By Joe O’Brien

Although a pre-pandemic report from GasBuddy indicated most consumers are not loyal to a particular fuel or convenience store brand, a steady drumbeat toward personalized customer experiences at quick one-stop-shop destinations may be changing the situation. And many strong regional brands are poised to take advantage of this as they pursue growth outside of their current footprint.

Most major c-store companies have announced plans to expand in number and territory. Michigan, for example, appears to be a coveted territory, with at least three regional retailers expanding there.

Chains that are expanding include:

  • Buc-ee’s: Known for its sprawling stores, the chain has been a staple in Texas. It first expanded outside the state in 2019 and is now building stores as far afield as Wisconsin, Missouri and Colorado.
  • Kum & Go: Recently acquired by Maverik, Iowa-based Kum & Go is planning to open more than 50 stores in Michigan, plus locations in Utah and Idaho. A new menu will coincide with the expansion.
  • Kwik Trip: This retailer is growing its footprint in Iowa, Minnesota, Wisconsin, Michigan, Illinois and South Dakota.
  • Murphy USA: Already operating c-stores and gas stations in 27 states, the company has announced plans to build at least 500 new stores.
  • QuikTrip: The Oklahoma-based retailer is reported to be expanding into the Chicago metropolitan area, Colorado, Tennessee, Arkansas, Alabama and Texas.
  • RaceTrac: With existing locations in Alabama, Georgia, Florida, Kentucky, Louisiana, Mississippi, Texas and Tennessee, the company announced plans to open locations in Ohio and South Carolina.
  • Royal Farms: This Mid-Atlantic chain is expanding into North Carolina.
  • Sheetz: With stores in Pennsylvania, Ohio, Maryland, West Virginia, Virginia and North Carolina, the retailer announced plans to expand into Michigan.
  • Wawa: This foodservice-prioritizing retailer is expanding into Florida, Virginia, New Jersey and Pennsylvania, and scouting sites in Ohio, Kentucky and Indiana.

As of January 2023, there were 150,174 convenience stores operating in the United States, a 1.5% increase from the previous year. The number of convenience stores run by single-store operators also increased from the previous year, making up 60.2% of all convenience stores. This ownership trend is creating an opportunity for the regional chains, some of whom are targeting acquisitions from operations with just a few stores as part of their expansion strategy.

 

Becoming a Local Favorite

C-stores across the country are focusing their efforts on delivering personalized buying experiences tailored to the individual. Also worth keeping an eye on is to what extent extoling a sense of community will play in the success of the regional brands’ expansion tactics.

Consider this: Many of the expanding brands have long operated with great success as regional powers, often becoming synonymous with the culture and character of a particular part of the country.

But many of these regional c-store institutions are spreading into new states and communities, where they are newcomers taking on existing brands. When businesses have moved in to capture market share already dominated by local brands—take grocery stores, soda pop, chips and snacks, for example—people have sometimes rejected the newcomers to support their trusted favorites.

Some of the c-store brands are integrating charitable programs and partnerships into their operations to support the people in the new communities they serve. This can range from free coffee for first responders to designating their sites as safe places for youths in need. Larger sites could also be viewed as a welcome source of jobs in locations where opportunities are scarce. These public relations aspects may turn out to be pivotal to the success of a regional brand’s long-term expansion strategy.

 

Bridging the Gaps

Whether it’s the novelty of a gas station that doubles as a tourist destination, made-to-order food or take-home meals, a large inventory of pantry staples or a forecourt of fuel dispensers that stretch as far as the eye can see, the regional chains can fill a void in rural areas. Additionally, they may be in a stronger position to bring more alternative fueling capabilities and advanced user experiences to these areas due to their access to capital and capacity for leveraging efficiencies across a network.

And, although high-quality food is a hallmark of many of the regional brands’ strategies, at least one of them is pursuing a store design that does not include a kitchen. Instead, the chain favors an optimal traffic flow for customers and employees. Other tactics the big brands are using to fuel growth include non-fueling stores, self-distribution models and persuasive loyalty programs.

Regardless of what these strategies may yield for the regional brands, there are universal principles that convenience and fueling operations big and small must prioritize to succeed.

Above all, ensure the entire facility is as safe as it can be. This includes everything from effective traffic routing and fire prevention to designing facilities to prevent criminal activity through lighting and other deterrents. Clean, safe and modern forecourts help attract and retain customers.

Next, don’t underestimate the impact of exceptional, friendly service—especially in a time when the tide is turning toward self-serve customer experiences. In the end, this may turn out to be the most powerful differentiator of all.

 

Joe O’Brien is vice president of marketing at Source North America Corporation. He has more than 25 years of experience in the petroleum equipment fuel industry. Contact him at jobrien@sourcena.com or visit sourcena.com to learn more.