Diversifying Your C-Store Business is Essential
According to NACS, about 150,000 gas stations are operating in the United States. That number has declined steadily over the last twenty years. Margins are disappearing, consumer demands are fluctuating rapidly, and more alternatively-powered vehicles are on our roads. In fact, the average net profit on a gallon of gasoline is only about 2 cents.
About 80% of the fuel in the U.S. is sold at convenience stores, and conversely, about 80% of convenience stores sell gas. That’s a bit of a mind-bender statistic. What’s important to note is that 80% of the retailers are combined c-store and fuel station operations, making C-store diversification essential.
There’s a good reason for that. It’s challenging for fuel stations to survive independently without a c-store presence with near null profitability on gasoline alone. Fuel, however, attracts consumers to the location, and c-store purchases supplement the bottom line. From 2019 to 2020, 2,446 convenience stores closed up shop. Most of those closures (81%) were convenience stores that did not sell fuel.
C-store diversification will attract even more customers?
It’s easy to see that the foundation for achieving substantial revenue and profitability is simply to get customers to your location. Diversifying your c-store business will fulfill more consumer needs and attract more customers to your sites.
Carwashes. Adding an automatic in-bay car wash to your location is estimated to make between $75,000 to $125,000 in gross sales per year. With a loyalty program to encourage repeat visits, this means you’re not only adding to your bottom line, but you’re bringing people who also need to refuel and restock their refrigerators to your business. Cross-promoting sodas, cigarettes, chips, candy, and milk near the car wash will help generate cross-sales.
Electric Re-charging Stations. With more electric vehicles traveling our roads, having re-charging stations available will bring customers to your location–and will keep them there while their vehicle is charging. With the car or truck plugged into a for-pay charging outlet, these travelers will have plenty of time to shop your c-store, purchase on-the-go food selections, eat at your in-store fast-food counter, or shop for souvenirs. There are several ways to structure pricing at a charging station, but the estimated gross revenue is between $1,800 to $10,125 per month.
Fast Food Counter. In 2019, food service was responsible for 23% of sales at convenience stores nationwide and growing. Providing a quality food item at a good value is attractive to many Americans who are short on time and need to grab meals quickly. Customers who can fill up their tanks while at the same time grabbing a quick lunch to take back to the office will appreciate the convenience of your location.
GP Energy makes diversifying your c-store simple.
Our team of industry experts is committed to helping our clients make well-informed decisions about expanding their businesses with diversified products. We’re successful when our clients reach and exceed their goals. We’ll start by analyzing your current operational portfolio and help you evaluate other opportunities such as card lock programs, convenience store programs, branded and unbranded fuel options, the ISTOBAL car wash program, and more. Taking a pit stop with GP Energy will get your business to the checkered flag in record time. Contact one of our Business Development Specialists today.