The ongoing cat-and-mouse game for c-store supremacy between 7-Eleven owner Seven & i Holdings and Circle K owner Alimentation Couche-Tard dominated the mergers-and-acquisitions landscape for the better half of 2024, setting up a new year of speculation as to how the two mega-chains would ultimately integrate—most likely needing to shed hundreds, if not thousands, of stores to satisfy antitrust regulators.
The duality presents a silver-lining scenario for the industry. On the one hand, combining the two retail titans means an unprecedented level of retail penetration, logistical and operational optimization and a marketing high ground that can only come from a national brand. But in formulating CSP’s annual Top 202 ranking of convenience operators by store count, merger and acquisition experts see the inevitable antitrust selloffs as a potential boon for growth-minded chains.
“If the 7-Eleven/Circle K merger were successful, most people think it would require store divestitures to be approved by the FTC [Federal Trade Commission],” said Roger Woodman, managing director at Raymond James, Atlanta.
While regional chains and others could benefit, Woodman said a cleaner, more straightforward transaction could happen with private-equity firms.
Any retailer having to compete with a mega-giant formed from two already established giants would be intimidated. 7-Eleven has 12,600 U.S. c-stores, while Alimentation Couche-Tard has 7,107.
“They’re already good operators,” said Steve Morris, president and CEO, Retail Management Inc., Saint Paul, Minnesota. “So, if you combine two top performers, combine their power over suppliers and consumers, it would keep me up at night.”
As the nation’s No. 1 and No. 2 chains locked horns in a “friendly” takeover battle potentially worth $47.2 billion, the pace of M&A within the c-store channel ground on in 2024, with several other significant developments taking place:
- Casey’s General Stores, Ankeny, Iowa, acquired Fikes Wholesale, Temple, Texas, which owned CEFCO Convenience Stores, a 198-location chain.
- H&S Energy Group, Orange, California, doubled in size in 2024, while Nouria Energy Corp, Worcester, Massachusetts, completed a similar feat in a deal that would close in February of this year.
- Houston-based BreakTime Corner Markets purchased 62 locations in two separate deals, bumping this chain into CSP’s Top 40.
- Monterrey, Mexico-based Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA) purchased 249 stores from Brentwood, Tennessee-based Delek US.
The Nouria purchase of Savannah, Georgia-based Enmarket, a chain of 133 stores and 25 car washes, and Couche-Tard’s pending purchase of GetGo Café + Markets, a 270-store network owned by Giant Eagle, a supermarket chain based in Cranberry Township, Pennsylvania, do not appear in CSP’s Top 202 this year because the deals were not completed by Jan. 1, 2025.
Individually, the deals were milestones for buyers, but collectively, they spoke to the continually evolving nature of c-store M&A.
“My overriding impression about last year is that there’s no geographic limits,” said Dennis Ruben, executive managing director, NRC Realty & Capital Advisors, LLC, Chicago. “Five years ago, most buyers focused on their own state or region. The deals we’ve been seeing today have a nationwide outreach.”
“[Our industry] has a high degree of fragmentation, with 60% being small retailers. Some with five stores or less,” said Jeff Traub, partner, Downstream Energy Group, Jonesboro, Arkansas. “There’s going to be continued consolidation until that percentage gets lower, as larger, scalable acquirers absorb smaller operators.”
And in the case of 7-Eleven and Circle K, for the largest to merge with each other.
The Big Dance
The saga of Laval, Quebec-based Alimentation Couche Tard taking a run at Tokyo-based Seven & i began in August, igniting a management crisis at 7-Eleven and prompting a series of internal maneuvers designed to keep the largest U.S. c-store retailer in control of its future. By last spring, Seven & i had abandoned its own buyout attempt and promised management changes that would unlock greater shareholder value, all while keeping the Alimentation Couche-Tard acquisition on the table.
In communications with investors in March, Seven & i detailed initiatives that included Stephen Dacus, chairman and lead independent outside director, succeeding Ryuichi Isaka as president and representative director and CEO; an initial public offering (IPO) for 7-Eleven’s North American assets; and a possible, extensive divestiture package that could go to a “viable, credible and independent buyer.”
