Consumer Snack Caution Leaves Convenience Stores in a Lurch
For many American consumers, rising prices have rendered cherished convenience store snacks off-limits.
And as the Wall Street Journal (WSJ) reported Thursday (March 13), this shift is dampening sales of chips and candy bars and eating into convenience store revenues.
American convenience store sales volume dropped by 4.3% as prices climbed for the year ending Feb. 23, the report said, citing data from market research firm Circana.
The sharpest drop came in sales of rice cakes, followed by products like dips, nuts and jerky. Refrigerated product sales declined about 7% by sales volume, with chocolate candy down 6%.
“People can’t afford it anymore,” David Guerino, sales rep for a Chicago-area Circle K store, told the WSJ. “If it’s not a necessity, they’re not as willing to splurge.”
Consumer sentiment fell to its lowest level since November 2023 last month, a decline driven in part by concerns about tariffs. Data from the University of Michigan’s Surveys of Consumers showed consumer sentiment down 9.8% month to month and a drop of 15.9% year over year.
“Right now the consumer is looking at a lot of these products and are saying: ‘Wow, I can’t remember when it was this expensive,’” Lori Buss Stillman, a vice president for research and education at the National Association of Convenience Stores, told the WSJ.
The report also cites comments from PepsiCo CEO Ramon Laguarta, who said many drivers who come to gas stations are simply filling up their cars and leaving without buying anything inside the stores. It’s a trend that’s led Pepsi to develop mini-meals to lure these shoppers.
Meanwhile, smokers who would normally purchase cigarettes by the carton are now opting for a single pack, the report added, citing information from the National Association of Tobacco Outlets. That’s led tobacco company Reynolds American to offer more affordable Newport cigarettes to attract price-conscious smokers.
Signs of a consumer pullback are evident in other industries, as PYMNTS wrote earlier this week, including airlines such as Delta and American, both of which have recently lowered their guidance based on weaker bookings. And retailers such as Macy’s and Kohl’s have forecast declining sales for the year.
“The banks and the payment networks have yet to chime in — if they are going to do so in advance of their official earnings reports,” PYMNTS wrote.
“But connecting the dots indicates that as consumers eye an uncertain macro environment and a volatile job market — along with expectations that inflation will ramp (and credit access deteriorates) they will pull back on spending, denting transaction volumes for the issuers and the networks.”
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