High fuel prices are impacting sales at convenience stores, with 59% of retailers saying their customer traffic has decreased in stores over the past three months, a survey from NACS, the Association for Convenience & Fuel Retailing has unveiled.
Gas prices in the US hit a record of $5 per gallon earlier this month.
Convenience stores, which sell an estimated 80% of the fuel purchased in the US, rely on in-store sales to drive profits, the report noted.
High fuel prices are hurting customer traffic in stores and basket size, with the latest data showing that nearly half of all retailers (49%) witnessing customers cutting down purchases compared to three months ago, when prices were $1.50 a gallon lower.
In addition, retailers were concerned that elevated gas prices could also affect sales over the traditionally busy summer-drive season. Data showed that 53% expect sales to be lower this summer compared to last year, with 25% anticipating increased sales.
Convenience retailers said they were looking to reduce expenses, chief among them credit card fees, which average more than 10 cents per gallon and pass along savings to price-conscious customers.
More than one in four (29%) retailers are offering cash discounts at the pump, and 31% are offering discounts for those who pay by app, the study found.
Read More: US Food Prices Set To Rise Again: NACS
Data also showed that consumers are more aware about the reason for higher prices. Thirty-seven percent of retailers said that consumers understand that higher gas prices are caused by factors outside of the retailers’ control. Around 35% of consumers blamed retailers for higher prices.
The US Energy Information Administration reports that only 5% of the cost of gas in May (the latest data available) is because of 'Distribution and Marketing', which includes the retail markup on fuel.
Only one in four retailers (25%) reported higher levels of gas theft compared to a year ago.
"While sales and traffic have slowed as gas prices climbed, retailers continue to seek out innovative ways to provide value at the pump and inside the store to help their customers extend their pay checks and weather this period of inflated costs," said Jeff Lenard, NACS vice president of strategic industry initiatives.
The 'Q3 2022 NACS Pulse Survey' was conducted in June by NACS Research with a total of 53 retailer member companies, representing 3,023 stores participating in the survey.