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North American mobility retail balances old and new for future success | McKinsey

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mobility retail balances old and new for future success</div></h1></div><div data-component="mdc-c-description" class="mdc-c-description___SrnQP_2734c4f mdc-u-ts-10 mck-u-animation-blur-in-800 ArticleDefault_mck-c-article-default__description__sjoe9"><div><time datetime="2023-09-08T00:00:00Z">September 8, 2023</time> | Article</div></div></div></div></div></div></div><div class="mck-o-container"><div class="mck-o-container--wrapped mck-o-container--mobile-spacing mdc-u-grid mdc-u-grid-gutter-xxl"><section data-layer-region="article-body-header" class="mdc-u-grid mdc-u-grid-col-md-12 mck-u-animation-blur-in-400 byline-share-container"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-7 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-8 mdc-u-ts-10"></div></section><section class="mdc-u-grid mdc-u-grid-col-md-12 mck-u-animation-blur-in-400"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-11"><div data-component="mdc-c-description" class="mdc-c-description___SrnQP_2734c4f mdc-u-ts-5"><div class="mck-u-links-inline">With the growth of e-mobility and younger consumers seeking high-tech convenience, nimble North American mobility-retail players are combining old and new offerings to stay competitive.</div></div></div></section><main data-layer-region="article-body" class="mdc-u-grid mdc-u-grid-gutter-xxl"><div class="mdc-u-grid mdc-u-grid-col-1 mdc-u-grid-col-md-12"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-11"><div class="mdc-o-content-body mck-u-dropcap"> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="DownloadsSidebar_mck-c-downloads-sidebar__iFmyt mck-o-xs-right-span"><div data-layer-region="downloads-right-rail"><h3 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-c-heading--title___5qyOB_2734c4f 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class="mdc-c-link__label___Pfqtd_2734c4f"> (7 pages)</span></a></div></div></div></div> <p><strong>Mobility retail (MR) has long been a profitable segment</strong> of the oil and gas industry. It encompasses fuel stations and associated convenience stores as well as services such as electric vehicle charging stations and car washes. The North American MR market is the largest in the world, accounting for half of global EBITDA in the sector, and is growing at a rate of 4 to 5 percent per year.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="75a8da0a-6ef6-41b7-ad27-4f865f6d423e"><sup class="FootNote_footnotesup__e73z_">1</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="75a8da0a-6ef6-41b7-ad27-4f865f6d423e" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">McKinsey Energy Solutions global retail value pools outlook, January 2022; McKinsey EV charging value pools model; <a href="/industries/oil-and-gas/our-insights/global-energy-perspective-2022">Global Energy Perspective 2022</a>, McKinsey.</span></span></span></a></span></p> <div data-component="mdc-c-module-wrapper" data-module-theme="light" data-module-background="lightest-grey" data-module-category="" data-module-gradient-position="bottom-right" class="mck-c-inline-module-container SideBar_mck-c-sidebar__bgimg-wrapper__Qj4Dt mck-o-sm-left-span SideBar_mck-c-sidebar__sidebar-wrapper__Dpjw2 SideBar_mck-c-sidebar__sidebar-wrapper--istablet__IQ6ii mck-u-screen-only mck-c-module-wrapper" data-layer-region="sidebar"><div class="SideBar_mck-c-sidebar__epoAm mck-o-md-center"><div class="SideBar_mck-c-sidebar__share-icons-wrapper__9gB_c"><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f mdc-c-link-container--display-column___X0HDD_2734c4f SideBar_mck-c-sidebar__share-icons___eQy6"><button data-component="mdc-c-button" aria-label="Expandable Sidebar" type="button" id="button_id" class="mdc-c-button___U4iY2_2734c4f mdc-c-button--ghost mdc-c-button--size-medium SideBar_mck-c-sidebar__toggle-btn__EL8iE" aria-expanded="false" data-layer-event-prefix="UI Item" data-layer-action="click" data-layer-category="sidebar" data-layer-subcategory="open" data-layer-text="open sidebar"><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mdc-c-icon--radial___y3csX_2734c4f mdc-c-icon--size-xxl___cL3ZT_2734c4f mck-plus-no-circle-icon"></span></button></div></div><div class="SideBar_mck-c-sidebar__content-outer__UdWCq"><div class="SideBar_mck-c-sidebar__eyebrow__5GSEq"></div><div class="SideBar_mck-c-sidebar__content__raEwe"><h2 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-u-ts-3 SideBar_mck-c-sidebar__content-heading__NJekY"><div>About the authors</div></h2><div class="SideBar_mck-c-sidebar__content-description__4p9iI mdc-u-ts-7"><div class="mdc-o-content-body"><p>This article is a collaborative effort by Hal Adams, Joy Anena, Arjun Chopra, <a href="/our-people/luciano-di-fiori">Luciano Di Fiori</a>, <a href="/our-people/valentina-ibarra">Valentina Ibarra</a>, Varun Mathur, and Fay Shong, representing views from McKinsey’s Oil &amp; Gas and Retail practices.</p></div></div></div></div></div></div> <p>However, this arena is becoming increasingly complex. Conventional internal-combustion engine (ICE) fuel is still a critical offer that attracts consumers to sites and is likely to remain so for the near future. But fuel’s dominance is challenged by increased fuel efficiency and the rise of electric vehicles (EVs). New commuting patterns such as e-hailing are also impacting the sector. Retailers need a transition plan to keep up.</p> <p>Along with new EV infrastructure, fuel-station convenience-stores will be an important part of this strategy. Convenience-store retail has been a major contributor to the success of North American MR over the last two decades, and currently generates 60 percent of gross profit in the sector.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="1f341e8b-4324-44de-8f87-a36656c422d3"><sup class="FootNote_footnotesup__e73z_">2</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="1f341e8b-4324-44de-8f87-a36656c422d3" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline"><em>NACS State of the Industry Report</em>, NACS, 2021.</span></span></span></a></span> It is set to become even more important, as traditional “fuel-first” consumer missions (focused primarily on refueling vehicles) dwindle in comparison to “store-first” trips. In addition, excellent consumer retail has become a key differentiator in the sector, especially in fresh food service.</p> <p>Leaders in this field will combine fuel retail, EV infrastructure, tech-enabled convenience, and food service—all while responding nimbly to consumer shifts, new technology, and the needs of younger consumers.</p> <h2>Fuel is still a force, but challenged by growing trends</h2> <div data-component="mdc-c-module-wrapper" data-module-theme="light" data-module-background="lightest-grey" data-module-category="" data-module-gradient-position="bottom-right" class="mck-c-inline-module-container SideBar_mck-c-sidebar__bgimg-wrapper__Qj4Dt mck-o-sm-left-span SideBar_mck-c-sidebar__sidebar-wrapper__Dpjw2 SideBar_mck-c-sidebar__sidebar-wrapper--istablet__IQ6ii mck-u-screen-only mck-c-module-wrapper" data-layer-region="sidebar"><div class="SideBar_mck-c-sidebar__epoAm mck-o-md-center"><div class="SideBar_mck-c-sidebar__share-icons-wrapper__9gB_c"><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f mdc-c-link-container--display-column___X0HDD_2734c4f SideBar_mck-c-sidebar__share-icons___eQy6"><div data-component="mdc-c-dropdown-menu" class="mdc-c-drop-down"><button data-component="mdc-c-button" aria-label="" type="button" id="button_id" class="mdc-c-button___U4iY2_2734c4f mdc-c-button--ghost mdc-c-button--size-medium mdc-c-drop-down__rootmenu___yJzvz_2734c4f" aria-expanded="false" aria-haspopup="menu"><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mdc-c-icon--default___f-hQM_2734c4f mdc-c-icon--size-md___yi5fA_2734c4f mck-share2-icon"></span></button><div data-component="mdc-c-module-wrapper" data-module-theme="light" data-module-background="white" data-module-category="" class=""></div></div><button data-component="mdc-c-button" aria-label="Expandable Sidebar" type="button" id="button_id" class="mdc-c-button___U4iY2_2734c4f mdc-c-button--ghost mdc-c-button--size-medium SideBar_mck-c-sidebar__toggle-btn__EL8iE" aria-expanded="false" data-layer-event-prefix="UI Item" data-layer-action="click" data-layer-category="sidebar" data-layer-subcategory="open" data-layer-text="open sidebar"><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mdc-c-icon--radial___y3csX_2734c4f mdc-c-icon--size-xxl___cL3ZT_2734c4f mck-plus-no-circle-icon"></span></button></div></div><div class="SideBar_mck-c-sidebar__content-outer__UdWCq"><div class="SideBar_mck-c-sidebar__eyebrow__5GSEq"></div><div class="SideBar_mck-c-sidebar__content__raEwe"><h2 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-u-ts-3 SideBar_mck-c-sidebar__content-heading__NJekY"><div>Mobility-retail infrastructure is expanding across formats</div></h2><div class="SideBar_mck-c-sidebar__content-description__4p9iI mdc-u-ts-7"><div class="mdc-o-content-body"><p>In North America, MR sites currently fall into four main categories:</p> <ul> <li><strong>Urban walk-up or drive-through sites.</strong> Small stores in densely populated areas with heavy foot traffic</li> <li><strong>Township sites.