Jefferies says C-store traffic turns positive in October despite weak food sales

Convenience store foot traffic rose about 0.3% year-over-year in October, marking the second consecutive month of sequential improvement, according to Jefferies. The increase represented an improvement of roughly 86 basis points from September’s growth.

Traffic turned positive despite elevated gas prices. Food category trends remained weak, with most top categories posting year-over-year declines and total volumes declining 12.5% in the last three months versus 10% in the last six months through October 17th.

Murphy USA (NYSE:MUSA) management described its core lower-income customer as selective but resilient during third-quarter earnings, noting that customers are absorbing higher fuel costs by reducing spending in other areas. Same-store gallons remained slightly positive compared to an industry decline of about 6%, as customers traded down to regular fuel and switched from higher-priced competitors.

Performance nutrition shakes stood out with sales up about 21% in the last three months versus 15% in the last six months, driven by roughly 22% volume growth. Chocolate sales weakened further, declining about 5.5% in the last three months versus a 2% drop in the last six months, with volumes falling 12.5%.

Multi-serve pizzas led volume declines at 25%, followed by chocolate at 12.5%, meat snacks at 10.5%, ice cream at 10.5%, and confection at 9.5%.

Non-alcoholic beverages improved 0.7% year-over-year over the last three months, supported by energy drinks, which rose 6.6%. Soft drinks declined 3.8% on a dollar basis and 6.8% by volume. Beer sales fell 4.4% in the last three months.