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C-stores are capturing market share from grocery and fast-food chains, driving strong investor interest in the net-lease market
MADISON, N.J., April 1, 2025 /PRNewswire/ -- Coldwell Banker Commercial®, an Anywhere (NYSE: HOUS) brand, today released its latest Trend Report examining how convenience stores (C-stores) have shifted from quick stops for snacks and fuel to popular food destinations. This shift has made C-stores an attractive asset class for commercial real estate (CRE) investors, especially in the net-lease market.
"The convenience store industry is evolving to meet changing consumer needs," said Dan Spiegel, SIOR, senior vice president and managing director of Coldwell Banker Commercial. "With smaller households, more urban locations, and evolving food preferences, the sector is undergoing significant transformation. Given their frequent visits, convenience stores must stay closely connected to shifting consumer lifestyles to remain competitive in the retail market."
C-Store Product Mix Drives Growth
The report highlights how C-stores have adapted from being fuel and snack retailers into quick-service food and grocery alternatives. Sales of prepared food have risen 12.2% year-over-year, and 56% of consumers now consider C-stores viable substitutes for fast-food chains. This growth, fueled by demand for convenient, affordable, and healthier food options, has added to the sector's stability, even though profit margins remain narrow (around 5% to 7%). However, the high turnover of products and steady consumer visits compensate for the tight margins, making C-stores a reliable source of income for investors.
The shift in consumer behavior–especially as inflation raises grocery prices–has positioned C-stores as an attractive alternative for those seeking fresh food at affordable prices.
Changing Real Estate Needs
As C-stores add more food service offerings, real estate needs are expanding. Chains like QuikTrip, Casey's General Stores, RaceTrac, and Wawa are investing in larger store formats to accommodate food preparation areas. Many operators are returning to urban centers and exploring non-traditional spaces, such as college campuses and downtown locations, which provide new opportunities for real estate investors.
Investment Opportunities for C-Stores
Despite 60% of C-stores being independently owned, the sector is seeing significant consolidation. Major players like 7-Eleven plan to open 500 new stores in the U.S. and Canada by 2027, while regional chains such as Wawa, Sheetz, and Buc-ee's are expanding into new markets. This consolidation creates opportunities for investors to acquire properties with stronger tenant profiles and more predictable cash flows.