New Report Highlights C-Store Growth Potential
The convenience store channel is going through a period of evolution as several leading chains transform from a quick stop for snacks and fuel to popular food destinations, according to a new report from Coldwell Banker Commercial.
"The convenience store industry is evolving to meet changing consumer needs," said Dan Spiegel, SIOR, senior vice president and managing director of Coldwell Banker Commercial. "With smaller households, more urban locations, and evolving food preferences, the sector is undergoing significant transformation. Given their frequent visits, convenience stores must stay closely connected to shifting consumer lifestyles to remain competitive in the retail market."
The report noted that sales of prepared food have risen 12.2% year-over-year, and 56% of consumers now consider C-stores viable substitutes for fast-food chains. This growth, fueled by demand for convenient, affordable, and healthier food options, has added to the sector's stability, even though profit margins remain narrow (around 5% to 7%). However, the high turnover of products and steady consumer visits compensate for the tight margins.
"With a new generation of consumers focused on health, value, speed, and convenience, C-stores are perfectly positioned to expand," the report said.
Additionally, as convenience stores expand their food offerings, they are also growing in size. Chains including QuikTrip, Casey's General Stores, RaceTrac, and Wawa are investing in larger store formats to accommodate food preparation areas. Many are returning to urban centers and exploring non-traditional spaces, such as college campuses and downtown locations, which provide new opportunities for real estate investors.
The convenience store channel is also seeing consolidation. While 60% of C-stores are independently owned, larger chains such as 7-Eleven, Wawa, Sheetz, and Buc-ee’s are expanding into new markets.
Wawa, for example, is moving west from its east coast base of operations. The Media, Pa.-based company will open its first Ohio store on April 16 and has announced plans to open as many as 60 stores over the next five to eight years. In 2024, Altoona, Pa.-based Sheetz revealed plans to open its first four stores in Michigan in the Detroit metropolitan area.
