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These have been busy months, especially in the second half of 2024, when there was a wave of mergers and acquisitions that shook the industry.
I’m talking about Casey’s acquisition of CEFCO in the summer and Alimentation Couche-Tard’s acquisition of Giant Eagle’s great GetGo chain. Both deals involved portfolios of over 200 stores and, more importantly, operations that were different from each other, especially in the case of GetGo.
Notably, these deals and Couche-Tard’s “friendly” $38 billion offer to acquire the oldest and largest convenience company, the timeless 7-Eleven, have broken up an otherwise mediocre year on the M&A front, as the usual players like EG America, ARKO/GPM and Refuel have mostly held back, largely due to high market interest rates and inflated sales prices of the potential exiting companies. Instead, these companies have focused on weeding out weaker assets, revitalizing existing assets and expanding from the ground up through new ventures.
- 7-Eleven, based in Irving, Texas, is No. 1 To CSP 2024 Top202 Ranking of US C-store chains by number of stores. Alimentation Couche-Tard, based in Laval, Quebec, is No. 2
Given the pressures for consolidation, I asked several experienced industry experts for their views on recent events.
Their considerations reflect a common concern: the standardization of acquired brands that were previously known for their personalization.
“What made these regional retailers so great was their ability to flex within the retail landscape and their entrepreneurial spirit, which is difficult to replicate by a much larger conglomerate,” explained one longtime retail expert. “In a future where large chains continue to grow, I see brands that exist in name only eventually becoming so standardized and generic that no one will really care who they are anymore – the human connection with customers will give way to standardization and sameness.”
I would say we’re seeing both: Large corporations rationalizing some acquisitions, like Circle K is doing with the acquired MAPCO assets; Maverik with Kum & Go (at least in certain markets) and 7-Eleven with Cal’s Convenience.
At the same time, we saw Murphy USA let QuickChek be QuickChek, while Casey’s ensured that the smaller but distinctive Lone Star Food Stores retained much of their personality.
We have also seen an extraordinary increase in fuel marketers using retail packaging. Just look at the winner and top three finishers of our recently concluded 21st annual CSP Intouch Insight Mystery Shop. A decade ago, Nouria, Twice Daily, and Stinker’s offered more rudimentary c-stores. Today, they are among the leaders of what I call the middle class of operators – mid-sized chains doing incredible things. I would add to that list Weigel’s, Loop Neighborhood, MFA’s Break Time, truenorth, and many others.
In my view, this tension is underscored by the business model itself. The model of companies like Circle K and 7-Eleven is more akin to the countless QSR models that emphasize product consistency and private labels. Their financial success is based in large part on store density, logistical superiority, back-end efficiency, and leveraging economies of scale to store their inventory at a lower cost. For the customer, these supergiants win through private labels, but even more so through strong digital rewards that sweeten the deals in ways that most smaller and mid-sized chains cannot.
At the same time, as you travel around the country, you’ll continue to encounter distinctive designs and experiences, such as Restoration Hardware chandeliers in many Parker stores, healthy meals at some of Global Partner’s upscale Alltown Fresh stores, or maple syrup pancake coffee at QuickChek and other fancy LTO flavors.
Whatever decision a buyer makes – whether to abandon or retain the identity of their acquisition – I hope they do so with humility and an appreciation of the value the acquired supermarket has had for the communities.
In short, it’s not just about business. It’s personal.
Mitch Morrison is Vice President of Retailer Relations at Informa Connect. He can be reached at [email protected].
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