year

1. Trip/transaction decline2. Labor3. Industry consolidation 4. Store opportunities 5. Future business models6. Speed of technological change

Research Committee Concerns

What happened to trips?

Total CONSUMER shopping TRIPS DECLINE over the long term

Source: Nielsen Answers, January 2013 – December 2017, Total U.S. All Outlets Combined, Total Retailer Trips per HH

Total Consumer Shopping Trips Decline Over the Long Term

3736

3534

33 33

35

Q213

Q313

Q413

Q114

Q214

Q314

Q414

Q115

Q215

Q315

Q415

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

TOTAL US RETAILER TRIPS PER HH

3.6 3.32.4 2.6

0

1

2

3

4

2014 2015 2016 2017

Convenience Trips per Week

Source: NACS Convenience Tracking Program, n= 56,000How often do you visit this particular c-store chain?

Tailwinds Headwinds

Low Unemployment Low Working Rate

Low Gas Prices Aging Population

Low Prices Low Population Growth

Interest Rates Spending Challenges

Economic Conditions

Source: Nielsen and NACS

Consumer Confidence at Record Highs

Source: Bloomburg

1. Fuel prices 13% higher YoY2. Low income HH left behind3. Growth in eCommerce4. Political climate for Hispanics5. Aggressive QSR tactics


$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00Ja

n-13

Mar

-13

May

-13

Jul-1

3Se

p-13

Nov

-13

Jan-

14M

ar-1

4M

ay-1

4Ju

l-14

Sep-

14N

ov-1

4Ja

n-15

Mar

-15

May

-15

Jul-1

5Se

p-15

Nov

-15

Jan-

16M

ar-1

6M

ay-1

6Ju

l-16

Sep-

16N

ov-1

6Ja

n-17

Mar

-17

May

-17

Jul-1

7Se

p-17

Nov

-17

$3.4919.3¢

2013 2015

$2.4021.8¢

$3.3622.8¢

2014

$2.1120.9¢

2016 2017

22.0¢$2.38

Motor Fuel Price & Pool Margin

Source: NACS

US Households

Source: Deloitte “The great retail bifurcation”

Low Income, 40%

Middle Income, 40%

High Income, 20%

Low Income, 40%

Middle Income, 40%

High Income, 20%

US Households

• Income < $50,000• 49% Homeowners• Decrease in

discretionary share of wallet

• No discretionary spend


Low Income, 40%

Middle Income, 40%

High Income, 20%

US Households




• Income $50,000 -$100,000

• 68% Homeowners• Income +$12,624 since

2007• Discretionary spend

$3,162


Low Income, 40%

Middle Income, 40%

High Income, 20%

US Households




• Income > $100,000• 83% Homeowners• Income +$46,000 since

2007• 10yr 401k gain +$360,000• 101% of growth in

discretionary spend

• Income $50,000 -$100,000

• 68% Homeowners• Income +$12,624 since

2007• Discretionary spend

$3,162


Household Income Growth, 2007-2016


Low Income HHs Expense Growth


Total Outstanding Debt Hits 26% of Disposable Income

Source: BEA, Board of Governors

Brick & Mortar, 91% Online, 9%

US Retail Sales

Source: Deloitte & Bureau of Economic Analysis

4.7%

-9.1%

2.2%

8.1%6.8%

4.0% 3.8% 3.7%1.3%

4.1% 4.3%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

B&M

Brick & Mortar Sales Growth vs. Online Sales Growth

Source: U.S. Census Bureau

4.7%

-9.1%

2.2%

8.1%6.8%

4.0% 3.8% 3.7%1.3%

4.1% 4.3%

18.0%

-5.5%

14.4%16.1% 15.5% 15.6% 16.0%

14.6% 14.7% 14.3%

18.4%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

B&M Ecommerce

Brick & Mortar Sales Growth vs. Online Sales Growth

Source: U.S. Census Bureau

So who buys online?


