Worlds Colliding
In the 15 years I've been covering the convenience store industry, one of the things that most fascinated me about the business is the regionalization of the competitive landscape.
With the exception of 7-Eleven and, to a lesser extent at the time, Circle K, you knew that certain states and markets were dominated by a select group of midsized retailers. Eastern Pennsylvania was Wawa country, while the western part of the state belonged to Sheetz. Atlanta was a battleground for RaceTrac and QuikTrip. Parker's dominated Savannah, Ga., and so on.
[Read more: Wawa Celebrates 60 Years With 70-Plus New Stores]
Because of that, we always talked about the pros and cons of this fragmented industry. On the one hand, there was no 1,000-pound gorilla (like a Walmart) putting everyone else out of business. Competition in many markets was limited to just a handful of top players. On the other hand, the fragmented nature of the business often resulted in companies lagging behind the larger, more sophisticated retailers with better technology and suffering from a less efficient supply chain (unless they were one of the few like Kwik Trip that were self-distributing).
One would think the industry would have consolidated greatly by now, like other retail channels such as mass merchandisers, drug stores, home improvement warehouses, wholesale clubs, etc. But that hasn't happened. There has been consolidation at the top, especially among the top three chains, which at last count on the Convenience Store News Top 100 accounted for 14% of the stores in the industry. Nevertheless, the top 10 chains account for only 18% while the top 100 comprise less than a third of the total industry. There are still a lot of c-store companies out there.
What strikes me as most intriguing about today's c-store landscape is how the expansion of some of the industry's best-in-class chains is increasingly pitting the best of the best against one another.
That's not unusual in the Mid-Atlantic, where great companies such as Wawa, Rutter's, Royal Farms and Dash In already go head to head daily. But now, Wawa, which has already grown a major presence in Florida, has expansion plans for its next 1,000 stores in states like Indiana, Kentucky, Ohio, North Carolina and Alabama. What impact will Wawa have on Family Express in Indiana or Thorntons in Kentucky or United Dairy Farmers in Ohio?
Sheetz recently opened a new food prep and distribution facility in Ohio to support its expansion there and in Michigan. It will be interesting to watch the Sheetz vs. Wawa competition in Ohio and North Carolina.
RaceTrac is opening its first stores in South Carolina this year, setting up interesting battles with Parker's, which is expanding from its Georgia base. Atlanta-based RaceTrac is also targeting Ohio this year, joining Wawa and Sheetz in zeroing in on The Buckeye State.
No one ever said that the c-store industry wasn't a competitive business. But I think 2024 is shaping up to be the most highly competitive year yet for this exciting industry.
