Learn about the convenience store business industry and find information on how to start a
convenience store or C-store. Don’t forget you can receive free or low-cost training and free
professional business advice, from your local Small Business Development Center!
View our related business reports here: Food Industry Research and Beverage Industry
Research
Get a free Convenience Store business plan template on our Business Plans page.
Convenience Store COVID-19 Resources
In response to the global COVID-19 pandemic, shelter-in-place orders and physical distancing
measures have affected many businesses; here is a look at the impact to the Convenience
Store industry. Convenience Stores were declared essential businesses when states began
enforcing closures. However, operators were now subject to many new safety measures, both
voluntary and not, including occupancy limits, requiring facial coverings to enter, sneeze
guards, and wiping down surfaces multiple times during the day. Here are additional
COVID-19 business resources specific to this industry:
SBDCNet’s COVID-19 Small Business Resources
SBDCNet’s COVID-19 Industry Resources
Convenience Store Industry Overview & Trends
Research, which also sells a full version of this report.
“Companies in this industry operate retail locations that primarily sell fuel, groceries,
cigarettes, and alcoholic beverages. Major US companies include 7-Eleven (the North
American subsidiary of Seven Eleven Japan), Circle K (a division of Canada-based
Couche-Tard), Casey’s General Stores, and Wawa. Economic growth, urbanization, and
an increasing affinity for smaller store formats is driving growth in the global
convenience store (c-store) sector. Worldwide c-store sales are expected to approach
$5 trillion by 2022, according to a report from GlobalData. Japan, China, and emerging
markets in Southeast Asia are among the fastest growing for c-stores.
The US c-store and truck stop industry includes more than 155,000 stores, according to
the National Association of Convenience Stores, with combined annual revenue of about
$650 billion. The industry includes establishments that are gas station/c-store
combinations, as well as c-stores that don’t sell fuel. Gas stations that don’t include c-
stores are covered in a separate industry profile.
Competitive Landscape: Consumer and commercial driving trends drive demand. The
profitability of individual stores depends on competitive pricing, effective
merchandising, and the ability to secure high-traffic locations. Large companies have
advantages in purchasing and finance. Small companies can compete effectively by
acquiring superior locations or offering specialized merchandise or services. The
industry is fragmented: the top 50 US companies account for about 40% of industry
sales. Single-store operators predominate, accounting for more than 60% of all
convenience stores”
This Convenience Store market research report summary is from Euromonitor, which also
sells a full version of this report.
Alcohol Sales: Consumer awareness of the health risks and decreasing interest in
tobacco and carbonated drinks has forced operators to refocus their sales strategies,
having to deal with the decrease in revenue of two major product categories in their
stores. A bright spot has appeared in alcohol sales. Many states have loosened various
restrictions on these types of stores selling different kinds of alcohol. Combined with
consumer desires for convenience in purchasing alcohol, sales have been bosted
considerably.
Foodservice Sales: For similar convenience reasons, many operators have found an
additional bright spot in selling hot/prepared food and drinks such as coffee to
customers. Corporate decisions and guidelines towards increasing the quality and value
of in-store food selection have slowly been changing the negative stigma of “gas station
food.” Many locations are having very successful in-store foodservice rebranding.
Convenience Store Business Customer Demographics
IBISWorld reports on the major market segments for Convenience Stores in the US. The full
version of the report is available for purchase.
Consumers below age 25 (10.6%): These consumers are the smallest share of the
market mainly due to a lack of expendable income and/or access to transportation.
However, the convenience of these stores and the specific product selection
(candy/snacks/soda) compared to larger big box or grocery stores appeals to them and
can make them frequent customers.
Consumers between ages 25 and 44 (37.8%): Many of these consumers are young
professionals or young families who value their time and convenience. With less brand
loyalty than older groups, convenience stores are very attractive to this age group. The
growth of in-store prepared food also appeals to them.
Consumers aged between 45 and 64 (38.1%): With a larger amount of disposable
income and a limited amount of time, this age bracket is a very large segment of the
market. However, older customers in this bracket begin to prefer buying all of their
needs at larger stores rather than smaller convenience stores.
