Convenience Stores Evolve to Become True Food Destinations

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.

Convenience Store News survey found two-thirds of c-store retailers predict total sales per store will grow in 2025 (Source: 2024 NACS/NIQ Convenience Industry Store Count)

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.

Billy Roberts, Senior Economist for Food and Beverage at CoBank:

"Convenience stores have evolved from their gas-fueled beginnings to become true food and beverage destinations, 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.

Billy Roberts:

"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."

Read the report, C-stores Evolve from Gas-N-Grub to True Food Destinations.