A Fresh Take on C-Stores

Laura Fraser | April 9, 2021

Convenience stores are booming, thanks to healthier offerings and a pandemic that has made speedy shopping a top priority

“I’m so hungry I could eat a sandwich from a gas station,” says Chevy Chase in the 1983 road-trip comedy “National Lampoon’s Vacation.” Traditionally, mini-marts have not been known for their culinary appeal; at best, they’ve been regarded as sources of junk food to fill a growling stomach while you fill an empty tank. At least until recently.

Convenience stores are changing, offering healthier grab-and-go snacks and meals, dining areas, on-site kitchens and even locally sourced produce. As consumers — particularly millennials — demand more convenience and healthier food options, contemporary “c-stores” are becoming more varied, ranging from urban micro-grocers selling premium products to gas station mini-marts with spruced-up menus and interiors.

The impact of COVID-19 on consumer shopping behaviors appears to be speeding up these trends. In the first few months of the pandemic, c-store owners saw a significant uptick in the sale of bulk items, grocery staples and ready-to-heat meals. Faced with the need to close down public-seating areas, some stores began to experiment with pre-orders and curbside pickup.

52

of convenience stores saw increases in food sales due to the coronavirus.

C-stores are scaling back self-serve items and loading up on household cleaning products and take-home meals.

Convenience stores make up a huge portion of our food landscape, occupying more than a third of brick-and-mortar retail real estate. According to the National Association of Convenience Stores (NACS), there are currently 152,720 of them in the United States, 80 percent of which sell gas. Some 165 million people across the country eat at c-stores occasionally — not just because they’re on the go, but increasingly because they’re turned off by large grocery stores that take lots of time to navigate. They want quick, ready-to-eat meals. While many core c-store customers go for the traditional products — soda, chips, beer — more and more are looking for quick bites and speed without sacrificing a healthy lifestyle.

A recent Hudson Institute report commissioned by the NACS shows that in the past five years, the share of c-store shoppers who say natural foods are an important way to maintain their health has doubled to 62 percent. Overall, these shoppers report eating more vegetables, fruits and lean proteins — and consuming less fast food and sugar-sweetened sodas. Three-quarters of them say they are “interested in snacks that are nutritionally healthy.”

“Selling better-for-you products is where the growth is,” says Hank Cardello, the former food marketing executive who authored the report. “It’s a business imperative, not just a public health issue.” Indeed, several c-store chains have made commitments with the Partnership for a Healthier America — a nonprofit created in conjunction with Michelle Obama’s Let’s Move project to work with private industry to fight childhood obesity — to offer healthier and lower-calorie foods. As a result, the Kwik Trip convenience store chain increased its bulk produce sales by 5.5 percent, often offering as many as 20 different types of fruits and vegetables (employees get a free piece of fruit each day). Love’s Travel Stops sell to-go containers with an assortment of fruits and vegetables, as do CEFCO and Pilot’s PJ Fresh stores. 7-Eleven often sells fresh salads and fruit. Buc-ee’s also sells salads, beef jerky and other protein options.

Convenience stores can make a huge impact on obesity.
Hank Cardello

They also provide healthier options for people who can’t easily shop at grocery stores, and that’s not insignificant. The U.S. Department of Agriculture estimates that 39.4 million Americans live in a “food desert.” That is, they reside more than a mile away from a grocery store in urban areas, or 10 miles away in rural areas. Of that group, about 19 million people have limited access to grocery stores, due to income and transportation, and c-stores may be the only places they can shop. All of these factors have become more acute during the pandemic for those without private vehicles. People who live in food deserts also typically have higher rates of cardiovascular disease than those who don’t, so fresher food offerings at convenience stores could improve their health significantly.

So, while gas station mini-marts still sell their share of fried and salty snacks, candy bars and sodas, they’re also offering more better-for-you products for customers who want not just convenience but also nutrient-rich foods with all-natural ingredients and no additives. For instance, Kwik Trip, a chain of convenience stores with 475 locations in Wisconsin, Minnesota and Iowa, sells 400 pounds of bananas per store each day; it also offers a 260-calorie breakfast sandwich.

For many customers, a quick and healthy meal includes protein, whether from packaged beef jerky, protein bars, nuts or nut butters. “In our industry, protein is a huge, huge trend,” says Jeff Lenard, vice president of strategic industry initiatives for the NACS. “Protein says it’s something substantial to eat, which is a big opportunity for c-store sales — particularly if it’s something someone can eat at 55 miles an hour.”

Healthier options aren’t just good for customers, says Lenard; they also help a store’s bottom line. Margins on gasoline sales are low — less than a dollar per fill-up — so c-store operators rely on food sales to make a profit. “Selling a $5 sandwich has a much higher margin than selling gas,” Lenard explains. Consumers are increasingly likely to choose where to stop based on who has tastier, healthier snacks, rather than who has cheaper gas. “With an elevated food offering, people are less sensitive about gas prices,” he says. “It’s about having a choice.”

Some chains place so much emphasis on their food offerings, they’ve revamped convenience stores to look more like restaurants, offering meals prepared on the premises. “On the East Coast and in the Midwest, there are strong regional chains that think of themselves as restaurants that happen to sell gas,” says Lenard. “More and more people eat on the go,” he says, singling out millennials for driving the trend toward healthier convenience-store fare. “People grab food when they want it, and more of them want a healthy bite.” Other stores are focused on making spaces where people can comfortably sit and use their computers over coffee and a snack — the “third-place” business model that made Starbucks so successful.

There’s also a new type of convenience store that exudes cool: urban micro-groceries or upscale bodegas. Unlike their gas-station counterparts, they sell a wide variety of grab-and-go healthy foods using organic and locally sourced produce and purveyors, all at a premium price. They mix the convenience of a mini-mart and modern positioning aimed at Whole Foods shoppers, helping busy consumers remember to eat the organic vegetables they don’t have time to chop themselves, and often offering app-enabled delivery.

One of these is American Natural, a six-store chain in Western Pennsylvania, which trumpets its approach as “a new culture of convenience” and offers gourmet coffee and fresh food — sandwiches, wraps and salads — made on-site and heavy on the vegetables, with plenty of gluten-free options. “American Natural was started with the vision of creating more of a convenient, welcoming community space where people can meet up and get healthier food options,” says Norma Quon, the chain’s vice president of marketing. “You can dine in or pick up what you’d like in the grab-and-go case and be in and out in less than a couple of minutes.”

Whatever the offerings, that quickness is the bottom line for most c-stores, says Lenard. “They sell immediate consumption and speed of service.” All the more so in a post-pandemic world in which every second saved reduces shoppers’ exposure to indoor pathogens. Average time spent in a convenience store is under four minutes, and 83 percent of items purchased there are consumed within an hour. “More places have nicer places to sit and healthier food, but you can’t slow people down or you’ll hurt your business model,” he says. “Your best offerings are still going to be what you can eat without a fork and fit in the cupholder.”

More From Inside Magazine

Impact

The Future of the Farm Is Here

How innovation saves resources and keeps the world fed

People

Leading the Way

Meet change-makers in the food world

All Inside Magazine stories

A Fresh Take on C-Stores

of convenience stores saw increases in food sales due to the coronavirus.

More From Inside Magazine