While fuel purchases may continue to be your top source of revenue, opening a convenience store can offer even greater profitability.
Selling food, drinks, and other items in a convenience store is an excellent way for gas stations to increase their revenue. For convenience stores, increasing profit margins is typically at the forefront of their strategy. This can either happen by increasing revenue or by reducing costs to boost profitability.
Here’s how you can boost your gas station convenience store’s profit margin.
Leap into the Hospitality Business by Expanding Your Restaurant Side
According to the National Association of Convenience Stores (NACS), food-related items account for a much greater portion of profit dollars, even if they account for fewer sales than gas. Because food typically has better margins than gasoline, it makes sense to expand this area of your business. What’s more, today’s younger generations are open to getting food and drinks anywhere, with convenience being key to their decision making. That makes the convenience store across the street a great solution.
Consider making a move to offer a wider, healthier selection of food options to increase non-fuel sales, including grab-and-go snacks and built-to-order hot items. The packaged beverages category is also gaining ground in convenience stores. Adding to your in-store food and drink options can offer new opportunities for revenue. Promoting these options at the gas pump can create more foot traffic and in-store sales as well.
Invest in Kitchen Technology
Technology can play a significant role in reducing convenience store operating costs and thus boosting your profit margin. New innovations are enabling gas station owners to sell more food and drinks for less. Kitchen display systems, for example, can make food prep more efficient and streamline ordering to reduce labor costs. Self-order kiosks can also eliminate labor costs by removing the need to have staff in store to take down orders and input them into the system.
Some forward-thinking convenience stores are also enhancing efficiency and boosting the convenience factor all the while increasing their revenue with mobile apps that enable customers to order ahead and have their food ready for them. Free Wi-Fi and other strategic loyalty solutions can increase food sales and profits as well.
Reduce Costs and Losses with Cash Management Automation
Human error, inefficiencies, and shrinkage can all be reducing your gas station convenience store’s profit margin. Any time your employees handle cash, it comes with costs and risks. They may give customers too much change, mistakenly accept counterfeit bills, or somehow lose money throughout the cash management process. The longer it takes to manage cash in a day, from customer transactions to the bank deposit, the more it costs you in labor as well. Having employees handling cash without an effective audit trail can also increase shrinkage, as can improper cash management procedures.
Gas stations can benefit from coin and banknote recyclers that accept, validate, dispense, and reconcile cash automation. Some can even be turned around to face the customer for self-serve transactions as well. What’s more, a smart safe can enable you to track, manage, and report on your cash, while keeping it safe and secure on site. A smart safe creates an audit trail that enhances employee accountability while also reducing cash handling to improve efficiency and reduce losses.
Your convenience store offers many opportunities for you to increase revenue. These tips can help you boost your profit margin.
