As sales of prepared foods rise, U.S. convenience stores are expanding the size of their locations to add kitchens and offer a wider selection of healthy foods to appeal to younger consumers.
The sector is taking a multipronged approach to increase food sales and reach new demographic groups, according to a report released this week by Coldwell Banker Commercial. Chains such as 7-Eleven, Casey’s General Stores, QuikTrip and Love's Travel Stops are investing in the development of new menu items made in the store, including pizza, soft pretzels and salads. They’re opening more locations in densely populated areas to capture single-person households and on college campuses to reach younger people. And they’re selling more organic and healthy foods to appeal to a wider range of customers.
"With smaller households, more urban locations and evolving food preferences, the sector is undergoing significant transformation,” Dan Spiegel, managing director at Coldwell Banker Commercial, said in a news release.
The new emphasis on food and beverage sales appears to be paying off, as food sales rose 12.2% in 2023 compared to 2022, according to the National Association of Convenience Stores, the most recent figures available from the trade association.
The addition of food sales enhances the attractiveness of convenience stores to real estate investors who focus on net-leased properties, Camille Renshaw, CEO at New York-based brokerage B&E, told CoStar News.
“Family offices and private buyers in particular like the diversification these assets add to their portfolio,” Renshaw said. B&E specializes in net-leased properties.
Convenience stores “typically have strong credit, solid real estate fundamentals, long term triple-net leases with little management responsibilities [and] annual rent increases,” she said.
Some chains have announced expansion plans surrounding food and beverage.
7-Eleven, the world’s largest convenience store chain, said last year that it plans to open 500 new stores in the United States by 2027. All new locations will be larger and focused on sales of prepared foods and beverages. Some new 7-Eleven locations include an attached Laredo Taco, a fast-food restaurant that 7-Eleven acquired last year.
Alimentation Couche-Tard, owner of the Circle K store chain, last year offered $47 billion to acquire Seven & I Holdings, the parent company of 7-Eleven. The two companies remain in talks and are considering the sale of some stores to address potential antitrust concerns. Couche-Tard does not break out figures on its food sales.
At Casey’s, sales of products inside stores, including food and beverages, rose 3.7% in the first quarter of 2025 compared to the same period a year earlier. Casey’s, based in Ankeny, Iowa, is one of the few publicly traded convenience store chains headquartered in the U.S. and provides some financial figures on food sales in quarterly earnings reports.
“Inside same-store sales were driven by the prepared food and dispensed beverage category, with hot sandwiches and bakery performing quite well,” Casey’s CEO Darren Rebelez said in a news release.
Love’s Travel Stops, which operates 656 stores in the U.S., is trying to expand food and beverage offerings with a program to “develop and test food offerings including tacos, salads, sandwiches, snack trays and more,” according to a news release.
“In addition to new fresh food offerings, customers will also see the continued expansion of Love’s branded items including new fresh juice options, candy and flavored popcorn,” Oklahoma City-based Love’s said in a news release.
QuikTrip, a Tulsa, Oklahoma-based chain with more than 1,000 U.S. locations, recently introduced a larger store layout to accommodate kitchens for its made-to-order food and beverage offerings. New and remodeled QuikTrip locations are typically 10,000 square feet or larger, roughly double compared to older stores that often were 5,000 square feet or smaller.
Investors in the convenience store sector could be hit with the upcoming expiration of a tax incentive from the 2017 Tax Cuts and Jobs Act, said Spiegel with Coldwell Banker Commercial. The incentive allows the owners of qualifying convenience stores and car washes to record a tax deduction from the depreciation of a property’s value in the year it was acquired rather than spreading out the deduction over a longer period.
However, B&E's Renshaw noted that President Donald Trump said last month that he plans to reinstate the tax incentive.
Even if the tax benefit expires, Spiegel said investors will remain interested in the convenience store space.
“With their exceptional locations on main roads, long leases, low vacancy rates, predictable income streams and varied merchandise mix, convenience stores have long been a desirable investment asset class for CRE investors, particularly net-leased investors,” Spiegel said in the report.
Convenience stores are also beefing up food and beverage offerings as more consumers shift to driving electric vehicles. It takes longer to recharge an EV than to refuel a gas-powered vehicle, and consumers need something to do while they wait.
In response, some convenience stores have added restaurants, Spiegel said. The mid-Atlantic regional chain Rutter’s recently said it will add sports bars at two locations in Pennsylvania.
“Increasingly, convenience stores are becoming substitute grocers and even restaurants for time-pressed and value-oriented shoppers,” Spiegel said in the report.