43%40%

31%27%26%

22%22%23%

17%12%13%

22%

34%32%

37%36%

32%32%32%29%

28%26%25%

32%

23%28%

32%37%

41%46%47%

48%55%

62%62%

46%

Dollar StoresConvenience/Gas

Value GrocerySupercenters

Drug StoreConventional Grocery

Mass Merch (ex. Supers)Online

Pet StoreWarehouse Club

Premium GroceryAll Outlets

$29k or less $30 - $69.9k $70k +

Where people shop depends on income…

% of Households 28% 33% 39%Source: Nielsen Homescan, Total U.S. 52 w/e 12/31/2016; excludes gas only or Rx only trips

AMZNYE 2016$366.5B

AMZNToday

$691.8B1.9x

Source: Bloomberg

16.0

16.2

20.1

23.0

24.8

27.3

37.8

53.4

86.1

166.3

0 20 40 60 80 100 120 140 160 180

Collectibles & Fine Art

Tools & Home Improvement

Industrial & Scientific

Cell Phones & Accessories

Automotive Parts & Accessories

Sports & Outdoors

Electronics

Books

Home & Kitchen

Clothing, Shoes & Jewelry

Products Sold (in millions)

* 160,681x the average c-store

Amazon Sells 562,382,292 Products*

Source: ScrapeHero

Amazon Sells 562,382,292 Products

Gift Cards, HBC, Automotive

Grocery

Source: ScrapeHero

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

'10 '11 '12 '13 '14 '15 '16

16.3%

Amazon

11.1%

7.8%

6.8%2017 Convenience

Walmart

2.26%

Source: WSJ, The Daily Snapshot

Amazon’s Low Prices Still Produce High Net Retail Margins

Brick & Mortar Retail UniverseTrade Channel 2016 2017 Unit

Change % Change

Convenience Store 154,535 154,958 423 0.27%

Single Stores 97,504 97,643 139 0.14%

Category Killer 87,983 86,306 (1,677) (1.91%)

Liquor Store 47,073 46,257 (816) (1.73%)

Drug 43,636 43,169 (467) (1.07%)

Supermarket 51,191 51,134 (57) (0.11%)

Dollar 28,832 30,332 1,500 5.20%

Cigarette Outlet 11,085 11,006 (79) (0.71%)

Mass Merchandiser 6,727 6,470 (257) (3.82%)

Wholesale Club 1,370 1,387 17 1.24%

Kiosk/Other 20,699 19,921 (778) (3.76%)

Total Retail 453,131 450,940 (2,191) (0.48%)

Source: Nielsen, TDLinx

1470

700

600

400 400358 330

250 220 200 190 180 171 160 138 124 120 110 106 100 100 100 100 74 74 70 70 70 68 65 61 60 60 55 50 48 45 44 40 32 31 27 23 12 10 8 6 6 6 30

200

400

600

800

1,000

1,200

1,400R

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Year-to-Date (January 5, 2018) Major U.S. Store Closure Announcements

2017 Store Closures

7,795 Total Announced

279% YoY

Source: Yahoo Finance

1500

1290

650

400320

190111 100 100 100 90 90 80 75 70 60 60 59 52 50 50 30 24 20 19 17 10

0

200

400

600

800

1,000

1,200

1,400

1,600

2017 Store Openings


163.5% YoY

7-Eleven: 412Couche-Tard: 318

Source: Forbes

600500

396 379

200 200144 124 102 100 100

64 50 50 45 40 39 30 18 12 100

100

200

300

400

500

600

2018 Store Closures


Source: Business Insider

Source: Deloitte analysis of various annual reports

25%

19%

15%

0%

5%

10%

15%

20%

25%

30%

2015 2016 2017

Buys c-store food >3 times per week

Frequent Food Buyers (>3 times/week) Hispanic Percent

Source: NACS Convenience Tracking Program, n= 56,000How often do you visit this particular c-store chain?