The leadership changes included three board resignations in March, one of which was Joe DePinto, the longtime Seven & i board member, who has been and will remain the CEO of Irving, Texas-based 7-Eleven Inc. The other two directors were Jenifer Simms Rogers and Elizabeth Miin Meyerdirk. The company later announced the addition of four new board members with experience in the areas of retail, food, fuel, franchise operations, brand management and global expansion.
Regarding the IPO that Seven & i has proposed for 7-Eleven’s U.S. assets, the company is exploring options for potential divestitures to address antitrust concerns. Seven & i said it has identified “2,000 or more overlapping stores that could be divested to a viable, credible and independent buyer in a manner that could be stood up to operate effectively on a go-forward basis and assure competition between the buyer and [Couche-Tard] post its acquisition of Seven & i.”
Couche-Tard said it has talked with buyers for any U.S. stores that would need to be divested to secure regulatory approval for a potential acquisition. In a statement provided to CSP, Couche-Tard said, “We have identified a potential divestiture portfolio of U.S. stores. In collaboration with Seven & i, and to provide further assurance, Couche-Tard is having exploratory discussions with third parties to identify potential acquirers.”
In open negotiations largely handled through publicly released statements, the two chains spelled out specific pain points, with the U.S. being a big concern. Couche-Tard officials said it continued “to be disappointed that engagement has been very limited and focused only on the path to U.S. regulatory approval.”
To bolster its perspective, Seven & i officials referred to the failed 2022 merger attempt between Boise, Idaho-based Albertsons and Cincinnati, Ohio-based Kroger. In 2024, a federal judge sided with the FTC, saying the move would be detrimental to consumers and employees. Both retailers pulled back, with the situation dissolving into litigation.
Seven & i officials said they would not “blindly enter a transaction with no clear path to closing that could leave the company in a value-destructive limbo for multiple years.”
Circling the Wagons
For its part, Couche-Tard officials announced a plan to divest itself of a significant number of U.S. stores to prepare for regulatory approval.
“We believe our proposal presents shareholders with a clear economic value, which stands in marked contrast to Seven & i’s repeatedly revised plan,” said Couche-Tard, which said Seven & i’s plans for increasing value “come with material uncertainty with respect to delivering value to shareholders.”
It added, “In our most recent efforts to engage with Seven & i with respect to a potential transaction, we have spent over six months attempting to enter fulsome, constructive, friendly discussions to reach a mutually agreeable transaction and have conscientiously worked to address the questions on our proposal posed to us by Seven & i.”
“We’re not surprised that Couche-Tard made a play,” said Woodman of Raymond James. “They’ve always been an acquisitive, growth-minded company. It’s been their approach from the beginning that scale has its advantage.”
Woodman said Circle K would have to make significant divestitures in the United States for antitrust regulators to approve the merger, but “Couche-Tard would not be making the offer if it didn’t have a strategy for the U.S.,” he said.
If any deal were to go through, that future No. 1 ranked U.S. c-store chain would have as many stores as the remaining top 15-ranked U.S. operators combined.
Neither behemoth hit the brakes on M&A in 2024. In January of last year, 7-Eleven bought more than 200 stores from Sunoco LP, Dallas, Texas, and Cal’s Convenience, Frisco, Texas. Then in August, Couche-Tard announced the agreement to purchase 270 GetGo stores.
In all, more than 20 significant deals were announced or transpired in 2024, with CSP’s annual Top 202 ranking of chains recording not only the dynamic shifts, but the slow-and-steady, new-to-industry growth of the industry’s most tried-and-true chains.
Potential Buyers
With a pinata of stores poised to burst into the market, industry speculation has turned to which players would likely benefit from the boost in retail inventory. Clearly large, regional players, like Casey’s, want to expand into new territories. They have financial resources ranging from cash to established credit facilities.
“So, if the situation arose, they have the ability to pay a premium for highly strategic properties,” Woodman said.
