U.S. C-Store Count: Stable

Fluctuating gas prices, interchange fees contribute to slight drop

ALEXANDRIA, Va. -- The number of U.S. convenience stores fell 0.2% over the past year and stands at 144,541 as of Dec. 31, 2009, according to the just-released NACS/Nielsen TDLinx 2010 Convenience Industry Store Count. Last year's count was 144,875, a difference of 334 stores. This is the second straight year the count has declined and only the fourth time in the last 15 years that the count has declined. The count reached a high of 146,294 stores two years ago.

U.S. Convenience Stores (as of December 31 of the previous year):
2010: 144,541 (-0.2% over previous year). 2009: 144,875 ([image-nocss] -1.0%). 2008: 146,294 (+0.8%). 2007: 145,119 (+3.2%). 2006: 140,655 (+1.8%). "The decline is driven by fluctuating gas prices and many retailers, especially single-store owners, not being able to keep up with the expense and operating at a profit," said Todd Hale, senior vice president of consumer & shopper insights for Nielsen. "Consumer purchases with payments by credit cardsand the associated interchange fees paid to the card companies by retailershave been a real problem for the industry and for single-store owners."

Despite the two-year decline, the convenience retailing industry has shown remarkable growth over the last three decades. In 1979 there were only 57,700 convenience stores in the United States.

"That our numbers largely held firm in a miserable economic climate and the dismal lending environment is a testament to our overall industry's strength and offer," said NACS vice chairman of research Greg Parker, CEO of The Parker Cos., Savannah, Ga.

Despite extreme price and profit volatility for motor fuels, c-store retailers still consider motor fuels operations to be important. A total of 115,340 c-stores sell motor fuels, a 0.6% increase over last year. Overall, 78.8% of all c-stores sell motor fuels.

The convenience retailing industry also continues to be dominated by single-store operators, accounting for 62.3% of the industry. While the overall industry store count declined 334 stores, one-store operators increased by 452 stores.

Texas once again led in terms of overall c-stores, with 14,226 stores, nearly one of every 10 in the country.

Top States for Convenience Stores (as of Dec. 31, 2009):
Texas: 14,226. California: 10,312. Florida: 9,223. New York: 7,552. Georgia: 6,363. North Carolina: 6,146. Ohio: 5,182. Michigan: 4,814. Illinois: 4,496. Virginia: 4,461. The bottom three states are Alaska (194), Delaware (328) and Wyoming (348).

C-stores especially serve as the one-stop shop for food and fuel in states that are dominated by small towns. At least 95% of c-stores sell motor fuel in North Dakota (97%), Nebraska (97%), Iowa (96%), South Dakota (95%) and Kansas (95%).

The states with the lowest percentage of stores selling fuel either have full-service fueling mandates (New Jersey and Oregon) or are in the Northeast where many stores were built before the early 1970s when motor fuels sales at c-stores began to flourish. The five states with the lowest percentage of c-stores that sell motor fuels are New Jersey (44%), Massachusetts (50%), New York (60%), Rhode Island (60%) and Oregon (62%). Only 37% of stores in Washington, D.C., sell motor fuels.

The percentage of one-store operators, true "mom-and-pop" stores, continues to climb. The percentage of one-store operators topped 50% for the first time in 2001. Today, that percentage is 62.3%. The states with highest percentage of one-store operations are Washington (78%), Georgia (74%), Louisiana (71%), Mississippi (71%) and New Jersey (71%). In Washington, D.C., 78% of c-stores are one-store operations.

C-stores also outnumber the cumulative total stores count from competing channels in the United States. According to Nielsen TDLinx, as of Dec. 31, 2009, there were 35,612 supermarkets, 37,654 drug stores and 27,247 mass merchandiser/dollar stores.