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
Recent Developments
Apr 18, 2024 - Job Growth and Rising Wages
- Employment by convenience stores grew 4.2% in January compared to a year ago, according to the US Bureau of Labor Statistics. Overall, hiring by convenience stores slowed last year, rising 1.5% above 2022 after climbing 3.4% in the previous annual comparison. Meanwhile, the average industry wage rose 1.9% in January compared to a year ago to a new high of $17.50 per hour, per BLS wage data. According to the Interindustry Economic Research Fund, sales for the US convenience stores industry are forecast to grow at a 1.0% compounded annual rate from 2024 to 2028, slower than the growth of the overall economy.
- 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 largest 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.
- Cigarettes are rapidly losing share of the nicotine market to smokeless alternatives, including vape pens and oral nicotine pouches, The Wall Street Journal reports. Cigarettes’ share of the US nicotine industry fell to 60% in 2023, down from 80% in 2018, according to data from the tobacco giant Altria. If the trend continues, it will only take another three years for cigarette share to slip below 50%, according to WSJ. Last year, the number of cigarettes sold in the US declined by about 8%, double the long-term average. The cause of the rapid decline in volume is a source of debate in the tobacco industry. Inflation and price increases may be behind the downward trend. A Goldman Sachs survey of 67,000 US convenience stores and gas stations that sell cigarettes found retailers think recent price increases are causing smokers to look beyond the cigarette category altogether.
- 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.
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