The total number of convenience stores operating within the United States declined 1.1 percent last year, falling from a record 154,958 stores to 153,237 as of Dec. 31, 2018.
The drop was fueled by a 2,918-store decline in single-store operations. However, single stores still account for 62.3 percent (95,445) of all U.S. c-stores, according to the 2019 NACS/Nielsen Convenience Industry Store Count.
Convenience stores account for more than 34.4 percent of the brick-and-mortar retail universe tracked by Nielsen in the U.S., according to NACS, the Association for Convenience & Fuel Retailing. With the exception of the dollar store channel, all other major channels had fewer units at the end of 2018.
Strong merger-and-acquisition (M&A) activity remains a key trend within the U.S. convenience and fuel retailing industry, especially among existing c-store chains. For the second year in a row, 2018 saw historically large deals of this type. The past year also saw new entries to the U.S. market from global companies, including those based in the United Kingdom and Chile.
The increased competition and active M&A environment means retailers are feeling pressure to deliver a quick, exciting shopping experience. "With one in seven stores getting re-modeled every year at a cost of $400,000, that can put pressure on some stores whether to modernise operations or exit the business," said NACS Vice Chairman of Research Andy Jones, who is also president and CEO of Wrens, Ga.-based Spirit Food Stores.
"Consumers are redefining what convenience means to them and, as a result, today's retailers must be extremely tuned in to the wants and needs of the individual consumer," added Jeff Williams, senior vice president of retail services at Nielsen.
"Convenience players will need to continue to seek growth opportunities amid a fiercely aggressive environment, whether that's through exploration of frictionless payment methods, piloting more efficient retail layouts, expanding private label programs, increasing food service offerings or a move toward building an omnichannel presence," Williams continued.
"That said, as the value of convenient shopping experiences continues to grow in importance, convenience as a channel must play into its true strengths and optimize to be the retail channel that best serves the needs of on-the-go consumers, on a personal level."
The number of c-stores that sell motor fuels also fell 0.5 percent (554 stores) to 121,998 stores, or 79.6 percent of all c-stores. This decline reflects how retailers are evolving their business models to focus on the in-store offer, as well as embracing new store formats and establishing brands in more urban, walk-up locations, according to NACS.
Still, c-stores sell approximately 80 percent of all the motor fuels sold in the U.S.
Texas leads the nation in c-store count at 15,745 stores, or more than one in 10 c-stores in the country. California comes in second at 11,930 c-stores, followed by Florida (9,803), New York (8,550), Georgia (6,698), North Carolina (6,069), Ohio (5,637), Michigan (4,930), Pennsylvania (4,778) and Illinois (4,753). The states with the fewest c-stores are Alaska (200), Wyoming (352) and Delaware (346).
From 2013 to 2018, Texas, California and Florida increased their store counts by a combined 1,362 c-stores. The growth came primarily from larger c-store chains that have 500-plus stores. Alaska, Wyoming and Delaware have remained fairly stable in c-store count. Since 2000 to now, the U.S. c-store count has risen 28.3 percent. This year marks just the fourth time the c-store count has declined in that time period.