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Convenience Stores - US - August 2012

Mintel’s proprietary research finds that overall usage of convenience stores is far-reaching, and frequency of visits is high. However, challenges exist for industry players to establish brand loyalty. A highly fragmented retail landscape and a potluck-style product mix contribute to the common consumer perception that convenience stores are “all pretty much the same.” This has provided the impetus for industry players to increasingly explore a broader range of product lines and services in an effort to create brand differentiation. Specifically, the emergence of fresh food platforms at convenience stores is a hot trend. As a result, the lines between retail and restaurant experiences are blurring and the scope of competition is broadening.

This report closely examines these themes as they relate to consumer usage, attitudes, and behavior toward convenience store usage, as well as the impact on overall market sales and in-store category performance.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Advertising creative
            • Abbreviations and terms
              • Abbreviations
                • Terms
                • Executive Summary

                    • The market
                      • Figure 1: Fan chart forecast of convenience store sales, at current prices, 2007-17
                    • Market factors
                      • The economic two-step
                        • Figure 2: Consumer Sentiment Index, January 2007–May 2012
                      • Poor economy stunts c-store industry store unit growth
                        • Figure 3: Number of convenience stores, 2008-12
                      • Price of fuel
                          • Figure 4: U.S. weekly retail gasoline and diesel prices for first week of July, 2008-12
                        • Young adult population
                            • Figure 5: U.S. adult population, by age, 2012
                          • In-store category performance
                            • Figure 6: In-store category sales, by share, 2011
                          • The consumer
                            • Frequency of c-store visits
                              • Figure 7: Frequency of convenience store visits, April 2012
                            • Shifts in convenience store usage
                              • Figure 8: Shifts in convenience store usage, April 2012
                            • Items typically bought at convenience stores
                              • Figure 9: Items typically bought at convenience stores, April 2012
                            • Convenience store services
                              • Figure 10: Convenience store services, April 2012
                            • Factors influencing choice of convenience store
                              • Figure 11: Factors influencing choice of convenience store, April 2012
                            • What we think
                            • Issues in the Market

                                • How will health trends impact the market?
                                  • How can convenience store operators stimulate brand loyalty?
                                    • How can technology be better utilized to boost in-store sales?
                                    • Insights and Opportunities

                                      • The convenience of drive-thru service
                                        • The convenience of vending
                                          • The convenience of fresh food
                                              • Figure 12: My Fit Foods store concept, 2012
                                          • Trend Application

                                              • Inspire Trend: Boomerang Generation
                                                • Inspire Trend: Attention Economy
                                                  • Inspire 2015 Trends
                                                    • Old Gold
                                                    • Market Size and Forecast

                                                      • Key points
                                                        • High price of fuel thwarts industry performance
                                                            • Figure 13: Total U.S. retail sales of convenience stores, at current prices, 2007-17
                                                            • Figure 14: Total U.S. retail sales of convenience stores, at inflation-adjusted prices, 2007-17
                                                          • Fan chart forecast
                                                              • Figure 15: Fan chart forecast of convenience store sales, at current prices, 2007-17
                                                          • Convenience Store Category Performance

                                                            • Key points
                                                              • Food and drink sales provide industry growth
                                                                  • Figure 16: Share of convenience store sales, by category, 2011
                                                                • Spotlight: Foodservice in c-stores
                                                                • Market Drivers

                                                                  • Economic factors weigh heavily on industry performance
                                                                    • Figure 17: Real personal disposable income, January 2007–April 2012
                                                                    • Figure 18: Median household income in inflation-adjusted dollars, 2000-10
                                                                    • Figure 19: Unemployment and underemployment rates, January 2007-May 2012
                                                                    • Figure 20: Consumer Sentiment Index, January 2007–May 2012
                                                                  • Poor economy stunts c-store industry store unit growth
                                                                    • Figure 21: Number of convenience stores, 2002-12
                                                                  • Price of fuel
                                                                      • Figure 22: U.S. weekly retail gasoline and diesel prices, April 1993-July 2012
                                                                    • Young age groups are highly engaged c-store users
                                                                        • Figure 23: Population, by age, 2007-17
                                                                      • Hispanic c-store shoppers important to sales
                                                                          • Figure 24: Population, by Hispanic origin, 2007-17
                                                                      • Competitive Context

                                                                        • Key points
                                                                          • Channel-blurring creates competitive landscape
                                                                            • The foodservice factor
                                                                              • Small store formats add competition
                                                                                • Dollar store growth challenges convenience stores
                                                                                • Leading Companies