</strong> Main-street stations that function as general stores and “go-to” food stops for town residents, often with a regional flavor</li> <li><strong>Metro or suburban mobility centers.</strong> Larger neighborhood stores with a big fuel presence, attracting crossover convenience-store traffic from commuting suburbanites</li> <li><strong>Highway sites.</strong> Big, fuel-heavy stations at major intersections, catering to users who need restrooms and food for immediate and travel use</li> </ul> <p>All these different formats are evolving and expanding in response to recent trends. The average fuel-station’s property size is now 10,000 square feet, with convenience stores accounting for almost half of that size in newer locations, as stations cater to longer visits and accommodate food service.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="101a1752-0643-4266-b366-93564e4dc50e"><sup class="FootNote_footnotesup__e73z_">1</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="101a1752-0643-4266-b366-93564e4dc50e" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">NACS State of the Industry Report, 2021.</span></span></span></a></span> The expansion of non-sales areas is being driven by several factors. These included the need for food preparation and kitchen space, refrigerated storage, increased inventory, and additional services such as mobility hubs, dark kitchens, quick-service restaurants, and car washes.</p> <p>A high-traffic location, near entertainment or retail spaces where motorists can go while charging their cars, is key to future success—along with the quality of on-site convenience stores.</p></div></div></div></div></div></div> <p>The forecourt, where drivers pull up to refuel, remains a drawcard. Most MR sites still rely on fuel sales to attract customers, with six in ten fuel buyers also making a purchase in attached convenience stores.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="7a421ae7-2106-486d-8454-3e77409b5c15"><sup class="FootNote_footnotesup__e73z_">3</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="7a421ae7-2106-486d-8454-3e77409b5c15" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">“Gas prices affect customer driving patterns,” NACS, September 29, 2022.</span></span></span></a></span> The revenue stream afforded by fuel sales is also important to recover outlays as stations expand to accommodate additional functions (see sidebar “Mobility-retail infrastructure is expanding across formats”).</p> <p>Fuel-retail margins are healthy: they hit over 30 cents per gallon in 2021 and remain high today.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="c3c6c2c8-9a5e-48ca-9c84-1514bfd5d1f8"><sup class="FootNote_footnotesup__e73z_">4</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="c3c6c2c8-9a5e-48ca-9c84-1514bfd5d1f8" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Expert interviews; NACS State of the Industry Report, NACS, 2021.</span></span></span></a></span> Other factors are expected to help maintain profits at the pump, including the recouping of credit-card fees, introduction of micro market and dynamic pricing, and the sale of premium biofuels. Industry restructuring could also play a role—with over 70 percent of the North American mobility-retail market currently owned by businesses with 50 stations or fewer, consolidation could firm up margins.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="d2108c78-681b-488b-8ab8-6d4d094e7cb6"><sup class="FootNote_footnotesup__e73z_">5</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="d2108c78-681b-488b-8ab8-6d4d094e7cb6" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">“U.S. convenience store count,” NACS, April 17, 2023.</span></span></span></a></span></p> <p>Nonetheless, volumes are under pressure from vehicle-fuel efficiency in the short term and EVs in the long. A further threat to the role of fuel as a drawcard is the slowdown in growth of the region’s car parc, due to factors such as the rise of e-hailing, which is increasingly replacing car ownership among many younger people.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="d204f791-8e88-451e-9a7f-9b9bdd71b101"><sup class="FootNote_footnotesup__e73z_">6</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="d204f791-8e88-451e-9a7f-9b9bdd71b101" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">McKinsey Center of Future of Mobility.</span></span></span></a></span></p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-disruptor1up mck-o-md-center mck-u-inline-module-border-top mck-u-inline-module-border-bottom mck-u-screen-only" data-layer-region="disruptor-1up"><div class="mdc-u-grid mdc-u-grid-gutter-md mdc-u-grid-col-lg-12 mdc-u-grid-col-md-12 "><div class="mdc-u-grid-col-md-span-12"><header data-component="mdc-c-header" class="mdc-c-header"><div class="mdc-c-header__block___i1Lg-_2734c4f"><h3 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f"><div>Would you like to learn more about our <a href="/industries/oil-and-gas/how-we-help-clients">Oil &amp; Gas Practice</a>?</div></h3></div></header><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f mdc-c-link-container--display-column___X0HDD_2734c4f mck-c-disruptor1up__content Disruptor1Up_mck-c-disruptor1up__content--links__VV4lE mdc-u-grid-gutter-md"><a data-component="mdc-c-link" href="/industries/oil-and-gas/how-we-help-clients/downstream" class="mdc-c-link-cta___NBQVi_2734c4f"><span class="mdc-c-link__label___Pfqtd_2734c4f">Visit our Downstream page</span><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mck-link-arrow-right-icon"></span></a></div></div></div></div> <h3>The e-mobility opportunity</h3> <p>E-mobility—the transition from ICE vehicles to EVs—is expected to grow steadily over the coming years as charging infrastructure matures, tech investment is incentivized, and EV vehicles become more affordable. Although it is not certain when EVs will overtake ICE vehicles in the United States, the transition is coming, and it is vital for MR businesses to be ready to adapt.</p> <p>Mobility retailers are strongly positioned for the coming e-mobility revolution. For one, charging can usually be integrated seamlessly into their existing networks. Second, their in-depth understanding of mobility consumer behavior across various domains—including B2C, B2B, and B2B2C—their proficiency in managing networks of sites in multiple formats, and how to build hybrid-energy businesses is an additional asset. Alternative fuels could also be an avenue for growth in the shorter term: an expected 7 percent growth in such fuels from 2020 to 2035 will be driven in part by biofuels’ role as a bridge to EV use.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="1365f892-c4c1-4315-a0f7-61856877f6f7"><sup class="FootNote_footnotesup__e73z_">7</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="1365f892-c4c1-4315-a0f7-61856877f6f7" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">McKinsey Energy Insights Global Retail Value Pools Outlook January 2022; EV Charging Value Pools Model; <a href="/industries/oil-and-gas/our-insights/global-energy-perspective-2022">Global Energy Perspective 2022</a>, McKinsey.</span></span></span></a></span></p> <p>Meeting the demand for EV charging infrastructure is a major opportunity for mobility retailers. This is a natural extension of the “forecourt or backcourt” station model: EV owners are even more likely than ICE vehicle drivers to patronize convenience stores while refueling and spend more when they do. The turn-in rate for EV drivers can be nearly 45 percent higher than for ICE drivers, while average food spend can be around 25 percent higher.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="c98dc66e-141f-4692-983c-1a7c7bfef65e"><sup class="FootNote_footnotesup__e73z_">8</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="c98dc66e-141f-4692-983c-1a7c7bfef65e" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">McKinsey Center for Future Mobility.</span></span></span></a></span></p> <p>The EV charging pool in North America is still relatively small, with a low percentage of “on-the-go” charging (around 40 percent compared to a global average of 55 percent). But in time, in- and out-of-home electric vehicle charging infrastructure (EVCI) will be required. Though slow to mature, this segment represents an approximately $40 billion market, with around $32 billion flowing from “on-the-go” charging.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="9a2d1e6c-8c5b-46f4-8077-766a69899ce8"><sup class="FootNote_footnotesup__e73z_">9</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="9a2d1e6c-8c5b-46f4-8077-766a69899ce8" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">McKinsey EVCI market model, January 2023.</span></span></span></a></span> Whatever the mix of infrastructure looks like in the future, the goal is the same—to encourage hybrid consumers to visit the convenience store as well as fueling or charging their vehicle.</p> <p>Nevertheless, as EVs grow more prevalent, charging will also increasingly occur at home, drawing customers away from the fuel station. In this case, simply providing charging infrastructure may not be enough. To adapt, the industry can build more destination offers, with an emphasis on the convenience store.