The modern American convenience store turns 50
John Roscoe, a forefather of the modern convenience store, changed the way that people pay for gas.
On June 10, 1964, Roscoe began offering self-service gasoline at his Big Top convenience store in Westminster, Colo., outside Denver, from a 2,400-square-foot building that sold grocery staples such as milk, bread and soda. This was a radical idea at the time, when the vast majority of gas stations were full-service and convenience stores were unknown to many people. In fact, the then-34-year-old, who owned a chain of Big Top stores, was skeptical when his banker suggested it.
Roscoe's unease was understandable. Fifty years ago, most state fire codes prohibited self-fueling because of concerns about the potential fire hazard. Those restrictions eased over time, although New Jersey and Oregon continue to prohibit consumers from pumping their own gas. To attract customers to his station, Roscoe advertised on billboards and in flyers stuffed in grocery bags at his stores.
"It was a different idea," said Roscoe, who now lives in California, adding that once the business got going it took him "30 seconds" to realize that he was on to something. "Whenever you see people spend money, you will never turn them off," he said.
Though 7-Eleven traces its roots to 1927, it didn't began offering self-service gasoline until the late 1960s, according to a company spokeswoman. Wawa, a convenience store chain that's prominent in the East Coast, also is celebrating its 50th anniversary. The chain first began selling gasoline in the 1970s, but quit the business in the 1980s. A decade later, it began selling gasoline again and now is one of the largest sellers of fuel in the country.
When Roscoe' Big Top first opened, oil companies owned most gas stations, and at the time they earned a 10-cent profit on each gallon of gasoline, which sold for 20 to 30 cents. Operating a gas station today is much more expensive because costs are much higher. Gross margins for today's stations are about 18 cents per gallon, which after expenses including credit card fees is about 3 cents per gallon. Independent businesspeople own most gas stations, even the ones that display well-known oil brands such as Exxon (XOM) and Chevron (CVX).
Combining gas pumps with groceries "not only changed fueling, but the concept of self-serve that we know today," said Jeff Lenard, vice president of strategic industry initiatives for the National Association of Convenience Stores (NACS), in a press release. "Because it was so unique, it took a good decade to truly catch on, but once it did, convenience stores quickly became the country's dominant fueling stations, and other modern conveniences like to-go coffee, self-serve fountain soda and ATMs."
Roscoe, one of the founders of NACS, wanted to share the news of his good fortune with the rest of the industry at the 1964 NACS annual meeting. He was offered the chance to address the organization's members on a panel titled "New Concepts of Merchandising for Profit." But his talk didn't generate much interest.
"I was with a person on the panel who operated a meat market in Oregon. After the presentations, all of the questions from the floor were directed to the meat market operator. Gasoline sparked no one's interest," Roscoe said in the press release.
Of course, that's changed. Fuel is an integral part of many convenience stores, accounting for about $490 billion of the industry's $700 billion in total sales. And convenience stores now account for roughly 80 percent of U.S. fuel sales and 4.5 percent of GDP.
Editor's note: This story was updated at 3:40 pm ET to add background on the history of 7-Eleven and Wawa.
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