Convenience Store News

MAR 2017

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WWW.CSNEWS.COM | MARCH 2017 | Convenience Store News 35 perspective, there are two factors at play: People are still making pretty good money in their stores and not looking to sell; and continued M&A activity is shrink- ing the pool of potential buyers in the market. "Take the Couche-Tard acquisition of CST; they will also wind up owning the general partner of CrossAmerica Partners. That really takes a poten- tial large buyer out of the game. You had CST and CrossAmerica bidding on these deals and, all of a sud- den with Couche-Tard, it's going to be one company," Ruben explained. "What we believe is where you are going to see more acquisitions is in the small to mid-sized compa- nies. There is going to be increasing pressure on the guys who have 25 to 75 stores," he continued. "It's going to be more difficult for them to compete with these very large players." So, the question then becomes how can a mid-sized operator grow — unless they can negotiate a deal with — more than all of this year's growth chains com- bined. Overall, the 2017 CSNews Top 20 Growth Chains added a net 1,396 stores to their portfolios between January 2016 and January 2017, equating to a 5.9-percent increase for the year. That's 1,763 stores less than what last year's Top 20 Growth Chains added (3,159 stores for a 12.3-percent increase). This may be the new normal, according to Monroe. The Top 100 convenience store chains in the United States feature a few big retailers, like 7-Eleven Inc. and Couche-Tard, but then it falls off into the 500 or below number as far as store count goes. "Look at Yesway. They came into the marketplace saying they were going to have 1,000 stores in no time and be a big player. They are having a hard time getting to first base because there are not that many chains of stores to acquire," said Monroe. Ruben echoed this insight, pointing out "there are fewer deals, fewer big companies out there." From his No. 9 Pilot Flying J Knoxville, Tenn. 2017 Store Count : 652 2016 Store Count : 598 Increase: 54 (9%) About the company's growth: Pilot Flying J achieved its 2016 growth through a combination of new builds and acquisi- tions, opening 17 new travel centers and buying 41 Wilco/Speedway locations that were then rebranded as Pilot or Flying J locations. The company plans to continue with this two-part growth strategy in 2017 in order to increase the size of its overall footprint. At the same time, it is launching a five-year, $500-million investment in a chainwide "reimagining" that will modern- ize locations by updating location exteriors and other features. ••••••••••••••• No. 10 Love's Travel Stops & Country Stores Inc. Oklahoma City 2017 Store Count : 416 2016 Store Count : 364 Increase: 52 (14.3%) About the company's growth: Love's achieved its goal of opening at least 40 new locations in 2016 and then some, marking its largest growth year in the company's history. In addition to opening new travel stops along interstates, Love's opened stores on state and federal high- ways to offer service to more areas. The company also expanded its services and amenities in 2016 by adding more than 20 Love's Truck Tire Care facilities and introducing three new restaurant concepts. This year, Love's plans to beat its own record by opening 50 new locations and entering its 41st state with a travel stop in Hardin, Mont. ••••••••••••••• No. 11 TravelCenters of America LLC Westlake, Ohio 2017 Store Count : 488 2016 Store Count : 447 Increase: 41 (9.2%) About the company's growth: Thomas O'Brien, CEO of TravelCenters of America (TA), spoke out against large acquisitions in 2016, citing overly high prices, but the company achieved considerable growth through smaller ones. Its convenience store purchases ranged in size from four stores to 17, and included a buyout of Quality State Oil Co.'s convenience business. Acquired c-stores were rebranded under TA's Minit Mart brand. ••••••••••••••• No. 12 Casey's General Stores Inc. Ankeny, Iowa 2017 Store Count: 1,947 2016 Store Count: 1,908 Increase: 39 (2%) About the company's growth: The April 2016 opening of Casey's second distri- bution center in Terre Haute., Ind., has allowed the chain to make plans for expan- sion into new markets, including entrance into its 15th state with a store in Ohio, where it plans to purchase c-stores in small towns. In the past year, Casey's also made a number of acquisitions, includ- ing the five-store Guppy's chain in Cedar Rapids, Iowa; opened multiple new builds and replacement stores; completed major remodels; and transitioned more stores to a 24-hour format. cover story

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