Convenience Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 87,300 convenience store companies in the US sell a limited selection of merchandise in high-traffic locations. The majority of convenience stores in the US sell gasoline. Most convenience stores are independent operators – 92% of c-stores have a single location.
Reliance on Fuel Sales
Managing fuel sales is a critical yet risky part of c-store operations.
Rising Credit Card Fees
The cost of credit/debit fees continues to grow and can exceed the pre-tax profits for a c-store.
Industry size & Structure
A typical convenience store sells gas, operates out of 1-2 locations, employs 14-15 workers, and generates almost $7.5 million annually. A typical c-store that does not sell gas employs about 5-6 workers and generates about $1 million annually.
- The convenience store industry consists of 87,300 companies with over 130,000 stores, which generate about $457 billion annually and employ 991,000 workers, according to the Census Bureau.
- The average convenience store had 45,312 transactions (at the pump and in-store) per month in 2023, or 1,491 per day.
- Most convenience stores are independent operators - 92% of c-stores have a single location, and 88% employ fewer than 10 workers.
- The average c-store chain has about 50 individual stores.
- Large companies include 7-Eleven, Couche-Tard, Casey's General Stores, and Murphy USA.
Industry Forecast
Convenience Stores Industry Growth
Recent Developments
Jul 18, 2024 - Wage and Job Growth
- Employment by convenience stores grew 2.7% in May compared to a year ago, while average industry wages inched up 0.8% over the same period, according to the latest US Bureau of Labor Statistics data. Producer Prices for gasoline stations rose 1.5% in May year over year amid rising sales at food and beverage stores and resilient consumer spending. In May, the Energy Information Administration predicted that the average pump price of regular gasoline would be around $3.70 per gallon this summer. Still, the EIA warned that higher refining costs could increase summer gas prices.
- Double-digit sales growth made food service the standout category at convenience stores last year, according to the Convenience Store News Industry Report 2024, released in June. In 2023, average food service sales per store grew 11.9% to $388,607, down from 18.8% in 2022. By comparison, merchandise sales per store increased just 0.9% last year. All food service segments experienced increased dollar sales, reinforcing the category’s importance to the channel. Prepared food was the top-selling and fastest-growing segment, with average dollar sales per store rising 12.9%, per CSN's report. Cold-dispensed and frozen-dispensed beverages both saw average dollar sales growth of at least 10%. In comparison, hot-dispensed drinks posted the lowest sales growth at 7.8%, but still generated the second-most dollar sales by a comfortable margin. The report shows total industry food service sales at c-stores jumped 13.5% in 2023.
- The Justice Department and FDA are joining forces to crack down on the illegal distribution and sale of e-cigarettes, the NACS reports. The multi-agency task force will include members of the US Marshals Service, US Postal Inspection Service, and other agencies to identify and target illegal sales and distribution of e-cigarettes. A statement from the FDA said the new task force would focus on topics “including investigating and prosecuting new criminal, civil, seizure and forfeiture actions,” adding that violations “can result in felony convictions, significant criminal fines, and civil monetary penalties.” As of April 2024, the FDA had issued over 550 warning letters and 108 civil money penalties to retailers for selling unauthorized tobacco products, some of which appeal to minors. Between April 23, 2022, and April 23, 2023, electronic smoking devices generated nearly $7 billion in sales for US convenience stores nationwide, per consumer analytics firm Circana.
- After dragging its feet for months, the Biden administration has postponed a ban on menthol-flavored cigarettes indefinitely, Convenience Stores News reports. The ban was first delayed in December 2023, and plans to finalize it in March never materialized. In a statement issued on April 26, US Health and Human Services Secretary Xavier Becerra said that the proposed ban "will take significantly more time." The ban faced opposition from the tobacco industry and the National Association of Convenience Stores (NACS) but was supported by health officials, anti-smoking and civil rights groups, who contend that menthol cigarettes pose a disproportionately higher risk in Black communities, where they are heavily marketed. In published remarks, administration officials stated they were still committed to implementing a ban but gave no timeline. Menthol cigarettes account for a third of the industry's overall market share in the US.
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