You might not want EV chargers now, but you should make it possible to add them five years later if you decide it’s time. store market consisting of chains with 50 or fewer locations, there is “ample opportunity to continue to consolidate.” The real issue raised by consolidation is what it means for the rest of the industry. While a particular segment has rushed forward with best-in-class customer experiences and foodservice that rivals QSRs, the rest of the industry continues to operate a more traditional conception of convenience retail. Consolidators generally do the same—except with the benefits of scale. “Many small chains and single stores put forth the same value proposition as consolidators, but they don’t share the same cost structure,” said Lawrence. “Not only are these retailers unable to compete with merchant canopies on fuel price or foodservice-forward chains inside the store, but they lose to the consolidators on both fronts. They just don’t have the room in their margins.” Lawrence argues that fuel demand forecasts raise additional concerns about the ability to grow volume post-pandemic. Rather than increasing demand organically, it’s more likely that retailers will have to steal market share from their competitors. In this, consolidators will enjoy additional advantages.
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“The acquisition of Speedway by 7-Eleven is instructive,” said Lawrence. “It gave them significant advantages in economies of scale related to fuel supply and pricing. Not only did they box Couche-Tard out of the Midwest, but I imagine that they will leverage their substantial volume for significantly advantaged supply arrangements.” This further raises the importance of differentiation. More than a catchphrase, it may be a survival strategy for some—especially in a post-pandemic marketplace. “In many cases, convenience stores were places that people went by and not to—coffee on the way to work, a gallon of milk on the way back,” said Montgomery. “If customers are working from home, they’re not going by those locations. Unless you’re a destination driver, you’re going to lose some traffic permanently.” ELECTRIC VEHICLES The pandemic produced an unanticipated side effect in March and April: clear skies. With the interstates suddenly free of gasguzzling vehicles, the smog surrounding many cities disappeared. Many readers will remember the crystal clear pictures of Los Angeles. Even in New Delhi, the world’s most polluted city, monuments were visible against blue skies for the first time in many years. New York City’s emissions and carbon monoxide levels dropped more than 50% in a single week in March. “EV skeptics will sometimes argue that charging cars with grid electricity merely moves the pollution somewhere else, aka, the long tailpipe argument,” wrote Wall Street Journal auto columnist Dan Neil in April. “But location matters, particularly for megacities with geographies that tend to trap airborne pollutants, such as Beijing, L.A. and Mexico City.” While it remains to be seen what impact this might have on consumer preferences for electric vehicles, the category has had a good year relative to the rest of the auto market. In Europe, EVs grew rapidly while sales of conventional cars collapsed. According to the International Energy Agency, EV sales were up 90% year-overyear in April for France, Germany, Italy and the U.K.—the region’s four largest EV markets. In China, February’s 60% year-over-year sales decrease had rebounded to 80% by April. The U.S., in comparison, saw EV sales roughly halved in April. CONVENIENCE.ORG