Convenience Store Sales Up But Rising Credit Card Fees Hit Profits
The National Association of Convenience Stores reports that convenience store industry sales reached a new high of $577.4 billion in 2007 (up 1.4 percent), but that profits dropped by $1.4 billion, 'largely because of higher credit card fees.' In its press release, NACS goes on to say that "the net effect is that the industry's credit card fees are now more than double the industry's pretax profits."
In a decidedly mixed year of industry performance, the biggest concern for convenience retailers remains escalating credit card fees, which surged $1.0 billion, or 15.2 percent, to reach $7.6 billion. Meanwhile, industry pretax profits dropped by roughly the same amount, $1.4 billion, falling to $3.4 billion. The net effect is that the industry's credit card fees are now more than double the industry's pretax profits, an extraordinary development considering that credit card fees surpassed industry profits for the first time ever last year.
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