Quebec-based company Couche-Tard has made a bid to buy the parent company of 7-Eleven. The Canadian firm already owns the Circle K and Holiday convenience store brands. Buying up 7-Eleven would give it even more control of a market that overall took in nearly $860 billion in 2023, according to a trade group.

The convenience store business model of a few decades ago could be summed up in just a couple of words, said Abbey Lewis, vice president of content strategy at Informa Connect: “Smokes and cokes.”

“You know, people would go, they’d get their fuel, they’d get their beverage, they would get their cigarettes, and that would be it,” she said.

But not nearly as many people are smoking these days and gasoline demand can be volatile. So, convenience stores have really upped their food offerings, which used to be a joke, said Jeff Lenard at the National Association of Convenience Stores.

“Forty years ago, the movie National Lampoon’s Vacation, there was a funny line where Clark Griswold said, I’m so hungry I could eat that sandwich from the gas station,” he said.

Now?

“You’re increasingly seeing the industry move from a gas station that, oh, by the way, had food, to a restaurant that, oh, by the way, has the opportunity for a fill up or a charge,” Lenard said.

Buying that sandwich or cup of coffee at a convenience store might be cheaper than at a quick-service restaurant, said Bobby Stephens, a principal at Deloitte. Plus, he said, the stores are convenient.

“Even if you maybe could afford to to spend a little bit more on fresh food or higher priced items, if you will, you don’t have the time to do so,” he said.

Convenience stores offer comparatively shorter wait times and lower prices. And that has helped the sector do relatively well in the last few years. 

Stephens said it has seen flat to slightly rising sales, while other retail categories have declined.

But convenience stores have seen rising costs too, for labor, gas and all of the ingredients that go into those sandwiches. Which Stephens said is helping drive consolidation in the industry.

“To allow for, you know, the buying power of larger organizations, the ability to have multiple stores, the ability to sort of weather regional trends on a global basis,” he said.

In other words, economies of scale, allowing stores to offer something more than a sweaty hot dog spinning on those rollers for who-knows-how-long.