                                                                                  • Key points
                                                                                    • C-store market highly fragmented
                                                                                        • Figure 25: Top 20 convenience store companies, by store count, May 2012
                                                                                      • Consolidation and merger activity
                                                                                        • Growth through acquisition and expansion
                                                                                          • 7-Eleven
                                                                                            • Alimentation Couche-Tard
                                                                                              • Casey’s General Stores
                                                                                                • Wawa Inc.
                                                                                                  • Susser Holdings Corp.
                                                                                                  • Marketing Strategies

                                                                                                    • Overview
                                                                                                      • TV advertising
                                                                                                        • More than just a c-store: focus on foodservice
                                                                                                          • Figure 26: Casey’s General Store TV ad, Pizza Joint, February-May 2012
                                                                                                          • Figure 27: Sheetz TV ad, Tight Squeeze, March 2012
                                                                                                          • Figure 28: Wawa Food Mart’s TV ad, Classic Summer, June 2012
                                                                                                        • Product and price promotion
                                                                                                          • Figure 29: Circle K TV ad, Good Morning, January 2012
                                                                                                          • Figure 30: 7-Eleven TV ad, Rites of Flavor, June-July 2012
                                                                                                        • Fuel promotions
                                                                                                          • Figure 31: Chu’s Convenience Marts TV ad, Choosing Chu’s, March-April 2012
                                                                                                        • Digital Marketing
                                                                                                          • Online initiatives
                                                                                                            • Figure 32: Hess Express contest promotion, July 2012
                                                                                                            • Figure 33: Casey’s General Store Website coupon, July 2012
                                                                                                            • Figure 34: ampm homepage, July 2012
                                                                                                          • Social media
                                                                                                            • Mobile technology
                                                                                                                • Figure 35: Pilot Flying J mobile app ad, 2012
                                                                                                              • Billboards going digital
                                                                                                                • Figure 36: Stripes Convenience Store digital billboard ad, 2011
                                                                                                            • Innovations and Innovators

                                                                                                              • Key points
                                                                                                                • Brand differentiation
                                                                                                                  • Unique products
                                                                                                                    • Restaurant brand partnerships
                                                                                                                      • Signature private label
                                                                                                                        • Store image and design
                                                                                                                        • Convenience Store Brand Usage

                                                                                                                          • Key points
                                                                                                                            • Convenience stores used by most adults
                                                                                                                              • Figure 37: Convenience store brands visited, October 2010-November 2011
                                                                                                                            • Convenience store usage decreases with age
                                                                                                                              • Figure 38: Convenience store brands visited, by age, October 2010-November 2011
                                                                                                                            • Regionalized c-store brand preferences
                                                                                                                              • Figure 39: Convenience store brands visited, by region, October 2010-November 2011
                                                                                                                          • Convenience Store Usage by Type

                                                                                                                            • Key points
                                                                                                                              • Types of convenience stores visited
                                                                                                                                • Figure 40: Types of convenience stores visited, April 2012
                                                                                                                              • Younger age groups more likely to visit all types of c-stores
                                                                                                                                • Figure 41: Types of convenience stores visited, by age, April 2012
                                                                                                                              • Full-time, self-employed workers more likely to visit road- and transportation-based c-stores
                                                                                                                                • Figure 42: Types of convenience stores visited, by employment status, April 2012
                                                                                                                              • Northeasterners support independent c-stores and transportation-based locations
                                                                                                                                • Figure 43: Types of convenience stores visited, by region, April 2012
                                                                                                                              • Frequency of visits by type of c-store
                                                                                                                                • Figure 44: Frequency of convenience store visits, April 2012
                                                                                                                            • Frequency of Convenience Store Visits

                                                                                                                              • Key points
                                                                                                                                • Majority of consumers visit c-stores weekly
                                                                                                                                  • Figure 45: Frequency of convenience store visits, April 2012
                                                                                                                                • Men account for larger share of high-frequency users
                                                                                                                                  • Figure 46: Frequency of convenience store visits, by gender, April 2012
                                                                                                                                • 25-34 year olds high-frequency c-store users
                                                                                                                                  • Figure 47: Frequency of convenience store visits, by age, April 2012
                                                                                                                                • Coffee platform may encourage full-time workers to visit frequently
                                                                                                                                  • Figure 48: Frequency of convenience store visits, by employment status, April 2012
                                                                                                                              • Shifts in Convenience Store Usage

                                                                                                                                • Key points
                                                                                                                                  • Little change in convenience store use
                                                                                                                                    • Figure 49: Shifts in convenience store usage, April 2012
                                                                                                                                  • 18-24s increase usage of c-stores
                                                                                                                                    • Figure 50: Shifts in convenience store usage, by age, April 2012
                                                                                                                                  • Part-time workers visiting more often
                                                                                                                                    • Figure 51: Shifts in convenience store usage, by employment, April 2012
                                                                                                                                • Reasons to Visit Convenience Stores

