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 85,300 convenience stores 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
Industry Forecast
Convenience Stores Industry Growth
Source: Vertical IQ and Inforum

Recent Developments

Feb 18, 2024 - Fuel Prices Forecast to Fall in 2024/2025
  • Average US retail gasoline and diesel prices are forecast to decrease this year and in 2025, according to the US Energy Information Administration’s January 2024 Short-Term Energy Outlook (STEO). The latest STEO forecast is for motor gasoline (regular) to fall from an annual average of $3.52 per gallon in 2023 to $3.36 this year and $3.24 in 2025. Likewise, on-highway diesel prices are forecast to fall from $4.21 last year to $3.92 and $3.85 in 2024 and 2025, respectively. The EIA credits increased inventories, new refinery capacity, and a slight reduction in motor fuel consumption for the declines. Additional refinery capacity came online last year, raising US operable refinery capacity from 18.06 million barrels per day (b/d) in January 2023 to 18.31 million b/d in December 2023.
  • Violence and theft are impacting the convenience store industry at unprecedented levels, Convenience Stores News (CSN) reported in February. According to the FBI, 4.5% of all reported violent crimes in 2022 took place at a gas station or convenience store, and C-stores and gas stations combined were the site of 13.8% of robberies. Moreover, the National Retail Federation's "2023 Retail Securing Survey" reported that the average shrink rate – the percentage loss resulting from the damage, expiration, or theft of unsold products – for the 2022 fiscal year increased by 1.6%, up from 1.4% for the prior fiscal year, representing a loss to the industry of more than $40 million a day.
  • Convenience stores are looking to food to pump up sales and fatten margins, The Wall Street Journal reports. As sales of fuel and cigarettes – traditional mainstays for convenience stores – decline, fresh food sales present an opportunity. Casey’s General Stores in the Midwest is the fifth-largest pizza purveyor by number of kitchens in the US, with about three-quarters of in-store transactions not including fuel, according to WSJ. On average, food-service sales account for about a quarter of in-store sales for convenience stores but well over a third of in-store gross profits, according to c-store industry group NACS. At Casey’s, the gross margin on prepared food and beverages is about 60% compared to about 10% on fuel. However, selling fresh food is labor and capital-intensive and a strategy better fit for chains with some geographical density, notes WSJ. Circle K, Wawa, and TXB Stores are among those expanding their menus.
  • The Biden administration has put off deciding whether it would ban menthol cigarettes, The New York Times reported in December. The delay came amid intense lobbying from the tobacco industry, convenience stores, and industry-backed groups that contend that billions of dollars in sales and jobs will be lost. Last year, the Food and Drug Administration formally proposed the Tobacco Product Standard for Menthol in Cigarettes, a rule aimed at reducing health disparities and citing statistics that an estimated 85% of Black smokers prefer menthol brands. Convenience store groups, tobacco companies, and the National Action Network, founded by the Rev. Al Sharpton, advanced concerns that Black smokers would become the targets of aggressive police tactics if the rule passed, a worry dismissed as a cynical ploy by the ban’s proponents. The Biden administration has suggested the proposal to ban menthol cigarettes could be made final by March 2024.
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