2006 Year in Review

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2006 Year in Review

The past year was good for the convenience store industry. Most operators saw higher in-store sales, and many companies continued to add stores and expand their product offerings. Of course, not everything was rosy: rising credit-card interchange fees drained profits out of many businesses, especially when added to the rapidly rising gas prices the nation experienced for the first half of the year.

The industry's most-accessed online news resource, CSNews.com, brings breaking news, new product information, industry research and more to its readers 24/7. Listed here are the most popular news stories, based on the number of online views, for each month of 2006. Updated analysis and commentary is added in blue italics where necessary.Looking for a Home in Convenience Business The Home Depot, the world's largest home improvement retailer, will make a new home in the convenience store industry with four convenience store openings in the first half of 2006, with the possibility of 300 by 2010. The new initiative was announced at the company's annual meeting with investors. The retailer opened its first Home Depot Fuel in Brentwood, Tenn., in February, a second one in Heritage, Tenn., in April, and its first Atlanta c-store in September.

Oklahoma Retailers Turn to Technology to Fight Drive-Offs Soaring gasoline prices continue to make drive-offs increasingly costly to retailers, but some c-store owners in Oklahoma turned to new technology, both to minimize drive-offs and appease customers, reported The Oklahoman. QuikTrip Corp. and 7-Eleven debuted new technology to make customers pay after fueling. As gas prices raced towards $4 a gallon over the summer, drive-offs were rated the most serious security problem by retailers in CSNews' 2006 Security Study (September 18 issue).

C-Stores to Retain Their Share of the Food Market While general merchandise retailers such as mass merchandisers, wholesale clubs and dollar stores, are expected to continue stealing market share from grocery-focused retailers like supermarkets, convenience stores look to have a stable future ahead, according to research conducted by Willard Bishop Consulting. Indeed, c-stores' appear to be taking share away from other channels.

BP Selling Stores, Property in Florida BP Products North America Inc. is coordinating the sale of 18 operating convenience and gasoline retail sites as well as nine non-operating surplus properties in the Orlando/South Florida market with the help of NRC Realty Advisors LLC. This continues a trend by BP and other Big Oil companies to shed units, many of which are picked up by single-store owners.

Sheetz Opens 'Visionary' Store Sheetz Inc. recently opened a 6,000-square-foot store along Route 51 in Belle Vernon, Pa. The restaurant-style store features digital menu boards showing food selections, which can quickly be ordered at electronic touch-screen kiosks, reported Pittsburgh's Tribune-Review. Sheetz continues to be one of the leading innovators in the channel.

Weird But True An award-winning middle school science project produced some disturbing results — 70 percent of the time, ice from fast-food restaurants was dirtier than toilet water, reported ABC News. Hopefully, this has nothing to do with the troubles some retailers have reported in growing their fountain drink sales.

Couche-Tard Buys 40 Midwest Locations Convenience store chain Alimentation Couche-Tard Inc. agreed to buy 40 Shell stores in the Indianapolis area, which will add $160 million in estimated annual revenues, reported the Canadian Press. This will turn out to be just the first of several acquisitions by the fast-growing Canadian-based retailer. Read on.

BP Sells 44 C-store Locations BP Products North America Inc. is selling 44 convenience and gasoline retail sites as well as 18 surplus properties in Illinois, Indiana, Ohio and Pennsylvania. NRC Realty Advisors LLC will handle the transactions.

Couche-Tard Buys 90 Spectrum Stores Alimentation Couche-Tard Inc. acquired 90 stores in the southeastern United States from Spectrum Holding Inc. in a deal it says will add $325 million in annual sales to the company, reported Reuters. And the beat goes on for the Canadian-based retailer.

BP Puts 77 West Coast Arco Stations on the Block BP West Coast Products (BP) is selling 77 ARCO stations on the West Coast.

New Owner for Fas Mart Chain Israeli company Gmul Energy purchased a majority ownership in GPM Investments, the parent company of Fas Mart and Shore Stop convenience stores along the East Coast. Gmul will own 51 percent of the company; 33 percent will remain with GPM and another 16 percent of shares will be public. New Israeli owners waste no time growing the U.S.-based company as CSNews Online breaks story on Sept. 1st of Fas Mart's acquisition of 74 Sweet Oil Co. locations for $50 million.

For Tesco, American Arrival Will Be "Fresh and Easy" British supermarket and convenience giant Tesco has created the brand name 'Fresh & Easy' for its planned convenience concept launch into the United States retail scene. The planned 2007 debut of the U.K.-based retailer in California, Nevada and Arizona is one of the most intriguing news stories of the year. Tesco's arrival will "spark consolidation and more intense competition among retailers; stimulate changes in consumer behaviors; create seismic shifts in pricing, promotional and merchandising strategies; necessitate re-evaluation of long-established relationships; and bring new definitions of service levels and supply chain metrics," said one expert (October 8 issue).

