Most major automakers have committed to converting their entire future fleets to some form of electric power, and if you look at autonomous vehicle developers like Waymo, it’s clear that electric vehicles (EVs) will go hand in hand with self-driving technology.
Unlike traditional internal combustion engines, EVs don’t require oil changes, have fewer moving parts to wear out, and rarely break down, which should worry the more than 160,000 independent auto repair shops in the US. In an EV-dominated future, gas stations will eventually be hit hard.
But this is not just a concern for mechanics; fewer gas station visits mean a big drop in beverages sales, according to a Morgan Stanley report released last week.
Even if you pay at the pump with a credit or debit card, chances are some of your fuel stops include a trip inside a gas station or convenience store to buy a drink or snack. In fact, Jeff Lenard of the National Association of Convenience Stores told The Washington Post that fuel sales comprise just 40 percent of gas station profits. The rest of revenue is rung up inside the store, and beverages are the bulk of sales.
For example, 63 percent of US sales for Monster Beverages comes from gas stations and convenience stores, the Morgan Stanley report revealed. Other convenience store purchases, such as alcoholic beverages and tobacco products, may not see the same declines since when people fuel up they tend to buy beverages impulsively and consume them right away.
“Beverages drive sales, and beverages drive profits at convenience stores,” Lenard added. “So any competition that could reduce those sales and those profits is a concern.”
The Morgan Stanley report acknowledged that EVs currently comprise only a small fraction of the total vehicles currently on US roads. From December 2010 to February 2018 the combined market share of all EVs in proportion to traditional internal combustion engine new vehicle sales was just 0.7 percent, according to InsideEVs. Convenience store industry analysts believe that any significant damage to their bottom line—and beverage sales—due to electric cars is still decades away.
But given automakers’ commitment to EVs, rapid market growth is expected. So convenience stores might want to consider catering to EV owners, much like the Mid-Atlantic gas station chain Sheetz (where customers can order food items such as drinks and sandwiches via touch screen while filling up) has partnered with Tesla to install Supercharger stations.
And while the Journal estimates that 80 percent of EV owners charge at home and a full battery can get them where they want to go and back in a day, road-tripping EV owners may spend more time—and more money—at convenience stores like Sheetz since it takes much longer to top off at a public charging station than it does to fill a gas tank.
“I think [convenience] stores will do what they always do,” Lenard added. “They’ll find a better way to compete.” And there will always be a convenient place to stop in for a beverage or snack even if you just need fuel for your body.