</p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-disruptor1up mck-o-md-center mck-u-inline-module-border-top mck-u-inline-module-border-bottom mck-u-screen-only" data-layer-region="disruptor-1up"><div class="mdc-u-grid mdc-u-grid-gutter-md mdc-u-grid-col-lg-12 mdc-u-grid-col-md-12 "><div class="mdc-u-grid-col-lg-span-4 mdc-u-grid-col-md-span-5 Disruptor1Up_mck-c-disruptor1up__image___2Gc4"><picture data-component="mdc-c-picture"><img alt="&quot;&quot;" src="/~/media/mckinsey/industries/automotive%20and%20assembly/our%20insights/the%20future%20of%20mobility/qweb_future-mobility_1536x1563.jpg?cq=50&amp;mh=145&amp;car=16:9&amp;cpy=Center" loading="lazy"/></picture></div><div class="mdc-u-grid-col-lg-span-8 mdc-u-grid-col-md-span-7"><header data-component="mdc-c-header" class="mdc-c-header"><div class="mdc-c-header__block___i1Lg-_2734c4f"><h3 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f"><div>The future of mobility</div></h3></div></header><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f mdc-c-link-container--display-column___X0HDD_2734c4f mck-c-disruptor1up__content Disruptor1Up_mck-c-disruptor1up__content--links__VV4lE mdc-u-grid-gutter-md"><a data-component="mdc-c-link" href="/industries/automotive-and-assembly/our-insights/the-future-of-mobility-mobility-evolves" class="mdc-c-link-cta___NBQVi_2734c4f"><span class="mdc-c-link__label___Pfqtd_2734c4f">Explore the interactive</span><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mck-link-arrow-right-icon"></span></a></div></div></div></div> <h2>Convenience stores on the rise</h2> <p>Convenience stores (and other nonfuel businesses) are central to the continued growth and profitability of the MR sector. They represent the largest and highest-value growth pool for MRs and increasingly act as the primary customer drawcard, for whom convenience-store brand is more important than fuel brand.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="d8874f49-08a9-488f-a705-6b3ae15e4747"><sup class="FootNote_footnotesup__e73z_">10</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="d8874f49-08a9-488f-a705-6b3ae15e4747" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">McKinsey US Consumer Pulse Surveys; Dover Fuel Solutions Survey (n = 1,000 US consumers); 2022 NACS Consumer Fuels Survey (n = 1,090 US consumers).</span></span></span></a></span> The backcourt is likely to continue to grow in importance as customers move from “fuel-first” missions to “store-first.”</p> <p>Consumers are visiting convenience stores more than ever, with over half of US consumers doing so at least once a week as of 2019.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="4d8b9f38-f039-4eb9-b167-4b6ba9d2e1b4"><sup class="FootNote_footnotesup__e73z_">11</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="4d8b9f38-f039-4eb9-b167-4b6ba9d2e1b4" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Thomas Ozbun, “Frequency of convenience store visits in the United States in 2019,” Statista, January 27, 2022.</span></span></span></a></span> This trend was amplified during the COVID-19 pandemic when many consumers were attracted to local shops that offered fast, streamlined operations and a variety of products, particularly high-value, freshly prepared food and beverages. Businesses that doubled down on these strengths flourished while others fell behind.</p> <p>Customers are also spending more money per visit. This trend spiked during the COVID-19 pandemic and has maintained its growth ever since. Between 2018 and 2022, there was a 22 percent increase in the average convenience-store basket value, outdoing fuel (Exhibit 1).</p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-inline-module-container mck-o-md-center"><div class="mdc-u-grid mdc-u-grid-gutter-lg mdc-u-grid-col-sm-1 mdc-u-grid--align-start mdc-u-mb-3 GenericItem_mck-c-generic-item__sGwKL"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_2734c4f mdc-u-grid-gutter-xs GenericItem_mck-c-generic-item__content__gq1m0"><div class="mck-c-eyebrow mdc-u-ts-10"><span> 1</span></div></div></div><div class="mck-u-inline-module-border-top mck-u-inline-module-border-bottom"><picture data-component="mdc-c-picture" class="Exhibit_mck-c-exhibit__image__pyIDm"><source media="(min-width: 768px)" srcSet="/~/media/mckinsey/industries/oil%20and%20gas/our%20insights/north%20american%20mobility%20retail%20balances%20old%20and%20new%20for%20future%20success/svgz-na-mobility-retail-ex2-v2.svgz?cq=50&amp;cpy=Center"/><img alt="Post-pandemic, consumers are spending more at mobility retailers." src="/~/media/mckinsey/industries/oil%20and%20gas/our%20insights/north%20american%20mobility%20retail%20balances%20old%20and%20new%20for%20future%20success/svgz-na-mobility-retail-ex2-v2.svgz?cq=50&amp;cpy=Center" loading="lazy"/></picture></div><div class="mck-u-sr-only"></div></div> <p>These trends are expected to continue. Overall, the food service and convenience sector in North America is expected to undergo a 4.3 percent EBITDA CAGR between 2019 and 2035.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="a9e099f8-3749-4057-bc2b-53b84701f702"><sup class="FootNote_footnotesup__e73z_">12</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="a9e099f8-3749-4057-bc2b-53b84701f702" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Energy Solutions Global Retail Insights Database (GRID) 2023.</span></span></span></a></span> This growth is particularly strong in the south and west of the United States, where fuel demand is also increasing along with population growth (Exhibit 2).</p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-inline-module-container mck-o-md-center"><div class="mdc-u-grid mdc-u-grid-gutter-lg mdc-u-grid-col-sm-1 mdc-u-grid--align-start mdc-u-mb-3 GenericItem_mck-c-generic-item__sGwKL"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_2734c4f mdc-u-grid-gutter-xs GenericItem_mck-c-generic-item__content__gq1m0"><div class="mck-c-eyebrow mdc-u-ts-10"><span> 2</span></div></div></div><div class="mck-u-inline-module-border-top mck-u-inline-module-border-bottom"><picture data-component="mdc-c-picture" class="Exhibit_mck-c-exhibit__image__pyIDm"><source media="(min-width: 768px)" srcSet="/~/media/mckinsey/industries/oil%20and%20gas/our%20insights/north%20american%20mobility%20retail%20balances%20old%20and%20new%20for%20future%20success/svgz-na-mobility-retail-ex1-v2.svgz?cq=50&amp;cpy=Center"/><img alt="In the United States, convenience, foodservice, and services value pools are expected to grow." src="/~/media/mckinsey/industries/oil%20and%20gas/our%20insights/north%20american%20mobility%20retail%20balances%20old%20and%20new%20for%20future%20success/svgz-na-mobility-retail-ex1-v2.svgz?cq=50&amp;cpy=Center" loading="lazy"/></picture></div><div class="mck-u-sr-only"></div></div> <p>The convenience-store sector has also become a favorite investment opportunity for private equity firms, oil and gas companies, and regional and family-owned players looking to capitalize on high price-to-earnings ratios, steady cash flows, and promising growth. Indeed, this sector has been the primary driver of increased EBITDA multiples in M&amp;A since the COVID-19 pandemic. Given that the convenience-store sector is highly fragmented, the race is on to expand, capturing lifelong, loyal customers.</p> <p>It is crucial for MR businesses to ensure that their convenience stores are attractive to consumers, and to differentiate their offerings from competitors. The availability of high-value, freshly prepared food and beverages is a major draw. Today’s consumers also demand a quick and easy shopping experience that often includes omnichannel or other tech-enabled services.</p> <h3>Foodservice: Fresh, healthy, sustainable, and affordable</h3> <p>Foodservice trends favor fresh, ready-made foods and beverages. Currently, MR food service contributes more than half the in-store gross margin. Profits in the prepared-food category have increased by 18 percent year-on-year—while in 2021, hot dispensed-beverage profits saw a 9 percent year-on-year increase (largely because of specialty coffee sales).<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="042ba233-21be-4d7c-96a9-8dfb7051444e"><sup class="FootNote_footnotesup__e73z_">13</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="042ba233-21be-4d7c-96a9-8dfb7051444e" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">McKinsey Consumer of the Future Perspectives; McKinsey US Consumer Pulse Surveys.</span></span></span></a></span> In the same year, prepared-food sales in the United States averaged $32,000 per store per month, with a $19,000 gross margin.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="45b80eda-1d6e-425e-b976-b14aab0d3c52"><sup class="FootNote_footnotesup__e73z_">14</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="45b80eda-1d6e-425e-b976-b14aab0d3c52" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">NACS State of the Industry Report, 2021.</span></span></span></a></span></p> <p>Fresh, local food service is compatible with a global trend toward healthier and more ethical eating: two out of three consumers have changed consumption behavior due to sustainability considerations.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="1154d6e9-b47c-4ef7-adea-162880cfdfc1"><sup class="FootNote_footnotesup__e73z_">15</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="1154d6e9-b47c-4ef7-adea-162880cfdfc1" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">McKinsey US Consumer Pulse Surveys.