1. Fuel prices 13% higher YoY2. Low income HH left behind3. Growth in eCommerce4. Political climate for Hispanics5. Aggressive QSR tactics


It’s Never Been Harder to Fill a Job in America

Source: Deutsche Bank

Retail has Suffered Worse Job Losses

Source: BLS

$7.95

$8.37 $8.27 $8.46 $8.56 $8.51

$8.76 $9.02

$9.44

$9.99 $10.19

$7.80

$8.30

$8.80

$9.30

$9.80

$10.30

$10.80

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Average Store Associate Wage

Source: Historic NACS Compensation ReportSource: NACS Compensation Report

123%

104% 107%

73%

95%

75%

86%

91% 95%

133%

115%

60%

70%

80%

90%

100%

110%

120%

130%

140%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Store Associate Turnover


Average Cost to Hire, Train & Equip

Source: 2016 NACS Compensation Report

Interviews A (1-10 stores)

B (11 - 50 stores)

C (51 - 200 stores)

D & E (> 200 stores)

Total

Mean $938 $1,254 $1,960 $1,763 $1,303

Median $500 $1,000 $2,100 $1,475 $772

Source: NACS Compensation Report

Hourly Store Associate

26%

22%

25%

15%

18%

12%14% 14%

10%

27%

18%

0%

5%

10%

15%

20%

25%

30%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Store Manager Turnover


Average Cost to Hire, Train & Equip

Source: 2016 NACS Compensation Report

Interviews A (1-10 stores)

B (11 - 50 stores)

C (51 - 200 stores)

D & E (> 200 stores)

Total

Mean $2,541 $3,587 $4,036 $7,400 $3,573

Median $1,750 $3,000 $3,000 $4,500 $2,750

Source: NACS Compensation Report

Store Manager/Assistant Manager

Cost Reduction vs. Meeting Employee Needs

What job seekers care about:

• Getting enough hours

• Pay

• Opportunities for growth

Source: Snagajob Hourly Worker Survey, n=2,000

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%U

nem

ploy

men

t

Unemployment Rate

4.1%

Through Nov 2017

10.0%

Labor Force Participation vs. Unemployment Rate

Source: Bureau of Labor Statistics

60.0

61.0

62.0

63.0

64.0

65.0

66.0

67.0

68.0

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Labo

r For

ce P

artic

ipat

ion

Une

mpl

oym

ent

Unemployment Rate

4.1%

Through Nov 2017

Labor Force Participation Rate

62.7%

10.0%

Labor Force Participation vs. Unemployment Rate

Source: Bureau of Labor Statistics

Labor Force Participation Heat Map

Source: BLS

Labor Force Participation

<60.7%

62.7% avg +/- 2pts

>62.7%

Value of Welfare by State Heat Map

Source: Cato Institute “The Work versus Welfare Trade-Off”

<$12/hour

Total Value of Welfare Benefits

$13.50/hour +/- $1.50

>$15/hour

1.1%

0.6%0.8%

0.3%0.04%

0.2%

0.4%

0.6%

0.3%

0.25%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

'77 - '86 '87-'96 '97-'06 '07-'16 '17-26

Native Born Immigrant

1.3%

1.0%

1.4%

0.6%

0.29%

Census Forecast

Percent Increase in Civilian Non-Institutional Population

Source: Census Bureau

Consolidation

59,876 67,612

78,395 76,044

84,770 84,574

89,957 90,683 89,567 90,049 91,815 93,209 93,819 95,056 96,318 97,359 97,504 97,643

59,876 56,904

54,029 54,615

53,435 56,081

55,162 55,611

55,308 54,492 54,526 54,917 55,401 56,226 56,476 56,836 57,031 57,315

- 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000

200020012002200320042005200620072008200920102011201220132014201520162017

Single Stores

All Others

Dec, 2017 154,958 stores

FLAT

NACS & Nielsen/TDLinx Store Count


2,006 1,959 1,880 1,900 1,852 1,813 1,814 1,7811,679 1,597

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Company Count


20

25

30

35

40

1000

1200

1400

1600

1800

2000

2200

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Company Avg. Store Count Linear (Company) Linear (Avg. Store Count )

