If you’re carefully watching your financials in 2023, you’re not alone. The economy is a bit uncertain at the moment, leading many convenience store owners to tighten their pursestrings as they keep a close eye on the ups and downs in the marketplace. In a recent Convenience Store News article, experts anticipate a slowdown in consumer spending that may likely impact fuel and food purchases. While it remains challenging to predict whether or not we’ll see a recession in the near future, there are some economic indicators c-store owners should watch as they adjust business plans throughout the year.
Three Economic Indicators C-Store Owners Should Watch This Year:
- Percentage of Savings. The U.S. Bureau of Economic Analysis (BEA) tracks the percentage of income that U.S. consumers set aside for savings. Before the COVID-19 pandemic, consumers were saving an average of 6.3%. Due to various issues, consumers have increased spending and decreased savings to 2.4% by September 2022. By December 2022, that rate increased a full percentage to 3.4%, and economists believe it will continue to grow until we return to pre-pandemic levels. We may likely see families cut down on vacation travel or other discretionary purchases as they work to get their savings back to a sufficient level.
- Rate of Inflation. Prices of many consumer goods increased this year as COVID restrictions were lifted and people were returning to shopping, dining, and recreational activities in abundance. According to the laws of supply and demand, prices increase when demand grows, but supply doesn’t keep up. That’s precisely what we saw this year as we dealt with supply shortages and labor gaps while consumers were ready to get back to “normal” life. The good news is that inflation is starting to come down. December 2022’s CPI report showed a 6.5% annual inflation rate–down from 7.1% in November and a high of 9.1% in June. We’ll need to watch other statistics to determine if this is from an evening out of supply, or if consumer demand (purchasing) is starting to slow.
- Job Security. It shouldn’t come as a surprise that people tend to spend more money when they feel secure about the future of their incomes. Unemployment was down to 3.5% in December 2022, a relatively normal employment rate for the U.S. However, the news continues to be filled with stories of mass layoffs and bankruptcies. In 2023, Google, IBM, Spotify, Microsoft, and others have already announced significant downsizing plans. Other companies, like Bed Bath and Beyond, struggle to keep their doors open.
GP Energy makes C-store management a breeze.
Owning and operating a business is a lot of work. Multi-tasking doesn’t even begin to describe all the facets of running a convenience store that you need to have a handle on to be successful. Our experts at GP Energy will work with you to analyze your current operations and recommend opportunities to grow your bottom line. Learn how a new fuel cardlock service, adding an automated car wash, or providing hot food selections for your customers can boost your profitability. Contact us today to learn the difference a partnership with GP Energy will make in your business.