Convenience Stores
By Malinda Geisler, content specialist, AgMRC, Iowa State University, malindag@iastate.edu.
Reviewed April 2008.
Overview
Convenience stores have become the neighborhood markets that many Americans rely on for purchasing their gasoline, coffee, food and snacks. The average amount of time for a consumer to walk in, make a purchase and depart a convenience store is between three and four minutes. In some metro locations, convenience stores are the primary source for groceries.
A convenience store is defined as a retail business in a convenient location with an emphasis on selling food and gasoline. Other characteristics include a building that is typically less than 5,000 square feet, compared to the median average supermarket with 45,500 square feet. It is convenient to pedestrians and offers off-street parking. The business has extended hours of operation and some are open 24 hours a day. Product mix of a convenience store includes grocery-type items such as beverages, snacks and tobacco. It offers in-store stock of at least 500 stock-keeping units (SKUs). The average number of items carried in a supermarket in 2006 was 45,000.
The United States had more than 146,000 convenience stores in 2007 with sales of $577.4 billion. That included more than $408.9 billion in motor fuel sales. Convenience stores are now a primary source for consumer fuel purchases, accounting for more than 80 percent of all the gasoline purchased in the United States. Convenience store profits in 2007 dropped to $3.4 billion. The decrease in profits was attributed to escalating credit card fees, which surpassed industry profits for the first time.
The top ten in-store product categories, not counting fuel, are as follows:
- Cigarettes
- Non-alcoholic packaged beverages
- Beer
- Foodservice
- Other tobacco
- Candy
- Salty snacks
- General merchandise
- Fluid milk products
- Packaged sweet snacks
Eighty percent of all convenience stores offer food that is prepared on location. One in ten people purchase food at a convenience store during a two-week period. Some convenience stores offer branded quick-service restaurants. According to the National Association of Convenience Stores (NACS), the most popular menu formats were sandwiches, pizza, chicken, burgers and Mexican food.
Nearly all convenience stores offer hot and cold dispensed beverage service. Seventy five percent offer frozen dispensed beverages as well. Of the consumers who purchase coffee, more than half report they most often purchase coffee from a convenience store.
Research indicates some population segments unable to travel to other food outlets rely on convenience stores for groceries. Convenience store groceries are limited and more costly compared to supermarkets.
Sixty two percent of all convenience stores in the United States, or 90,683 stores, are owned and operated as a one-store business or franchise. More than three-fourths of California's stores are one-store operations. Other states with small, independent operators include Texas, Florida and New York.
Sources
Food Availability and Food Deserts in the Nonmetropolitan South, Mississippi State University and Cornell University, 2006.
Food Marketing Institute (FMI)
National Association of Convenience Stores (NACS)
Other Links
- Consumers respond to transformation in UK convenience store sector, University of Southhampton, United Kingdom, 2005.
- Convenience Culture, Higher Education and Research Opportunities in the United Kingdom, 2006 – Supermarkets have expanded into the convenience store sector in the U.K.
- Convenience Store Decisions – An online publication that covers the convenience store industry. It includes an online buyers guide.
- The Convenience Store Industry, National Association of Convenience Stores – This fact sheet provides an overview of this market segment and the top ten product categories.
- Convenience Store News – Online daily news covering the convenience store industry.
- Convenience Store/Petroleum (CSP) Daily News – Online daily news covering the convenience store and petroleum industries.
- Directory of Convenience Stores – This comprehensive source, available from Trade Dimensions, includes the top 100 convenience store chains ranked by number of stores operated and state statistics.
- Food Availability & Food Deserts in the Nonmetropolitan South, Mississippi State University and Cornell University, 2006 – Convenience stores and small grocery stores offer a smaller variety of food for populations in the nonmetropolitan southern United States.
- Foodservice at Convenience Stores, National Association of Convenience Stores (NACS).
- Food Retailing, Economic Research Service, USDA Briefing Room.
- Food Services and Drinking Places, Bureau of Labor Statistics, U.S. Department of Labor.
- Retailers offer food that is convenient but sometimes unprofitable, The University of Arizona, 2005 – Convenience stores were found to be the most wasteful with food, compared to other retail outlets.
- National Association of Convenience Stores (NACS).
- Using Contemporary Archaeology and Applied Anthropology to Understand Food Loss in the American Food System, University of Arizona, 2005 – This research on the amount of food loss in the U.S. food production and marketing system found convenience stores had the highest percent of loss compared to other outlets.
- Where you shop matters: Shop formats drive variation in retail food prices, Amber Waves, Economic Research Service, USDA, 2005.
Links checked February 2008.