Company Count and Average Store Count


2018 Rank Company Total 2018 U.S. Store Count1 7-Eleven Inc. 10,0002 Alimentation Couche-Tard Inc. 7,7723 Marathon Petroleum Corp. (Speedway) 2,7304 Casey’s General Stores Inc. 1,9805 Murphy USA Inc. 1,4236 GPM Investments LLC 1,1147 BP America Inc. (ampm) 9508 Pilot Flying J 7679 Chevron Corp. 766

10 EG Group (Kroger) 76211 Wawa Inc. 76012 QuickTrip Corp. 75913 Cumberland Farms 60014 Sheetz Inc. 56415 Kwik Trip Inc. 56016 Andeavor 55017 TravelCenters of America LLC 49518 RaceTrac Petroleum Inc. 45519 Love’s Travel Stops & Country Stores 43820 Kum & Go LLC 413

Top 20 Total Store Count 33,858

Top 20 U.S. Convenience Brands

Source: CSP – Ranking the top 40 C-Store Chains

M&A Activity• Yesway

• Acquired 40 locations from various deals• Pester Marketing Co.

• Acquires 61 locations from various deals• Global Partners LP

• Bought 33 stations from Honey Farms• EG Group Acquires Kroger Convenience

• $2.1B for 791 Stores• Alimentation Couche-Tard Inc.

• Reached a deal to purchase CST Brands cleared in June • Holiday Stores 500+ stores

• 7-Eleven • Signed an agreement to purchase 1,108 Sunoco locations; will sell 26 outlets to Sunoco, and Sunoco will retain 33 fuel outlets it intended to sell due to

SEC• Petroleum Marketing Group

• Acquired 223 dealer-operated sites owned by Gulf Oil LP (Undisclosed terms)• GPM Investments LLC

• Acquired 273 E-Z Mart Stores convenience stores • Acquired 20 Jiffy Mart convenience stores • Acquired 92 Roadrunner stores

• Brookwood Financial Partners LLC• Acquired 72 locations in various deals

• Kwik Trip • Acquired 34 PDQ stores convenience stores

Number of Public Companies1996: 7,439

2017: 3,616(51%) Change

US IPO Market, 1991-2016

Source: Dealogic, Ernst & Young


Acquisitions of US Private Companies with $100M+ Valuations

VC Backed M&A Strong – Valuations Drive Deal Values Up


Performance Benchmarks

Snapshot 2016 2017 % Change

Store Count 154,535 154,958 FLAT

Inside Sales $233.0B $237.0B 1.7%

Fuel Sales $316.8B $364.1B 14.9%

Total Sales $549.9B $601.1B 9.3%

Pretax Profit $10.2B $10.4B 1.6%

Credit Card Fees $9.5B $10.1B 5.8%

Employees 2.50M 2.48M (0.8%)

Fuel Margin (cpg) 20.09 22.02 9.6%

Net of CC Fees (cpg) 14.93 16.57 11.0%

Key Industry Metrics

Source: NACS, Nielsen, TDLinx & EIA

173.

918

2.4

190.

419

5.0

199.

320

4.0

213.

422

5.8

233.

023

7.0

450.

232

8.7

385.

2 486.

950

1.0

491.

548

2.6

349.

031

6.8

364.

