Convenience-store chains and independents are armed with a host of motivators in determining when, where and how they expand their retail footprints. Often, chains follow the people—those relocating to new areas in search of better jobs, schools, affordable housing, quality of life and—as an added perk—favorable year-round climates.
“What retailers notice most is where the household growth is occurring first before they measure jobs expansion,” said Travis Heiser, CEO and president of IMST Corp., Houston, an independent market research firm specializing in retail site selection, analysis and sales forecasting.
“Chains keep close track of [residential growth]. For a lot of consumers they’re asking, ‘Where can I go for good jobs and acceptable cost of living?’” said Heiser, whose firm provides data for c-store retailers around traffic counts, demographics, competitive impacts, pricing strategies and fuel.
The people are just the tip of the iceberg because c-store expansion motivation is multilayered—including tapping metros with ambitious economic redevelopment plans, which bodes well for c-store business.
When Maverik Inc. acquired Kum & Go’s chain of more than 300 Midwest and Southern-based stores in 2023, the deal was motivated by the Salt Lake City, Utah-based chain’s desire to pursue a new type of clientele—plus the desire to add stores that resembled Maverik’s own.
Des Moines, Iowa-based Kum & Go’s stores mimic Maverik’s from a design standpoint, according to outgoing Maverik CEO Chuck Maggelet, who retired in May. In addition, many stores are in central Iowa—a growth market in its own right (the Des Moines area has in the past landed on CSP’s "10 Hot Metro Markets for C-Stores" list).
Love’s Travel Stops & Country Stores, Oklahoma City, acquired EZ GO from Carey Johnson Oil Co., Lawton, Oklahoma, because it was attracted to “adjacencies,” such as Love’s stores close to homes, businesses, shopping malls and more.
The deal represented the first time Love’s offered retail locations along turnpikes—all part of a goal of making a commitment to “high-demand areas,” according to Love’s executives.
As Wawa was opening its first store in North Carolina in April—in Kill Devil Hills—site selection was motivated by a chance to serve new customers and communities, said Kim Dowgielewicz, director of store operations for Wawa. Another factor: providing the community with “not only a new level of convenience but a strong, committed community partner,” she said .
Over the next decade, Wawa plans to build at least 80 stores across North Carolina, with the first eight to 10 stores opening this year and up to 15 stores in 2025.
The competitive c-store advantage has come a long way in the minds of many after being viewed as a spartan, no-frills retail option.
“You see c-stores as hypermarts and travel centers and on the other side, as bodegas—this all helps make convenience a trending channel—you saw it with the record sales generated,” said IMST’s Heiser. “The pandemic helped open a lot of eyes, change a lot of minds.”
With maximum leverage in tow, chains see significant value in connecting their loyalty networks.
“Wawa is eager to connect their retail network from Pennsylvania to Florida,” Heiser said. “There’s so much emphasis on retail loyalty and trip frequency that chains want to provide customers ample shopping opportunities to solidify that loyalty.”
“There’s so much emphasis on retail loyalty and trip frequency that chains want to provide customers ample shopping opportunities to solidify that loyalty.”—Travis Heiser, IMST Corp.
Heiser said large-track developers are game-planning around soon-to-be built or existing retail in development areas, with convenience regarded as a magnet for build-outs. The surrounding retail can serve as an anchor for the development plan.
Several factors dictate the narrative: One is foodservice—seen by chains as an expense requiring not only additional real estate to accommodate programs but hinging on municipalities amenable to foodservice expansion—this is seen with green-lighting permitting, zoning, infrastructure/easement set-asides and more.
“Some local communities run from foodservice, as an imposition on residential space, while others run to it and see the supreme value,” said Heiser.
Chains are eager to “bring their food with them wherever they expand, confident they can enter new states because the reputable food has become iconic,” he adds. “New markets have heard about the Wawa food experience.”
Top Cities
Many of the same “evergreen” cities have dominated top metropolitan lists over the years, such as Sunbelt markets in Florida, Texas, North Carolina and Georgia.
These perennially hot metros are sustaining growth, but with a caveat. Take Austin, Texas, where a recent Wall Street Journal article, titled “Once America’s Hottest Housing Market, Austin Is Running in Reverse,” stated the city that “came to symbolize the pandemic housing boom is now leading a national property cool-down,” noting that home prices and rents in Austin have fallen more than in any other part of the country.