</span></span></span></a></span> At the same time, financial struggles persist. In 2022, a <a href="/capabilities/growth-marketing-and-sales/our-insights/the-great-uncertainty-us-consumer-confidence-and-behavior-during-inflationary-times">McKinsey survey</a> found that 74 percent of US consumers were trading down to less expensive brands.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="4a44bb33-8b25-42d1-b236-4fd6c57c2cb0"><sup class="FootNote_footnotesup__e73z_">16</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="4a44bb33-8b25-42d1-b236-4fd6c57c2cb0" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Tamara Charm, Jason Rico Saavedra, Kelsey Robinson, and Tom Skiles, “<a href="/capabilities/growth-marketing-and-sales/our-insights/the-great-uncertainty-us-consumer-confidence-and-behavior-during-inflationary-times">The great uncertainty: US consumer confidence and behavior during inflationary times</a>,” McKinsey, August 16, 2022.</span></span></span></a></span> Many retailers now offer private-label brands to cater to consumers seeking value.</p> <h3>Tech-enhanced customer experience</h3> <p>Consumers of different age groups have different spending patterns in convenience stores (Exhibit 3). While baby boomers have a higher average basket value, Gen X and millennial consumers tend to visit convenience stores more often. Consumer preferences are also evolving—younger, digital-savvy consumers are eager users of new technology, have a lower tolerance for queuing, and want a quick, easy shopping experience as they refuel or recharge.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="e891117e-6b2e-4ed1-b2c7-e56b8507fa69"><sup class="FootNote_footnotesup__e73z_">17</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="e891117e-6b2e-4ed1-b2c7-e56b8507fa69" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Medallia Analysis; 2018 omni-channel apparel survey, McKinsey. Leaders and laggards are defined using the American Customer Satisfaction Index.</span></span></span></a></span> Such customers expect high-tech payment and ordering options: e-pay, pre-order, delivery, hands-free mobile voice ordering, and self-checkout. We also see a trend toward online engagement, e-commerce, and customization.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="70b7ce5a-b278-492d-8047-e02049ae6982"><sup class="FootNote_footnotesup__e73z_">18</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="70b7ce5a-b278-492d-8047-e02049ae6982" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">McKinsey Consumer of the Future Perspectives; McKinsey US Consumer Pulse Surveys; McKinsey analysis.</span></span></span></a></span></p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-inline-module-container mck-o-md-center"><div class="mdc-u-grid mdc-u-grid-gutter-lg mdc-u-grid-col-sm-1 mdc-u-grid--align-start mdc-u-mb-3 GenericItem_mck-c-generic-item__sGwKL"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_2734c4f mdc-u-grid-gutter-xs GenericItem_mck-c-generic-item__content__gq1m0"><div class="mck-c-eyebrow mdc-u-ts-10"><span> 3</span></div></div></div><div class="mck-u-inline-module-border-top mck-u-inline-module-border-bottom"><picture data-component="mdc-c-picture" class="Exhibit_mck-c-exhibit__image__pyIDm"><source media="(min-width: 768px)" srcSet="/~/media/mckinsey/industries/oil%20and%20gas/our%20insights/north%20american%20mobility%20retail%20balances%20old%20and%20new%20for%20future%20success/svgz-na-mobility-retail-ex3.svgz?cq=50&amp;cpy=Center"/><img alt="Younger generations have lower basket values but shop more frequently." src="/~/media/mckinsey/industries/oil%20and%20gas/our%20insights/north%20american%20mobility%20retail%20balances%20old%20and%20new%20for%20future%20success/svgz-na-mobility-retail-ex3.svgz?cq=50&amp;cpy=Center" loading="lazy"/></picture></div><div class="mck-u-sr-only"></div></div> <h2>Looking to the future</h2> <div data-component="mdc-c-module-wrapper" data-module-theme="light" data-module-background="lightest-grey" data-module-category="" data-module-gradient-position="bottom-right" class="mck-c-inline-module-container SideBar_mck-c-sidebar__bgimg-wrapper__Qj4Dt mck-o-sm-left-span SideBar_mck-c-sidebar__sidebar-wrapper__Dpjw2 SideBar_mck-c-sidebar__sidebar-wrapper--istablet__IQ6ii mck-u-screen-only mck-c-module-wrapper" data-layer-region="sidebar"><div class="SideBar_mck-c-sidebar__epoAm mck-o-md-center"><div class="SideBar_mck-c-sidebar__share-icons-wrapper__9gB_c"><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f mdc-c-link-container--display-column___X0HDD_2734c4f SideBar_mck-c-sidebar__share-icons___eQy6"><div data-component="mdc-c-dropdown-menu" class="mdc-c-drop-down"><button data-component="mdc-c-button" aria-label="" type="button" id="button_id" class="mdc-c-button___U4iY2_2734c4f mdc-c-button--ghost mdc-c-button--size-medium mdc-c-drop-down__rootmenu___yJzvz_2734c4f" aria-expanded="false" aria-haspopup="menu"><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mdc-c-icon--default___f-hQM_2734c4f mdc-c-icon--size-md___yi5fA_2734c4f mck-share2-icon"></span></button><div data-component="mdc-c-module-wrapper" data-module-theme="light" data-module-background="white" data-module-category="" class=""></div></div><button data-component="mdc-c-button" aria-label="Expandable Sidebar" type="button" id="button_id" class="mdc-c-button___U4iY2_2734c4f mdc-c-button--ghost mdc-c-button--size-medium SideBar_mck-c-sidebar__toggle-btn__EL8iE" aria-expanded="false" data-layer-event-prefix="UI Item" data-layer-action="click" data-layer-category="sidebar" data-layer-subcategory="open" data-layer-text="open sidebar"><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mdc-c-icon--radial___y3csX_2734c4f mdc-c-icon--size-xxl___cL3ZT_2734c4f mck-plus-no-circle-icon"></span></button></div></div><div class="SideBar_mck-c-sidebar__content-outer__UdWCq"><div class="SideBar_mck-c-sidebar__eyebrow__5GSEq"></div><div class="SideBar_mck-c-sidebar__content__raEwe"><h2 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-u-ts-3 SideBar_mck-c-sidebar__content-heading__NJekY"><div>Five strategic practices for the mobility-retail store of the future</div></h2><div class="SideBar_mck-c-sidebar__content-description__4p9iI mdc-u-ts-7"><div class="mdc-o-content-body"><p>Mobility-retail operators shaping the future of the sector are consumer-oriented and innovative. These stores may have high operating expenses but also enjoy high unit margins. They innovate technologically in key categories to grow their network, attracting new customer profiles. Five key business practices point the way:</p> <ol> <li><strong>Use zone-based pricing to maximize profits.</strong> Zone-based pricing strategy can be fine-tuned using various relevant inputs: consumer (demographics, purchase behaviors), competitive (number of competitors, market share, availability of competitor products), and economic (socioeconomic dynamics).</li> <li><strong>Integrate and deliver tech innovation.</strong> Production management can be assisted by real-time inventory tracking; food preparation by automation and predictive pick-up and delivery tracking; and checkout by touchless self-service and digital payment. Finally, AI-enabled decision making frees site managers to focus on customers.</li> <li><strong>Explore adjacent revenue streams for charging customers.</strong> Customers typically spend more time in an EV charging station than they would refueling—creating an opportunity for expanded convenience and foodservice offerings. These could include hot and fresh meals, waiting and dining areas, entertainment outlets, workstation areas, and playgrounds.</li> <li><strong>Leverage media networks to bolster sales and gather data.</strong> Mobility-retail media consists of a network of multi-value data sources: websites, pump screens, third-party platforms, apps, and in-store omnichannel presences. Retailers have started to use these to target consumer segments more effectively, and to collect, manage, and monetize data.</li> <li><strong>Use micro market analysis for EV site selection.</strong> It is important to locate charging infrastructure strategically: on highways, and in regions and metros, where demand is expected to be highest.</li> </ol></div></div></div></div></div></div> <p>Our research suggests that successful retailers will continue to leverage high traffic, diversify to serve new needs, and use strategic practices to drive growth in nonfuel services (see sidebar “Five strategic practices for the mobility-retail store of the future”). Three broad action areas will be particularly fruitful in generating revenue, hedging against changing fuel volumes and margins, and retaining customer loyalty.</p> <p><strong>Maximize the fuel business while preparing for e-mobility.</strong> Set fuel prices dynamically to drive volume and margins; market in-store fuel brands to capture market share; and develop a biofuel offering to ease the EV market transition.</p> <p><strong>Enhance operations and customer experience.</strong> Leverage next-generation merchant insights to drive performance and vendor management; reinforce loyalty via personalization, customized incentives, and enriched customer journeys; and deploy store-of-the-future technology to automate and streamline operations.