1

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

$700.0

$800.0

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Dol

lars

in B

illio

ns

Inside SalesMotor Fuels Sales $601.1 vs. $549.9

Up 9.3%

Industry Sales

Concern:Fuel Up 14.9%Inside Up 1.7%

Source: NACS

7,900

8,100

8,300

8,500

8,700

8,900

9,100

9,300

9,500

9,700

9,900

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51

2016 2017B

arre

ls a

Day

(tho

usan

ds)

Week

First 6 months, consumption off (2.4%) YoY

U.S. Fuel Consumption

Source: EIA

Equivalent to 4.4 Days of no fuel sold in the US

7,900

8,100

8,300

8,500

8,700

8,900

9,100

9,300

9,500

9,700

9,900

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51

2016 2017B

arre

ls a

Day

(tho

usan

ds)

Week

(0.8%) YoY Decline in Consumption


Source: EIA

7,900

8,100

8,300

8,500

8,700

8,900

9,100

9,300

9,500

9,700

9,900

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51

2016 2017 2018B

arre

ls a

Day

(tho

usan

ds)

Week


Source: EIA

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00Ja

n-13

Mar

-13

May

-13

Jul-1

3Se

p-13

Nov

-13

Jan-

14M

ar-1

4M

ay-1

4Ju

l-14

Sep-

14N

ov-1

4Ja

n-15

Mar

-15

May

-15

Jul-1

5Se

p-15

Nov

-15

Jan-

16M

ar-1

6M

ay-1

6Ju

l-16

Sep-

16N

ov-1

6Ja

n-17

Mar

-17

May

-17

Jul-1

7Se

p-17

Nov

-17

$3.4919.3¢

2013 2015

$2.4021.8¢

$3.3622.8¢

2014

$2.1120.9¢

2016 2017

22.0¢$2.38

Motor Fuel Price & Pool Margin

Source: NACS

Industry Profits

($2.0)

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Dol

lars

in B

illio

ns

$10.4 vs. $10.2Up 1.6%

Source: CSX

Profits vs. Credit Card Fees

$3.2

$10.1

$4.0

$10.4

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Bill

ions

of D

olla

rs

Card Fees Pretax Profit

Source: NACS

173.

918

2.4

190.

419

5.0

199.

320

4.0

213.

422

5.8

233.

023

7.0

450.

232

8.7

385.

2 486.

950

1.0

491.

548

2.6

349.

031

6.8

364.

1

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

$700.0

$800.0

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Dol

lars

in B

illio

ns

Inside SalesMotor Fuels Sales $601.1 vs. $549.9

Up 9.3%

Industry Sales

Concern:Fuel Up 14.9%Inside Up 1.7%

Source: NACS

S Curve Phases

Smokes

CokesGas

Our Business Model

S Curve Phases

Per Store/Per Month 2016 2017

Total All Sales $366,619 $409,163 11.6%

Fuel Sales $298,510 $342,846 14.9%

Fuel Gallons 141,169 143,800 1.9%

Average Selling Price $2.11 $2.38 12.8%

In-Store $159,751 $162,435 1.7%

Foodservice $35,613 $36,749 3.2%

Merchandise $124,423 $126,220 1.4%

Mdse Less Cigarettes $78,700 $79,045 0.4%

Cigarettes $45,454 $46,555 2.4%

Sales

Source: CSX

Per Store/Per Month NE (1) SE (2) MW (3) SC (4) CE (5) WE (6)

Total All Sales 9.6% 9.5% 8.2% 12.2% 9.8% 12.6%

Fuel Sales 9.8% 16.2% 4.6% 17.4% 14.4% 15.2%

Fuel Gallons 0.3% 0.3% 0.7% 3.4% 2.0% 3.6%

Avg Selling Price 13.8% 12.5% 10.6% 13.5% 12.2% 11.2%

Inside Sales 0.9% 1.1% 1.5% 3.4% 3.1% 5.4%

Foodservice Sales 4.1% 6.8% (1.3%) 7.1% 3.2% 12.5%

Merchandise Sales 0.7% 0.3% 1.9% 2.6% 3.1% 4.1%

Merch – Cigs 1.4% 1.0% 3.6% 2.8% 3.2% 5.0%

Cigarettes (2.9%) (1.9%) (0.2%) 0.7% 2.9% 2.8%

Regional Sales Change

Source: CSX


Total Gross Profit $78,421 $83,231 6.1%

Fuel $28,361 $31,670 11.7%

Pool Margin 20.09 22.02 9.6%

Margin – CC Fees 14.93 16.57 11.0%

In-Store $54,600 $55,985 2.5%

Foodservice $18,263 $19,084 4.5%

Merchandise $36,482 $37,179 1.9%

Mdse Less Cigarettes $29,490 $30,077 2.0%

Cigarettes $7,031 $6,980 (0.7%)

