U.S. Convenience Stores: A Market Analysis


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U.S. Convenience Stores: A Market Analysis

  1. 1. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research Page 1 of 14
  2. 2. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research About Us RNCOS, formed in the year 2002, aims to outsource all your business needs and serve your customers in their quest for the information. RNCOS is transforming the concept of ‘Outsourcing’ by adapting it into a strategic management preference to attain world-class operational excellence and competitive advantage. RNCOS specializes in Industry intelligence and creative solutions for contemporary business segments. Our professionals study and analyze the industry and its various components, with comprehensive study of the changing market behavior. We provide corporations with an insight of the ‘industry, competitive and market’ necessary to compete in today's business environment. Additionally, our team focuses on the cause and effect relationship between federal and state regulations and the industries affected by regulation. The company also works closely with small and medium sized consultancy firms, in various industry sectors. We assist in back-end research and data gathering processes. Our accuracy and data precision proves beneficial in terms of pricing and time management that assist the consultants in meeting their objectives in a cost-effective and timely manner. Page 2 of 14
  3. 3. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research About the Report RNCOS’ “U.S. Convenience Stores: A Market Analysis” provides extensive research and rational analysis on the proliferating market of convenience stores in United States. This report helps clients to analyze the opportunities and factors critical to the success of the convenience stores market in US. This report reviews the stores and industry practices across the globe in general and in US in particular. It provides an insight into how convenience business is shaping up to address the gamut of issues raised by this new standard-bearer of world retail. In recent years, with convenience stores operators initiated on strategic moves to improve operations, enhance performance and differentiate from the competitor to position themselves—the changing nature of convenience retailing and the margin pressures brought on by encroaching competitive formats is driving c-store industry consolidation. Key Issues and Facts Analyzed  What is the market size of the US retail store industry?  How is the convenience stores growth state-wise?  What are the factors driving growth in this sector?  What are the technologies that can help convenience store markets to improve their operations?  How these technologies are increasing operational efficiency in this industry?  Who are the major players of US Convenience Industry, their presence and strategies being used by them to improve profitability? Key Findings  C-store unit growth continues to outpace US’ population growth as average person per store has declined by 0.72% in the year 2005 in comparison to 2004.  California provides a big opportunity market for the C-stores to grow. California is, by far, the largest US state with a population of 36.13 Million in 2005 and accounts for the second highest number of C-stores in US. Page 3 of 14
  4. 4. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research  Convenience stores sell three-quarters of all the gasoline purchased in the United States through Convenience stores.  As the gasoline prices are increasing day-by-day, two states, New Jersey (30.1%), and Oregon (51.7 %), had shown the lowest fuel sales in the year 2005.  Gasoline theft is a major problem for retailers in US. It is estimated that on an average, one in every 1,100 fill-ups gasoline was theft in 2005.  