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

Jun 18, 2024 - Wholesale Gas Prices Are Easing
  • According to the latest data from the US Bureau of Labor Statistics, producer prices for gasoline stations were flat in April compared to a year ago. The relative price stability comes after producer prices for gas stations sank 18.6% between April 2023 and April 2022 after soaring 38% in previous year-over-year comparison, BLS data show. The price per gallon of regular gasoline at the pump is falling, bringing some relief to motorists as they look toward the summer driving season. Meanwhile, employment by convenience stores grew 2.8% in April compared to a year ago, while average wages at convenience retailers and vending machine operators were flat, per the BLS.
  • 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.
  • Convenience stores rang up record in-store sales in 2023, driven by food service offerings, according to data from the National Association of Convenience Stores (NACS). Convenience industry sales totaled $859.8 billion in 2023, of which $327.6 billion were from in-store sales. The average basket – what customers spent per visit – increased 3.7% to $7.80. Despite sales growth, expenses ate into store profits: direct store operating expenses climbed 3.3% to $150.1 billion last year, with wages and benefits representing the highest operating cost at $84.2 billion, according to the NACS. Total industry food service sales, including prepared food, commissary, and dispensed beverages, accounted for 26.9% of in-store sales, up 1.3% in 2023 versus 2022, representing 37.3% of total in-store profits. Fuels sales decreased in 2023 to $532.2 billion, mostly due to lower gas prices, NACS reports.
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