C-stores modernize to meet consumer needs in the face of consolidation
What it means: Convenience retail is no longer just about function. Like all sectors of retail, it must modernize and adapt to shifting consumer needs. C-stores and gas stations have seen a flurry of mergers and acquisitions, generating buzz around future endeavors within the c-store channel. Consumers’ desire to return to travel, including road trips, leaves them looking to source all of their items in a convenient way and experience convenience beyond grab-and-go items. This all provides a catalyst for change within this sector that will alter the landscape of convenience and impact the broader industry.
The convenience sector of retail, while usually relatively stable, is undergoing a transformation to embrace new consumer demands and changing lifestyles. Convenience channels are on the forefront of transforming the consumer experience, adapting to technology and embracing the theater of retail in ways that modernize the sector.
M&A activity is high within the convenience sector, which may stem from some of the obstacles to transforming current business operations. The owners of Midwestern convenience chain Kum & Go have reportedly expressed interest in selling the chain after six decades of business. BP also recently announced its purchase of TravelCenters of America (TA) in a move that would bring them a larger presence in the on-highway market. Consolidation is natural within any sector of retail, particularly in specialty categories, but much of the recent activity has come out of essential sectors, like grocery and convenience. New and large convenience brands can capitalize on innovations within the industry more easily and own certain markets or channels within the overall convenience sector.
In the new age of convenience, many retailers and brands are leaning into creating an experience for consumers. Retailers may take a different approach, but investing in prepared foods, full-service options and branding are all ways that c-stores have engaged consumers and built followings. Creating additional capacity for prepared foods and fresh items is key for chains in urban environments where third-party delivery continues to rise. Saratoga, New York-chain Stewart’s recently announced its expansion of commercial kitchen space in order to keep up with demand for prepared foods and specialty items. Southern convenience and gas chain Buc-ee’s has cultivated a loyal fan base through social media platforms like TikTok, with consumers going out of their way to visit the experiential stores and try specialty items, such as house-smoked barbeque, jerky, fudge and other snacks. Convenience stores aren’t traditionally thought of as experiential retailers, but consumers continue to look for physical stores that make life better and offer entertainment value.
Finally, technology not only helps the convenience channel become even more convenient for consumers, but it also helps them to attract new shoppers. Installing electric charging stations in on and off highway locations offers a new service to consumers who wouldn’t normally need to visit a gas station. C-stores are also testing autonomous delivery systems to own their last-mile delivery to consumers. Technology naturally fits into the c-store model as it improves the efficiency of the shopper experience and is a great barometer for how technology may be applied in other retail sectors.
What’s next: Convenience stores are embracing their newfound buzz within the retail industry and are looking ahead toward the future in a way that may provide learnings to grocery and general merchandise retailers. The blend of efficiency and experience for consumers is quickly earning c-store brands recognition and loyalty. Leaning into prepared foods and delivery tech is key to gaining new customers and fostering long-term growth of the channel.