Fractured Assets
C-store industry remains fragmented even as several top chains add stores
7-Eleven once again holds the top position on Convenience Store News’ Top 100 Convenience Stores list. The Dallas-based division of the Japanese c-store giant, Seven & I, operated 6,727 stores, as of April 2011, almost 2,000 more than its runner-up, Shell.
However, despite adding more than 200 net new stores over the past year (not including the recently announced pending acquisition of 188 Wilson Farms stores in western New York), 7-Eleven’s total store count represents less than 12 percent of the total 57,721 stores operated by the Top 100.
More evidence of the continued fragmented nature of the c-store industry: The Top 100 retailers cumulatively experienced a decline of 63 stores from last year’s report, while the total c-store industry store count grew by 1,800 stores (or 1.3 percent) in the past year, according to Nielsen TDLinx, which supplies much of the store count data for CSNews’ Top 100 list. In a retail industry marked by intense consolidation in other channels — from category killer superstores to department stores, drug stores and even grocery chains — the convenience store sector remains set apart by its high number of individual operators and lack of dominant chains. The Top 100 chains accounted for 39.4 percent of the total number of c-stores in the industry today, down from 40 percent a year ago.
The other major trend that this year’s Top 100 list illustrates is the continued shift from company operated to franchisee/licensee-operated stores. Among the Top 100 retailers, the number of company-operated stores declined by 2,215 units to 25,308. Meanwhile, the number of franchisees or licensees of Top 100 companies rose by 2,152 units to 32,413.
The company with the most company operated convenience stores in the U.S. is Laval, Canada-based Alimentation Couche-Tard, with 2,916 stores, mostly under the Circle K banner in the U.S. Couche-Tard is followed by The Pantry, with 1,667 stores, Casey’s with 1,616, Marathon (Speedway) with 1,524, Hess with 1,244 and Valero with 995. The convenience stores operated by supermarket giant Kroger (799), Cumberland Farms (598), Wawa (584), and Tulsa, Okla.-based QuikTrip (577) round out the Top 10 companies in corporate-run stores.
With all its stores run by franchisees or licensees, 7-Eleven is No. 1 among franchised/licensed operators. Among its licensees are large operators like Dallas-based Southwest Convenience Stores, with over 300 stores in Texas and New Mexico, and Handee Marts, with more than 60 stores mostly in western Pennsylvania and northeast Ohio.
The rest of the Top Franchisee/Licensee list is dominated by oil companies, most of whom have been divesting their directly operated retail stores for the past decade.
With 204 net new units in the past year, 7-Eleven was also the fastest-growing c-store chain in store count. The next fastest grower was Shell with 195 net new units followed by Casey’s (95), Sunoco (85), CHS/Cenex (64), Cumberland (52), Marathon (50) and Valero with 41 net new stores.
Just because the industry as a whole is not becoming more consolidated doesn’t mean there weren’t several high profile acquisitions among the Top 100 in the past year.
Last October, Marathon Oil reached agreement to sell its company-owned SuperAmerica locations, as well as franchise rights for another 67 stores to Northern Tier Energy LLC. The sale prompted the March 2011 name change of Speedway SuperAmerica LLC to Speedway, which is expected to eventually split from Marathon.
Casey’s General Stores, itself the target of an unsuccessful takeover attempt by Couche-Tard, was extremely active on the acquisition front in the past year. Last July, the company announced plans to open 60 to 90 stores in the coming year. Acquisitions began in October with the announcement of Casey’s intent to acquire 19 convenience stores from Harper Oil Co in Springfield, Ill. Then in November, Casey’s said it would buy up to 44 c-stores from Kabredlos Co. of Lincoln, Neb. The stores are located in Nebraska, Kansas and Oklahoma.
The acquisitions continued in 2011, as Casey’s signed an agreement to purchase 11 convenience stores from NuWay Cooperative in Trimont, Minn. in February, and in March it purchased five c-store locations in Springfield, Mo. from QuikTrip Corp. Finally, in April, Casey’s announced plans to open 20 more locations in the coming six months.
AMONG OTHER TOP 100 CHAINS:
Wawa last July announced plans to open between 75 and 100 stores in Florida by 2013.
Not discouraged by its unsuccessful takeover of Casey’s, Couche-Tard acquired 12 Crystal Flash Stores last September for its Circle K division.
The Pantry closed on its acquisition of 47 Presto Convenience Stores in Kansas and Missouri in December.
Also in December, 7-Eleven agreed to acquire from ExxonMobil the retail interests of 183 locations in Florida, all to be re-branded to 7-Eleven. In January, the retailer said it plans to open as many as 20 new locations in New York City by the end of 2012. In April, 7-Eleven then announced plans for an internal reorganization. The eight existing regions were replaced with 14 geographic zones.
E-Z Mart (No. 23 on the Top 100 list) acquired all eight stores owned by BBF Oil last December.
In January, VPS purchased 22 former Appco convenience stores that had been closed for the last six months. The stores are located in northeastern Tennessee and southwestern Virginia and will be converted to the Scotchman Store brand.
In February, Loves announced its plan to open 20 new travel stop locations this year.
Little General, which climbed from 90th place last year to a tie for 76 this year, acquired five former Bandy’s Sunny Spot Sunoco locations in West Virginia late last year.
Source: Nielsen TDLinx; Convenience Store News Market Research, 2011
*All Commodity Volume (ACV) figures are annualized ranges of the estimated retail sales volume of all items sold in a store that pass through the retailer’s cash registers. Lottery sales are not included; gas sales are included where applicable. The Nielsen TDLinx ACV is an estimate - a directional measure to be used as an indicator of company size.
- Alimentation Couche-Tard Inc., based in Laval, Quebec, operates convenience stores in both Canada and the U.S. For this ranking, only U.S. stores are included.
- Speedway LLC is a wholly owned subsidiary of Marathon Oil Corp.
- WFI Acquisition Inc. executed an agreement for the sale of its 188 Wilson Farms locations in New York to 7-Eleven Inc., in April, 2011.
- 7-Eleven of Oklahoma is not affiliated with 7-Eleven Inc.
Editor's Note: Licensees are included in the total store count of the parent’s banner name. For example, companies like Southwest Convenience Stores and Garb-Ko (both 7-Eleven Inc.) fall under those respective chain counts. Nielsen TDLinx utilizes the convenience store trade channel definition endorsed by the National Association of Convenience Stores and Convenience Store News. The Convenience Store Trade Channel includes small format stores, between 800 and 3,000 square feet and 500 and 1,500 SKUs, that operate at least 13 hours a day and carry a limited selection of grocery items, including at least two of the following: toilet paper, soap, disposable diapers, pet foods, breakfast cereal, tuna fish, toothpaste, ketchup, and canned goods. This channel includes stores that may or may not sell gasoline and offer fast-food services.
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