Gas stations used to be places to fill up and leave in five minutes. Now, chains like Buc-ee's are building stores the size of small supermarkets, and customers are staying for 20.8 minutes.
Profit margins on gasoline are razor-thin. That is why operators use cheap fuel as a loss leader to bring in customers. Once inside, shoppers buy higher-margin items like food, drinks, and merchandise.
"The traditional gas station is rapidly transforming from a transactional stop for fuel into a sprawling, multi-faceted retail and travel destination. This evolution is driven primarily by razor-thin profit margins on gasoline, forcing operators to leverage fuel as a loss leader to draw customers into high-margin convenience stores and food service," said Sudip Mazumder, a senior vice president and retail industry lead for North America at Publicis Sapient.
Buc-ee's has mastered this model. Its Dayton, Ohio location has 120 fuel pumps. The store itself is roughly half the size of a small Walmart (150,000 square feet) - a low-end Walmart comes in at around 150,000 square feet.
Tom Seng, a Texas Christian University professor whose official designation is professor of professional practice, said, "These stores have become destinations in themselves for some people." One customer, Sally McQuinn, drove from Roanoke, Virginia to Dayton, Ohio for a Buc-ee's opening. "I'm a super fan of Bucs for sure," she said.
Get your free investing masterclass bonus when you join Market Briefs, our free daily newsletter
Dolly Parton's new Dolly's Tennessean Travel Stop debuted with a 25,000-square-foot building on 18 acres, featuring amenities such as a dog park, a theater, a restaurant and bar, trucker showers, and a lounge - yet it has only 16 fuel pumps. "Initially, we are focusing on making the Cornersville flagship location the best it can be. The plan is to open up locations throughout the country, in a deliberate, measured fashion," said Gregory H. Sachs, a partner at Dolly's Tennessean Travel Stop.
Midwest chain Wally's runs three 50,000-square-foot locations, with plans for more. Meanwhile, Buc-ee's has over 50 locations across 13 states.
Elizabeth Lafontaine, the director of research at Placer.ai, noted, "The convenience store channel has, in many ways, evolved past its name to become a full-service one-stop shop for consumers." She added, "Social media has played a key role in bringing regional offerings onto the national stage, which has in turn pushed all chains to take a closer look at what resonates with consumers."
According to Placer.ai, customers linger longer at convenience stores that emphasize fresh food or distinctive products. 7-Eleven averages 9.8 minutes, Circle K 9.3 minutes, Casey's General Store 8.7 minutes, and Cumberland Farms 8.5 minutes.
Not every chain can build a 75,000-square-foot behemoth. "While these stores can get remarkably large, physical expansion faces practical limits," Mazumder said.
Seng agrees: "That benefits the small towns connected to our interstate system. Buc-ee's appears to be setting the standard for now, but I don't see the development of shops larger than what they currently have."
Lafontaine observed that the concept of a convenience store has broadened, with many different store types now gaining traction as popular formats emerge.
But rivals like Dolly's Tennessean and Wally's are proving that a smaller footprint can still attract loyal customers. Gas stations are evolving into destinations, but the race to build bigger will hit a natural limit.
Subscribe to Market Briefs, our free daily newsletter, and claim your bonus investing masterclass
