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In 2023, the National Association of Convenience Stores (NACS) counted over 152,000 convenience stores in the United States. Of these, many are family-owned businesses. According to the United States Census Bureau, 90% of American businesses are family owned or operated in some way. While family-owned businesses have a reputation for being small, some family-owned c-store chains are quite large. For example, Rutter’s, a chain of over 80 stores across Pennsylvania, West Virginia, and Maryland is a 10th generation family-run business.
Though many business transitions occur when a family-operated business passes hands through generations, this is not the only possible scenario. Businesses may be passed to trusted partners from outside the family or sold to a larger company. These scenarios are becoming increasingly prevalent in the c-store industry due to younger generations’ faltering interest in running retail businesses. For instance, in 2019 EG Group acquired Cumberland Farms, a New England chain of over 500 stores, from the Haseotes family, who were in the third generation of ownership. Through acquisitions of several c-store chains, EG Group’s United-States division EG America, became the 4th largest c-store retailer in the country.
C-store experts predict that instances of family businesses selling to larger corporations will continue to rise. Family businesses experience the same struggles as other businesses, such as rising inflation, employee turnover rates, and shrinking demand for fuel as electric vehicles rise. However, they also experience unique challenges that make them different from other businesses. For example, finding a successor may be challenging in a family where there is no apparent interest from the next generation. The opposite problem may also exist, where multiple interested family members argue over who is best suited to take over. From the single store operators to massive chains, transferring power in a family business can sound like a daunting undertaking. However, it also provides an opportunity to grow a thriving business.
According to a study published by the Harvard Business Review, the time to transition a family business often coincides with a natural transition in a business and can be a time of opportunity. Some businesses may use this opportunity to expand into multiple locations, diversify offerings, or make fundamental changes. These opportunities can lead to expansion in services, such as adding food service or car washes to c-stores, or improvements in retail technology.
Many small businesses owners may still operate the way they did when they first began their business, leading to an opportunity to upgrade when the business changes hands. Possible upgrades can include adopting a back-office system, improving point-of-sale hardware, and adding a loss prevention system. These technological changes have several benefits, which include streamlining operations and improving profitability.
Interested in learning more about what struggles and opportunities arise when you transfer your business to the next generation? Register for our webinar with NACS on September 19th, 2024!