</p> <p><strong>Develop innovative convenience offerings.</strong> Plan value propositions in high-growth, high-margin categories such as foodservice, and tailor value-added services to emerging customer profiles. Develop a commercial strategy (partnerships, joint ventures, and M&amp;A) to expand the in-store offer, improve margins, and strengthen the brand.</p> <hr/> <p>Retaining customers and growing one’s customer base in the complex and competitive MR sector demands a combination of retail modes: fuel, EV infrastructure, tech-enhanced customer experience, and high-quality convenience-store offerings. Although the energy transition will likely take years, the shift to e-mobility seems inevitable. Forward-looking MR players will prepare for this transition by investing now in diversified stations that cater to increasingly discerning current and future consumers.</p></div><div class="container-placeholder"></div></div></div><div class="mdc-u-grid mdc-u-grid-gutter-xl"><section role="contentinfo" data-layer-region="article-about-authors" class="mdc-u-grid mdc-u-grid-col-md-12 AboutAuthor_mck-c-about-author__nRJzu"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-11"><h5 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-c-heading--title___5qyOB_2734c4f mdc-c-heading--border___K8dj3_2734c4f mdc-u-align-center"></h5><div data-component="mdc-c-description" class="mdc-c-description___SrnQP_2734c4f mdc-u-ts-8 mck-u-links-inline mck-u-links-inline--secondary mdc-u-mt-5"><div><p><strong>Hal Adams</strong> is a senior expert in the Mckinsey&rsquo;s Houston office, where <strong><a href="/our-people/luciano-di-fiori">Luciano Di Fiori</a></strong> is a partner; <strong>Joy Anena</strong> is a consultant in the Washington office; <strong>Arjun Chopra</strong> is a consultant in the London office; <strong><a href="/our-people/valentina-ibarra">Valentina Ibarra</a></strong> is a partner in the Mexico City office; <strong>Varun Mathur</strong> is an associate partner in the Austin office; and <strong>Fay Shong</strong> is a partner in the Chicago office.</p> <p>The authors wish to thank Ruth Chun, Li Li, and Aaron Rettaliata for their contributions to this article.</p></div></div></div></section><section class="mdc-u-grid mdc-u-grid-col-md-12 mck-u-screen-only"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-5 mdc-u-grid-col-lg-end-9"><h5 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-c-heading--title___5qyOB_2734c4f mdc-c-heading--border___K8dj3_2734c4f mdc-u-align-center">Explore a career with us</h5><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f mdc-c-link-container--align-center___ar3mu_2734c4f"><a data-component="mdc-c-link" href="/careers/search-jobs" class="mdc-c-button___U4iY2_2734c4f mdc-c-button--secondary___Boipq_2734c4f mdc-c-button--size-large___jwpUy_2734c4f" aria-label="Search Openings" data-layer-event-prefix="CTA Link" data-layer-action="click" data-layer-category="careers" data-layer-subcategory="search" data-layer-text="Search Openings"><span class="mdc-c-link__label___Pfqtd_2734c4f">Search Openings</span></a></div></div></section></div></main></div><div data-component="mdc-c-module-wrapper" data-module-theme="light" data-module-background="lightest-grey" data-module-category="StandalonePromo" class="RelatedArticle_mck-c-article-related__GGA76 mck-u-screen-only" data-layer-region="related-articles"><div class="mdc-o-container__wrapper is-wrapped mdc-u-spaced-mobile"><h5 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-c-heading--title___5qyOB_2734c4f mdc-u-align-center">Related Articles</h5><div class="mdc-u-grid mdc-u-grid-col-md-2 RelatedArticle_items-container__s2uD0"><div class="mdc-u-grid mdc-u-grid-gutter-lg Card_card__diA2r Card_hover-effect__RGb9b"><div class="Card_wrapper-image__8b4P6"><a data-component="mdc-c-link" href="/industries/automotive-and-assembly/our-insights/the-future-of-mobility-mobility-evolves" class="mdc-c-link___lBbY1_2734c4f"><picture data-component="mdc-c-picture" class="Card_wrapper-image__8b4P6"><style>.picture-uniqueKey-thef-0 { aspect-ratio: 16/9 }</style><img alt="&quot;&quot;" class="picture-uniqueKey-thef-0" src="/~/media/mckinsey/industries/automotive%20and%20assembly/our%20insights/the%20future%20of%20mobility/qweb_future-mobility_1536x1563.jpg?cq=50&amp;mw=767&amp;car=16:9&amp;cpy=Center" loading="lazy"/></picture></a></div><div class="Card_wrapper-text__U6Y3k"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_2734c4f Card_content-block__pF6Z1"><span>Interactive - <i>McKinsey Quarterly</i></span><h6 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-u-ts-6"><a data-component="mdc-c-link" href="/industries/automotive-and-assembly/our-insights/the-future-of-mobility-mobility-evolves" class="mdc-c-link-heading___Zggl8_2734c4f mdc-c-link___lBbY1_2734c4f"><div>The future of mobility: Mobility evolves</div></a></h6></div></div></div><div class="mdc-u-grid mdc-u-grid-gutter-lg Card_card__diA2r Card_hover-effect__RGb9b"><div class="Card_wrapper-image__8b4P6"><a data-component="mdc-c-link" href="/industries/oil-and-gas/our-insights/fuel-retail-in-the-age-of-new-mobility" class="mdc-c-link___lBbY1_2734c4f"><picture data-component="mdc-c-picture" class="Card_wrapper-image__8b4P6"><style>.picture-uniqueKey-fuel-0 { aspect-ratio: 16/9 }</style><img alt="Fuel retail in the age of new mobility" class="picture-uniqueKey-fuel-0" src="/~/media/mckinsey/industries/oil%20and%20gas/our%20insights/fuel%20retail%20in%20the%20age%20of%20new%20mobility/gettyimages-582284500-bt-1536x1536.jpg?cq=50&amp;mw=767&amp;car=16:9&amp;cpy=Center" loading="lazy"/></picture></a></div><div class="Card_wrapper-text__U6Y3k"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_2734c4f Card_content-block__pF6Z1"><span>Article</span><h6 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-u-ts-6"><a data-component="mdc-c-link" href="/industries/oil-and-gas/our-insights/fuel-retail-in-the-age-of-new-mobility" class="mdc-c-link-heading___Zggl8_2734c4f mdc-c-link___lBbY1_2734c4f"><div>Fuel retail in the age of new mobility</div></a></h6></div></div></div></div></div></div></div></main></div><script id="__NEXT_DATA__" type="application/json">{"props":{"pageProps":{"locale":"en","dictionary":{},"sitecoreContext":{"route":{"name":"North American mobility retail balances old and new for future success","displayName":"North American mobility retail balances old and new for future success","fields":null,"databaseName":"web","deviceId":"fe5d7fdf-89c0-4d99-9aa3-b5fbd009c9f3","itemId":"bc52145e-ade0-48af-9586-aea8440321ba","itemLanguage":"en","itemVersion":1,"layoutId":"ae753eb4-a035-40b4-83bf-4b4438df6742","templateId":"683910db-02ba-40ba-92e7-726c880160a9","templateName":"ArticleJSS","placeholders":{"jss-main":[{"uid":"232bb7e9-289f-492d-a916-2b6185e44a84","componentName":"ArticleTemplate","dataSource":"","fields":{"data":{"articleTemplate":{"title":{"jsonValue":{"value":"North American mobility retail balances old and new for future success"}},"sEOTitle":{"value":""},"description":{"jsonValue":{"value":"With the growth of e-mobility and younger consumers seeking high-tech convenience, nimble North American mobility-retail players are combining old and new offerings to stay competitive."}},"sEODescription":{"value":"Mobility retail can stay competitive with a transition plan to combine fuel retail, EV infrastructure, tech-enabled convince, and food service."},"displayDate":{"jsonValue":{"value":"2023-09-08T00:00:00Z"}},"body":{"value":"[[audio 1]]\n[[DownloadsSidebar]]\n\n\u003cp\u003e\u003cstrong\u003eMobility retail (MR) has long been a profitable segment\u003c/strong\u003e of the oil and gas industry. It encompasses fuel stations and associated convenience stores as well as services such as electric vehicle charging stations and car washes. The North American MR market is the largest in the world, accounting for half of global EBITDA in the sector, and is growing at a rate of 4 to 5 percent per year.[[footnote 1]]\u003c/p\u003e\n\n[[sidebar authors]]\n\n\u003cp\u003eHowever, this arena is becoming increasingly complex. Conventional internal-combustion engine (ICE) fuel is still a critical offer that attracts consumers to sites and is likely to remain so for the near future. But fuel\u0026rsquo;s dominance is challenged by increased fuel efficiency and the rise of electric vehicles (EVs). New commuting patterns such as e-hailing are also impacting the sector. Retailers need a transition plan to keep up.\u003c/p\u003e\n\n\u003cp\u003eAlong with new EV infrastructure, fuel-station convenience-stores will be an important part of this strategy. Convenience-store retail has been a major contributor to the success of North American MR over the last two decades, and currently generates 60 percent of gross profit in the sector.[[footnote 2]] It is set to become even more important, as traditional \u0026ldquo;fuel-first\u0026rdquo; consumer missions (focused primarily on refueling vehicles) dwindle in comparison to \u0026ldquo;store-first\u0026rdquo; trips. In addition, excellent consumer retail has become a key differentiator in the sector, especially in fresh food service.\u003c/p\u003e\n\n\u003cp\u003eLeaders in this field will combine fuel retail, EV infrastructure, tech-enabled convenience, and food service\u0026mdash;all while responding nimbly to consumer shifts, new technology, and the needs of younger consumers.