Trend-Spotting At All Candy Expo Success in the confectionary category comes from keeping on top of what's new. Retailers must continuously look at their product mix to make sure it's on target with what customers want — and that's no easy task considering the consumer is always changing. The top trends: dark chocolate, gourmet everyday, fortified treats, sugar-free sweets and healthy treats, indulgent delights and kiddie creations.

Anonymous Washington Couple to Open Non-Profit Gas Station An anonymous couple in Mukilteo, Wash. have decided to buy the local Speedway 76 station and turn it into a money-maker for local causes, reported The Mukilteo Beacon. Inspired by the philanthropy of Bill Gates, a local couple gives back.

BP Looks to Shed Company Ops BP plc is working to put more of its company-operated convenience store sites into the hands of franchisees and increase the participation of jobbers in its retail network, while bringing its am/pm franchise east of the Rockies for the first time. Despite looking to sell off retail operations, BP still operated more than 1,100 stores as of July, according to CSNews' Top 100.

Exxon Mobil Pulling Out of New York Exxon Mobil sold at least 20 of its gas stations located in upstate New York since 2005, according to county records. This realignment of operations is making the affected store operators happy, reported The Buffalo News.

7-Eleven Unveiling Proprietary Fuel Program 7-Eleven Inc. is rolling out its own brand of gasoline in anticipation of the expiration next month of its 20-year contract with CITGO Petroleum Corp. CITGO recently announced that it is cutting 14 percent of its 13,000 service-station network across 10 states, including Texas where the c-store giant is headquartered, and selectively in four other states. In an exclusive interview with Tim Rogers, CEO of Tower Energy, one of the retailer's unbranded suppliers, CSNews Online elicits details of 7-Eleven's shift to proprietary fuel, along with mixed opinions from the company's franchisees.

7-Eleven Hopes It Plucked a Winner in White Hen Acquisition Will 7-Eleven's iconic Slurpee be sold at White Hen? How about White Hen's "Hot & Fresh" sandwiches at 7-Eleven? 7-Eleven tells CSNews Online that it hopes to share best practices with the regional chain known for its expertise with fresh food following acquisition. CEO Joseph DePinto tells CSNews that he'd had his eye on the Chicago-based chain for a while.

7-Eleven Replaces CITGO as Fuel Supplier In accordance with plans announced earlier this year, 7-Eleven will switch fuel suppliers from Venezuelan-owned CITGO to Tower Energy Group, Sinclair Oil and Frontier Oil Corp., reported The Associated Press. With this announcement, CITGO's public relations woes begin.

CITGO Could Get Florida's Boot Eight CITGO stations may have to pay the price for Venezuelan President Hugo Chavez's statement about U.S. President George W. Bush. A south Florida legislator wants the state to cancel its contracts with the stations that reside along the Florida Turnpike, the Tallahassee Democrat Capitol reported.

Another Blow For CITGO Christy Mihos, a Massachusetts gubernatorial candidate and owner of 14 Christy's Market stores, is following 7-Eleven's actions and cutting ties with fuel supplier, CITGO. But unlike 7-Eleven's announcement of the expiration of its contract, Mihos' decision was political, not business, according to the Boston Herald.

New Upscale C-Store Debuts in Atlanta A real estate investment and advisory firm on Saturday held the grand opening of the first of what it hopes will be several upscale c-stores ringing the metro Atlanta market. Owner Richard Bell describes The Market at Jodeco as a store that sells traditional c-store products in a more customer-friendly way.

CITGO to Advertise its Patriotism CITGO, the subsidiary of Venezuelan-owned oil company CITGO Petroleum, will launch an advertising campaign that will clarify issues surrounding the company's political affiliations and its commitment to its business in the United States, Marketing Daily reported.

Move Over Cocaine, GreenCard is Latest Controversial Drink in Energy Category As the energy drink category expands to the point where every new offering apparently needs an even more controversial stance than its predecessor, one new energy beverage is looking to target an illegal market — migrant Hispanics illegally crossing the border to the U.S. CSNews' Spare Change Blog has been addressing this topic at length. To read more on the controversial products and names, and comments from readers, as well as provide comments or opinions of your own, visit the site at http://sparechange.csnews.com.

E85's Future Stalled over Pump Safety Concerns The nation's largest product safety laboratory, Underwriters Laboratory (UL), decided to remove its approval of ethanol pumps, leaving the alterna-fuel frozen in pumps across the country and forming legality debates at nearly 1,000 stations, the Journal Star reported.

Circle K Launches New Authentic Hispanic Products Program The West Coast Business unit of Circle K Stores, Inc. has launched a new program of authentic Hispanic products supplied by Inca Products, LLC and Core-Mark International in its Southwest market stores, the company reported.