The Forecourt White Space: Where Fuel Demand Outran Modern Supply

Most gas-station deals are underwritten on the wrong number. A sponsor projects gallons, applies a per-gallon margin, and presents a fuel business. But in 2025 motor fuel accounted for roughly 65 percent of convenience-store industry sales dollars and only 38.8 percent of gross profit, while foodservice generated 38.9 percent of in-store gross profit on 28.5 percent of in-store sales, according to the NACS 2025 State of the Industry data released April 15, 2026. Fuel is the traffic driver. The inside store is the profit engine. A feasibility study that underwrites a new forecourt on gallons rather than on the blended inside-sales and foodservice model is measuring the wrong asset, and it will mislead the lender about where the underserved opportunity actually sits.

This note lays out the case a credit committee should see: why gallons are the wrong unit of analysis, why fuel demand is eroding gradually rather than collapsing, where population growth has genuinely outrun modern forecourt supply, and how the financing math has shifted in the developer's favor as of mid-2026. The through-line is simple. The best white space is where four conditions overlap, and the discipline is refusing to build anywhere they do not.

Why gallons are the wrong unit of underwriting

Start with the margin structure, because it inverts the intuition almost every first-time sponsor brings to the table. Retail gasoline gross margin has averaged roughly 35 to 40 cents per gallon over the past five years, with OPIS pegging it at 35.7 cents in its January 30, 2025 report, up structurally from the 22 to 24 cents that prevailed from 2014 to 2019 — in the industry's phrase, "40 cents is the new 20 cents." But that gross figure is not what reaches the operator. After roughly 8.4 cents per gallon in card fees, about 6 cents in store operating expense, 2 cents of amortization, and a cent of inventory loss, net profit lands at only a few cents per gallon, on the order of three to seven. A NACS consumer survey found 45 percent of drivers believe retailers make at least $2 a gallon. That misperception is the foundation of the "fuel is the business" fallacy, and it is the first thing an underwriter has to discard.

Foodservice is where the profit concentrates, and its share is climbing. It contributed 28.5 percent of in-store sales but 38.9 percent of in-store gross-profit dollars in 2025 (up from 28.7 percent of sales and 39.6 percent of margin in 2024, and from just 11.9 percent of in-store sales two decades earlier). Within foodservice, prepared food is now the largest and fastest-growing segment at 73.9 percent of foodservice sales, up from 66.4 percent in 2021; packaged beverages are the number-two in-store category at 18.7 percent of sales. Roughly one-third of convenience-store shoppers plan to visit a quick-service restaurant within thirty minutes — an estimated $100 billion a year the channel currently cedes to fast food, and precisely the upside a modern foodservice-led format is designed to recapture. The underwriting consequence is direct: model gallons as a traffic driver, and build the pro forma on the inside store.

Fuel demand is eroding, not collapsing

The second thing a lender needs settled is the durability of demand, because a fuel-anchored loan can run twenty-five years and the cliff narrative that dominated underwriting two years ago has not materialized. U.S. motor gasoline consumption averaged 8.9 million barrels a day in 2025, 1 percent below 2024 and about 4 percent under the 2019 pre-pandemic peak, per the EIA's April 2026 Short-Term Energy Outlook. The mechanism matters for underwriting: vehicle miles traveled actually rose 1.2 percent in 2025, but fleet fuel economy improved 1.9 percent, so efficiency outran the additional driving. In its February 2026 STEO, the EIA projects gasoline consumption "would decrease by about 1% in 2026 and continue to decline in 2027" — the only one of the three primary transportation fuels it expects to fall — as "improvements in vehicle efficiency allow drivers to travel farther while using less fuel," with slowing VMT growth tied to a weak 0.3 percent employment forecast against a 2010–2019 average of 1.4 percent.

The long horizon tells the same story at a slower cadence. The EIA's Annual Energy Outlook projections — explicitly modeled scenarios, not predictions — show gasoline demand in gradual structural decline through 2050, a modest near-term plateau followed by steady erosion from efficiency and, in policy-enforcement cases, EV adoption. Transportation-sector energy use falls in every case, from 27 quads in 2025 to 21–25 quads in 2050, and in the Alternative Transportation case 2050 gasoline consumption sits about 2.3 million barrels a day above baseline, which means the baseline itself already embeds meaningful decline. The correct word is erosion, not collapse, and that distinction is the single most important framing for any long-horizon fuel-anchored credit.

Diesel is the resilient counter-story

Gasoline's gentle decline is not the whole demand picture, and the counterweight is diesel. The EIA (February 2026 STEO) forecasts total U.S. distillate consumption — diesel, renewable diesel, and biodiesel — to rise about 2 percent in both 2026 and 2027, reaching record highs by 2027, driven by GDP and industrial and trucking activity on an S&P Global macro model. In 2025, transportation-sector diesel consumption ran roughly 2.94 million barrels a day, about 123 million gallons a day and some 75 percent of total distillate use. That makes diesel-capable travel centers and rural, agricultural, and freight-corridor sites structurally attractive even as gasoline plateaus — a distinct demand pool that a gasoline-only site cannot reach.

