BUFFALO, N.Y.—Consolidation continues in the convenience store industry and isn’t expected to abate anytime soon, the Buffalo News reports, pointing to Noco Energy Corp.’s planned sale of 33 Noco Express c-stores and gas stations to Marathon Petroleum.
The c-store and fuel-retailing industry has seen a slew of big consolidations in recent years. In 2011, 188 stores in the Wilson Farms chain sold to 7-Eleven. In 2018, Marathon purchased 10 Express Mart chain locations, turning them into Speedway. Likewise, Marathon plans to rebrand the Noco stores as Speedway. A few months ago, Sunoco bought four gas stations from Schmitt Sales.
Between 2015 and 2019, half of the 20 largest chains in the industry have gone through some sort of merger or acquisition, consolidating a major portion of stores with the largest chains, according to data presented at the NACS 2019 State of the Industry Summit (SOI).
“I'm not sure that the trend will subside any time soon, nationally or across the state, but the business climate and the marketplace are driving things in this direction,” James Calvin, executive director of the New York Association of Convenience Stores, told the Buffalo News.
NACS SOI data show that c-stores in 2018 had their 16th straight year of record in-store sales. U.S. convenience stores sales overall surged 8.9% to $654.3 billion, led by a 13.2% increase in fuel sales, which account for 69.6% of total sales.
However, c-stores are still experiencing financial pressure, including rising labor costs, smaller operating margins and a rising demand for electric cars and more fuel-efficient vehicles. For some—especially mom-and-pop or family-operated stores—a buyout may be an attractive option.
“It seems as if every day, there are new regulations and new cost mandates that convenience stores have had to adapt to,” Calvin told the newspaper. “And that has continued to drive things in the direction of having a model with greater economies of scale in order to remain profitable.”