However, don’t rule out the smaller, entrepreneurial players. “Not everyone is running to the exit,” Woodman said. “There’s a number of small-to-midsize companies with strong bank relationships that want to make an investment in growth, even though capital expenses and interest rates [are currently high].”
These companies can move the needle through acquisition, “finding local ways to win,” Woodman said.
In general, here are market segments that could stir up the M&A landscape:
- Private Equity. Funding from the investment community still plays a vital role in industry consolidation. While the more established firms were dormant in 2024, the new year could bring renewed activity, especially with a potential U.S. merger between 7-Eleven and Circle K. A private-equity firm could take advantage of any resulting divestiture with fewer antitrust concerns and offer a single, clean transaction, Woodman said.
- Larger c-store chains. While Casey’s had always been known for its new-builds, its lightning-fast entry into Texas via acquisition may prove to be a successful, new growth tactic. Similarly, other regional players may jump into the fray for markets they deem desirable.
- Small, mid-sized players. Many chains in the 50-100 store range have grown through acquisition and have both financial backing and a history of success. The issue becomes bidding wars with larger, more formidable acquirers, Traub of Downstream Energy Group said. And while local buyers may have an inside understanding of the area and of the seller itself, the seller is concerned primarily with an efficient closing process. “Money doesn’t drive everything, but often times, it does,” he said.
- Major Oil. With activity from Chicago-based bp and Houston-based Shell in recent years, major oil companies have shown renewed interest in rebuilding the networks they sold off over the past two decades, Traub said. “These are two leading examples of Big Oil re-entering the sector—not by rebuilding vertically integrated chains, but by leveraging joint ventures, branding partnerships and strategic acquisitions,” he said. “They’re focused on participating in non-fuel margin and are using creative deal structures to align with strong operators. It’s a clear shift from purely supplying and branding to reengaging in retail economics.” Ruben of NRC confirms that representatives have shown up in regional conventions inquiring about potential purchases. “Oil companies actively looking everywhere,” he said. “It’s something I had not heard before.”
- Independents. Don’t count out independents either, said Terry Monroe, president and founder, American Business Brokers & Advisors, Fort Meyers Beach, Florida. Many aging assets are still viable for people willing to operate them. “In those cases, they’re buying a job,” he said. “You can make a good living if you’re operating the store yourself. There’s no overhead or cost structure, so they give extended life to stores that should have been closed.”
Ultimately, matching buyers with sellers is as much about the product as it is what’s driving the purchase. In recent years, the product has been what the 7-Eleven/Circle K merger may feed back to the industry: sites that growth-minded chains would not consider long-term assets.
“Those big M&A packages will still have the good, the bad and the redheaded,” Morris of Retail Management said, noting the wide-ranging value of divestiture properties that will likely come up for sale.
Similarly, sellers may put stores on the block that are in what they consider non-core markets, taking advantage of the current demand for sites and raising cash to pay down debt, Woodman said.
“At the end of the day, it’s about the individual assets, the quality and financial profile, that make the site attractive,” he said, in addition to who the buyer is and what they’re looking for.
“At the end of the day, it’s about the individual assets, the quality and financial profile, that make the site attractive,” said Roger Woodman, managing director at Raymond James.
Midsized Action
Quite a bit of M&A activity in 2024 still came from midsized chains. The deal for Nouria Energy to buy Enmarket was announced in October 2024, even though it closed in February. The acquisition of more than 133 Enmarket locations and nearly 25 Enmarket car washes almost doubled Nouria’s store count and will extend its reach into the Southeast.
Similarly, Orange, California-based H&S Energy had more than 160 convenience stores under the Chevron, Texaco, Shell and 76 fuel brands prior to its acquisition last year of San Carlos, California-based Andretti Petroleum Group, which had nearly 170 retail convenience stores and fuels distribution assets in California, Oregon and Washington.
