ALEXANDRIA, Va.—Electric vehicles are beginning to infiltrate American roads, and with California’s plans to phase out the sale of new gasoline-powered cars and light trucks by 2035, convenience stores have the opportunity to become “EV stores,” according to Forbes.
“Think: C-stores thrive on habit, but habits could be changed. Who’s to say there aren’t already business models on the horizon that could alter those routines? Not just EV charge boxes, but rows of charging stations located in walkable plazas, or EV service hubs where multiple businesses operate. There's a sense of urgency under which c-store operators should consider these ramifications,” writes Forbes.
Of course, it’s easier said than done to install a robust charging program at a convenience store. Installing an EV station that provides level 2 charging could cost anywhere between $3,000 and $13,000, depending on quality and installation conditions, according to transportation information group Inspire Advanced Transportation.
Plus, there is the issue of demand charges that results in c-stores making little, if any profit, on EV charging stations. Convenience retailers are hit with demand charges from electric companies because they are considered commercial users of electricity when a customer uses their EV charger to juice their battery. A demand charge is not just based on how much electricity convenience retailers use, but the highest consumption they have over a short period of time.
NACS believes that EV charging should be an open, competitive market. Convenience and fuel retailers should have the option to sell any legal source of transportation energy in a competitive market with a level playing field.
Despite hurdles, many convenience stores are investing in EV charging infrastructure, including 7-Eleven, Sheetz and Circle K, among many others.
“We’ve been very early adopters of EV charging,” said Trevor Walter, vice president of petroleum supply management, Sheetz, in a Bloomberg article. “We installed our ﬁrst EV chargers in Pennsylvania in 2012.”
Sheetz has worked closely with Tesla to install Tesla-branded chargers at its locations, and when Tesla users charge up at a Sheetz location, they pay Tesla for the charge, not Sheetz. The company is betting that during the half hour or so it takes to charge an EV, customers will come into the store and buy a drink or order food.
Because these EV owners will have time on their hands to spend at c-stores while their vehicles recharge, some retail experts say that c-stores may be required to change their formats.
“Those c-stores that have the wherewithal to add charging stations will inherit an opportunity to redefine what they are,” writes Forbes.
Forbes offers five ideas that convenience stores can consider to morph their spaces.
The first is high-quality, innovative food offerings in a “sit-n-wait” environment as opposed to a “grab-n-go” store. Convenience retailers have been investing heavily in robust foodservice programs, and operators who invest in foodservice set themselves apart of the competition, as reported in the NACS State of the Industry Report of 2021 Data.
Idea No. 2 is a rentable workstation, where c-stores could offer a work pod with Wi-Fi for a rental fee. Forbes references work booths available at some airports that charge $30 an hour or more. Chains that offer reward programs could allow members to earn and redeem their points at these stations.
The workstations could also become streaming video booths, which could encourage in-store sales of snacks and beverages. Reward members could earn and redeem points to use the booths, while providing deeper and more diverse insights into their preferences.
Convenience stores could also offer auto detailing services while their car is charging. The services may be outsourced to auto detailing specialists or kept in-house. “This doubles the convenience for customers, while c-store operators can collect a percentage of the fees,” writes Forbes.
The last idea is a small-device recharge hub, which c-stores could offer for free. This would also encourage EV customers to grab a drink and a snack while they wait, and they could also have a display of chargers for sale nearby.
“EV charging stations, while a big investment, could be the one investment that will accelerate a c-store beyond average growth. Timing, location and technology are all major factors. C-stores in California, for example, are probably already weighing the cost-benefits. Operators in other states should pay close attention. Electric power, after all, is not going to short out. It is itself a vehicle of growth,” writes Forbes.
The NACS EV Charging Calculator allows retailers to assess the cost and profitability of offering EV chargers at their sites. The calculator focuses on what retailer utility costs associated with EV recharging are and what the corresponding revenue must be to recover those costs after allowing for potential ancillary in-store visits and purchase profitability.
The Fuels Institute is headlining two EV-related education sessions at the 2022 NACS Show, October 1-4 in Las Vegas. These include: EV Economics: Fact vs. Fiction and Reality of EV Transitions. Register today to attend the NACS Show.