Convenience store sector: consolidation is underway watch for success clues.

We predicted in January that industry consolidation would take place in this sector this year and it’s is happening now. Most exciting to watch are those operating in the grocerant niche conducting or rolling out multiple fresh prepared food product or new product test. Prepared fresh food continues to drive this sector top line revenue and bottom line profits. C-stores entering or expanding offerings are growing in both per store volume and new units. 7 Eleven is buying units from East to West and North and South and positioning to become the leader in fresh prepared food in this sector with testing well underway.

Casey’s General Stores continues to expand its prepared food offerings and this according to, CFO Bill Walljasper CFO this purchased 10 Holiday stores. With that purchase Casey’s now has over 1,500 units and growing or may be bought if Alimentation Couche-Tard Inc. has its way. . Watch for Casey’s to continue to enter new markets gobbling up marketshare even if they are acquired.

Prepared food has provided new life for companies like Kum & Go the 50 year old convenience chain that added 21 new stores this year to bring it total to more than 430 units by the end of 2009. Growing units at more than 4% a year QuikTrip is growing in both units and geography from Tulsa, Kansas City, Atlanta, Phoenix, Dallas, Wichita, St. Louis, Des Moines and Omaha markets utilizing commissaries to serve all 534 units sales of the fresh deli-sandwiches, salads, fruit cups and muffins are all exceeding company expectations. This company is one to watch organic growth is in play here they have the mind-set to grow and want too.

Two companies that are conservative in growth Sheetz and Wawa both are high volume regional players with outstanding grocerant style prepared food. These were my takeover or take-out targets for 2010. However each seems stifled in its ability to grow outside the current operating borders. Each would be a plum for companies searching for volume, highly skilled management teams and premade template for success. These are two companies that may have lost a bit of competitive advantage when health care reform passed; for each had solid industry leading benefit package’s for employees. Now others will gain footing and might be able to attract and hold a more competitive employee. If each don’t begin a strong push for growth they may be inadvertently and unintentionally marginalized by an industry they helped progress.

Grocerant prepared ready-to-eat and ready-to-heat food soled the stage in 2009. Companies with a solid footing in the niche clearly lead the sector. Foodservice sales rose 7.7 percent on a per store basis in 2008, and prepared foods led the way with a 9.1 percent sales gain per store, according to a Convenience Store News 2009 Foodservice Study.

Convenience store sector: consolidation is underway watch for success clues on this blog. Please feel free to share you view on who might be next to acquired in the comment sections or on any new fresh prepared food products you might have seen.

Since 1991 Foodservice Solutions of Tacoma, WA has been the global leader in the Grocerant niche. Join me here on my blog for insights, information and inspiration or for more on Steven A. Johnson and Foodservice Solutions visit http://www.linkedin.com/in/grocerant or on Facebook at Steven Johnson.

http://www.foodservice.com/articles/show.cfm?contentid=7513&title=Convenience store sector: the stage is set for consolidation in 2010.