Consumers aged 65 and older (13.5%): As customers become retired, the time saving
appeal of convenience stores becomes less of a selling point for them. In it’s place, they
tend to value larger box stores or supermarkets that can also sell them products in one
trip that convenience stores cannot, such as filling their prescriptions, home goods, and
a broader selection of groceries. However, this segment does provide a large amount of
smokers for operators to sell cigarettes to.
C-Store Business Startup Costs
According to Entrepreneur: Business Idea Center: Convenience Stores:
“Startup Costs: $10,000 – $50,000
Franchises Available? Yes
Online Operation? Yes
In spite of the rising popularity of internet shopping combined with home delivery of
grocery and convenience items, starting and operating a ‘mini convenience store’ is still
a good business venture to activate that has the potential to generate respectable
profits. The name suggests it all. In order to succeed in this segment of the highly
competitive retail industry, the store must be convenient. This means an easily
accessible and highly visible business location, well-stocked with the most popular
convenience products, and fast and friendly service.”
According to ProfitableVenture: Starting a Convenience Store Business:
“As for technical requirements, you would need a number of equipment to manage your
business especially for handling payments, inventory and preventing theft. Some of the
equipment you might need include: RFID Scanners, Anti-theft devices, CCTV
installations, POS Software and gadgets, Credit card terminals, Touch screen monitors,
Customer pole displays, Carts, Sponge matting for fruits and vegetables, Plastic bags,
Measuring Scales, Shelving, Freezers and refrigerators, Stationery, Office desk and
chairs, Computers, Delivery vans
You may not have to buy all of these items if you are starting really small or operating a
limited selection convenience store but as your business continues to grow, you may
need all of these and more.You can purchase the larger equipment from fairly-used
dealers or on hire-purchase while some of the gadget suppliers can allow you to spread
the costs over a few months.”
According to Chron: How to Stock a Convenience Store:
“While the items in a convenience store don’t generally cost too much individually,
costs do add up. Expect to pay at least $20,000 to stock even a small store.
The number of products you choose to sell in your convenience store will influence the
cost to stock the store. Very small convenience stores may stock as few as 500 stock-
keeping units, or SKUs, according to the business appraisal firm JSO Valuation Group.
JSO reports that a typical convenience store, though, carries nearly 2,500 different
products, and larger convenience stores, such as those at major truck stops, may carry
even more.”
How to Open a Convenience Store
Starting a Convenience Store Checklist
Convenience Store Associations
Trade associations often are excellent sources of information on an industry. Here are some
relevant convenience store industry associations:
National Association of Convenience Stores
American Petroleum and Convenience Store Association
State Associations for Convenience Stores
National Association of Truck Stop Operators
Convenience Store Business Employment Trends
Understanding trends in your industry is important when running a convenience store, with
your most common type of employee most likely being a cashier. Here is a labor market
summary from the Bureau of Labor Statistics focused on Cashiers.
“Work Environment
Cashiers held about 3.6 million jobs in 2018. The largest employers of cashiers were as
follows:
Food and beverage stores – 27%
General merchandise stores – 21%
Gasoline stations – 17%
Restaurants and other eating places – 9%
Pharmacies and drug stores – 5%
The work is often repetitive, and cashiers spend most of their time standing behind counters
or checkout stands. Dealing with dissatisfied customers can be stressful.
Job Outlook
Employment of cashiers is projected to decline 4 percent from 2018 to 2028.
Although retail sales are expected to increase over the next decade, employment of cashiers
is expected to decline because of advances in technology, such as the use of self-service
checkout stands in retail stores and increasing online sales.
Pay
The median hourly wage for cashiers was $11.37 in May 2019. The median wage is the wage
at which half the workers in an occupation earned more than that amount and half earned
less. The lowest 10 percent earned less than $8.73, and the highest 10 percent earned more
than $15.04.”
Additional Resources
Already in business or thinking about starting your own small business? Check out our
various small business resources:
View more business reports here: Small Business Snapshots
View small business help topics here: Small Business Information Center
View industry-specific research here: Market Research Links
View business plans samples here: Sample Business Plans
Remember, you can also receive free professional business advice and free or low-cost
business training from your local Small Business Development Center!
