Pay-at-pump may be hurting convenience-store sales

Associated Press

SAVANNAH, Ga. — With nearly two-thirds of American convenience stores allowing customers to pay at the pump, gassing-and-going has never been easier. No lines. No cash. No need to go inside the store at all.

For hurried drivers that also means no soda. No coffee. No candy bars and no newspapers.

The accelerated pace of refueling could be putting a crimp in convenience stores' sales of impulse items. Last year, the industry reported profits dropped 4.1 percent to $4.6 billion before taxes, their first decline since 1996.

While sales of bottled and canned sodas, chips, candy and gum increased slightly, the nation's 120,000 stores reported sagging sales of other items — from fountain drinks and milk to batteries and adult magazines.

The proliferation of pay-at-the-pump technology took off within the last six years. In 1995, only 17 percent of convenience stores offered them, compared with 65 percent in 2000. But the industry insists the technology has been good for business.

The National Association of Convenience Stores blames lower profits on soaring prices for gasoline and cigarettes, the industry's two top-selling items. While stores sell more gas than anything, it yields some of the lowest profits.

"People who used to pay $15 for a fill-up and a sandwich are now paying $15 for a fill-up," said Jeff Lenard, the association's spokesman.

Lenard says the pay-at-the-pump approach helps sales because it makes the stores more convenient for harried commuters who want to gas and go and shortens checkout lines for customers who want to buy other items.

"Buying gas, a lot of people equate with a chore. A lot of people don't consider it to be the highlight of their day," he said. "When people have more time, they will go in and buy in-store items."

But even some folks with plenty of time, such as vacationers, don't want to bother going inside.

"I don't like to go inside and wait for people to buy lottery tickets and stuff," said Jim Hiner of Louisville, Ohio, who stopped along I-95 on the way home from a trip to Florida. "I just get the gas and take off."

Companies that sell their products in convenience stores are taking notice.

Beverage Digest, a newsletter covering the soft drink industry, reported last month that convenience stores' volume sales of carbonated drinks declined 4.5 percent in the first quarter of 2001, though sales of bottled water and sports drinks had increased.