                                                                                                                                  • Key points
                                                                                                                                    • Primary reasons for visiting convenience stores
                                                                                                                                        • Figure 52: Primary reason for convenience store visits, April 2012
                                                                                                                                      • Young consumers visit for food and drink
                                                                                                                                        • Figure 53: Primary reason for convenience store visits, by age, April 2012
                                                                                                                                      • Items typically bought at convenience stores vary by region
                                                                                                                                        • Figure 54: Primary reason for convenience store visits, by region, April 2012
                                                                                                                                    • Items typically bought at convenience stores

                                                                                                                                      • Key points
                                                                                                                                        • Items purchased at convenience stores
                                                                                                                                            • Figure 55: Items typically bought at convenience stores, April 2012
                                                                                                                                          • Men are more likely to buy alcoholic beverages
                                                                                                                                            • Figure 56: Items typically bought at convenience stores, by gender, April 2012
                                                                                                                                          • Young age groups more likely to buy food and drink, especially alcoholic beverages
                                                                                                                                            • Figure 57: Items typically bought at convenience stores, by age, April 2012
                                                                                                                                        • Convenience Store Spending

                                                                                                                                          • Key points
                                                                                                                                            • Average spending on convenience store items
                                                                                                                                              • Figure 58: Average spend on convenience store items, April 2012
                                                                                                                                            • Average spending on gasoline at convenience stores
                                                                                                                                              • Figure 59: Average spend on convenience store gasoline purchase, April 2012
                                                                                                                                            • Total spend at convenience stores
                                                                                                                                              • Figure 60: Average spend on any convenience store purchase (including gasoline purchased), April 2012
                                                                                                                                            • 25-34 year olds have highest average spend at c-stores
                                                                                                                                              • Figure 61: Average spend on any convenience store purchase (including gasoline purchased), by age, April 2012
                                                                                                                                            • C-store spending peaks among upper-middle-income users
                                                                                                                                              • Figure 62: Average spend on any convenience store purchase (including gasoline purchased), by household income, April 2012
                                                                                                                                            • Larger families spend more at c-stores
                                                                                                                                              • Figure 63: Average spend on any convenience store purchase (including gasoline purchased), by presence and number of children in household, April 2012
                                                                                                                                          • Attitudes and Behaviors of Convenience Store Users

                                                                                                                                            • Key points
                                                                                                                                              • Health and convenience trade-off
                                                                                                                                                • Positive perceptions
                                                                                                                                                  • Factors influencing choice of convenience store
                                                                                                                                                    • Health and convenience trade-off
                                                                                                                                                        • Figure 64: Attitudes to the health and convenience trade-off at c-stores, April 2012
                                                                                                                                                      • Women are more interested in healthy foods
                                                                                                                                                          • Figure 65: Attitudes to the health and convenience trade-off at c-stores, by gender, April 2012
                                                                                                                                                        • Those younger than 35 more likely to trade health for convenience
                                                                                                                                                          • Figure 66: Attitudes to the health and convenience trade-off at c-stores, by age, April 2012
                                                                                                                                                        • Larger families more likely to trade health for convenience, but want “healthy” foods
                                                                                                                                                          • Figure 67: Attitudes to the health and convenience trade-off at c-stores, by presence and number of children in household, April 2012
                                                                                                                                                        • Perceptions of foodservice and packaged goods
                                                                                                                                                          • Figure 68: Perceptions of improved foodservice and packaged foods at c-stores, April 2012
                                                                                                                                                        • Young users agree c-store private label packaged snacks and drinks are good quality
                                                                                                                                                          • Figure 69: Perceptions of improved foodservice and packaged foods at c-stores, by age, April 2012
                                                                                                                                                        • Affluent less likely to say private label packaged items are good quality, but do see improvement in coffee platforms
                                                                                                                                                          • Figure 70: Perceptions of improved foodservice and packaged foods at c-stores, by household income, April 2012
                                                                                                                                                        • Larger families have favorable perceptions of c-store coffee, fresh food, and private label goods
                                                                                                                                                          • Figure 71: Perceptions of improved foodservice and packaged foods at c-stores, by presence and number of children in household, April 2012
                                                                                                                                                        • Factors influencing choice of convenience store
                                                                                                                                                            • Figure 72: Factors influencing choice of convenience store, April 2012
                                                                                                                                                          • Women more likely to choose c-stores based on the price of gas
                                                                                                                                                            • Figure 73: Factors influencing choice of convenience store, by gender, April 2012
                                                                                                                                                          • Young age groups think c-stores are all the same, yet they are more likely to choose specific brands
                                                                                                                                                            • Figure 74: Factors influencing choice of convenience store, by age, April 2012
                                                                                                                                                        • Attitudes toward Convenience Store Services

