How Convenience Stores are Transforming to Maintain Success
After COVID-19, convenience stores emerged as essential hubs for quick and easy access to food, snacks, and other everyday items. With significant shifts in the retail landscape—particularly the rise of electric vehicles (EVs), which threaten fuel sales for traditional retailers—many convenience store chains are refocusing on internal sales and diversifying their offerings. One major player, 7-Eleven, plans to open over 600 large-format, food-focused stores in North America by the end of 2027.
These new stores, branded as “New Standard” locations, will introduce more contemporary designs with expanded product assortments. The main focus of these stores will be food and drink offerings. As CEO Joseph DePinto explained, these stores will provide a broader selection of items, emphasizing high-quality food and drink options. This strategy builds on 7-Eleven’s 2019 launch of the Evolution store concept, which featured its Mexican QSR, Laredo Taco Company, along with made-to-order specialty beverages, self-serve coffee stations, cold treats bars, and the introduction of mobile checkout and delivery services. While many elements of the New Standard stores mirror the Evolution stores, the new designs will include additional food choices, in-store seating, and EV charging stations.
According to 7-Eleven’s investor presentation, the New Standard stores have outperformed the Evolution store concept by 30% in sales during their first year. With plans to open 125 of these new stores in 2025, 175 in 2026, and 200 in 2027, 7-Eleven is positioning itself to lead the industry in shifting its focus to in-store sales, growing its brand, and encouraging customers to spend more time at their locations. From an investment perspective, these stores are expected to be the most profitable and innovative convenience store prototypes. Additionally, these locations represent the future of the sector.
The Rise of Technology in Convenience Retail
As technology continues to shape the retail landscape, convenience stores are increasingly leveraging digital tools. These new developments can be used to enhance customer experience, streamline operations, and increase sales. One significant development is the widespread adoption of contactless payments, both for fuel and in-store purchases. Around 69% of all U.S. retail transactions are made using credit or debit cards. This trend makes contactless payments the norm. Following the pandemic, curbside pickup and contactless delivery services have gained popularity. Many retailers are enhancing these services by using GPS tracking, modern ordering systems, and real-time updates to expand their reach.
Convenience stores are also tapping into the power of big data to offer personalized rewards and loyalty programs. 7-Eleven stands out in this regard, with its 7Rewards membership program recently reaching 25 million members. This data-driven approach allows 7-Eleven to align its offerings with customer preferences, driving sales while enhancing the shopping experience. Cashier-less technology, inspired by Amazon Go, is also beginning to appear in convenience stores. This shopping method uses cameras and sensors to track purchases and charge customers via an app. The system not only reduces wait times and enhances efficiency, but also cuts operational costs. By utilizing this method, a faster, more seamless, shopping experience is created. Amazon has hinted at licensing its cashier-less technology to traditional convenience stores in the future, further accelerating the trend.
Industry Consolidation: The Potential Merger of Couche-Tard and Seven & I Holdings
One of the most significant developments in the convenience store industry is the possible merger between Alimentation Couche-Tard, the parent company of Circle K, and Seven & I Holdings, which owns 7-Eleven. With a combined total of approximately 30,000 stores, this merger would give the two companies control of nearly 20% of the U.S. convenience store market. While the merger’s impact on competition has raised concerns, both companies believe it will not significantly disrupt the sector.
The merger is expected to lead to increased operational efficiency, enhanced supply chain management, and an improved customer experience. However, the potential for large-scale chains to dominate metropolitan markets may force smaller convenience store operators to adapt quickly to remain competitive. While the merger could shift the dynamics of the industry, its long-term effects will depend on how smaller players navigate this evolving landscape.
What the Convenience Store Transformation Means for Owners
For property owners leasing to major convenience store tenants, the industry’s evolution presents both opportunities and challenges. As operators prioritize innovations, owners should assess how well their properties align with these trends. Tenants that invest in modernizing their operations and store formats can drive higher foot traffic and enhance property value over time.
With the potential for industry consolidation, such as the anticipated merger between 7-Eleven and Circle K, owners should also consider how saturated markets might lead to store count reductions. After a major merger, overlapping locations in dense markets are often consolidated to improve operational efficiency, potentially impacting certain properties. Being proactive and adaptable to these changes will help ensure that properties leased to these tenants remain high-performing and resilient assets in a rapidly shifting retail landscape.