Gross Profits

Source: CSX


Total Gross Profit 4.3% 8.1% 3.5% 7.3% 4.7% 4.0%

Fuel 14.2% 12.9% 11.4% 15.6% 6.4% 0.8%

Pool Margin 9.4% 15.8% 3.8% 11.8% 4.4% (0.4%)

Margin – CC Fees 10.1% 18.8% 3.1% 12.0% 3.3% (2.6%)

In-Store 1.1% 3.1% 2.8% 4.5% 4.0% 8.2%

Foodservice 4.1% 6.8% (1.3%) 7.1% 3.2% 12.5%

Merchandise 2.2% 4.2% 4.7% 3.3% 1.8% 4.9%

Merch – Cigs 1.4% 2.9% 7.4% 3.1% 2.6% 6.2%

Cigarettes (2.7%) 7.0% (2.9%) 0.1% (1.7%) (1.5%)

Regional GP$ Change

Source: CSX


Wages & Benefits $18,872 $20,401 8.1%

Card Fees $5,047 $5,652 12.0%

Utilities $3,033 $3,183 4.9%

Repairs & Maintenance $2,910 $3,042 4.5%

Supplies $1,713 $1,733 1.2%

Total DSOE $47,325 $50,767 7.3%

Facility Expense $11,875 $13,003 9.5%

Total DSOE & Facility Expense $59,200 $63,771 7.7%

Core Direct Store Operating Expenses

Source: CSX


Wages & Benefits $18,872 $20,041 8.1%

Wages $15,260 $16,520 8.3%

Payroll Taxes $1,396 $1,493 6.9%

Workers Compensation $365 $352 (3.8%)

Health Insurance $1,368 $1,495 9.3%

Other Benefits $660 $727 10.1%

Wages & Benefits Detail

Source: CSX

DSOE Growth

80

90

100

110

120

130

140Ja

n-15

Mar

-15

May

-15

Jul-1

5

Sep-

15

Nov

-15

Jan-

16

Mar

-16

May

-16

Jul-1

6

Sep-

16

Nov

-16

Jan-

17

Mar

-17

May

-17

Jul-1

7

Sep-

17

Nov

-17

DSOE Total 113

Card Fees 95

Repairs and Maintenance 136

Supplies 108

Utilities 103

Subtotal W&B 116

Source: CSX

Wages & Benefits Growth

80

90

100

110

120

130

140Ja

n-15

Mar

-15

May

-15

Jul-1

5

Sep-

15

Nov

-15

Jan-

16

Mar

-16

May

-16

Jul-1

6

Sep-

16

Nov

-16

Jan-

17

Mar

-17

May

-17

Jul-1

7

Sep-

17

Nov

-17

Other Benefits 120

Health Insurance 132

Payroll Taxes 117

Workers Comp 94

Wages 125Subtotal W&B 123

Source: CSX


Wages & Benefits 3.2% 2.2% 4.7% 1.26% 7.1% 9.3%

Card Fees 8.9% 6.7% 8.1% 13.6% 9.2% 12.0%

Utilities 2.9% 2.7% (1.9%) 2.7% 3.1% 4.9%

Repairs & Maintenance 2.4% 6.1% 5.2% 8.8% (1.4%) 4.5%

Supplies (3.3%) (1.4%) (5.6%) (0.1%) 22.7% 6.3%

Total DSOE 3.4% 3.1% 5.1% 4.7% 4.4% 6.7%

Facility Expense 9.3% (3.1%) 1.0% (4.1%) 10.9% 10.1%Total DSOE & Facility Expense 4.5% 1.8% 4.4% 2.7% 5.6% 7.5%