The EV cliff moved away from the cliff

The demand case only holds if the electric-vehicle transition stays on the slower track it settled onto in 2025, so the evidence is worth stating plainly. EVs made up 7.8 percent of new-car sales in 2025, down from 8.1 percent in 2024 — the first annual decline of the modern EV era. Share crested above 10 percent in the third quarter before falling to 5.8 percent in the fourth after the $7,500 federal tax credit expired September 30, 2025, eliminated under the "One Big Beautiful Bill." Cox Automotive (December 2025) put full-year EV sales down about 2.1 percent to roughly 1.275 million units, and battery-electric registrations in the first quarter of 2026 fell 28 percent year over year. The forecasters followed the data down: BloombergNEF cut its 2030 EV-share forecast to 24 percent from 46 percent in 2024, and the IEA cut its 2030 light-duty EV forecast to 20 percent from 50 percent. The underwriting takeaway is that gasoline demand is far more durable than headline forecasts implied even eighteen months ago, particularly in rural areas, among commercial vehicles, and given slow fleet turnover.

Market structure: consolidating at the top, fragmented at the base

With demand framed, turn to supply. The U.S. had 151,975 convenience stores as of December 31, 2025, down 280 or 0.2 percent year over year — the second straight annual decline — yet the number selling fuel rose 768 to 122,620, the highest count in eight years. The base is strikingly fragmented: 63 percent of stores are owned by operators with ten or fewer locations, and the top ten owners together control under a third of sites. The industry generated $837.4 billion in total sales in 2024 and $817.5 billion in 2025, the dip driven by a 5.9 percent drop in the average gas price, from $3.30 to $3.11, even as gallons ticked up. Independent site-mapping firm Orbital counted 145,158 active gas stations in April 2026. Convenience stores sell an estimated 80 percent of the fuel purchased in the country, and 93 percent of Americans live within ten minutes of a station — a saturated national average that nonetheless masks real submarket gaps.

A note on market-size figures, because they are easy to conflate. IBISWorld sizes the narrower "Gas Stations" NAICS segment at $122.2 billion in its 2026 edition, declining at roughly a 1.9 percent annual rate from 2021 to 2026, and the broader "Gas Stations with Convenience Stores" category at about $549 to $553 billion. These measure different universes than the NACS $817 to $837 billion total-industry figure and should not be read as competing estimates of the same market.

Where the white space actually is

The national benchmark is one convenience store per 2,257 people against a 2025 population of 343 million — a ratio that has risen from one per 2,204 in 2023, meaning stores per capita are slowly falling even as population grows. That divergence is the essence of the white-space opportunity: demand accreting faster than modern forecourt supply. By raw count the market is concentrated in the large states — Texas 16,504 stores, California 12,143, Florida 9,730, New York 7,561, Georgia 7,092, Ohio 5,833, North Carolina 5,799, Michigan 4,957, Pennsylvania 4,784, and Illinois 4,708, with Alaska the fewest at 185 (2026 NACS/NIQ counts). Counts rose in 22 states, led by Texas (+88), Georgia (+39), and Ohio (+38), while New York (−143), Massachusetts (−77), and New Jersey (−61) declined most.

The opportunity, though, is where growth has outrun that supply. Population grew fastest in 2024 in Florida (+2.04 percent), Texas (+1.83 percent), Utah (+1.75 percent), South Carolina (+1.69 percent), and Nevada (+1.65 percent); over 2020–2025, Idaho (+10.4 percent), Florida (+8.9 percent), and Texas (+8.8 percent) led in percentage terms. Texas added the most residents, roughly 391,000 in a single year and about 2.5 million since 2020, while Florida added some 1.9 million since 2020. Converting counts to a per-capita read (our calculation from NACS counts and Census populations) isolates where the supply has genuinely lagged.

Florida is the standout: modestly under-stored versus the national average despite rapid growth, the clearest large-market white-space signal in the data. Texas, North Carolina, and Georgia are better supplied on average, which does not close the door but relocates the opportunity to specific exurbs and traffic corridors rather than the state as a whole. That is the analytical point — a statewide average is a screening tool, not a site thesis.

Reading the state demand-pressure signal

A second screen approaches the same question from the demand side. A directional state-level demand-pressure estimate — dividing 2024 EIA state gasoline demand by 2023 Census-derived station counts — approximates gallons per day flowing through the average station in each state. It is a statewide signal, not parcel- or trade-area-level unmet demand, but it usefully flags where each existing outlet is carrying the most volume.

