Declining Gas Prices Boost Beverage Sales in C-Stores

wells fargo logoDeclining gas prices have resulted in a favorable tailwind for beverage sales in convenience stores, according to a recent Wells Fargo Securities report.

Dollar sales of carbonated soft drinks (CSD) were up 3.6 percent in the U.S. C-store channel in the four-week period ending on December 2014. The Coca-Cola Co. experienced a 4.8 percent increase in dollar sales of its soda products, with PepsiCo seeing a 2.4 percent bump in the same category.

Wells Fargo Securities analyst Bonnie Herzog credited the category’s growth in the channel to Coke’s continued successful pricing initiatives, which have boosted the category’s dollar sales across several channels over the last six months. Herzog also pointed to the fall in gas prices as a meaningful variable in strong growth for CSD.

Outside of soda, the energy category also experienced strong growth in C-stores this period. With a 10.9 percent increase in dollar sales, the category was powered by Monster and Red Bull, which saw jumps of 12.4 percent and 8.3 percent respectively. Herzog also attributed surging sales to lower retail gas prices as well as recent product innovation from Monster and the company’s new and powerful distribution partner.

“We remain encouraged by the [Coca-Cola – Monster] partnership, as well as positive results from innovation, and we believe growth should continue to accelerate heading into 2015 and beyond, particularly if retail gas prices continue to support strong in-store sales,” Herzog said.