Credit card fees in 2005 constituted more than 90% of a store's profits; totaling to US$ 38,383 per store, and it is expected to grow in the coming years. Key Players This section covers the key facts about major players currently operating in the C-store industry, such as 7-Eleven Inc., Kroger, Koninklijke Ahold N.V, Shell Oil Products US, Exxonmobil Corporation, Alimentation Couche-Tard Inc. and Sunoco, Inc. Research Methodology Used Information Sources Information has been sourced from books, newspapers, trade journals, and white papers, industry portals, government agencies, trade associations, monitoring industry news and developments, and through access to access to more than 3000 paid databases. Analysis Methods Ratio Analysis, Historical Trend Analysis, Linear Regression Analysis using software tools, Judgmental Forecasting and Cause and Effect Analysis are the methods used to analyze the facts and figures given in this report. Page 4 of 14
  5. 5. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research Table of Contents 5.2.4 Online Presence 1. Analyst View 5.2.5 Out of Stock 2. Research Overview 5.2.6 Competition 3. Industry Overview 5.3 Challenges 3.1 Worldwide Development of C-Store 5.3.1 High Credit Card Fees 3.2 Worldwide Retail Sales 5.3.2 Same Customer Visit has to Pay 3.3 Retail Sales by Geographical Regions Twice Fees 3.4 Worldwide Top Retailers 5.3.3 Shrinking Margins 4. US C-Stores Industry Market 5.3.4 Labor Challenges 4.1 Total Number of US C-Stores 5.3.5 Violence and Robbery 4.1.1 US - Top Ten States by Maximum 5.3.6 Increased Competition Number of C-Stores 5.3.7 Virtual Robbery 4.2 C-Stores - Regional and State-Level 5.3.8 Gasoline Theft Analysis 5.4 Future Outlook 4.2.1 Southern Region 6. Key Players 4.2.2 Northeast Region 6.1 7-Eleven Inc. 4.2.3 Midwest Region 6.2 Kroger 4.2.4 Western States 6.3 Koninklijke Ahold N.V 4.3 C-Store Sales in US 6.4 Shell Oil Products US 4.4 C-Stores selling Motor Fuels 6.5 ExxonMobil Corporation 4.5 In-Store Sales 6.6 Alimentation Couche-Tard Inc. 4.6 Total Single Store and Chain Stores 6.7 Sunoco, Inc. in Operation 4.7 C-Stores Closed in US 4.8 Growth and Sales Analysis of US C- Stores Companies 4.9 Employment Opportunities in US C- Stores 5. Industry Analysis 5.1 Driving Forces 5.1.1 Strong GDP Growth 5.1.2 Investment on the Part of Fuel Retailers 5.1.3 Increase in Disposable Income 5.1.4 Demand for Convenience Shopping 5.1.5 Convenient Location of C-Stores 5.1.6 Socio-demographic Shifts 5.1.7 Single Person Households 5.1.8 Increased Immigration 5.1.9 Increased Travel Time 5.1.10 Eating Patterns 5.1.11 Busy Lives 5.2 Opportunities 5.2.1 IT in C-Stores 5.2.2 Biometric Products for C-Stores 5.2.3 Local C-Stores Page 5 of 14
  6. 6. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research List of Figures & Tables List of Figures: List of Tables: Figure 3-1: Worldwide - Retail Sales (in Trillion US$), Table 3-1: Structure of Convenience Storefront 2001-2006E by Size and Operation Figure 3-2: Worldwide - Retail Sales by Geographical Table 3-2: Worldwide - Top 10 Retailers by Net Regions (in Trillion US$), 2006 Sales (in Billion US$), 2005 Figure 4-1: US - Growth in Various Retail Formats Table 4-1: US - Historical Growth of C-Stores (%), 2005-06 (1973, 1983, 1993 & 2003) Figure 4-2: US - Total Number of C-Stores (2003-04, Table 4-2: US - Total Number of C-Stores in 2004-05 & 2005-06) Southern States (2004 & 2005) Figure 4-3: US - Number of C-Stores Share by Top 10 Table 4-3: US - C-Stores Saturation Figure for States (%), 2005-06 Southern States (Average Person per Store), Figure 4-4: US - C-Stores Saturation Figures (Average 2004 & 2005 Person per Store), 2004 & 2005 Table 4-4: US - Total Number of C-Stores in Figure 4-5: US - C-Store Industry Sales (in Billion Northeast States (2004 & 2005) US$), 1998-2002 & 2003-04 to 2005-06 Table 4-5: US - C-Stores Saturation Figure for Figure 4-6: US - Share of Motor Fuel and In-Store Northeast States (Average Person per Store), Sales in C-Store Sales (%), 2005-06 2004 & 2005 Figure 4-7: US - Motor Fuel Sales (in Billion US$), Table 4-6: US - Total Number of C-Stores in 2004-05 & 2005-06 