Single-Store Operators Continuing to Leave C-store Industry
ALEXANDRIA, Va. — The number of U.S. convenience stores dipped in 2019, with single-store operators accounting for most of the decline.
According to the 2020 NACS/Nielsen Convenience Industry Store Count, there are 152,720 convenience stores operating in the United States, down less than 1 percent from last year's 153,237 stores.
The count is based on stores that were open as of December 2019.
Single-store operators are driving the slight decrease as consolidation and profitability challenges take their toll. Over the past year, the number of single-store operators dropped from 95,445 in 2018 to 95,108 in 2019.
Single-store operators make up 62.1 percent of all c-stores.
Smaller companies — those in the one to 10, 11-50 and 51-200 store range — are also feeling the effects of continued consolidation in the convenience store industry, NACS added.
On the other hand, operators with more than 200 c-stores continue to expand, mainly through mergers and acquisitions (M&A). Between 2015 and 2019, half of the 20 largest chains have gone through some sort of M&A activity, consolidating a major portion of stores, according to NACS 2019 State of the Industry Summit data.
Broken out by company size, the 2019 store count vs. the 2018 store count is:
- One to 10 stores: Decreased 569
- 11-50 stores: Decreased 249
- 51-200 stores: Decreased 145
- 201-500 stores: Increased 134
- 501-plus stores: Increased 312
"Historically, c-stores have been unique in the retail channel in that new companies could enter the market relatively easily and succeed with a simple business model," said Andy Jones, president and CEO of Sprint Food Stores. "That's not the case anymore. What we have been seeing during the past few years — and especially in 2019 — is that the small operators are either going out of business because the model for success has changed, or they mastered the old business model — and maybe the new one as well — to be profitable enough to be bought by a larger company."
Jones is also a NACS board member and vice chairman of the NACS Research & Technology Committee
In 2019, United Kingdom-based EG Group was a dominate M&A player, acquiring Westborough, Mass.-based Cumberland Farms and its 567 stores, as well as select sites from Certified Oil and Fastrac.
Des Moines, Iowa-based Yesway continued its buying spree, acquiring Allsup's Convenience Stores, a 304-store regional chain based in Clovis, N.M.
Competitive Watch
Even with the decline in store count, the convenience channel is seeing less contraction that grocery and drug channels. According to NACS, grocery was down 1.6 percent and drug was down 1.7 percent. The dollar store channel grew, adding 1,565 stores in 2019.
The convenience store count represents more than one third (35 percent) of the brick-and-mortar retail universe tracked by Nielsen in the United States. Except for the dollar store channel, all other major channels had fewer units at year-end 2019.
"Accelerated change defined another deal-heavy year in convenience retail," said Jeffrey Williams, senior vice president of Retail and U.S Industry Relations at Nielsen. "The dynamics within the industry are shifting, and bringing investor value is now a top priority for many players in the space. Since convenience has been relatively sheltered from the disruption of e-commerce, retailers in 2020 will continue to prioritize physical store growth to scale and grow the industry at large.
"That said, digital transformation and the consumer's growing desire for frictionless retail are headwinds on the horizon that should not be ignored," he added.
The number of convenience stores that sell motor fuels remained steady at 121,988 stores. Overall, convenience stores sell about 80 percent of the motor fuels purchased in the United States.
State Rankings
Among the states, Texas continues to lead in store count at 15,856 stores, or more than one in 10 stores in the country. California is second at 11,990 stores, followed by Florida (9,811), New York (8,489), Georgia (6,668), North Carolina (6,024), Ohio (5,635), Michigan (4,917), Pennsylvania (4,754) and Illinois (4,715).
During 2019, Texas gained 111 stores, California added 60 and Florida added eight, while the other states rounding out the top 10 lost stores.
The three states with the lowest store counts are Alaska (194 stores), Wyoming (352) and Delaware (344).