Regional DSOE Change

Source: CSX

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Cha

nge

in D

olla

rs

Inside GP$ DSOE Linear (Inside GP$) Linear (DSOE)

Change in Inside GP$ vs DSOE

Source: CSX

2017 TopQuartile

2nd

Quartile3rd

QuartileBottomQuartile

Store Operating Profit $38,267 $18,399 $10,111 $4,225

Store Operating Profit/SF $11.39 $5.98 $3.68 $1.47

Breakeven CPG 8.60 12.43 10.53 20.21

EBITDA $39,415 $17,573 $11,125 $3,881

EBITDARL $43,390 $21,307 $17,002 $9,349

Net Profit Margin(Pretax/Sales) 3.20% 2.35% 2.31% 0.50%

Return on Capital Employed 11.40% 12.84% 5.79% 5.61%

Capital Productivity

Source: CSX

2017 TopQuartile

BottomQuartile Diff

Store Operating Profit $38,267 $4,225 9.1x

Store Operating Profit/SF $11.39 $1.47 7.4x

Breakeven CPG 8.60 20.21 (11.61) cpg

EBITDA $39,415 $3,881 10.2x

EBITDARL $43,390 $9,349 4.6x

Net Profit Margin(Pretax/Sales) 3.20% 0.50% 2.70 pts

Return on Capital Employed 11.40% 5.61% 5.79 pts

Capital Productivity

Source: CSX

2017 TopQuartile

2nd

Quartile3rd


Motor Fuels Gallons Sold 202,834 116,056 106,054 94,610

Merchandise Sales $156,695 $109,613 $111,039 $91,884

Foodservice Sales $50,206 $30,793 $25,657 $11,863

In-Store GM% 34.01% 33.89% 33.31% 27.13%

Cigarette GM% 14.69% 15.56% 13.74% 15.31%

Average Square Feet 3,361 3,075 2,751 2,878

In-Store Sales/Sq. Foot $60.87 $45.54 $49.67 $36.01

Store Operational Productivity

Source: CSX

2017 TopQuartile

BottomQuartile Diff

Motor Fuels Gallons Sold 202,834 94,610 2.1x

Merchandise Sales $156,695 $91,884 1.7x

Foodservice Sales $50,206 $11,863 4.2x

In-Store GM% 34.01% 27.13% 6.88 pts

Cigarette GM% 14.69% 15.31% (0.62) pts

Average Square Feet 3,361 2,878 1.2x

In-Store Sales/Sq. Foot $60.87 $36.01 1.7x

Store Operational Productivity

Source: CSX

2017 TopQuartile

2nd

Quartile3rd


Non-Mgr Turnover (annual) 74.7% 110.9% 106.6% 98.8%

Manager Turnover (annual) 17.4% 31.3% 46.1% 21.3%

In-Store Sales per Labor Hour $99.88 $101.58 $75.91 $86.73

In-Store GP$ per Labor Hour $34.34 $31.27 $23.26 $24.13

Labor Cost per Hour $16.54 $18.00 $13.79 $15.22

People Productivity

Source: CSX

1. Trip/transaction decline• Impact of Amazon

2. Labor• Impact of welfare

3. Industry consolidation • Fewer firms, higher values

4. Store opportunities • Alan – “How to become a destination”

5. Future business model• Need to develop

6. Speed of technological change• Gray – “Technology Adoption is Not an Option”

Research Committee Concerns

Research Committee Concerns1. Trip/transaction decline

• Impact of Amazon2. Labor

• Impact of welfare3. Industry consolidation

• Fewer firms, higher values4. Store opportunities

• Alan – “How to become a destination”5. Future business model

• Need to develop6. Speed of technological change

• Gray – “Technology Adoption is Not an Option”

Andy Jones - convenience · Source: Nielsen Answers, January 2013 – December 2017, Total U.S. All...

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