Whatever Happened to Home Depot Fuel?

ATLANTA -- Six years ago, the convenience store industry was abuzz over news that Home Depot had entered the business. With so many core c-store customers already making daily stops at the home improvement giant's locations, industry insiders wondered and worried that Home Depot's new concept would, no doubt, cannibalize competing c-stores.

As Convenience Store News reported at the time, the home improvement retailer planned to open 300 Home Depot Fuel convenience stores by 2010, and expected to earn $5 million to $7 million annually in revenue per site.

Today, though, The Home Depot Inc. continues to operate just six Home Depot Fuel convenience and fuel stores. First opened in 2006, all the Home Depot Fuel sites -- which are in Tennessee and Georgia -- are located in parking lots of the retailer's big-box stores.

Wondering if the 300-store expansion is still on the drawing board, CSNews Online recently posed that question to the company. Stephen Holmes, the chain's spokesperson, reported that growth in that area is not in the retailer's future.

"Although we're pleased with the way the Fuel stores have performed, we don't have any plans to expand them because we're focused on our core retail business," Holmes explained.

One area where Home Depot has expanded in its core retail business is in mobile payments -- a technology emerging within the convenience channel as well. The big-box retailer first tested its PayPal mobile wallet payment platform at seven stores in three markets and since has expanded the service to its entire retail network.

"Checkout has been a major focus for the company," Holmes said. "We're constantly looking for ways to improve the checkout experience. It's one of the top priorities for our customers. They want to get in and get out [quickly]. Home Depot stores have an average of 105,000 square feet, but they actually are just very, very large convenience stores for most of our customers. We want to offer our customers a lot of [payment] options."

According to Holmes, Home Depot selected PayPal as its mobile wallet provider for several reasons. The company researched the mobile wallet technologies in the marketplace and determined it could "work with PayPal to develop something that would bring them into the physical world from the purely digital world. With that in mind, [PayPal] is fast, secure and very convenient for customers," he said.

Perhaps the greatest selling point about PayPal's mobile wallet compared to its competitors was its hands-free payment option, Home Depot's spokesperson relayed. "With hands-free, you don't even need to have a mobile device [to make a payment]," he said. "All you need is your PIN number and your cell phone number."

In addition, PayPal's mobile wallet platform was advantageous because Home Depot didn't need to install new hardware, as is required by Near Field Communication (NFC) systems.

As of this March, PayPal's mobile wallet is now in Home Depot's nearly 2,000 stores. "Obviously, we're in the early stages of it. But we're extremely pleased with the feedback we're received so far," said Holmes. "Most of [the feedback] has been anecdotal, but we're excited about it and are really excited to see where [the PayPal mobile payment technology] will go from here."

PayPal is a division of eBay Inc.