Inflation rose at its fastest rate since 1982 in November according to US Labor Department.  A lot of focus has been on Food Price Inflation (+6.1%) but Energy and Gas are actually bigger drivers of overall inflation. 

As consumers start the Holiday travel season, Gas price inflation will heavily impact their wallets.  When stopping for Gas consumers will also notice a significant rise in the prices of food, snacks and other items in small format retailers. 

Convenience Channel Price Inflation

Year over year Convenience channel prices are up mid-single digits across most major departments. Consumers will be paying significantly more when they stop for a snack or drink on their holiday drive.  Prices have been led higher by Food, Beverages and General Merchandise with Candy, Salty Snacks and Breakfast Treats being the fastest rising categories. 

Merchandise KVI Prices

Prices on KVIs in the Convenience Channel are rising 1-5% in November vs. the beginning of Q2.  KVI items like with Orbit Gum (+5.0%), Extra Large Fountain Drinks (+4.7%), Snickers (+4.5%) and Pepsi 20oz (4.0%) are rising the fastest among the top 100 items in the average Convenience store.  There are however a few key items that are not seeing prices rise as quickly including: Smart Water (+1.4%), Gatorade 28oz (+1.2%) and Medium Coffee (+1.1%).  Out of the top 50 items tracked over 95% have seen their prices rise by more than 1% in the last 6 months.

Convenience vs. Other Small Format Channels

Despite recent price increases, Convenience prices are actually increasing at a slower rate than all outlet prices for similar categories. As an example, the Drug Channel is increasing prices significantly faster than the Convenience channel on key items. 

The Convenience Channel is increasing prices on Fountain Drinks faster than QSR but QSR is increasing Coffee prices significantly faster.