Gas Station Industry Faces Shifting Landscape Amid Retail Theft and Entry Restrictions
The U.S. Gas station industry, a mainstay of the nation’s transportation infrastructure for over a century, is navigating a complex period marked by rising retail theft and, in some regions, restrictions on new construction. As of , You’ll see approximately 147,000 gas stations across the United States, a figure that includes a diverse range of ownership structures and business models.
Industry Structure and Ownership
The industry is characterized by a fragmented ownership landscape. While larger chains like Wawa, 7-Eleven, and Sheetz control 15% of the fuel retailing market, the vast majority – 62.1% – is comprised of single-store owners, individuals independently operating their businesses. This means over 100,000 companies are involved in the convenience and fuel retailing industry nationwide. The remaining portion of fuel sales is distributed among convenience stores (accounting for 80% of all gasoline purchased), fuel-only kiosks (13,346 outlets), hypermarkets such as Costco and Walmart (6,648 outlets), and smaller-volume locations like service stations and marinas (approximately 8,000 outlets). Notably, 79% of convenience stores also sell fuel, totaling 118,678 stores as of .
The Growing Threat of Retail Theft
A significant challenge facing gas stations, particularly in urban areas, is the escalating problem of retail theft. In Minneapolis, Minnesota, one gas station owner, Joe Zerka of Stop and Shop, reports experiencing daily, dozens of times a day
shoplifting incidents. This theft is impacting profitability, with Zerka stating that the losses is money right out of your pocket. You know, that money could be used to give raises for my staff.
He has invested over $10,000 in security cameras, including bulletproof glass installed after an attempted break-in with a 30-pound rock. Despite the proximity of the MPD’s 5th Precinct, Zerka notes that police response times are often insufficient to prevent theft, as perpetrators typically leave before officers can arrive.
Former St. Paul Police Chief Todd Axtell, now a security consultant, attributes the issue to dwindling police resources. The resources in police departments across the country continue to struggle. There are less officers on the streets we know today in Minneapolis and St. Paul than we’ve seen in decades,
Axtell stated, adding that departments are forced to prioritize more pressing, violent calls.
Restrictions on New Construction and Potential Price Impacts
Adding another layer of complexity to the industry’s future is the growing trend of local jurisdictions restricting the construction of new gas stations. Starting in Petaluma, California, in , several cities in the state have banned new gas station construction and limited the expansion of existing ones. Research suggests that while the exit of existing stations has had limited impact, banning the entry of new stations could lead to higher prices for consumers. What we have is likely due to reduced competition within the market.
The Evolution of the Gas Station
The modern gas station has evolved significantly since the first commercial fuel pump was sold to a grocery store in Fort Wayne, Indiana, in , and the opening of the first drive-in service station in Pittsburgh, Pennsylvania, in . What began as simple fuel stops have transformed into destinations offering shopping, food, and rest. However, the rise of electric vehicles presents a long-term challenge to the traditional gas station model, prompting questions about the industry’s future.
Geographic Accessibility
Despite the evolving landscape, gas stations remain highly accessible to the vast majority of Americans. Currently, 93% of Americans live within a 10-minute drive of a gas station, highlighting the continued importance of these locations for many consumers.
Looking Ahead
The gas station industry is at a crossroads. While the immediate challenges of retail theft and evolving consumer habits are pressing, the long-term implications of the shift towards electric vehicles remain a significant uncertainty. The restrictions on new construction in certain areas, coupled with the dominance of single-store owners, suggest a potentially volatile market where pricing and accessibility could become increasingly important factors. The industry will need to adapt to these changes to remain viable in the years to come.