\u003c/p\u003e\n\n\u003ch2\u003eFuel is still a force, but challenged by growing trends\u003c/h2\u003e\n\n[[sidebar 1]]\n\n\u003cp\u003eThe forecourt, where drivers pull up to refuel, remains a drawcard. Most MR sites still rely on fuel sales to attract customers, with six in ten fuel buyers also making a purchase in attached convenience stores.[[footnote 3]] The revenue stream afforded by fuel sales is also important to recover outlays as stations expand to accommodate additional functions (see sidebar \u0026ldquo;Mobility-retail infrastructure is expanding across formats\u0026rdquo;).\u003c/p\u003e\n\n\u003cp\u003eFuel-retail margins are healthy: they hit over 30 cents per gallon in 2021 and remain high today.[[footnote 4]] Other factors are expected to help maintain profits at the pump, including the recouping of credit-card fees, introduction of micro market and dynamic pricing, and the sale of premium biofuels. Industry restructuring could also play a role\u0026mdash;with over 70 percent of the North American mobility-retail market currently owned by businesses with 50 stations or fewer, consolidation could firm up margins.[[footnote 5]]\u003c/p\u003e\n\n\u003cp\u003eNonetheless, volumes are under pressure from vehicle-fuel efficiency in the short term and EVs in the long. A further threat to the role of fuel as a drawcard is the slowdown in growth of the region\u0026rsquo;s car parc, due to factors such as the rise of e-hailing, which is increasingly replacing car ownership among many younger people.[[footnote 6]]\u003c/p\u003e\n\n[[disruptor1up learnmore]]\n\n\u003ch3\u003eThe e-mobility opportunity\u003c/h3\u003e\n\n\u003cp\u003eE-mobility\u0026mdash;the transition from ICE vehicles to EVs\u0026mdash;is expected to grow steadily over the coming years as charging infrastructure matures, tech investment is incentivized, and EV vehicles become more affordable. Although it is not certain when EVs will overtake ICE vehicles in the United States, the transition is coming, and it is vital for MR businesses to be ready to adapt.\u003c/p\u003e\n\n\u003cp\u003eMobility retailers are strongly positioned for the coming e-mobility revolution. For one, charging can usually be integrated seamlessly into their existing networks. Second, their in-depth understanding of mobility consumer behavior across various domains\u0026mdash;including B2C, B2B, and B2B2C\u0026mdash;their proficiency in managing networks of sites in multiple formats, and how to build hybrid-energy businesses is an additional asset. Alternative fuels could also be an avenue for growth in the shorter term: an expected 7 percent growth in such fuels from 2020 to 2035 will be driven in part by biofuels\u0026rsquo; role as a bridge to EV use.[[footnote 7]]\u003c/p\u003e\n\n\u003cp\u003eMeeting the demand for EV charging infrastructure is a major opportunity for mobility retailers. This is a natural extension of the \u0026ldquo;forecourt or backcourt\u0026rdquo; station model: EV owners are even more likely than ICE vehicle drivers to patronize convenience stores while refueling and spend more when they do. The turn-in rate for EV drivers can be nearly 45 percent higher than for ICE drivers, while average food spend can be around 25 percent higher.[[footnote 8]]\u003c/p\u003e\n\n\u003cp\u003eThe EV charging pool in North America is still relatively small, with a low percentage of \u0026ldquo;on-the-go\u0026rdquo; charging (around 40 percent compared to a global average of 55 percent). But in time, in- and out-of-home electric vehicle charging infrastructure (EVCI) will be required. Though slow to mature, this segment represents an approximately $40 billion market, with around $32 billion flowing from \u0026ldquo;on-the-go\u0026rdquo; charging.[[footnote 9]] Whatever the mix of infrastructure looks like in the future, the goal is the same\u0026mdash;to encourage hybrid consumers to visit the convenience store as well as fueling or charging their vehicle.\u003c/p\u003e\n\n\u003cp\u003eNevertheless, as EVs grow more prevalent, charging will also increasingly occur at home, drawing customers away from the fuel station. In this case, simply providing charging infrastructure may not be enough. To adapt, the industry can build more destination offers, with an emphasis on the convenience store.\u003c/p\u003e\n\n[[disruptor1up readnext]]\n\n\u003ch2\u003eConvenience stores on the rise\u003c/h2\u003e\n\n\u003cp\u003eConvenience stores (and other nonfuel businesses) are central to the continued growth and profitability of the MR sector. They represent the largest and highest-value growth pool for MRs and increasingly act as the primary customer drawcard, for whom convenience-store brand is more important than fuel brand.[[footnote 10]] The backcourt is likely to continue to grow in importance as customers move from \u0026ldquo;fuel-first\u0026rdquo; missions to \u0026ldquo;store-first.\u0026rdquo;\u003c/p\u003e\n\n\u003cp\u003eConsumers are visiting convenience stores more than ever, with over half of US consumers doing so at least once a week as of 2019.[[footnote 11]] This trend was amplified during the COVID-19 pandemic when many consumers were attracted to local shops that offered fast, streamlined operations and a variety of products, particularly high-value, freshly prepared food and beverages. Businesses that doubled down on these strengths flourished while others fell behind.\u003c/p\u003e\n\n\u003cp\u003eCustomers are also spending more money per visit. This trend spiked during the COVID-19 pandemic and has maintained its growth ever since. Between 2018 and 2022, there was a 22 percent increase in the average convenience-store basket value, outdoing fuel (Exhibit 1).\u003c/p\u003e\n\n[[Exhibit 1]]\n\n\u003cp\u003eThese trends are expected to continue. Overall, the food service and convenience sector in North America is expected to undergo a 4.3 percent EBITDA CAGR between 2019 and 2035.[[footnote 12]] This growth is particularly strong in the south and west of the United States, where fuel demand is also increasing along with population growth (Exhibit 2).\u003c/p\u003e\n\n[[Exhibit 2]]\n\n\u003cp\u003eThe convenience-store sector has also become a favorite investment opportunity for private equity firms, oil and gas companies, and regional and family-owned players looking to capitalize on high price-to-earnings ratios, steady cash flows, and promising growth. Indeed, this sector has been the primary driver of increased EBITDA multiples in M\u0026amp;A since the COVID-19 pandemic. Given that the convenience-store sector is highly fragmented, the race is on to expand, capturing lifelong, loyal customers.\u003c/p\u003e\n\n\u003cp\u003eIt is crucial for MR businesses to ensure that their convenience stores are attractive to consumers, and to differentiate their offerings from competitors. The availability of high-value, freshly prepared food and beverages is a major draw. Today\u0026rsquo;s consumers also demand a quick and easy shopping experience that often includes omnichannel or other tech-enabled services.\u003c/p\u003e\n\n\u003ch3\u003eFoodservice: Fresh, healthy, sustainable, and affordable\u003c/h3\u003e\n\n\u003cp\u003eFoodservice trends favor fresh, ready-made foods and beverages. Currently, MR food service contributes more than half the in-store gross margin. Profits in the prepared-food category have increased by 18 percent year-on-year\u0026mdash;while in 2021, hot dispensed-beverage profits saw a 9 percent year-on-year increase (largely because of specialty coffee sales).[[footnote 13]] In the same year, prepared-food sales in the United States averaged $32,000 per store per month, with a $19,000 gross margin.[[footnote 14]]\u003c/p\u003e\n\n\u003cp\u003eFresh, local food service is compatible with a global trend toward healthier and more ethical eating: two out of three consumers have changed consumption behavior due to sustainability considerations.[[footnote 15]] At the same time, financial struggles persist. In 2022, a \u003ca href=\"/capabilities/growth-marketing-and-sales/our-insights/the-great-uncertainty-us-consumer-confidence-and-behavior-during-inflationary-times\"\u003eMcKinsey survey\u003c/a\u003e found that 74 percent of US consumers were trading down to less expensive brands.[[footnote 16]] Many retailers now offer private-label brands to cater to consumers seeking value.\u003c/p\u003e\n\n\u003ch3\u003eTech-enhanced customer experience\u003c/h3\u003e\n\n\u003cp\u003eConsumers of different age groups have different spending patterns in convenience stores (Exhibit 3). While baby boomers have a higher average basket value, Gen X and millennial consumers tend to visit convenience stores more often. Consumer preferences are also evolving\u0026mdash;younger, digital-savvy consumers are eager users of new technology, have a lower tolerance for queuing, and want a quick, easy shopping experience as they refuel or recharge.[[footnote 17]] Such customers expect high-tech payment and ordering options: e-pay, pre-order, delivery, hands-free mobile voice ordering, and self-checkout. We also see a trend toward online engagement, e-commerce, and customization.