Read together with the growth and density data, the two screens converge on a practical shortlist. The markets where demand pressure, population growth, highway traffic, freight corridors, and development feasibility overlap are Arizona, Florida, Utah, Nevada, Colorado, Texas, Virginia, Washington, and the Carolinas. The high-barrier states — California, New Jersey, Maryland, Hawaii, Oregon — show strong demand pressure but harder entitlement, land, labor, and fuel-blend constraints, which tilts them toward redevelopment of obsolete stations rather than greenfield builds. And the rural and freight angle is its own thesis: about 71 percent of Casey's stores serve towns under 20,000 people, diesel-capable interstate travel centers address a national truck-parking shortage (TravelCenters of America added more than 1,100 spaces in the first half of 2024), and the winning rural format bundles gasoline, high-speed diesel and DEF, foodservice, restrooms, and local services to capture exactly the record distillate demand the EIA forecasts for 2027.

The chains are voting with private capital

The most persuasive validation of the white-space thesis is that the best-capitalized operators are building into it, and their expansion maps onto the growth corridors above. Buc-ee's lists 55 locations across 12 states and is entering roughly 8 new ones — Arizona and Arkansas in 2025; Wisconsin, Kansas, and Louisiana in 2027; North Carolina in 2028 — targeting more than 70 locations across nearly 20 states. Each new store runs $60 to $95 million (the Kansas City, Kansas site broke ground in October 2025 at $94.8 million all-in), on 25 to 36 acres of land bought outright for $6.5 to $11.5 million, and generates $55 to $93 million per store against a national convenience-store average near $5.5 million; the Huber Heights, Ohio opening reportedly booked more than $1 million in sales on its first day. Casey's operated 2,893 stores across 20 states as of January 31, 2025, acquired the 198-unit CEFCO (Fikes) chain for $1.1 billion in November 2024 to enter Alabama, Florida, and Mississippi, and was building seven-plus new Texas stores in 2025 — with about 71 percent of its stores in towns under 20,000, a direct proof point for underserved small-town and exurban demand.

The pattern extends across the field. Circle K (Couche-Tard) plans 500-plus new North American stores by fiscal 2028, tripling its Wisconsin presence and doubling New York. 7-Eleven runs roughly 13,000 U.S. sites after absorbing Speedway and Stripes and has 600-plus new locations planned alongside 400-plus closures and a $520 million sale-leaseback program. Among the travel-center majors, Pilot Flying J operates 675 travel centers plus 82 fuel-only sites (wholly owned by Berkshire Hathaway since January 2024) serving 1.2 million guests a day, and Love's opened 18 new locations in 2025 against a target of 20, backed by $1 billion in upgrades. One consolidation did not happen: Alimentation Couche-Tard withdrew its roughly $47 billion bid for Seven & i Holdings, 7-Eleven's parent, on July 16–17, 2025, citing a lack of engagement — ending what would have been the largest-ever foreign takeover of a Japanese company and leaving the North American landscape without its biggest potential consolidation, and its white space intact for independents.

What makes a forecourt financeable

Site selection is where a market thesis becomes a specific parcel, and the thresholds are well established. Industry convention holds that a fueling site needs about 20,000 to 25,000-plus average daily traffic on its primary frontage road, with some operators specifying 30,000; Refuel Market's public criteria require a minimum of 25,000 vehicles a day, a roughly two-acre lot (four to five acres where diesel is segregated), an approximately 4,800-square-foot building, eight multiproduct dispensers, and a signalized corner. Smaller convenience stores work a "Goldilocks Zone" of 5,000 to 15,000 vehicles a day that balances pass-by capture against the ability to secure direct access. Access geometry is not a detail: hard-corner signalized parcels appraise at two to three times comparable mid-block lots, and a full-movement median cut can lift capture rate 15 to 30 percent over a right-in, right-out configuration.

Development budgets for a new-to-industry gas station plus convenience store commonly run $2 to $6 million or more (2024–2025), from $1.5 to $3 million for small independents to $2.5 to $6 million for a mid-size store, with large travel plazas well beyond. One detailed eight-dispenser, 3,024-square-foot model totaled about $6.07 million, with land near $750,000 (12.4 percent) and financing costs around $460,000 (7.6 percent) at 80 percent loan-to-cost; the full range of market-entry approaches spans roughly $250,000 to lease an existing site up to $7 million-plus for a ground-up build, before $50,000 to $150,000 of initial inventory and a $40,000 to $60,000 first fuel fill.

