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Are EV Charging Stations a Threat or Opportunity for C-Stores?
For convenience stores, the rollout of electric vehicle (EV) charging stations promises to more than offset the loss of foot traffic from declining gas and tobacco sales and further accelerate recent success with grab-and-go food offerings. However, quick-service restaurants and big box stores are also looking to capitalize on EV traffic.
Subway, Taco Bell, and Starbucks are among QSRs that have recently started launching EV-charging projects.
In April, Walmart announced plans to build EV charging stations at thousands of Walmart and Sam’s Club locations across the country by 2030. “With a store or club located within 10 miles of approximately 90% of Americans, we are uniquely positioned to deliver a convenient charging option that will help make EV ownership possible whether people live in rural, suburban or urban areas,” said Walmart’s SVP of Energy Transformation Vishal Kapadia in a press release.
S&P Global Mobility projects that EVs could make up 40% of the U.S.’s new vehicles by 2030, supported by a major push from the Biden administration. S&P further predicted that even though many vehicles can be charged in home garages, the total number of EV chargers available to motorists needs to grow more than eight-fold by 2030 to match forecasted sales demand.
For C-stores and other retailers, the opportunity is capitalizing on the significantly increased dwell time while charging versus getting gas. Peter Rasmussen, CEO of Convenience and Energy Advisors, told Convenience Store News, “Nobody is getting rich selling EV [charging], but the average dwell time is 23 minutes compared to five for gasoline, so you want to have good-quality public restrooms, packaged goods, an experience like a café or quality foodservice to entice them in the store.”
The 2023 Convenience Store News Realities of the Aisle Study, which surveyed 1,500 consumers who shop at a C-store at least once a month, found that 68% of current electric vehicle owners believe it’s “extremely/very important” that a convenience store has an EV charging station.
Incisiv’s 2023 State of the Industry “Future of Convenience Stores” report based on interviews with 125 C-store executives found a whopping 71% highlighting the significance of offerings like EV charging as a differentiator. Of the respondents, 39% intend to expand space for EV charging infrastructure over the next year.
The study also found many C-stores planning upgrades to better compete with investments by grocers and QSRs in to-go food offerings:
- 31% currently see their food offerings as only “satisfactory” with plans for improvement.
- 92% value a unified experience across channels, but 73% face challenges integrating store experiences with digital.
- 61% feel it’s important for C-stores to increase their market share on third-party platforms such as Uber Eats and DoorDash, with 53% planning to prioritize expanding their space for rapid online fulfillment in the next 12 months.
- At the store level, 52% are emphasizing the need for a transformed in-store look and feel, 43% were either piloting scan-and-go technology or had it on their roadmap, and 24% plan to increase space allocated for in-store dining.
Discussion Questions
Are C-stores best positioned among channels to benefit from dwell opportunities created by the rollout of electric vehicle charging stations? How may C-stores have to be reimagined to take full advantage of the opportunity?
Poll
Loading …BrainTrust
Mark Self
President and CEO, Vector Textiles
John Lietsch
Chief Operating Officer, Bloo Kanoo
Superficially this might seem a like-for-like swap (e-“pumps” for g-pumps); but what’s quite different, as the article points out, is the time element – a large fraction of an hour vs few minutes – and this disparity probably won’t ever go away; in short what will be missing is the “convenience” part…which is why retailers who already have a captive audience for a similar amount of time seem well positioned to capitalize. I think c-stores can adapt, but they’ll have to provide amenities to keep people occupied. Pinball arcades? Newsreel theaters? (OK, OK something, anyway)
The whole concept of service stations, and the associated convenience stores, needs to be reinvented to take into account the additional time needed to charge vehicles compared to filling them with gas. Basically, facilities to keep customers entertained are required. Of course, there is also an opportunity for bigger stores to offer charging facilities in their carparks.
The challenge with C-stores is they haven’t been optimized for speed. For the 5 minute dwell time window. To maximize the value of a customer charging their EV they’ll need to provide a different experience. Something more engaging. A different kind of convenience. Meanwhile, they still need to service their 5-minute gas buying customers. I think it’s going to be a challenge for them to get it right in the short term as they struggle to service both markets well.
How many people think microwaves are too slow? I’ve always envisioned a pit-crew-type evolution to my gas pumping experience where I get 20 plus gallons of fuel in under 10 seconds. If we’re accepting 20+ minutes of charge time then the whole concept of convenience must be reimagined because 20+ minutes is not even remotely convenient. Therefore, it would make more sense for the “NICs” (naturally inconvenient stores) to take advantage of these opportunities not for the traditional, C-stores. I think I’m with Craig on this one. Let’s bring back the arcades or continue investing in Subways, Starbucks and Taco Bell Gas Stations; let’s make our C-stores more inconvenient to match the inconvenience of EVs. Thankfully, there are hybrids – a win for our mental health, the environment and maybe even C-stores since hybrids may give C-stores more time to revamp a broken business model.
