Dive Brief:
- CST Corner Stores, a convenience store and gas station brand in Canada and the U.S., is expanding at a rapid pace.
- The retailer has opened 8 stores since being spun off by Valero Energy on May 1. In an earnings call yesterday, CST executives said they planned to double the pace of that expansion.
- The new stores are bigger than the legacy outlets that Valero built. Certainly CST has the wherewithal to fund an expansion and to build larger stores. CST reported that it has $424 million in cash on hand and access to a $300 million credit facility.
Dive Insight:
Something is happening at those highway convenience stores. The industry has moved beyond the gasoline-and-coffee crowd and turned into something with a much broader product base and a yearning for a bigger share of shopper's grocery budget. CST is growing like crazy now that it's free of Valero. And although Hess wants to dump its chain, rival Marathon wants to buy. Meanwhile mainstream food brands like Tyson are moving into convenience stores in a big way.
We don't know what's driving growth at conveniences stores, but we have a sense that there's something here that is strangely class-based. One segment of the American public is flocking to Whole Foods, fighting for GMO labels and celebrating local growers and slow food. While another group seems to be embracing speed and ease and shunning the health debate. We're coming to think of this as the Blue states and Red states of food.