Then in two separate purchases, Breaktime Corner Market LLC (BTCM) acquired 39 c-stores operating under the Minit Mart brand in central and northern Illinois from EG America LLC, Westborough, Massachusetts, the U.S. unit of U.K.-based EG Group Ltd. The acquisition followed BTCM’s purchase of 23 Loaf N’ Jug stores, also from EG America.
While these purchases seem to bode well for midsized players, the specter of an emerging combination of the industry’s largest chains, along with the growing M&A presence of players like Casey’s, cast an imposing shadow on future growth.
“I feel bad, because a lot of them get squeezed out,” Traub said, pointing out how calculating return on investment, synergies and economies of scale never add up for the smaller companies. “It’s hard to compete with bigger chains. I’ve seen so many times when the bigger player always wins the deal.”
M&A Pressure Continues
However M&A unfolds going forward, the root causes of retail shuffling are only gaining momentum. On the plus side of the equation, post-COVID fuel margins have been historically high, allowing for resilience and renewed profitability in recent years, said Ruben of NRC. But the tide on that front is beginning to turn.
“We’ve seen some operators with bad fourth-quarter gasoline margins, volumes too,” Ruben said. “We’re at a new normal where margins have stabilized at a lower level, which clearly have [led to] downward pressure on multiples.”
That said, the cash flow that established c-stores generate is highly appealing, especially when compared to other retail options—and even new-to-industry c-stores.
“Having sold hundreds and hundreds of convenience stores and reviewed hundreds of financial statements and talked with my clients, I know the acquisition of convenience stores is a better return on their investment rather than building new stores,” Monroe said.
“Having sold hundreds and hundreds of convenience stores and reviewed hundreds of financial statements and talked with my clients, I know the acquisition of convenience stores is a better return on their investment rather than building new stores,” Terry Monroe, president and founder, American Business Brokers & Advisors, said.
Investing time and energy to address permits and rising construction costs doesn’t always guarantee the store will succeed, he said.
Still, whether a new-build or newly acquired, the c-store model has shown its resiliency over the years, Monroe said, making it a bankable paradigm for the future.
Of course, for many retailers, the challenge isn’t sustaining a successful business—it’s succession.
“The Baby Boomer generation, often with family-owned operations spanning multiple decades, may not have a next generation ready to step in, roll up their sleeves and lead the company forward,” Traub said. “In many cases, owners are facing the need for major site rebuilds and capital investments over the next 20 years. That level of risk isn’t always appealing to the next generation. So, families often decide it’s time to sell.”
AI for C-stores
And what about retailers committed to the business model, but who lack the resources to properly prepare for the future? Monroe sees a lot of uncharted territory left to explore, especially with artificial intelligence (AI).
“Customers want their convenience store to offer them more of what they want, not what their vendors are telling them,” Monroe said. “In order to be profitable, c-store owners can’t be lazy and just keep doing the same things they have been doing for years. I see it every day. A lot of operators treat the stores like they all have the same customers and have cookie-cutter offerings.”
Recalling a recent run-in with a friend who operates 40 restaurants, Monroe said the man has an employee who is just learning how to work with AI. She went through all his stores, evaluated their budgets using an AI tool and cut costs by 3%.
“That’s 3% on $20 million that went straight to the bottom line,” Monroe said. “Most operators are running blind. There’s so much inefficiency.”
Tools like AI can help retailers navigate a shifting retail landscape, Morris of Retail Management said. The role c-stores played as a “fill-in grocer” is fading, with the dominance of big-box retailers and their ability to home deliver or offer curbside preorders.
“I used to put in four feet of grocery, paper, pet suppliers and larger dairy items,” he said. “These days, we’re seeing those categories fight for space.”
The industry is moving towards immediate consumption, he said. “That is changing everything from gondola and shelf spacing to promotional activity,” Morris said.
As a saving grace, Morris believes the industry is best at adopting new products. In recent times, he’s seen success with THC and CBD products, alongside the continued expansion of vape.
“Much like energy drinks, I’ve seen e-cigarettes and nontraditional tobacco lines increase,” Morris said. “Consumers look at us for new stuff.”
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