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DENVER — Convenience stores, once primarily recognized for quick stops for gas and snacks, are now emerging as serious competitors in the foodservice industry. C-stores are boosting foot traffic and in-store sales by expanding their selection to feature a diverse array of prepared foods, private label brands, and creative loyalty programs, as CoBank’s Knowledge Exchange reported.
The report titled C-stores Evolve from Gas-N-Grub to True Food Destinations emphasizes the industry's transformation and increasing impact in the food service sector. With c-stores innovating and broadening their offerings, they are set to reshape how consumers view convenience dining.
In 2023, c-stores achieved record sales, fueled by an 8% year-over-year growth in in-store sales for both 2022 and 2023, as reported by Circana. This increase surpassed the general inflation rates for grocery and restaurant food prices.
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C-stores now compete directly with quick-service restaurants (QSRs) and fast-food chains, tailoring menus to rival and surpass them. CoBank’s report highlights that the lines between grocery stores, QSRs, and c-stores are blurring, heightening competition in food retail.
“Convenience stores have evolved from their gas-fueled origins to become true food and beverage destinations,” said Billy Roberts, food and beverage economist at CoBank. “Foodservice is the future for c-stores, and we expect them to continue innovating with freshly prepared items, signature menu offerings, and private label products.”
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Major food manufacturers are increasingly aware of this transformation. For example, J.M. Smucker and Hormel Foods have pursued strategic acquisitions to enhance their presence in the convenience store (c-store) market. J.M. Smucker highlighted c-store distribution as a significant factor in its 2024 acquisition of Hostess Brands. Likewise, Hormel Foods broadened its c-store reach with its 2021 acquisition of Planters and Corn Nuts, leveraging these brands to launch new products such as pizza toppings and bacon for c-store menus.
Convenience stores increasingly serve as venues for trialing new flavors and product ideas. A case in point is Hormel’s Bacon 1, specifically crafted for quick preparation, enabling c-store operators to add bacon to various menu offerings seamlessly. This emphasis on convenience and efficiency meets the demands of c-store kitchens, which value speed and simplicity.
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Loyalty programs are another critical factor in c-store success. 2024 Loyalty Trend Report at least 80% of c-store loyalty program members are among the top half of customers in monthly transaction visits. These programs assist c-stores in establishing a loyal customer base and enhance their competitiveness against restaurants, which have faced challenges keeping customers engaged in recent years.
“Loyalty programs are a powerful tool for c-stores as they aim to capture more traffic from restaurants,” Roberts noted. “This enthusiasm for loyalty initiatives will likely grow as c-stores continue to refine their strategies.”