Denver — The pace of merger and acquisition activity in the U.S. convenience store sector is accelerating with recent trends suggesting the nation’s c-store landscape is ripe for more change, according to a new research brief from CoBank’s Knowledge Exchange.
While most of the transactions in 2024 involved smaller chains or single-store operators, several larger operators inked deals to significantly expand their footprints into new regions, the bank reports.
The brief finds c-store consolidation stands to disproportionally affect rural communities, many of which lack a grocery store or access to major food delivery services. Convenience stores often fill an important need in rural areas, providing local access to food, grocery items, fuel and even household staples.
“Mass merchandisers like Walmart are unevenly spread among states through various regions of the country,” says Billy Roberts, food and beverage economist with CoBank. “Convenience stores are found in towns large or small. Food insecurity affects roughly 1 in 10 Americans and nearly 90 percent of U.S. counties with the highest rates of food insecurity are rural. Consequently, c-store consolidation trends can have a significant impact on food accessibility in rural areas.”
The U.S. had 152,396 convenience stores in 2024, a 1.5 percent year-over-year increase, according to data from the National Association of Convenience Stores. Only 22 c-store chains in the U.S. have more than 400 locations, while roughly 96,000 have 10 or fewer. Most of the sector – 63 percent – is comprised of single-store operators.
“The vast number of single-unit operators alone points to opportunities for larger chains to expand their relationships or acquire new properties to maximize efficiencies across supply chains and distribution networks,” Roberts adds.
Acquisitions of smaller operators have been commonplace in recent years. Data from Capstone Partners indicates 80 percent of deals completed in 2023 were for target companies of less than 50 stores. Through September of 2024, 74 percent of the transactions involved smaller c-store entities.
However, several major moves involving some of the largest operators have occurred in recent years. Notable examples in 2023 include Maverik purchasing Kum & Go’s 400 c-stores, RaceTrac’s purchase of Gulf Oil and its 1,000 branded sites, and BP’s $1.3 billion acquisition of TravelCenters of America.
Similar activity in 2024 was largely driven by major chains looking to expand their geographical footprint. FEMSA purchased 249-unit Delek US Holdings. Casey’s acquired 198 CEFCO c-stores for $1.15 billion, pushing the chain to over 2,900 locations. And Sunoco sold 200 stores to 7-Eleven in a $1 billion deal.
The biggest potential deal that could shake up the market even further puts 7-Eleven’s 13,000 U.S. locations on the table, along with its market-leading position, the report says. While 7-Eleven recently announced plans to open 1,300 new stores in North America through 2030, it has been an acquisition target itself lately. Canada-based Alimentation Couche-Tard recently attempted to purchase 7-Eleven owner Seven & i Holdings for nearly $40 billion.
In a saga that began in August 2024, the Canadian c-store chain and 7-Eleven are reportedly working on a potential divestiture package to address regulatory concerns considered a major hurdle to the merger, the bank reports. Alimentation Touche-Card owns more than 7,000 Circle K locations. Under a merger, the combined 7-Eleven/Circle K would be nearly 10 times the size of its next-closest competitor and own more than 13 percent of all c-stores in the U.S., according to CoBank.
Roberts says that regardless of how things play out with 7-Eleven, major acquisitions within the c-store space generally require significant capital expenditure investments. “Rebranding acquired units can demand upwards of $1 million per store, mostly for upgrading or building out kitchens to support foodservice aspirations. The evolution of c-stores as food destinations is playing a significant role in all these acquisition moves.”
