New insights into c-stores in Arizona. From the leading chains to the lottery revenues and commissions, read on to discover this market.
Why lottery and c-stores?
Not surprisingly, it turns out that most people buy their lottery tickets from convenience stores/gas stations. In Arizona, that figure is over 64% of all lottery sales. C-stores lead in this space along with cigarettes and fuel.
How many states offer a lottery?
Most states sell lottery with the exception of Alabama, Alaska, Hawaii, Nevada, and Utah (see the map below). Mississippi was the sixth state until recently with the launch of its lotto in 2019.
What does the Arizona Commission say about c-stores?
There are 2,182 c-stores in Arizona that sell lottery (table below). About 40% are independent which means that chains, specifically Circle-K, dominate this state.
Do all c-stores sell lottery in Arizona?
We can be pretty confident that most do. Why? The number of stores matches up pretty well to both NACS and the US Census Bureau’s reported total c-store locations of 2,217 and 2,011.
| Business Classification | # of Accts | % of Accts |
| Shopping Malls | 4 | 0.1% |
| Smoke/Gift Shops – Newstands | 106 | 3.3% |
| Chain Supermarkets | 478 | 15.1% |
| Independent Supermarkets | 47 | 1.5% |
| Chain Convenience Stores | 1,162 | 36.6% |
| Independent Convenience | 872 | 27.5% |
| Liquor Stores | 98 | 3.1% |
| Drug Stores | 4 | 0.1% |
| Auto/Gas Stations | 148 | 4.7% |
| Truck Service Centers | 48 | 1.5% |
| Bars/Restaurants | 75 | 2.4% |
| Spec Non-Grocery | 103 | 3.2% |
| Bowling Centers | 3 | 0.1% |
| Mass Merchandise | 1 | 0.0% |
| In-House & Promotional | 23 | 0.7% |
| Total | 3,172 | 100% |
| Chain/Indpt Supermarkets | 525 | 16.6% |
| Total Convenience Stores | 2,182 | 68.8% |
| Other Classifications | 465 | 14.7% |
| Total All Classifications | 3,172 | 100% |
C-store chains that dominate Arizona.
It’s clear that Circle-K dominates this geography with almost 50% of all convenience chain locations (see table below). Still, there is a good group of smaller chains and independents to give consumers a choice in where to buy their smokes, cokes, and lotto. How much did they make in lotto sales?
| Top Retailers | # of Accts | % of Accts |
| 4 Sons | 21 | 0.7% |
| 7-Eleven | 56 | 1.8% |
| Carioca | 36 | 1.2% |
| Circle K | 613 | 19.8% |
| Cobblestone | 12 | 0.4% |
| Fry’s Gas | 93 | 3.0% |
| Good 2 Go | 17 | 0.5% |
| Jackson’s Food Stores | 11 | 0.4% |
| Loves | 12 | 0.4% |
| Maverik | 22 | 0.7% |
| Pilot Travel Centers | 18 | 0.6% |
| Quik Mart | 23 | 0.7% |
| QuikTrip | 114 | 3.7% |
| Quik-Way Retail | 24 | 0.8% |
| Safeway Gas | 31 | 1.0% |
| Shay’s | 21 | 0.7% |
| Superpumper | 13 | 0.4% |
| Terribles | 9 | 0.3% |
| Woody’s | 15 | 0.5% |
| Speedway | 77 | 2.5% |
| Convenience Total | 1,238 | 40.0% |
| Albertson’s | 30 | 1.0% |
| Bashas’ | 47 | 1.5% |
| El Super | 6 | 0.2% |
| Food City | 46 | 1.5% |
| Fry’s | 121 | 3.9% |
| Los Altos Ranch Market | 7 | 0.2% |
| Safeway | 105 | 3.4% |
| Walmart | 85 | 2.7% |
| Food Store Total | 447 | 14.5% |
| Major Chains | 1,685 | 54.5% |
| All Stores | 3,092 | 100% |
Average lottery revenue and commissions per c-store (Jul – Dec 2019).
The below averages show that c-stores (chains and independents) are second only to supermarkets in lottery sales. Since these figures reflect only half the year, we can expect that a chain will earn about $24K in commissions per store per year and an independent will earn about $13K.
Lottery and category affinity.
When viewing lottery, just like any other category, it’s also important to view the basket. In previous NACS SOI presentations, some of the items that had a high affinity with lottery purchases were newspapers, bakery items, coffee, cigarettes, soda, bottled water, prepared foods, pizza, and energy drinks.
| Business Classification | Share | Avg Sales | Avg Commission |
| Shopping Malls | 0.00% | $20,041 | $1,303 |
| Smoke/Gift Shops – Newstands | 0.90% | $39,253 | $2,551 |
| Chain Supermarkets | 26.80% | $268,421 | $17,447 |
| Independent Supermarkets | 0.80% | $86,550 | $5,626 |
| Chain Convenience Stores | 45.40% | $187,118 | $12,163 |
| Independent Convenience | 18.50% | $101,777 | $6,615 |
| Liquor Stores | 1.30% | $61,989 | $4,029 |
| Drug Stores | 0.00% | $15,951 | $1,037 |
| Auto/Gas Stations | 2.80% | $91,197 | $5,928 |
| Truck Service Centers | 0.90% | $94,552 | $6,146 |
| Bars/Restaurants | 0.80% | $51,935 | $3,376 |
| Spec Non-Grocery | 0.90% | $42,597 | $2,769 |
| Bowling Centers | 0.00% | $37,921 | $2,465 |
| Mass Merchandise | 0.00% | $31,009 | $2,016 |
| In-House & Promotional | 0.70% | $152,015 | $9,881 |
| Total | 100% | $150,975 |
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