Electric vehicles will shake up gas stations
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Des Moines is home to longtime convenience store leaders, including Casey's, Kum & Go and Hy-Vee, but expect to see their store operations shake up when electric vehicles go mainstream.
Why it matters: EVs could disrupt the historically resilient convenience store industry, said Frank Beard, a retail speaker and host of the "In-Convenience Podcast."
- Industry leaders will have to diversify and rely less on fuel sales and more on tasty food and snacks, Beard said.
State of play: Gas stations have remained mostly protected from the "retail-pocalypse," Beard said.
- But EVs' steady growth threatens an industry that's long relied on Americans' need for nearby fuel and "smokes and cokes" conveniently 50 feet away.
By the numbers: The electric vehicles' U.S. market share is estimated to grow from about 6% of new sales this year to 16% in 2024.
- But it's unknown how much demand will exist for public charging stations, especially at urban c-stores, when EVs become mainstream, Beard said.
- While they currently command 80% of U.S. fuel sales, they'll be competing with home charging, malls and even the roads themselves.
Zoom in: About 10% of Kum & Go's stores will have a charging station by the end of the year, said VP of fuels Ken Kleemeier, though they're not profitable yet.
- But looking even 10 years down the road, Kum & Go is reducing the size of some new stores, as well as the number of gas pumps as they step back from a narrow fuel focus, said Tracy Ging, Kum & Go's chief marketing officer.
Of note: The company is launching six smaller "bistro" stores. The first one will open in Walnut, Iowa.
What's next: Don't expect any dents in fuel anytime soon.
- It would take a major, sustained surge to meet the Biden administration's target of EVs growing to 50% of U.S. passenger vehicle sales by 2030.
Go deeper: Why convenience retailers are gearing up to win in food service