CHICAGO -- As a year of industry-rocking acquisitions and jaw-dropping technology distruption nears its end, the editors and industry experts at CSP and Technomic gathered to identify what convenience stores can expect in 2018.
Here's a peek at Winsight’s top 2018 convenience retailing trends …
1. 7-Eleven vs. Couche-Tard: The battle for supremacy
Convenience behemoths 7-Eleven and Alimentation Couche-Tard will continue to fight for U.S. store-count supremacy into 2018. With nearly 9,000 stores, 7-Eleven will hold onto the top position when it adds 1,100 Sunoco sites to its tally. Couche-Tard, with 7,200 stores, will maintain the No. 2 spot with its acquisition of the more than 1,100-store CST Brands and the pending acquisition of 500-store Holiday Stationstores. Even with Speedway off the M&A board—its 2,700 stores will remain with Marathon Petroleum—there are still plenty of companies left for deal-hungry 7-Eleven and Couche-Tard to assimilate. But other large players, such as Casey’s General Stores and GPM Investments, aren’t conceding the playing field to the two giants.
2. RIP MLPs, welcome VC and PE
Venture capital and private equity have been replacing master limited partnerships (MLPs) as the engines driving M&A in the industry, and this trend is poised to continue. Despite their favorable tax structure, MLPs don’t appear to have staying power, and they haven’t performed as well as expected. More stable forces—traditional companies armed with fresh funds, as well as new investors and private-equity firms with a solid grasp of the nuances that define convenience retailing—have powered recent deals. Expect historic multiples to be the exception rather than the rule for M&A in 2018.
3. Employee benefits get personal
In this historically snug labor market, convenience stores are finding innovative ways to directly connect with team members. To tie workers’ heartstrings to the store, some retailers are offering more flexible and generous parental-leave policies. They’re also taking an individualized approach to career ladders and training programs, providing employees with the freedom to set goals beyond the company. Expect to see more town hall meetings, feedback boxes and hotlines directly to top-level executives as the industry listens to employee concerns and desires.
Watch for Wednesday's CSP Daily News for the complete list of 10 industry trends.