[[footnote 18]]\u003c/p\u003e\n\n[[Exhibit 3]]\n\n\u003ch2\u003eLooking to the future\u003c/h2\u003e\n\n[[sidebar 2]]\n\n\u003cp\u003eOur research suggests that successful retailers will continue to leverage high traffic, diversify to serve new needs, and use strategic practices to drive growth in nonfuel services (see sidebar \u0026ldquo;Five strategic practices for the mobility-retail store of the future\u0026rdquo;). Three broad action areas will be particularly fruitful in generating revenue, hedging against changing fuel volumes and margins, and retaining customer loyalty.\u003c/p\u003e\n\n\u003cp\u003e\u003cstrong\u003eMaximize the fuel business while preparing for e-mobility.\u003c/strong\u003e Set fuel prices dynamically to drive volume and margins; market in-store fuel brands to capture market share; and develop a biofuel offering to ease the EV market transition.\u003c/p\u003e\n\n\u003cp\u003e\u003cstrong\u003eEnhance operations and customer experience.\u003c/strong\u003e Leverage next-generation merchant insights to drive performance and vendor management; reinforce loyalty via personalization, customized incentives, and enriched customer journeys; and deploy store-of-the-future technology to automate and streamline operations.\u003c/p\u003e\n\n\u003cp\u003e\u003cstrong\u003eDevelop innovative convenience offerings.\u003c/strong\u003e Plan value propositions in high-growth, high-margin categories such as foodservice, and tailor value-added services to emerging customer profiles. Develop a commercial strategy (partnerships, joint ventures, and M\u0026amp;A) to expand the in-store offer, improve margins, and strengthen the brand.\u003c/p\u003e\n\n\u003chr /\u003e\n\n\u003cp\u003eRetaining customers and growing one\u0026rsquo;s customer base in the complex and competitive MR sector demands a combination of retail modes: fuel, EV infrastructure, tech-enhanced customer experience, and high-quality convenience-store offerings. Although the energy transition will likely take years, the shift to e-mobility seems inevitable. Forward-looking MR players will prepare for this transition by investing now in diversified stations that cater to increasingly discerning current and future consumers.\u003c/p\u003e"},"isFullScreenInteractive":{"boolValue":false},"hideStickySocialShareBar":{"boolValue":false},"desktopID":{"value":""},"mobileID":{"value":""},"desktopURL":{"value":""},"mobileURL":{"value":""},"desktopPaddingPercentage":{"value":""},"mobilePaddingPercentage":{"value":""},"desktopOverrideHeight":{"value":""},"mobileOverrideHeight":{"value":""},"cerosOembedURL":{"value":""},"cerosRenderMode":{"targetItem":null},"cerosBackgroundColor":{"targetItem":null},"hideByLine":{"boolValue":true},"tableOfContentsTitle":{"value":"TABLE OF CONTENTS"},"accessStatus":{"targetItem":{"key":{"value":"RegisteredUsers"},"value":{"value":"Registered Users"}}},"articleType":{"targetItem":{"displayName":"Article"}},"hasSpecialReport":{"boolValue":false},"contentType":{"targetItem":{"displayName":"Article"}},"sourcePublication":{"targetItem":null},"externalPublication":{"value":""},"mobileReady":{"boolValue":true},"forClientsOnly":{"boolValue":false},"excludeFromClientLink":{"boolValue":false},"originalPublishDate":{"jsonValue":{"value":"2023-09-08T00:00:00Z"}},"footnotes":{"value":"\u003col\u003e\n \u003cli\u003eMcKinsey Energy Solutions global retail value pools outlook, January 2022; McKinsey EV charging value pools model; \u003ca href=\"/industries/oil-and-gas/our-insights/global-energy-perspective-2022\"\u003eGlobal Energy Perspective 2022\u003c/a\u003e, McKinsey.\u003c/li\u003e\n \u003cli\u003e\u003cem\u003eNACS State of the Industry Report\u003c/em\u003e, NACS, 2021.\u003c/li\u003e\n \u003cli\u003e\u0026ldquo;Gas prices affect customer driving patterns,\u0026rdquo; NACS, September 29, 2022.\u003c/li\u003e\n \u003cli\u003eExpert interviews; NACS State of the Industry Report, NACS, 2021.\u003c/li\u003e\n \u003cli\u003e\u0026ldquo;U.S. convenience store count,\u0026rdquo; NACS, April 17, 2023.\u003c/li\u003e\n \u003cli\u003eMcKinsey Center of Future of Mobility.\u003c/li\u003e\n \u003cli\u003eMcKinsey Energy Insights Global Retail Value Pools Outlook January 2022; EV Charging Value Pools Model; \u003ca href=\"/industries/oil-and-gas/our-insights/global-energy-perspective-2022\"\u003eGlobal Energy Perspective 2022\u003c/a\u003e, McKinsey.\u003c/li\u003e\n \u003cli\u003eMcKinsey Center for Future Mobility.\u003c/li\u003e\n \u003cli\u003eMcKinsey EVCI market model, January 2023.\u003c/li\u003e\n \u003cli\u003eMcKinsey US Consumer Pulse Surveys; Dover Fuel Solutions Survey (n = 1,000 US consumers); 2022 NACS Consumer Fuels Survey (n = 1,090 US consumers).\u003c/li\u003e\n \u003cli\u003eThomas Ozbun, \u0026ldquo;Frequency of convenience store visits in the United States in 2019,\u0026rdquo; Statista, January 27, 2022.\u003c/li\u003e\n \u003cli\u003eEnergy Solutions Global Retail Insights Database (GRID) 2023.\u003c/li\u003e\n \u003cli\u003eMcKinsey Consumer of the Future Perspectives; McKinsey US Consumer Pulse Surveys.\u003c/li\u003e\n \u003cli\u003eNACS State of the Industry Report, 2021.\u003c/li\u003e\n \u003cli\u003eMcKinsey US Consumer Pulse Surveys.\u003c/li\u003e\n \u003cli\u003eTamara Charm, Jason Rico Saavedra, Kelsey Robinson, and Tom Skiles, \u0026ldquo;\u003ca href=\"/capabilities/growth-marketing-and-sales/our-insights/the-great-uncertainty-us-consumer-confidence-and-behavior-during-inflationary-times\"\u003eThe great uncertainty: US consumer confidence and behavior during inflationary times\u003c/a\u003e,\u0026rdquo; McKinsey, August 16, 2022.\u003c/li\u003e\n \u003cli\u003eMedallia Analysis; 2018 omni-channel apparel survey, McKinsey. Leaders and laggards are defined using the American Customer Satisfaction Index.\u003c/li\u003e\n \u003cli\u003eMcKinsey Consumer of the Future Perspectives; McKinsey US Consumer Pulse Surveys; McKinsey analysis.\u003c/li\u003e\n\u003c/ol\u003e"},"contributoryPractice":{"targetItems":[{"displayName":"Oil \u0026 Gas"},{"displayName":"Consumer Packaged Goods"}]},"aboutTheAuthors":{"value":"\u003cp\u003e\u003cstrong\u003eHal Adams\u003c/strong\u003e is a senior expert in the Mckinsey\u0026rsquo;s Houston office, where \u003cstrong\u003e\u003ca href=\"/our-people/luciano-di-fiori\"\u003eLuciano Di Fiori\u003c/a\u003e\u003c/strong\u003e is a partner; \u003cstrong\u003eJoy Anena\u003c/strong\u003e is a consultant in the Washington office; \u003cstrong\u003eArjun Chopra\u003c/strong\u003e is a consultant in the London office; \u003cstrong\u003e\u003ca href=\"/our-people/valentina-ibarra\"\u003eValentina Ibarra\u003c/a\u003e\u003c/strong\u003e is a partner in the Mexico City office; \u003cstrong\u003eVarun Mathur\u003c/strong\u003e is an associate partner in the Austin office; and \u003cstrong\u003eFay Shong\u003c/strong\u003e is a partner in the Chicago office.\u003c/p\u003e\n\n\u003cp\u003eThe authors wish to thank Ruth Chun, Li Li, and Aaron Rettaliata for their contributions to this article.\u003c/p\u003e"},"authors":{"targetItems":[{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"E93DEB24E36543AC8624390740816805","name":"Hal Adams","authorTitle":{"value":"Hal Adams"},"description":{"value":""},"thumbnailImage":{"alt":"","src":null},"profile":{"targetItems":[]}},{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"548BD5D8DBFF49D7B8E7B954B4F079B4","name":"Joy Anena","authorTitle":{"value":"Joy Anena"},"description":{"value":""},"thumbnailImage":{"alt":"","src":null},"profile":{"targetItems":[]}},{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"B2BE9C4C5B25442D9D90AAAB9283236D","name":"Arjun Chopra","authorTitle":{"value":"Arjun Chopra"},"description":{"value":""},"thumbnailImage":{"alt":"","src":null},"profile":{"targetItems":[]}},{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"BF63D2A88B5A46078DFB6A906F47E3A7","name":"Luciano DiFiori","authorTitle":{"value":"Luciano Di Fiori"},"description":{"value":""},"thumbnailImage":{"alt":"","src":null},"profile":{"targetItems":[{"standardImage":{"src":"/~/media/mckinsey/our people/luciano di fiori/luciano-di-fiori_profile_1536x1152.jpg","alt":""},"emailLinks":{"value":""},"linkedInUrl":{"value":""},"description":{"value":"Advises clients on strategy and M\u0026A issues across North American unconventional resources, global upstream, oilfield services, and midstream, in addition to coleading Energy Solutions globally"},"locations":{"targetItems":[{"name":"Houston","displayName":"Houston"}]},"firmTitle":{"value":"Partner"},"thumbnailImage":{"alt":"","src":"/~/media/mckinsey/our people/luciano di fiori/luciano-di-fiori_headshot_988x741.jpg"},"url":{"path":"/our-people/luciano-di-fiori"}}]}},{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"86F7868C578A4755B4C797A8FD18EB09","name":"Valentina Ibarra","authorTitle":{"value":"Valentina Ibarra"},"description":{"value":""},"thumbnailImage":{"alt":"","src":null},"profile":{"targetItems":[{"standardImage":{"src":"/~/media/mckinsey/our people/valentina ibarra/valentina_ibarra_profile_1536x1152.jpg","alt":"Valentina Ibarra"},"emailLinks":{"value":"Valentina_Ibarra@mckinsey.com"},"linkedInUrl":{"value":"https://www.linkedin.com/in/valentina-ibarra-975b9718/?originalSubdomain=mx"},"description":{"value":"Serves clients in the oil and gas and global energy and basic-materials sectors in strategy, organization, and transformation across the value chain"},"locations":{"targetItems":[{"name":"Mexico City","displayName":"Mexico City"}]},"firmTitle":{"value":"Partner"},"thumbnailImage":{"alt":"Valentina Ibarra","src":"/~/media/mckinsey/our people/valentina ibarra/valentina_ibarra_headshot_988x741.jpg"},"url":{"path":"/our-people/valentina-ibarra"}}]}},{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"CD28E165056044799E997199A3EB1469","name":"Varun Mathur","authorTitle":{"value":"Varun Mathur"},"description":{"value":""},"thumbnailImage":{"alt":"","src":null},"profile":{"targetItems":[]}},{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"4F60BCE9D357441AB46ACE3F811769AC","name":"Fay Shong","authorTitle":{"value":"Fay Shong"},"description":{"value":""},"thumbnailImage":{"alt":"","src":null},"profile":{"targetItems":[]}}]},"nonPartnerAuthors":{"targetItems":[]},"interactiveToUse":{"targetItem":null},"enableArticleComponents":{"boolValue":false},"relatedArticles":{"targetItems":[{"sourcePublication":{"targetItem":{"name":"McKinsey Quarterly"}},"publicationSource":null,"externalPublication":{"value":""},"title":{"value":"The future of mobility: Mobility evolves"},"url":{"path":"/industries/automotive-and-assembly/our-insights/the-future-of-mobility-mobility-evolves"},"eyebrow":{"targetItem":{"name":"Interactive"}},"articleType":{"targetItem":{"name":"Interactive"}},"contentType":{"targetItem":{"name":"Article"}},"description":{"value":"Mobility is entering a new age of innovation. 