Fuel-Free C-stores Make Food the Star

NATIONAL REPORT — While convenience stores throughout the United States continue to expand and strengthen their in-store offerings, particularly around foodservice programs, the majority still offer motor fuels to add extra profit and help drive traffic inside the store. Even industries outside of the c-store arena, from big-box retailers to grocery stores, continue to add fuel pumps to their retail sites to offer consumers more amenities.

So then, why would c-store companies like Kwik Trip Inc., QuikTrip Corp., Sheetz Inc. and Maverik Inc. start opening stores without fuel? It comes down to location and offering a strong enough in-store selection to stand on its own.

"To open a store without gasoline has been part of our strategic plan for some time, but it had to be the right timing and the right location," said Mike Thornbrugh, spokesperson for QuikTrip, which operates more than 700 c-stores in 11 states and opened its first store sans fuel in downtown Atlanta this June. "The store in Atlanta was the right time and location, and a good opportunity for us to see if it will be successful and to learn from it."

As part of the retail space of Viewpoint Condominiums, the 3,500-square-foot QuikTrip store in downtown Atlanta offers a range of grocery items, as well as fresh foods through the QT Kitchens made-to-order concept. This store is focused even more on the fresh food side of the business than other locations, Thornbrugh noted.

"Placing a lot of emphasis on fresh food will give us a chance to bring a lot of different products in; to see if we can perfect it and learn from it," he said. "A lot of people don't remember, but QuikTrip began as a grocery store that opened and operated for many years before we even got into gasoline."

Another convenience chain opening stores sans gas is Sheetz, based in Altoona, Pa., and known for its "convenience restaurant" concept. During a recent speech to the Carlisle Rotary Club in Carlisle, Pa., Louie Sheetz, a long-time company executive and now member of the board of directors, explained how this is the direction the retailer is headed in for the future.

Sheetz already has a full-scale convenience restaurant operating in Altoona, and opened two Sheetz Cafés in Morgantown and State College, Pa. Another location without gasoline was slated to open this fall in Indiana, Pa.

"We have the two cafes that are totally food focused and don't offer gasoline," Tarah Arnold, public relations manager for Sheetz, told Convenience Store News. "Morgantown opened in spring of 2015 and State College opened in fall of 2015. They have been incredibly successful due to the location of the two cafes in two college towns and the loyalty of our Sheetz customers for our food offering."

High-quality, prepared food seems to be key in driving traffic without gasoline, according to Donald Strenk, president of California-based Strenk Management Consulting LLC, who works with gas station and convenience store operators.

"To be successful without gasoline, a store has to offer high-quality, well-differentiated prepared food," he noted. "7-Eleven does well [without selling gas], but they may not be averaging $300,000 a month. Sheetz and QuikTrip have locations that do significantly high sales in the c-store."

Sheetz leverages the strength of the standalone c-store and competes very well with quick-service restaurants (QSRs), according to Strenk. "They have such a strong c-store offer, and there may be locations that would be viable for that type of offer that don’t have the ability or space to move gasoline as well."

Some areas of the country, especially urban and downtown markets, lend themselves to producing customer traffic without gasoline, and that is where many of these chains are now setting up shop.

Those c-store retailers who are moving into urban locations and stores without space for gasoline all have very strong and compelling offers in-store, noted Mark Whitehead, first vice chairman of the Petroleum Marketers Association of America.

"All of these chains are leaders in the c-store business and have strong store sales along with gasoline. In some cases, the c-store can stand on its own," Whitehead noted.

For more on the fuel-free convenience store trend, look in the November issue of Convenience Store News.