ccording to the National Association of Convenience Stores, more than 80 percent of the 150,000 convenient stores nationwide sell automotive fuel. This is a huge business that generates billions of dollars in sales each year. Between 2019 and 2020, fuel sales fell about 26 percent due to impacts of COVID-19 pandemic as fewer motorists commuted daily.
Even as people return to the office, a new threat is emerging – the electric car. This could have a huge impact on c-stores who rely on traffic from consumers looking to refuel their vehicles. On average, consumers visit gas stations once or twice each week to refuel. These visits account for two-thirds of the average convenience store profits. C-store operators need to understand how electric vehicles will impact their business and what they can do to adapt.
A lot has changed since the Toyota Prius became the first mass-produced hybrid-electric vehicle in 1997. Today, dozens of manufacturers offer hybrid and full electric vehicles. In fact, the global automobile industry is expected to have nearly 100 different EV models to choose from by 2024. Many manufactures have set goals to stop the production of gasoline-powered cars altogether in the next decade or so. There are many factors that continue to drive this change.
First, most people acknowledge that oil reserves and other fossil fuels are in limited supply. It’s critical for companies to start thinking about alternative ways to power vehicles. Consumers are also becoming aware of the harmful effects of fossil fuels on the environment.
“For convenience retailers, right now they have a monopoly in selling transportation energy… If you want to move your vehicle, you have to go to a gas station. That’s going to change” John Eichberger, Executive Director, Fuels Institute
Technology is improving making electric vehicles more affordable. Plus, more charging stations are enhancing the range that these vehicles can operate. According to the US Department of Energy, there are currently over 40,000 electric charging stations available to the public.
Despite their popularity, electric cars account for less than 2 percent of vehicles on the road in the US. This is expected to slowly shift in the future. The US Energy Information Association predicts that electric vehicles will make up about 10 percent of all new vehicle sales by 2040.
With the slow adoption of electric vehicles, c-store operators will fortunately have plenty of time to prepare. It’s important that they understand the current state of the market to help them decide the timing for making the switch from fossil fuels to electric.
There are still some major hurdles that c-store operators will need to overcome if they want to provide electric vehicle charging stations at stores. While the technology is improving each year, there is still a long way to go.
Electric vehicles are still in the early stages of development. Challenges such as affordability and convenience of charging times will lead to new innovations and products. Increased competition between auto manufacturers is expected to decrease the cost of new electric vehicles. New cars are being developed to charge at higher kw (kilowatt) ratings which will decrease charging times. Also, charging stations will likely get cheaper as more companies enter the market and the technology gets cheaper to produce.
While this should help c-store, businesses feel more comfortable with providing electric charging, c-stores will need to provide more amenities to avoid losing their customers to other locations including lounges, Wi-Fi, secure and well-lit locations, and restrooms.
Some EV charging companies are exploring wireless charging that uses a pad or base which allows drivers to charge without getting out of their vehicle. This could force more c-stores to embrace curbside delivery. Brands can take advantage of their existing customer loyalty programs or apps to help deliver this service.
It’s clear that the reduction of fossil fuels is set to change the way c-stores look forever. C-store operators who adapt well to this change could help revolutionize the industry.