U.S. Gas Station & Convenience Store Update Q4 2024

Throughout 2024, retail gasoline and diesel prices were projected to decline due to increased refinery capacity and narrowing crack spreads— the difference between wholesale fuel prices and crude oil costs. This trend, noted in early 2024 analyses, persisted into Q4, with lower fuel prices potentially reducing fuel revenue but boosting in-store sales as consumers redirected spending. Industry data from earlier in 2024 showed that in-store sales rose to 37.1% of total revenue in 2023, up from 33.8% in 2022 — a shift that continued into Q4 2024, as convenience stores (c-stores) emphasized food service and premium offerings.

A cautious lending environment in 2024 pushed investors toward “Amazon-proof” assets like gas stations and c-stores. These properties, often situated at high-traffic intersections, remained attractive due to their long-term viability and consistent cash flow. Sale-leaseback transactions, revitalized by tight capital markets, peaked in Q4 as businesses sought liquidity, further supporting property sector stability.

With the growing adoption of electric vehicles (EVs), Q4 2024 saw continued investment in EV charging infrastructure at gas station properties. This adaptation, alongside renewable energy integrations like solar, aimed to future-proof these assets, potentially increasing property values for forward-thinking operators.

The NACS Show 2024, held from October 7 to 10, 2024, at the Las Vegas Convention Center, was a pivotal event for the U.S. convenience store and fuel retailing industries, encompassing the gas station and c-store property sector. Organized by the National Association of Convenience Stores (NACS), it brought together thousands of industry professionals, retailers, suppliers, and innovators to showcase trends, technologies, and strategies shaping the sector.

Below is an overview of the event based on its significance and reported highlights:

NACS Show Highlights and Trends

Technology Showcase: The expo floor featured cutting-edge solutions like AI-driven inventory management, contactless payment systems, and self-service kiosks. Companies such as NCR Voyix and Gilbarco Veeder-Root demonstrated advancements in fuel pump technology and mobile app integrations (e.g., Shell’s connected car payment solutions).

Foodservice Innovation: With in-store sales driving profitability, the show emphasized foodservice. Exhibitors showcased grab-and-go options, premium coffee programs, and healthier alternatives to counter shifting consumer preferences.

Sustainability and EV Focus: EV charging infrastructure was a hot topic, with companies unveiling scalable solutions for gas stations transitioning to hybrid fuel and EV models. Several partnerships between c-store operators and EV charging providers (e.g., Electrify America) were announced. Solar panel integrations and energy-efficient store designs were also featured, aligning with broader sustainability goals.

New Product Launches: Suppliers debuted seasonal and limited-time offerings for Q4 2024 and Q1 2025, targeting holiday shoppers and early-year travelers. Beverage innovations, including energy drinks and functional waters, as well as snack categories, dominated, with an eye on health-conscious consumers.

Educational Sessions: Workshops and keynotes covered topics such as labor retention, supply chain resilience, and adapting to economic shifts following the 2024 elections. Sessions included data-driven insights from NACS’ State of the Industry reports, projecting Q4 2024 and 2025 trends. A notable focus was on leveraging data analytics for personalized marketing and operational efficiency.

(Source: NACS)

Q4 2024 Cap Rates

Average cap rates for U.S. gas stations c-stores decreased by 27 basis points in Q4 2024 as compared to Q3 2024. The following table illustrates minimum, maximum, and average cap rates for gas stations and c-stores in Q4 2024 and Q3 2024. The sector’s operational efficiency—enhanced by AI-driven inventory and pricing optimization— kept valuations strong, even as broader commercial real estate faced challenges.