Convenience stores, commonly called C stores, and gas stations are a significant business market in Texas supporting it's highly mobile population. The National Association for Convenience & Petrloeum Retailing has identified six business styles that all fit into this large business market.
Kiosk - This is a relatively small area of a gas station that generates additional sales from quickly moving items such as beverages, snacks, travel accessories, and tobacco. It may account for less that 10% of total business sales.
Mini Convenience Store - This is a larger area, around 1,000 square feet, of a branded gasoline station. This has been popular with major oil companies as the c store concept not only attracts more gasoline sales, it generates it's own profits.
Limited Selection Convenience Store - This format is becoming more popular as former two bay service stations are converted into c stores. They carry a broader mix of food items and may also offer some basic food services.
Traditional Convenience Store - These have over 2,000 square feet of retail area and carry a broad range of frequently needed food items. These will consist of packaged and canned goods as well as some limited produce and possibly meats. Supplemental services, such as check cashing and lottery sales, have greatly added to profitability in recent years. These are the operations that have been traditionally owned by the large convenience store chains.
Expanded Convenience Store - As grocery stores continue to expand into super markets, some c store operators have begun to follow, taking the place of the small neighborhood grocery. They generally dedicate a significant portion of their space for high profit margin fast foods.
Hyper Convenience Store - These are facilities, often 4,000 square feet or more, at larger gasoline stations, such as trick stops, that are organized into various departments. They typically include a sit down eating area, multiple product lines, and in some cases a pharmacy or bakery. The product mix will cater to the needs of the travelers the gasoline service station attracts.
Listings of Convenience Stores and Gasoline Stations For Sale in Texas
High Traffic Dallas area Convenience Store
Industry Overview
The revenue mix of a c store and gas station will depend on its format; however there are some industry averages. Gasoline has been the historical industry driver and generally accounts for over 60% of sales. Tobacco, beer and wine average about 15% of industry sales, with groceries and prepared foods being another 15%. In addition, lottery and video game sales are continually taking an increasing share of c store sales. About 15% of industry sales come from store without a gas service station. A store may stock from hundreds to thousands of items depending on its format.
These are primarily cash businesses with no accounts receivable and a small inventory with a very turn-over, 20 to 40 times per year. Gasoline inventory should turn every week. Merchandising correctly for the store location's traffic is the key to profitability. There is little advertising. Volatility of gasoline prices has caused the industry to shift its reliance more and more to store profitability.
There are two important compliance areas for anyone interested in a Texas convenience store or gas station for sale. First, gasoline is stored in Underground Storage Tanks (USTs) which are regulated by the Texas Commission on Environmental Quality. Any leakage from USTs is considered a significant environmental hazard and may be expensive to repair.
Secondly, the industry has caught the attention of the Texas Comptroller's Office as a center of under-reported sales tax. Cash sales are often under-reported to reduce income tax; however, any sales tax is also reduced. The Comptroller is trying to develop ways to better audit the industry in this area.
Industry Benchmarks
Size and location of the store has a great influence on its value in the business market. Many operations include real estate which may command a premium. The terms of any lease or gasoline contracts are of critical importance when considering a business which includes a gasoline station.
Reasonable expense profiles as a percentage of sales for a convenience store and gas station business opportunity are:
Cost of Goods Sold: 60% or less (for the c store)
Labor Costs: 20% (less with an owner - operator)
Occupancy Costs: 10%
Pretax Profit: 10%
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