No. Convenience stores are just that-CONVENIENCE stores, where you go in, get something (or a couple of somethings) and leave. Not enough time to charge up your EV. Any C-store executive thinking about this should consider other ways to draw people in.
The EV challenge for C-stores is not the greater dwell time of charging EVs. C-stores get 36% of their gross profit from fuel sales. Eighty percent of EV owners charge their cars at home. This business is simply going away.
While my colleagues make good suggestions for keeping customers busy, it would be a foolish initiative for C-stores to focus on keeping customers in the store. After all, they are convenience stores.
As ever, well said Gene. And, I need to see some hard numbers before I’d even consider thinking about whether EV recharging will offset gas and tobacco losses..
The numbers just don’t work for a C store. Assume limited parking space. and then you install what 6 charging stations that will be occupied for 20+ minutes. Those spaces are tying up parking that with normal turnover would have let another 20 plus customers shop who may not find parking anymore. Can’t believe the revenue from the electricity sold will offset that.
When renting a car these days, it’s very difficult to procure a gas-powered vehicle. Additional charging stations are coming, thanks to the Infrastructure Act, but EV charging is a huge opportunity for any retailer with enough space.
I’ve rented about 15 cars since August in multiple major cities and have never had an issue getting a gas vehicle.
Sometimes with Avis I notice the EV is renting at a price equal to or slightly lower than an Economy car though. This is a recent change the past few months. Before that the EV cost more to rent.
I don’t think people want to rent EVs. One person I know rented one and it was given to him with 60% charge. I would have refused that vehicle but he was confused.
Charging stations at C-stores make sense just as charging stations at larger retail stores make sense. Proportionality is the key. A small C-store footprint (1,000-2,500 sqft) should have 1-2 stations, while a very large C-store like Buc-ee’s (100+ gas pumps, 50,000+ sqft store) should have 10+ charging stations. In fact, yesterday, I visited a Buc-ee’s in south Alabama returning from a few days at the beach and saw 10-12 Tesla EV charging stations on one corner of the property. Half of them were being used. Assuming EV’s grow as a percentage of cars on the road, strategies will have to adapt and change for all retailers, both large footprint stores and small c-stores.
This is a great opportunity for C-stores. Charge the car and go in and buy a drink or cup of coffee… and a roll, sandwich, snacks, etc., etc., etc. Maybe there is is room for some seating (probably not) or some other amenity that makes the wait tolerable with an opportunity to capitalize on the customer’s extended “in-store” time. Smart C-store retailers will find a way to take advantage of this opportunity.
Spot on Shep. Rather than assuming C-stores will all or should all stick to the old 5 minute convenience format, its time for some owners to reinvest, add, or refocus on new program offerings to take advantage of this boom. It’s about reorienting for the customer and thinking of marketshare opportunities.
It’s a double-edged sword for most. Looking optimistically, the “extra” time spent charging an automobile versus pumping fuel allows the c-store to step out from the shadows and serve as a respite for the traveler. That means the space needs to be reinvented with adequate seating, WIFI access, and more of a coffee shop atmosphere. If I had the magic wand, I’d create compelling reasons to lure these shoppers inside while the car is charging … and it cannot be done with aisles of salty snacks, confections, and coolers.
On the other hand, with limited space for cars at the charging stations and the return on that investment suspect at best, it becomes a numbers game. And that is IF the travelers elect to come to a “convenience station” for their charging needs. With some c-stores emerging as destinations like Buc-ees, WaWa, Casey’s, Rutters and a handful others, the transformation could work. For others, the sun is shining less brightly indeed.
Does the average EV driver want to spend an hour at a c-store? I think the answer is no.
Until this charging speeds up, EVs will be a niche item at best.
Once the charging speeds up then it will be appropriate for c-stores. Need to get a full vehicle charge in under 10 minutes. The consumer may accept that.
While it appears CStore customers want EV charging stations that may emanate more from a lack of total EV charging stations than a real desire to charge their EVs at a CStore. The advent of additional charging facilities that match charging times with related activities, e.g., grocery shopping, lunch, etc. fit the model better than CStores. That being said, CStores need to better address what’s going on inside their stores if they realistically expect customers to wait 23 minutes for an EV charge.
The convenience store of the future will look very different than today’s stores. EV charging stations are a natural transition that will drive longer customer dwell times, which is a good thing. Longer dwell times will create incremental revenue opportunities from traditional entertainment and food offerings and new service offerings that can be delivered in 20 minutes or less.
C-Stores have always had two key advantages over big box stores and grocery stores, which is proximity to home and ubiquity, making them great e-charging candidates. The potential is sky high, but in order to work, they’ll need to expand offerings, format size and new services. The key is not only to increase dwell time for charging, but also to remove hassles and save time so customers don’t have to shop, eat or get something done elsewhere. The time to start is now, by investing in building additions and program expansion to capture this boom opportunity.