Midwest States (2004 & 2005) Figure 4-8: US - Motor Fuel Sales by Product (%), Table 4-7: US - C-Stores Saturation Figure for 2005-06 Midwest States (Average Person per Store), 2004 Figure 4-9: US - States with Highest and Lowest & 2005 Percentage of Motor Fuel Sales Table 4-8: US - Total Number of C-Stores in Figure 4-10: US - In-Store Sales Growth (in Billion Western States (2004 & 2005) US$), 2003-04 to 2005-06 Table 4-9: US - C-Stores Saturation Figure for Figure 4-11: US - In-Store Sales by Products (%), Western States (Average Person per Store), 2004 2004-05 & 2005 Figure 4-12: West Coast - Market Segmentation of Table 4-10: US - Number of Single Stores and Single Stores (%), 2005 Chain Stores (2004-05 & 2005-06) Figure 5-1: US - Personal Disposable Income (in US$ Table 4-11: US - Number of C-Stores Closed, per Head), 2001-2006E 2004 Figure 6-1: Kroger - Stock Performance Table 4-12: US - Number of C-Stores Closed, Figure 6-2: Koninklijke Ahold N.V - Stock 2005 Performance Table 4-13: US - Top 50 C-Store Companies, Figure 6-3: Exxonmobil Corporation - Stock 2005 Performance Table 4-14: US - Average Wage Rates (in US$ per Figure 6-4: Alimentation Couche-Tard Inc. - Stock Hour), 2004-05 Performance Table 5-1: US - GDP Growth (%), 2001-2006E Figure 6-5: Sunoco, Inc. - Stock Performance Table 5-2: US - Population Break-up (%), 2001- 2006E Table 6-1: 7-Eleven Inc. - Financial Overview (in Million US$), 2000-2004 Table 6-2: Kroger - Financial Overview (in Million US$), 2006 Table 6-3: Koninklijke Ahold N.V - Financial Overview (in Million Euro), Q3 2005 to Q3 2006 Table 6-4: ExxonMobil Corporation - Financial Overview (2003-2005) Table 6-5: Alimentation Couche-Tard Inc. - Financial Overview (in Million US$), 2005 &2006 Table 6-6: Sunoco, Inc. - Financial Overview (2003-2005) Page 6 of 14
  7. 7. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research 4.1 Total Number of US C-Stores The number of convenience stores in the United States stands at 140,655 in the year 2005-06. The new figure is a 1.77 % increase over the 138,205 stores in the year-end 2004. Figure 4-2: US - Total Number of C-Stores (2003-04, 2004-05 & 2005-06) 144000 140655 140000 138205 in Numbers 136000 131000 132000 128000 124000 2003-04 2004-05 2005-06 Source: NACS, 2006 Historical Growth of C-stores C-Stores growth in US saw a boom during the period 1973 to 1983. The CAGR during the period was around 12.11% and the number of C-stores increased by 51,900. But the CAGR slowed down during the period 1983 to 1993 (2.84%) and 1993 to 2003 (2.66%), although the overall number of C-store increased and touched the new height of 131,000 by 2003. Table 4-1: US - Historical Growth of C-Stores (1973, 1983, 1993 & 2003) Year No. of Stores CAGR 1973 24,300 - 1983 76,200 12.11% 1993 100,800 2.84% 2003 131,000 2.66% Source: NACS Total C-store industry sales increased from US$ 186 Billion to US$ 394.7 Billion from 1998 to 2004. Page 7 of 14
  8. 8. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research 4.2.3 Midwest Region The Midwest’s population growth since 2004 has only been 0.38%, but C-store development did not show any significant growth from 2004 to 2005. Ohio, Kansas, Michigan, Illinois and Missouri lead the way. Out of twelve states, six states showed negative growth as the number of c-store have declined in the year 2005 in comparison to 2004 in these states. Table 4-6: US - Total Number of C-Stores in Midwest States (2004 & 2005) State 2004 2005 % Growth Minnesota 3,974 3,820 -3.88 Nebraska 1,638 1,600 -2.32 Iowa 2,788 2,732 -2.01 Michigan 5,176 5,089 -1.68 South Dakota 1,100 1,085 -1.36 North Dakota 835 830 -0.60 Indiana 3,300 3,300 0.00 Wisconsin 4,253 4,253 0.00 Illinois 4,900 5,100 4.08 Ohio 4,923 5,125 4.10 Kansas 2,200 2,500 13.64 Missouri 3,825 4,410 15.29 Source: NACS, 2005 Note: Store Four states have shown the declined saturation figure in the year 2005 where the average person per stores has decreased. Table 4-7: US - C-Stores Saturation Figure for Midwest States (Average Person per Store), 2004 & 2005 States Saturation Figure (2004) Saturation Figure (2005) % Change Missouri 1678 1451 -13.51% Kansas 1243 1098 -11.70% Ohio 2328 2237 -3.90% Illinois 2595 2503 -3.55% Wisconsin 1295 1302 0.49% Page 8 of 14