Heiser said the report has two sides: “First, Austin is still a huge attraction for vacationers and relocating people and businesses. But there’s been a shift with the ‘evergreen’ metros that sees people not necessarily targeting Austin proper … but identifying nearby satellite communities. They can reap the benefit of living outside the city limits and still be in close proximity to call these cities home.”
He adds: “Everyone is asking, ‘What’s the next Nashville or Austin? Because they’re out there ready for growth.”
One emerging market that landed on this year’s Top Metros list is Northwest Arkansas, anchored by development trends in Fayetteville and Benton. Northwest Arkansas appeared within the top 15 of U.S. News & World Report’s “Best Places to Live” list. New census data pinpoints this region as the 18th fastest-growing metro area in America, with Benton and Washington counties seeing the largest population increases statewide.
“Everyone is asking, ‘what is the next Nashville or Austin? Because they’re out there ready for growth if the stars align properly”—Travis Heiser, IMST Corp.
Another is Huntsville, Alabama, ranked in the Top 10 of CSP’s 2023 and 2024 metro list. The momentum continues, as the 2023 Huntsville Development Review said the city’s population is continuing to grow even as the real estate market for single-family homes moderates and demand for single-family lots continues to trend high. There were 1,284 single-family lots approved in 2023, the seventh year in a row with above-average approvals. The approvals were also the third-most in the last decade, according to the Huntsville Development Review.
See the Top 10 Metro Markets to Grow In Now
Real estate consultants also see another X factor to expansion in these markets—the “satellite” effect. Northern Arkansas can deliver connectivity to the Missouri Ozarks and south to north Texas and Dallas-Fort Worth; communities in Alabama, from Huntsville to Gulf-coast Mobile, can deliver connectivity to Florida’s Panhandle and further southeast.
During the pandemic, people moved to metropolitan areas on their bucket list because, simply, they could. The pandemic meant fully remote work for many—thus providing flexibility to relocate.
These days, the hybrid work trend is evolving, in which workers come to the office two or three times a week. In essence, Dallas can ride the coattails of people settling in Arkansas and working for a Dallas-based firm; the same for Gulf Coast Florida reaping the benefits of folks relocating to Alabama.
“People can move to these satellite markets [think Arkansas or Alabama] and because of hybrid work, they can rationalize traveling two to three days a week and not feel the stress of a five-day commute,” Heiser said.
In the meantime, chains continue to see value in new metro markets.
Sheetz Inc. has been on an expansion rampage of late, planning to open its first Michigan location by the end of 2024. Sheetz is also expanding its footprint in its home state, reportedly planning to open as many as 30 new stores in western Pennsylvania and western Ohio.
Love’s Travel Stops & Country Stores’ acquisition of EZ GO included six truckstops located on Oklahoma turnpikes, five on the Kansas turnpike and 11 convenience stores in Oklahoma and Nebraska—22 stores in all. The deal also translates to 400 new employees joining the Love’s family of companies.
“The opportunity to serve commercial and casual customers on two state turnpikes supports our strategic priority of pursuing adjacent acquisition opportunities,” said Shane Wharton, president of Love’s. “In addition to being family-owned, we share a similar culture with the seller in that we operate on a customer-centric model focused on an extensive assortment of products, superior customer experience and inviting environment.”
Buc-ee’s broke ground in January on a new travel center in Brunswick, Georgia. Buc-ee’s Brunswick occupies 74,000 square feet and offers 120 fueling positions. Buc-ee’s operates 47 stores across Texas and the South.
“Brunswick is a natural stop between our Florida and South Carolina locations on a stretch of interstate near the beautiful Georgia coastline,” said Stan Beard, director of real estate at Buc-ee’s, Lake Jackson, Texas. “The community has welcomed us with open arms, and we are excited to finally get started here.”
Costs Intensify
C-store chains and independents with an eye on either existing or new metros know that the cost burden of late has only intensified, placing an emphasis on a prudent real estate strategy.
“Over the past 12 to 18 months, the industry has endured a long period of cost increases, and retailers are waiting to see the equilibrium restored,” said Heiser. “All the cost inputs of new development are high: it’s more costly to build new stores and buy land, and more costly to employ workers [amid rising wages]. C-stores have enjoyed record sales, but it’s nonetheless being offset by the cost-side increases.”
Not to place a damper on the anticipation of entering new metros, but the most valuable properties might be the ones chains already own. “C-store companies need to ask, ‘Can we add a leased space on the existing property? Can we build out?’ It's like a homeowner who opts to remodel their home—to build up or out rather than move. They are maximizing their existing assets,” said Heiser.
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