Circle K would give a big boost to the restaurant industry with its planned takeover of 7-Eleven. | Photo: Shutterstock.
It was an exceptionally busy week in the convenience store acquisitions space.
And it’s only Tuesday.
On Monday, the parent company of Circle K and Holiday Stationstores, Alimentation Couche-Tard, made a $38 billion offer to acquire Seven & i Holdings, the owner of 7-Eleven.
The deal would combine the country’s two largest c-store chains. (Imagine McDonald’s buying Starbucks.)
On the same day, Quebec-based Couche-Tard also announced that it would buy the approximately 270-store GetGo Café + Markets convenience stores from Pittsburgh-based grocery chain Giant Eagle.
This is great news for the c-store industry, reminiscent of the proposed $24.6 billion Kroger-Albertsons merger that is still being negotiated in court. If approved, that deal would combine the country’s two largest grocers.
This consolidation is causing a lot of concern for consumers, who have already cut back on spending at grocery stores and restaurants due to inflation.
However, there is another big problem here:
What does this mean for the catering industry in convenience stores?
There’s no doubt that c-stores are a growing competitor to quick-service restaurants. In fact, Restaurant Business-affiliated data firm Technomic recently reported that c-store foodservice sales growth is expected to outpace that of fast-food concepts this year.
“Consumers appear to be increasingly interested in prepared foods and beverages in convenience stores, intensifying competition between c-stores and QSRs and making 2024 a potentially pivotal year for convenience foodservice,” Donna Hood Crecca, head of Technomic, wrote in a recent blog post.
For example, 40 percent of consumers said they were visiting fast-food restaurants less often, and 19 percent of respondents said they were buying more groceries at convenience stores than they did a year ago.
Technomic also found that the average price of a chicken sandwich at a QSR was almost twice the price at c-stores.
In the case of Couche-Tard, the ink was barely dry on the Giant Eagle deal when retailers said grocery would continue to be a big focus for the brand.
“Couche-Tard plans to continue the incredible legacy that GetGo has built, including its outstanding customer service and food-first approach to the company’s convenience,” Giant Eagle said in a statement.
If the deal goes through, Circle K would acquire a thriving food service business in 7-Eleven. The Irving, Texas-based retailer already competes with limited-service chains and operates the Laredo Taco Company, Speedy Café and Raise the Roost Chicken and Biscuits restaurant brands.
Couche-Tard’s foodservice program, on the other hand, is less well developed.
In June, the retailer announced that its Fresh Food Fast platform was available at 5,800 of its more than 16,700 locations worldwide, and has long said it wants to dominate the beverage market.
Couche-Tard said grocery accounts for about 12% of its sales systemwide, with a goal of increasing that number to 20%.
With the planned acquisition of 7-Eleven, the company would take over a grocery giant that should give restaurant operators food for thought.
Members make our journalism possible. Become a Restaurant Business member today and receive exclusive benefits, including unlimited access to all of our content. Sign up here.
