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Yahoo
4 days ago
- Business
- Yahoo
Convenience store M&A activity suggests more consolidation is coming
Majority of recent transactions involve smaller operators, but major moves among larger entities could be coming in 2025 DENVER, June 05, 2025 (GLOBE NEWSWIRE) -- The pace of merger and acquisition activity in the U.S. convenience store sector is accelerating with recent trends suggesting the nation's c-store landscape is ripe for more change. While most of the transactions in 2024 involved smaller chains or single-store operators, several larger operators inked deals to significantly expand their footprints into new regions. According to a new research brief from CoBank's Knowledge Exchange, c-store consolidation stands to disproportionally affect rural communities, many of which lack a grocery store or access to major food delivery services. Convenience stores often fill an important need in rural areas, providing local access to food, grocery items, fuel and even household staples. 'Mass merchandisers like Walmart are unevenly spread among states through various regions of the country,' said Billy Roberts, food and beverage economist with CoBank. 'Convenience stores are found in towns large or small. Food insecurity affects roughly 1 in 10 Americans and nearly 90% of U.S. counties with the highest rates of food insecurity are rural. Consequently, c-store consolidation trends can have a significant impact on food accessibility in rural areas.' The convenience store market remains heavily fragmented and widely dispersed, which lends itself to additional consolidation. The U.S. had 152,396 convenience stores in 2024, a 1.5% year-over-year increase, according to data from the National Association of Convenience Stores. Only 22 c-store chains in the U.S. have more than 400 locations, while roughly 96,000 have 10 or fewer. The majority of the sector – 63% – is comprised of single-store operators. 'The vast number of single-unit operators alone points to opportunities for larger chains to expand their relationships or acquire new properties to maximize efficiencies across supply chains and distribution networks,' Roberts added. Acquisitions of smaller operators have been commonplace in recent years. Data from Capstone Partners indicates 80% of deals completed in 2023 were for target companies of less than 50 stores. Through September of 2024, 74% of the transactions involved smaller c-store entities. However, several major moves involving some of the largest operators have occurred in recent years. Notable examples in 2023 include Maverik purchasing Kum & Go's 400 c-stores, RaceTrac's purchase of Gulf Oil and its 1,000 branded sites, and BP's $1.3 billion acquisition of TravelCenters of America. Similar activity in 2024 was largely driven by major chains looking to expand their geographical footprint. FEMSA purchased 249-unit Delek US Holdings. Casey's acquired 198 CEFCO c-stores for $1.15 billion, pushing the chain to over 2,900 locations. And Sunoco sold 200 stores to 7-Eleven in a $1 billion deal. The biggest potential deal that could shake up the market even further puts 7-Eleven's 13,000 U.S. locations on the table, along with its market-leading position. While 7-Eleven recently announced plans to open 1,300 new stores in North America through 2030, it has been an acquisition target itself lately. Canada-based Alimentation Couche-Tard recently attempted to purchase 7-Eleven owner Seven & i Holdings for nearly $40 billion. In a saga that began in August 2024, the Canadian c-store chain and 7-Eleven are reportedly working on a potential divestiture package to address regulatory concerns considered a major hurdle to the merger. Alimentation Touche-Card is well represented in the c-store sector with over 7,000 Circle K locations. Under a merger, the combined 7-Eleven/Circle K would be nearly 10 times the size of their next-closest competitor and own more than 13% of all c-stores in the US. Roberts said regardless of how things play out with 7-Eleven, major acquisitions within the c-store space generally require significant capital expenditure investments. 'Rebranding acquired units can demand upwards of $1 million per store, mostly for upgrading or building out kitchens to support foodservice aspirations. The evolution of c-stores as food destinations is playing a significant role in all these acquisition moves.' Read the research brief, C-store M&A Activity Signals Consolidation Era. About CoBank CoBank is a cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 78,000 farmers, ranchers and other rural borrowers in 23 states around the country. CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore. CONTACT: Corporate Communications CoBank 800-542-8072 news@
Associated Press
29-01-2025
- Business
- Associated Press
Convenience Stores Evolve to Become True Food Destinations
DENVER, Jan. 29, 2025 (GLOBE NEWSWIRE) -- Convenience stores are intensifying their focus on foodservice offerings to drive foot traffic, in-store sales growth and frequency of repeat visits. Strong consumer interest in prepared foods, commissary and beverage options has led convenience stores, often referred to as c-stores, to compete much more aggressively with quick service restaurants and fast-food chains. The focus on offering a wider variety of prepared and ready-to-eat food items is clearly paying off, as c-stores registered record sales in 2023. Those gains are largely attributable to in-store sales, which grew 8% year-over-year in both 2022 and 2023 according to Circana, well ahead of overall inflation numbers for both food at and away from home. While sales appeared to soften in 2024, a Convenience Store News survey found two-thirds of c-store retailers predict total sales per store will grow in 2025. According to a new report from CoBank's Knowledge Exchange, the line between grocery stores, quick-service restaurants and c-stores will continue to blur, intensifying competition across the foodservice and retail grocery spectrum. C-store chains are increasingly viewing QSR and traditional fast-food chains as their chief competition and tailoring their food offerings to match if not exceed competitors' menu options. 'Convenience stores have evolved from their gas-fueled beginnings to become true food and beverage destinations,' said Billy Roberts, food & beverage economist with CoBank. 'Food service is the future for c-stores, and we expect they'll continue to emulate their competitors with a greater variety of freshly prepared items, along with more attention to signature menu items and private label products.' The emergence of c-stores as formidable destinations for prepared foods hasn't gone unnoticed by major food manufacturers. Several leading food brands have taken the merger and acquisition route to enter the c-store channel. J.M. Smucker cites c-store distribution as an important reason behind its early 2024 acquisition of Hostess Brands. Similarly, Hormel Foods dramatically expanded its c-store penetration with its 2021 purchase of Planters and Corn Nuts brands. Hormel has subsequently leveraged those newfound distribution relationships to bring more of its products to c-stores, including pizza toppings and bacon. C-store kitchens are seeking quick and easily prepared products. Hormel is among the suppliers that has found c-stores to be something of a testing ground for new flavors and product concepts. For example, the key distinction of Hormel's Bacon 1 isn't necessarily flavor but ease for the operator. The fully cooked product heats quickly, enabling c-store operators to easily add bacon to a host of their menu options. Customer loyalty programs are also playing a significant role in the success c-stores have had with food sales and repeat visits. Several c-stores have developed loyal followings on a near-nationwide scale. The 2024 Loyalty Trend Report from Paytronix finds at least 80% of c-stores' loyalty program members in the top half of loyalty transaction visits per store every month. 'This enthusiasm for loyalty programs will be a tool that c-stores look to sharpen as they attempt to claim more traffic from restaurants, which have seen weak results of late,' said Roberts. Read the report, . About CoBank CoBank is a cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 77,000 farmers, ranchers and other rural borrowers in 23 states around the country. CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.