  9. 9. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research Indiana 1890 1901 0.55% North Dakota 760 767 0.97% Michigan 1954 1989 1.79% South Dakota 701 715 2.05% Iowa 1060 1086 2.46% Nebraska 1067 1099 3.05% Minnesota 1284 1344 4.68% Source: NACS, 2005 Note: Store Page 9 of 14
  10. 10. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research 5. Industry Analysis 5.1 Driving Forces 5.1.2 Investment on the Part of Fuel Retailers Retail margins have fallen significantly in the past two decades, as rising oil prices and taxation levels led to increased price-sensitivity among motorists and more aggressive price competition between retailers, spurring a complete transformation of the forecourt. Where once their sole business was the retail of fuel and car-related products, it has now become imperative for service stations to sell other goods and services in order to survive. Increasing non-fuel sales has become a strategic priority and oil companies have been investing especially heavily in the forecourt shop in recent years, extending these to cover a greater proportion of the network, whilst expanding existing shops and increasing the range of products to attract 'on-the-go' consumers and top-up shoppers as well as motorists. 5.1.4 Demand for Convenience Shopping Strong consumer demand for convenience shopping has made the convenience store (C-store) sector as one of the most dynamic sectors in the whole retail market. C-stores have established an important niche for themselves in the grocery supply chain, essentially serving top-up shopping requirements to supplement the supermarket shop. 5.2 Opportunities 5.2.3 Local C-Stores There is an opportunity for local C-stores to develop their potential as community stores and ‘lifestyle assistants’, as they are better placed to know the particular needs of a town or village more intimately than the larger supermarkets. They could create solutions for the increasingly time-pressured element in the community, by offering anything that will give the consumer extra time, e.g. home deliveries of high-quality frozen food, whether it is lunch for the home worker, or the evening meal for a busy family. Page 10 of 14
  11. 11. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research 5.2.4 Online Presence Finding space has always been an issue for an average C-store. Offering any product beyond the traditional boundaries is generally rendered impossible, simply as a result of size constraints. However, the development of the computerized kiosk is seen by some as one way to revolutionize the world of convenience retailing, making it possible to buy cars, book holidays or select sports gear from these outlets. Page 11 of 14
  12. 12. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research Other Related Reports Opportunities in Brazil Retail Sector (2007-2011) The report "Opportunities in Brazil Retail Sector (2007-2011)" is a result of extensive research on the Brazilian retail industry. The report talks about the various aspects of the retail industry in the country, like industry performance, future prospects, growth opportunities, etc. http://www.rncos.com/Report/IM544.htm ……………………………………………………………………………………………………………………………………………………… Opportunities in Retail Sector - China (2007-2011) "Opportunities in Retail Sector - China (2007-2011)”, a report by RNCOS, provides extensive research and rational analysis on the retail industry in China. This report helps clients to analyse the opportunities and factors critical to the success of retail industry in the country. http://www.rncos.com/Report/IM545.htm ……………………………………………………………………………………………………………………………………………………… China Apparel Retail Analysis (2007-2008) RNCOS "China Apparel Retail Analysis (2007-2008)" report provides