CHICAGO-- Consolidation of a fragmented channel may be the most obvious reason for what drove convenience-store growth in 2016, but CSP’s annual, newly expanded Top 202 countdown of c-store retailers, which will debut later this month on CSP Daily News, exposed a number of factors that contributed to why some chains grew and others didn’t.
At least six distinct business formats emerged to change the landscape of convenience retail in the past year …
1. Convenience consolidators
By far the largest acquisition that occurred in 2016 was Laval, Quebec-based Alimentation Couche-Tard’s purchase of San Antonio, Texas-based CST Brands. As the parent of Circle K, Couche-Tard—alongside fellow c-store giant 7-Eleven, Dallas—is clearly a convenience-store consolidator.
At 1,277 units, Couche-Tard’s purchase of CST and one other smaller acquisition (which were counted in this year’s Top 202 despite the deals not closing in 2016), was the largest number of stores to change hands last year. While it only represented a 21% increase in unit growth for the already massive consolidator, it brought Circle K close to 7-Eleven’s U.S. store count, with the Top 202 showing 7,232 stores for the No. 2-ranked Circle K and 8,303 stores for 7-Eleven at No. 1.
2. Refiners, marketers and jobbers
The chain that achieved the greatest percentage of growth in 2016 was El Paso, Texas-based Western Refining. The firm purchased Minneapolis-based Northern Tier’s refining and marketing assets, essentially doubling its retail base to 543 company and franchised locations. Though the purchase was a significant retail acquisition, refining played a major role, as signified by San Antonio, Texas-based Tesoro Corp.’s subsequent purchase of Western Refining.
Jobbers also did well in 2016. Wallis Oil, Cuba, Mo., for instance, almost doubled its store count with the acquisition of U-Gas, Fenton, Mo., bringing its store count to 66 and entering the chain into CSP’s Top 202 at No. 91.
Other retailers with gas-station roots also did well in 2016. Upland, Calif.-based Anabi Oil added 75 stores to rank No. 32 and Worcester, Mass.-based Nouria Energy Corp. bought 33 locations to rank No. 55.
3. Travel center expansion
Travel centers were also building and acquiring. Most notably, TravelCenters of America made a strategic move to embrace its convenience-store pedigree in 2016. For the first half of last year, the Westlake, Ohio-based chain gobbled up c-stores to expand its Minit Mart stand-alone network. In August, it took a break from acquisitions to focus on incorporating those c-stores into its system and improve sales. In CSP’s Top 202 ranking, TravelCenters added 31 stores and ranked No. 19 on the list.
Love’s Travel Stops & Country Stores, Oklahoma City, added 35 stores to rank No. 22, while Pilot Flying J, Knoxville, Tenn., added 55 to rank No. 12.
4. Organic growth
Several c-store-focused chains grew by building new, state-of-the-art locations. Among these were Casey’s General Stores, Ankeny, Iowa, adding 41 stores to rank No. 4; RaceTrac Petroleum, Atlanta, adding 45 stores to rank No. 20; and Kwik Trip, La Crosse, Wis., adding 30 stores to rank No. 15.
5. Private equity
Brookwood Financial Partners LLC, a private-equity investment firm based in Beverly, Mass., formed BW Gas & Convenience in June 2015 to acquire and operate a diversified portfolio of convenience stores in select regions of the United States, which became Yesway. The entity came near the end of the Top 202 list at 31 stores.
6. Foreign investment
Certainly, Canadian c-store giant Couche-Tard can be considered a foreign investor, but a Chilean company bought Brentwood, Tenn.-based Mapco, a coup of 350 stores, from Delek U.S. in 2016. Santiago, Chile-based COPEC, an energy conglomerate with fuel stations and c-stores in five other countries, including Colombia, Ecuador, Mexico, Panama and Peru, bought Delek’s retail assets for $535 million and immediately jumped to No. 26 on CSP’s Top 202.