The unit economics explain why the inside store, not the pump, decides financeability. Per an MSSA analysis of NACS data, average store operating profit rose from about $30,000 a month in July 2019 to roughly $75,000 a month in 2024, and net profit per store averaged about $46,000 a month in May 2024 against roughly $11,000 in July 2019. The average fueling site sold 186,572 gallons in 2023, up from 152,608 in 2009, and the national average basket is about $7.83. The most telling figure is from the first half of 2024: inside merchandise per transaction showed a basket of $8.98, cost of goods of $5.84, and facility plus labor of $1.88, leaving inside operating profit per transaction of negative $0.11. In other words, fuel margin is what keeps many stores profitable today — and the bankable interpretation follows directly. A site that depends on commodity fuel margin to break even is fragile; a site with genuine foodservice depth controls its own profitability and is the more financeable asset.

The financing tailwind

The capital structure just got materially friendlier, and it is worth putting the specifics in front of a lender. SBA 7(a) and 504 loans are the workhorses of gas-station and convenience-store acquisition and development. Effective July 4, 2026, SBA Policy Notice 5000-879058 — announced May 18, 2026 by Administrator Kelly Loeffler under SBA News Release 26-52 — decoupled the two programs: a borrower who secures a 7(a) first can now access up to $5 million in 7(a) plus up to $5 million in 504, a combined $10 million, double the prior $5 million cumulative cap and described by the SBA as "the highest level in agency history." Given typical $2 to $6 million-plus build costs, that lets a single project pair long-term 504 real-estate and equipment financing with 7(a) working capital and still sit comfortably inside the guarantee umbrella. Alongside it, 100 percent bonus depreciation was made permanent in July 2025 under the "One Big Beautiful Bill" — a direct boost to development economics.

Valuation has moved the other way, which favors buyers and disciplined developers. Single-tenant convenience-store and gas-station net-lease cap rates averaged about 5.6 percent in 2023, up from roughly 4.8 percent in 2021, and a first-quarter 2025 segment average reached about 6.96 percent, rising for nine consecutive quarters from a 5.60 percent low at the end of 2022. Credit quality still sorts the field.

STAX Real Estate (2026) frames the operating side alongside the real estate: corporate-backed triple-net in Florida and the Carolinas at 5.00 to 5.50 percent caps, "business-only" operating deals at 2.5 to 4.0 times EBITDA, and owner-operator deals including the real estate at roughly 8 times EBITDA (a 7 to 9 times range). The recurring signal is that convenience depth and tenant credit both compress the rate — another reason the inside store, not the gallonage, drives the value.

Underwriting an underserved forecourt

Pulling the threads together yields a disciplined sequence rather than a single number. First, target the overlap, not the average: prioritize markets where growing gasoline and population demand, thin modern-forecourt supply, strong traffic and access, and a retail concept that captures inside sales all coincide. The shortlist is Florida (confirmed under-stored, plus 1.9 million residents since 2020) alongside growth corridors in Arizona, Utah, Nevada, Colorado, the Texas exurbs, Virginia's I-95 and I-81, and the Carolinas. The screening benchmarks are concrete: primary frontage AADT of 25,000 or more and a signalized hard corner, with local density below one modern forecourt per roughly 2,257 residents in a growth submarket reading as a buy signal.

Second, underwrite the blend and weight the inside store. Model gallons only as a traffic driver, require genuine foodservice depth approaching the national mix of roughly 28 to 29 percent of in-store sales and about 39 percent of in-store gross profit, and reject sites that need commodity fuel margin to break even — the first-half-2024 inside operating profit of negative $0.11 per transaction is the reason foodservice depth is what converts a fragile site into a financeable one. Stress-test the pro forma under low, base, and high fuel-margin scenarios, given net fuel profit of only a few cents a gallon. Third, optimize the capital stack: use the new $10 million combined 7(a)-plus-504 structure to pair 504 real-estate and equipment financing with 7(a) working capital, capture permanent bonus depreciation, and secure a branded fuel-supply agreement to lock volume and improve fuel-quality perception. Fourth, hedge the transition: design electrical capacity and site layout for optional future EV charging without over-investing today, and add diesel, DEF, and fleet-card capability on freight, rural, and agricultural corridors to capture the record distillate demand forecast for 2027.

Finally, name the risks the way a reviewer will. The EV transition is real but now on a slower timeline; fuel-price volatility keeps margins thin and variable; environmental liability from underground storage tanks can run $20,000 to $100,000-plus in remediation; labor is tight and the industry paid a record roughly $21.3 billion in card fees in 2025; and entitlement risk spans zoning, median cuts, and reformulated-gasoline blend requirements covering parts of 17 states plus the District of Columbia, about 25 percent of U.S. gasoline. Four thresholds would change the strategy: EV share in a target state resuming a sustained climb past the high teens; reinstatement of federal EV incentives or state zero-emission mandates; local station density falling below one modern forecourt per roughly 2,257 residents in a growth submarket (a buy signal); or sustained fuel margins compressing back toward the pre-2019 22 to 24 cents a gallon (a caution signal for fuel-dependent sites). Underwrite to those triggers, weight the inside store, and the underserved forecourt is one of the more financeable small-format developments in the current market.