What is the inventory turnover for a convenience store?

Understanding inventory turnover is crucial for managing a convenience store effectively. The inventory turnover ratio is an indicator of how often a store sells and replaces its stock during a specific period. This article answers common questions about key metrics related to inventory turnover in a convenience store, helping new store owners make informed decisions.

Metric	Typical Range / Value	Details
Average Monthly Sales Volume	$75,500 to $154,000 (up to $500,000 for top locations)	Sales are driven by high-volume items like beverages and snacks. Top stores may have daily customers reaching 1,491.
Average Monthly COGS	60-70% of sales (approx. $45,300 to $107,800)	COGS represents the cost to restock goods, often accounting for 30-40% of the COGS.
Inventory Value at Cost	Around $15,000	The value of inventory depends on store size, product mix, and sales velocity.
Reorder Frequency	Multiple times per week	High-turn categories like beverages, snacks, and tobacco are reordered frequently to keep shelves stocked.
Lead Time for Stock	1-14 days for local suppliers; up to 75 days for international suppliers	Lead times vary by supplier location and logistics complexities.
Top Inventory Categories	Tobacco, packaged beverages, food service	These categories typically represent the highest inventory value, with varying margin impacts.
Unsellable Stock Percentage	Under 5% for healthy stores	Dead stock (unsellable items due to expiration or damage) should be minimized for better profitability.

What is the average monthly sales volume of the store in units and in value?

The average convenience store generates between $75,500 and $154,000 in monthly sales, depending on location and customer base. High-performing stores in prime locations can exceed these figures, reaching up to $500,000 in monthly sales.

What is the average monthly cost of goods sold for the store?

COGS for a convenience store typically ranges from 60% to 70% of sales. For a store with $100,000 in monthly sales, COGS would typically fall between $60,000 and $70,000.

What is the current value of the store’s inventory at cost?

The value of inventory at cost is generally around $15,000, though this can vary significantly depending on the store size and inventory management practices.

How frequently are products typically reordered from suppliers?

Reordering occurs frequently, especially for fast-moving items like snacks, beverages, and tobacco. Stores often place orders multiple times per week to ensure stock levels remain high.

What is the average lead time from ordering to receiving stock?

Lead times can range from 1 to 14 days for local suppliers, but for international suppliers, the lead time may be up to 75 days. Shorter lead times from local suppliers are generally preferred to ensure quick restocking.

Which product categories represent the highest proportion of inventory value?

Typically, tobacco, packaged beverages, and food service items account for the highest proportion of a convenience store's inventory value. These items generate significant revenue but may have varying margins.

Which product categories experience the fastest and slowest sales velocity?

Fast-moving categories include beverages, snacks, and tobacco. Slower-moving categories often include dairy products, toiletries, and certain specialty items.

What is the percentage of stock that becomes unsellable due to expiration or damage?

Ideally, the unsellable stock due to expiration or damage should be kept below 5%. Dead stock rates above 20% can hurt profitability and increase inventory carrying costs.

How often is a full inventory count performed to ensure accuracy?

Full inventory counts are often done monthly or quarterly, but cycle counts for fast-moving items are conducted more frequently. Regular inventory checks help prevent discrepancies and loss.

What is the typical gross margin percentage across all products?

Gross margins can vary widely, typically ranging from 18% for tobacco to 60% for health & beauty products. Convenience stores typically see an overall gross margin of 20-40%.

What seasonal fluctuations affect product demand throughout the year?

Seasonal fluctuations include higher sales during the holiday months (November-December) and reduced sales in January-February. Weather-related events, like heatwaves, also drive increased demand for beverages and snacks.

How does the store’s inventory turnover compare to industry benchmarks for convenience stores?

The industry benchmark for convenience stores is an inventory turnover ratio of 8-12 times per year. Stores with fast-moving products like beverages and snacks typically experience higher turnover, aiding cash flow and profitability.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

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