The C-Store Evolution

Convenience Stores associated with gasoline outlets (“C-Stores”) across Canada and the United States have evolved over the past 10 to 20 years in response to pressures affecting the economics of every gasoline and diesel retailers’ core business – selling fuel. The profit margin achieved by retail gasoline outlets experienced a sharp decline in the early 1990s from more than 6.00¢/L to less than 4.00¢/L.


The industry then endured a decade of sustained low profit margins (3.50¢/L to 4.50¢/L in inflation-adjusted terms) before a partial recovery occurred in the mid-to-late 2000s that has since been sustained. Profit margins on gasoline (expressed in nominal and real terms) in cents-per-litre is shown.

→ Industry participants are diversifying by increasing product and service offerings


The number of retail fuel outlets in Canada once exceeded 20,000 but since the late 1980s/early 1990s has declined steadily to a present level of less than 12,000. As a result of this reduction and the growth in consumption, the average fuel throughput per station has risen over the same time frame from roughly 1.5 million litres (“ML”) in 1991 to nearly 3.5ML in 2013.
(MJ Ervin & Associates – National Retail Petroleum Site Census 2013)

Competitive strategy continues to evolve in the product and service offering of outlets and C-stores. C-Stores are getting larger to provide for greater consumer retail activity and offering additional ancillary services. In 2006, 75% of C-Stores across Canada were less than 1,500 square feet (sf), and many locations only operated a small kiosk. Presently, about 40% of C-Stores are over 1,500 sf.  In 2008, approximately 20% of major oil branded C-Stores had car washes. Since then, the collective car wash network has grown by more than 10% and nearly a quarter of major oil-branded sites now operate car washes. These trends are plainly indicative of expanding product and service offerings to bolster profits.

The trend of increasing C-Store size and expanded ancillary service offerings has largely been driven by downward pressure on profit margins from the sale of gas and diesel. It is expected that growth in C-Store size and ancillary service offering will continue into the foreseeable future.

About the Authors. . .


Jonathan Gallant is a Principal at the Dartmouth office of WBLI Chartered Accountants. He has significant Oil and Gas industry experience in leveraged buy-outs, divestitures and acquisitions. Jonathan specializes in business valuation and providing strategic corporate finance advice on M&A transactions. He has experience working with private equity groups and developing sophisticated financial models. He has significant M&A experience with over $300 million in completed transactions over the past few years.

Prior to joining WBLI, Jonathan worked for Bluewave Energy LP and Parkland Fuel Corporation in corporate finance roles.


Chace Hynes is an Analyst at the Dartmouth office of WBLI Chartered Accountants.Chace conducts research, review and financial analysis in the course of business valuation assignments and other corporate finance advisory engagements. He has contributed to financial analysis in a variety of contexts, including purchase and sale transactions, shareholder and partnership buyouts, tax and estate planning and financial projections.

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