                                                                                                                                                          • Key points
                                                                                                                                                            • Use of and interest in convenience store services
                                                                                                                                                              • Figure 75: Use of and interest in select convenience store services, April 2012
                                                                                                                                                            • Users of convenience store services
                                                                                                                                                              • Figure 76: Use of select convenience store services, by age, April 2012
                                                                                                                                                            • Potential consumers of convenience store services
                                                                                                                                                              • Figure 77: Interest in select convenience store services, by gender, April 2012
                                                                                                                                                            • Young adults show greater interest in email and social media marketing
                                                                                                                                                              • Figure 78: Interest in select convenience store services, by age, April 2012
                                                                                                                                                          • Impact of Hispanic Origin

                                                                                                                                                            • Key points
                                                                                                                                                              • Hispanics are more frequent c-store users
                                                                                                                                                                • Figure 79: Frequency of convenience store visits, by Hispanic origin, April 2012
                                                                                                                                                              • Hispanics are visiting c-stores more often
                                                                                                                                                                • Figure 80: Shifts in convenience store usage, by Hispanic origin, April 2012
                                                                                                                                                              • Hispanics visit c-stores for food and beverages
                                                                                                                                                                • Figure 81: Primary reason for convenience store visits, by Hispanic origin, April 2012
                                                                                                                                                              • Besides food/beverage, Hispanics more apt to buy a range of items
                                                                                                                                                                • Figure 82: Items typically bought at convenience stores, by Hispanic origin, April 2012
                                                                                                                                                              • Hispanics show greater interest in healthy c-store food options
                                                                                                                                                                • Figure 83: Attitudes to the health and convenience trade-off at c-stores, by Hispanic origin, April 2012
                                                                                                                                                              • Hispanics offer positive c-store product perceptions
                                                                                                                                                                • Figure 84: Perceptions of improved foodservice and packaged foods at c-stores, by Hispanic origin, April 2012
                                                                                                                                                              • C-store brand and fresh food platforms influence Hispanics
                                                                                                                                                                • Figure 85: Factors influencing choice of convenience store, by Hispanic origin, April 2012
                                                                                                                                                              • Debit card rewards more popular among Hispanics
                                                                                                                                                                • Figure 86: Use of select convenience store services, by Hispanic origin, April 2012
                                                                                                                                                              • Social media deals provide opportunity to target Hispanics
                                                                                                                                                                • Figure 87: Interest in select convenience store services, by Hispanic origin, April 2012
                                                                                                                                                            • Custom Groups: Male Age Groups

                                                                                                                                                                • Men aged 18-34 are highly frequent c-store visitors
                                                                                                                                                                  • Figure 88: Frequency of convenience store visits, men by age group, April 2012
                                                                                                                                                                • Young men visiting more often
                                                                                                                                                                  • Figure 89: Shifts in convenience store usage, men by age group, April 2012
                                                                                                                                                                • Older men buy fuel and lottery tickets
                                                                                                                                                                  • Figure 90: Primary reason for convenience store visits, men by age group, April 2012
                                                                                                                                                                • Young men typically buy food and beverages
                                                                                                                                                                  • Figure 91: Items typically bought at convenience stores, men by age group, April 2012
                                                                                                                                                                • Convenience store spending is higher among men aged <35
                                                                                                                                                                  • Figure 92: Average spend on convenience store items, men by age group, April 2012
                                                                                                                                                                • Health and convenience trade-off more common among men aged 18-34
                                                                                                                                                                  • Figure 93: Attitudes to the health and convenience trade-off at c-stores, men by age group, April 2012
                                                                                                                                                                • Young men offer positive perceptions of private label quality
                                                                                                                                                                  • Figure 94: Perceptions of improved foodservice and packaged foods at c-stores, men by age group, April 2012
                                                                                                                                                                • Fresh food platforms are influential among younger men
                                                                                                                                                                  • Figure 95: Factors influencing choice of convenience store, men by age group, April 2012
                                                                                                                                                                • Men aged 18-34 more likely to use convenience store services
                                                                                                                                                                  • Figure 96: Use of select convenience store services, men by age group, April 2012
                                                                                                                                                              • Appendix: Trade Associations

                                                                                                                                                                Companies Covered

                                                                                                                                                                • 7-Eleven (North America)
                                                                                                                                                                • Casey's General Stores Inc
                                                                                                                                                                • ChevronTexaco Corporation
                                                                                                                                                                • ConocoPhillips
                                                                                                                                                                • Exxon Mobil Corporation
                                                                                                                                                                • Shell Oil Products US
                                                                                                                                                                • Sunoco, Inc.
                                                                                                                                                                • Supervalu Inc
                                                                                                                                                                • The Pantry Inc
                                                                                                                                                                • Valero Energy Corporation
                                                                                                                                                                • Wawa, Inc

                                                                                                                                                                Convenience Stores - US - August 2012

                                                                                                                                                                £3,174.67 (Excl.Tax)