Can Walmart Succeed in the C-Store Space? Five Hurdles They Must Overcome

 

For decades, grocery retailers have struggled to break into the convenience store (C-store) space. While on the surface, grocery and C-store operations may seem similar—both selling food and essentials—the reality is vastly different. Grocery chains that have attempted to transition into C-store retail, such as Safeway, Kroger, and Albertsons, have largely failed because they underestimated the key differences in consumer behavior, operational efficiency, and Wall Street’s distinct expectations for each sector.

Now, Walmart is rumored to be making another attempt at cracking the C-store business. But can they succeed? History suggests major challenges lie ahead. Here are some insights collected by Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® that should help in our understanding:

Wall Street Metrics: Grocery vs. C-Stores

One of the biggest hurdles for any grocery chain entering the C-store space is the fundamental difference in Wall Street’s expectations and performance metrics for each sector:

·         Grocery Stores: Measured by total revenue, same-store sales growth, gross margins on high-volume items, and basket size. Grocery retailers rely on consistent household shopping trips, often with average checkout times exceeding 20 minutes.

·         C-Stores: Measured by transaction count, average ticket per transaction, fuel sales (when applicable), and prepared food sales growth. C-store profitability is heavily reliant on impulse purchases, high-margin grab-and-go items, and a seamless, sub-5-minute customer experience.

Grocery chains have historically struggled with the transition because they try to bring grocery store metrics (such as bulk purchasing and loyalty-driven promotions) into a convenience-first model, which is driven by immediate consumption, speed, and impulse-driven sales.

Five Hurdles Walmart Must Overcome

For Walmart to succeed in the C-store space, they must tackle the following critical challenges:

1. Understanding the Convenience Consumer Mindset

The average C-store customer spends under five minutes inside a store, with 50% of customers making unplanned purchases based on impulse. (NACS 2023) Walmart must shift its strategy from bulk shopping and low-price guarantees to meeting the needs of time-starved consumers who prioritize speed and accessibility.

2. Curating Immediate Consumption Meal Options

Modern consumers demand fresh, ready-to-eat meals. A 2023 study found that 41% of convenience store shoppers purchase hot, prepared foods at least once a week, with 51% rating these offerings equal to or better than quick-service restaurants. (Food Institute) C-stores are no longer just about snacks and packaged goods; the fastest-growing segment is fresh meal solutions.

For Walmart to succeed, they must create an elevated fresh-prepared food program that competes with Wawa, Sheetz, and 7-Eleven. Failure to deliver high-quality, grab-and-go fresh meals will leave Walmart vulnerable to losing market share to these established players.

3. Competing with Established C-Store Brands

Legacy convenience store chains such as Casey’s, Circle K, and Buc-ee’s have decades of customer loyalty, efficient supply chains, and deep market penetration. Walmart must differentiate itself by either innovating in fresh food, leveraging its grocery supply chain, or offering exclusive meal solutions that consumers can’t find at traditional C-stores.

4. Adapting Store Formats to Maximize Efficiency

Walmart’s traditional big-box model does not translate well to a convenience environment. C-stores operate on compact footprints, with a strong focus on high-margin grab-and-go purchases. Walmart must refine its approach by:

·         Implementing streamlined store layouts that encourage quick purchases.

·         Using AI-driven inventory management to optimize product placement and restocking.

·         Enhancing checkout efficiency with automation and cashier-free technology.

5. Implementing Technology-Driven Service Speed

Consumer expectations for faster service in C-stores have skyrocketed. According to Convenience Store News, 72% of customers expect mobile ordering or self-checkout options, while 58% prefer contactless payment solutions. Walmart must integrate:

·         Mobile app-based ordering and pickup for grab-and-go meals.

·         AI-driven self-checkout kiosks that eliminate friction at the register.

·         QR-code-based marketing messaging that delivers real-time promotions directly to consumers' phones.

Failing to invest in technology-driven service will leave Walmart behind in a space where speed is king.

Why Fresh and Fast is the Future

C-stores are no longer just about gas station snacks. A 2023 report revealed that prepared food sales in C-stores surpassed cigarettes for the first time, demonstrating a major consumer shift toward fresh, immediate consumption options. (Solink)

Moreover, 27% of C-store shoppers report purchasing fresh-prepared items more frequently than they did a year ago, highlighting the growing demand for high-quality, convenient food solutions. (Vending Connection)

If Walmart wants to succeed, they must abandon the traditional grocery store mindset and fully embrace the convenience-driven model—one that prioritizes fresh-prepared meals, seamless checkout, and impulse-driven food sales.

Final Thoughts: Can Walmart Win in C-Stores?

History has shown that grocery retailers struggle when entering the convenience space. Walmart must avoid past mistakes by recognizing the distinct consumer behaviors, operational efficiencies, and Wall Street expectations that separate C-stores from grocery stores.

If Walmart can:
✅ Deliver high-quality fresh-prepared meals,
✅ Optimize store formats for rapid transactions,
✅ Invest in cutting-edge technology for checkout speed,
✅ Develop impulse-driven marketing strategies,
✅ And differentiate itself from legacy C-store chains…

Then, and only then, can they disrupt the C-store space. Otherwise, Walmart risks becoming yet another grocery retailer that failed to understand what makes convenience retail thrive.

Success Leaves Clues—Are You Ready to Find Yours?

One key insight that continues to drive success is this: "The consumer is dynamic, not static." This principle is the foundation of our work at Foodservice Solutions®, where Steven Johnson, the Grocerant Guru®, has been helping brands stay relevant in an ever-evolving market.

Want to strengthen your brand’s connection with today’s consumers? Let’s talk. Call 253-759-7869 for more information.

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At Foodservice Solutions®, we specialize in consumer-driven retail food strategies that enhance convenience, differentiation, and individualization—key factors in driving growth.

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