extensive research and rational analysis on China apparel and Textile Industry. The overview of domestic and foreign players along with their expansion strategies allows the client to formulate their business plans as per the Chinese market environment. http://www.rncos.com/Report/IM536.htm ……………………………………………………………………………………………………………………………………………………… Asian convenience store - Industry Analysis(2005-2009) “Asian convenience store - Industry Analysis(2005-2009)” discusses the state of the Convenience store markets in Asian countries and the opportunities available for companies in this sector based on key statistics. http://www.rncos.com/Report/CP12.htm ……………………………………………………………………………………………………………………………………………………… European Convenience Stores Market Report [2006-2008] RNCOS, a bespoke market research company in its market research report “European Convenience Stores Market Report [2006-2008]” provides in-depth product wise analysis of sales trends in European Convenience Store Market. http://www.rncos.com/Report/CP10.htm ………………………………………………………………………………………………………………………………………………………. For More Reports related to Retail, http://www.rncos.com/Retail%20industry.htm Page 12 of 14
  13. 13. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research Our Partial List of Clients  ABN Amro Bank  ETRI  Novratis Consumer  Accenture  FMC Technologies Health Switzerland  AES Corporation  GE Global Research AG  Agrana  Gene Codes  Oak Petroleum  Allianz Risk Corporation Technologies Transfer,  ICICI  Pfizer Animal Health PharmChem  ICRA Ltd  PSE International Solutions  IIC (P) Ltd  RBB Economics  Apollo Marketing  IIM Ahemdabad  Reliance Capital Partners, Inc.  IITA  Reliance Industries  Bain & Company  ION Automative Limited  BenQ Mobile Systems  Ritzio  Bosch Security  ITT Industries Entertainment Systems  Japan Bank For  Schuff International  British American International  Scotiabank Tobacco Cooperation.  SiGe Semiconductor  Cernium  Japan Electric  Sony Corporation  Chart Energy & Power Information  Sony Ericsson Chemicals, Inc. Center Inc.  SUEK  CheckPhone, Inc.  KCC Research  Suite-Soft  Chevron Institute Technologies, Inc. International Pte.  KIPA (Korea IT  Sun Life Financial Ltd. Industry Promotion  Vocera  CNSGT/Foxconn Inc. Agency) Communications  Core Media AG  Minerals  Walt Disney Internet  CSC Technologies Inc Group  Direct Insurance  Nomura Research  Zebra Technologies Financial Institute, Ltd. Investments LTD  Norkom  Dow Chemical Technologies Company Page 13 of 14
  14. 14. RNCOS U.S. Convenience Stores: A Market Analysis Online Business Research Disclaimer Most of the information available in this report is within the public domain. The submitting authors or other copyright holders retains rights for reproduction or redistribution. All persons reproducing or redistributing this information are expected to adhere to the terms and constraints invoked by the copyright holder. Such protected material, however, may be used under the terms of "fair use” as defined in the copyright laws, which generally permit use for non-commercial educational purposes such as teaching, research, criticism, and news reporting. With respect to documents available, neither the company nor any of its employees makes any warranty, express or implied, including the warranties of merchantability and fitness for a particular purpose, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Unless otherwise stated, the copyright, database rights, and similar rights in all material published on this manual is solely owned by Research and Consultancy Outsourcing Services. You are permitted to print or download extracts from this material for your personal use only. None of this material may be used for any commercial or public use. No part of this manual or any material appearing may be reproduced, stored in or transmitted on any other Web site without written permission of www.rncos.com and any payments of a specified fee. Requests to republish any material may be sent to us. Page 14 of 14