Why Convenience Stores Are Becoming Fast-Food Chains

By: Anneken Tappe · December 19, 2023 · Reading Time: 2 minutes

More Than Just Gas

Convenience stores have focused on gas sales to feed their bottom lines for years. But there’s a new game in town.

Major chains like Circle K (ANCTF) and Casey’s General Store (CASY) are becoming fast-food restaurants in their own right — and are seeing handsome profits as a result.

Changing the Sentiment

Casey’s, a Midwestern convenience store chain, is currently America’s fifth-largest pizza producer in terms of number of kitchens. And it’s showing: Three out of every four transactions at the chain don’t involve the purchase of fuel.

And this shift is profitable. Casey’s gross margin on food and beverages is around 60%, whereas the margin on fuel is only 10%.

A Bigger Slice

With convenience stores embracing food sales consumers might see an increased variety of food served in these stores.

Beloved East Coast chain Wawa, best known for its breakfast and deli sandwiches, launched a dinner menu for the first time in 2021, and recently added pizza as an offering. Meanwhile, Casey’s expanded to serve thin-crust pizza this year, which now amounts to around 13% of the chain’s total pizza sales.

With the nearest gas station and your favorite quick bite steadily becoming one and the same, convenience stores may only get more convenient in the years to come.

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