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The average fuel-station\u0026rsquo;s property size is now 10,000 square feet, with convenience stores accounting for almost half of that size in newer locations, as stations cater to longer visits and accommodate food service.[[footnote 1]] The expansion of non-sales areas is being driven by several factors. These included the need for food preparation and kitchen space, refrigerated storage, increased inventory, and additional services such as mobility hubs, dark kitchens, quick-service restaurants, and car washes.\u003c/p\u003e\n\n\u003cp\u003eA high-traffic location, near entertainment or retail spaces where motorists can go while charging their cars, is key to future success\u0026mdash;along with the quality of on-site convenience stores.\u003c/p\u003e"}},"aboutTheAuthors":{"jsonValue":{"value":""}},"headline":{"jsonValue":{"value":"Mobility-retail infrastructure is expanding across formats"}},"footnotes":{"value":"\u003col\u003e\n \u003cli\u003eNACS State of the Industry Report, 2021.\u003c/li\u003e\n\u003c/ol\u003e"},"showShareTools":{"boolValue":true},"backgroundColor":{"targetItem":null},"gradientDirection":{"targetItem":{"key":{"value":"Bottom Right"},"value":{"value":"bottom-right"}}},"renderMode":{"targetItem":{"key":{"value":"Collapsible"},"value":{"value":"default"}}},"isAboutAuthor":{"boolValue":false},"background":{"targetItem":null},"image":{"src":null,"alt":""}},{"mediaID":{"value":"2"},"description":{"jsonValue":{"value":"\u003cp\u003eMobility-retail operators shaping the future of the sector are consumer-oriented and innovative. These stores may have high operating expenses but also enjoy high unit margins. They innovate technologically in key categories to grow their network, attracting new customer profiles. Five key business practices point the way:\u003c/p\u003e\n\n\u003col\u003e\n \u003cli\u003e\u003cstrong\u003eUse zone-based pricing to maximize profits.\u003c/strong\u003e Zone-based pricing strategy can be fine-tuned using various relevant inputs: consumer (demographics, purchase behaviors), competitive (number of competitors, market share, availability of competitor products), and economic (socioeconomic dynamics).\u003c/li\u003e\n \u003cli\u003e\u003cstrong\u003eIntegrate and deliver tech innovation.\u003c/strong\u003e Production management can be assisted by real-time inventory tracking; food preparation by automation and predictive pick-up and delivery tracking; and checkout by touchless self-service and digital payment. Finally, AI-enabled decision making frees site managers to focus on customers.\u003c/li\u003e\n \u003cli\u003e\u003cstrong\u003eExplore adjacent revenue streams for charging customers.\u003c/strong\u003e Customers typically spend more time in an EV charging station than they would refueling\u0026mdash;creating an opportunity for expanded convenience and foodservice offerings. These could include hot and fresh meals, waiting and dining areas, entertainment outlets, workstation areas, and playgrounds.\u003c/li\u003e\n \u003cli\u003e\u003cstrong\u003eLeverage media networks to bolster sales and gather data.\u003c/strong\u003e Mobility-retail media consists of a network of multi-value data sources: websites, pump screens, third-party platforms, apps, and in-store omnichannel presences. Retailers have started to use these to target consumer segments more effectively, and to collect, manage, and monetize data.\u003c/li\u003e\n \u003cli\u003e\u003cstrong\u003eUse micro market analysis for EV site selection.\u003c/strong\u003e It is important to locate charging infrastructure strategically: on highways, and in regions and metros, where demand is expected to be highest.\u003c/li\u003e\n\u003c/ol\u003e"}},"aboutTheAuthors":{"jsonValue":{"value":""}},"headline":{"jsonValue":{"value":"Five strategic practices for the mobility-retail store of the future"}},"footnotes":{"value":""},"showShareTools":{"boolValue":true},"backgroundColor":{"targetItem":null},"gradientDirection":{"targetItem":{"key":{"value":"Bottom Right"},"value":{"value":"bottom-right"}}},"renderMode":{"targetItem":{"key":{"value":"Collapsible"},"value":{"value":"default"}}},"isAboutAuthor":{"boolValue":false},"background":{"targetItem":null},"image":{"src":null,"alt":""}},{"mediaID":{"value":"authors"},"description":{"jsonValue":{"value":"\u003cp\u003eThis article is a collaborative effort by Hal Adams, Joy Anena, Arjun Chopra, \u003ca href=\"/our-people/luciano-di-fiori\"\u003eLuciano Di Fiori\u003c/a\u003e, \u003ca href=\"/our-people/valentina-ibarra\"\u003eValentina Ibarra\u003c/a\u003e, Varun Mathur, and Fay Shong, representing views from McKinsey\u0026rsquo;s Oil \u0026amp; Gas and Retail practices.\u003c/p\u003e"}},"aboutTheAuthors":{"jsonValue":{"value":""}},"headline":{"jsonValue":{"value":"About the authors"}},"footnotes":{"value":""},"showShareTools":{"boolValue":false},"backgroundColor":{"targetItem":null},"gradientDirection":{"targetItem":{"key":{"value":"Bottom Right"},"value":{"value":"bottom-right"}}},"renderMode":{"targetItem":{"key":{"value":"Collapsible"},"value":{"value":"default"}}},"isAboutAuthor":{"boolValue":false},"background":{"targetItem":null},"image":{"src":null,"alt":""}}]},"boxout":{"results":[]},"globalsidebar":{"results":[]},"video":{"results":[]},"scrollycontainer":{"results":[]},"bespokeinteractive":{"results":[]},"storycontainer":{"results":[]},"interactive":{"results":[]},"sectionheader":{"results":[]},"statementdisruptor":{"results":[]},"fullbleedphoto":{"results":[]},"tocitem":{"results":[]},"quizcontainer":{"results":[]},"generalup":{"results":[]},"twoupmedium":{"results":[]},"accordion":{"results":[]},"factoid":{"results":[]},"promobarwithquote":{"results":[]},"oneupmedium":{"results":[]},"oneupmediumquote":{"results":[]},"gridwall":{"results":[]},"twoupsmall":{"results":[]},"oneclicksubscribe":{"results":[]},"promobar":{"results":[]},"promobanner":{"results":[]},"sectionhero":{"results":[]},"threeuplinklist":{"results":[]},"table":{"results":[]},"explainertooltip":{"results":[]},"isFiveFiftyHorizontalArticle":{"boolValue":false},"fiveFifty":{"results":[]}},"contextItem":{"ancestors":[{"breadCrumbUrl":{"path":"/industries/oil-and-gas/our-insights"},"breadCrumbTitle":{"value":"Our Insights"},"isMiniSite":{"boolValue":false},"displayName":"Oil \u0026 Gas Insights","template":{"id":"85FF05307883480F9A4C82123F72FFD8"}},{"breadCrumbUrl":{"path":"/industries/oil-and-gas/how-we-help-clients"},"breadCrumbTitle":null,"isMiniSite":{"boolValue":true},"displayName":"Oil \u0026 Gas","template":{"id":"414C6C64AD35440E9668CF39D8A18CCF"}},{"breadCrumbUrl":{"path":"/industries"},"breadCrumbTitle":{"value":"Industries"},"isMiniSite":{"boolValue":false},"displayName":"Industries","template":{"id":"85FF05307883480F9A4C82123F72FFD8"}},{"breadCrumbUrl":{"path":"/"},"breadCrumbTitle":{"value":""},"isMiniSite":{"boolValue":false},"displayName":"Home","template":{"id":"85FF05307883480F9A4C82123F72FFD8"}}]}}},"placeholders":{"main-area":[],"sidebar-area":[]}}]}},"itemId":"bc52145e-ade0-48af-9586-aea8440321ba","pageEditing":false,"site":{"name":"website"},"pageState":"normal","language":"en","pageMetaData":{"alternateLanguages":[{"languageCode":"en","displayName":"English","url":"/industries/oil-and-gas/our-insights/north-american-mobility-retail-balances-old-and-new-for-future-success"}],"currentLanguage":"en","navigationLink":"industries","activeItemId":"{10891851-9CC2-4A39-8FB1-8CCCADC8B7C9}","miniSiteId":"{53CBFFC4-895F-4004-9F66-1264A87CE0EA}","officeCode":"","officeDisplayName":"","subscriptionPracticeData":null,"isAlaisedPage":false,"originalHostName":"www.mckinsey.com","updatedDate":"2023-10-23T12:13:27Z","createdDate":"2023-09-05T13:22:41Z","practice":{"isDefaultPractice":false,"name":"Energy, Resources \u0026 Materials","code":"N14","stickyTitle":"Sign up for emails on new Energy, Resources \u0026 Materials articles","stickySubtitle":"Never miss an insight. 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