Lotto Max: The Savior of Depanneurs

Convenience store owners in Quebec can utter a big thank you to Lotto Max and praise their good fortune as well for the unusual series of Quebec jackpot winners over the past few years which helped fuel their sales and reverse a declining trend.

In its latest 2016-2017 annual report unveiled on June 17, Loto-Québec is proudly confirming its strongest lottery tickets sales over the past seven years with a total of $ 1.83 billion. It is also ending a very bad sequence of declining sales that lasted for 6 years. But strong as they are, the current annual sales are still far, though, from levels achieved in 2007-08 of $ 1.91 billion and in 2008-09 of $ 1.9 billion.

As can be seen in the following table, a sales trend reversal for the better occurred in 2015-16. In that year, Lotto Max sales jumped 65% from $ 218 million to $ 361 million, a gain of $ 143 million!

 

LOTO-QUÉBEC’S LOTTERY TICKETS REVENUE OVER THE PAST FIVE YEARS

2016-17
2015-16
2014-15
2013-14
2012-13
Total sales of lottery tickets
$ 1,827,896
$ 1,797,590
$ 1,633,589
$ 1,773,636
$ 1,792,838
Depanneur market share (75% of total)
$ 1,370,922
$ 1,348,192
$ 1,225,191
$ 1,330,227
$ 1,344,629
Commissions paid (total)
$ 128,298
$ 124,764
$ 115,523
$ 122,906
$ 122,672
Depanneur market share (75 % of total)
$ 96,223
$ 93,573
$ 86,642
$ 92,179
$ 92,004
Dividend paid to the government
$ 1,206,000
$ 1,202,000
$ 1,026,000
$ 1,055,000
$ 1,194,000

One might have feared that after their dazzling progression in 2015-2016, sales of Lotto Max collapse the following year under the effect of a passing fashion. But no: Loto-Québec confirms in its latest annual report that Lotto Max sales have been beautifully maintained at their new cruise altitude, losing barely 2.5%. With the launch of new products such as La Grande Vie and a strong push on the Special Editions, Loto-Québec has more than compensated for the consolidation of Lotto Max and maintained a pace of growth that is extirpating sales from the slump of declining revenues (the following table is available in French only).

The good news (and we don’t hear good news that often) is that this strong performance by Loto-Québec means more hard cold cash for depanneurs.

Commissions paid to convenience stores have increased 11% over the past two years. With approximately 6,600 depanneurs in Quebec, average annual benefits per store increased from $ 13,127 per year in 2014-15 to $ 14,579 in 2016-17, an increase of $ 1,452.

According to the Quebec Convenience Store Association (QCSA), the sale of lottery tickets represents approximately 4% of sales of a convenience store with gas and 8.4% of sales of a convenience store without gas. It generates a gross margin of approximately 7%.

 

 

Photo: Carl Villeneuve and his family shared the $ 60 million Lotto Max jackpot won in 2016 after buying a ticket at the convenience store Accommodation Chez François in Saguenay (credit: Loto-Québec).

Note on the table: all numbers must be multiplied by a thousand. The portion of commissions paid to convenience stores is estimated at 75% of the total (source: QCSA)

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