business news in context, analysis with attitude

Following a successful three-year test, Jack In The Box Inc. has announced that it will open between 100 and 150 24-hour c-stores, including gas pumps, next to its full-sized fast food restaurants over the next five years.

The stores, called “Quick Stuff,” are wholly owned by Jack In The Box, using a variety of gasoline brands, depending on the market. The fast food chain tested a joint venture with Arco a decade ago, but has found that it likes being in control of its own destiny.

According to a story in The Wall Street Journal, the move on the part of Jack In The Box is in part made to differentiate itself from the fast food competition, and in part made because c-stores increasingly are installing fast food franchises and competing with the chains. But there’s another reason, and it has to do with growth: while McDonald’s, the largest fast food operator in the US, has about 43 percent of the market, the largest c-store chain, 7-Eleven, has just a four percent share of the convenience market.
KC's View:
Which means that the industry is ripe for these kinds of strategic moves, not to mention mergers and acquisitions that combine retail venues from different segments.

One can imagine that this move could open the floodgates. McDonald’s could open its own chain of c-stores, or just acquire some. Wal-Mart, Costco, Albertsons or any of the major players in the supercenter, wholesale club and supermarket industries could do the same.

That sound you hear is that of formerly immovable walls coming tumbling down…