Hitting the Road

Kum & Go’s real estate team seeks prime locations as the company expands

The day of CSNews’ interview with Senior Vice President of Store Development Niki DePhillips was spent at Kum & Go’s headquarters, but an average workday is just as likely to take her to one of the 11 states in which the chain operates to evaluate potential new store sites.

“I’m involved with everything from adding and divesting stores, to any kind of asset that’s coming in or out of our network,” DePhillips said.

In 2012, Kum & Go built 43 new stores, a figure that’s the result of nearly a decade’s worth of shifting focus from acquisitions to expansion through ground-up construction. The new-build strategy puts DePhillips on the road with one of the company’s real estate development representatives approximately every other week, visiting 20 to 40 sites in a market.

Locations visited are at various stages in the building process, from sites that need city approval to under-construction stores, to locations still being considered. Once a month, CEO Kyle Krause comes along on one of the eco-friendly paperless tours that use iPads to organize site information.

Even though all new Kum & Go stores are being built using the 5,000-square-foot “5K” model, it’s not a simple task to decide where to place those stores. Sales projections, area demographics, nearby competitors and other factors all play a part.

“There’s not a scientific formula that tells us if it’s a good site. It’s a combination of several things,” DePhillips said. “You could have great traffic and a ton of people around, but what if you’re the fourth competitor on the intersection? Quality matters when it comes to competition.”

Kum & Go’s increased focus on foodservice also plays a part, with nearby fast-food and quick-service restaurants being important factors when evaluating a location.

Scouting out potential new locations is just one piece of the real estate puzzle. “A lot of what our team does is builds relationships,” DePhillips said. Mayors, city council members and other local officials get the chance to learn more about Kum & Go and the charitable and sustainability initiatives that come with the retailer. “We really reach out and get involved in communities. We’re proud of what we do and we have a great story to share,” she said.

DePhillips knows the story well because her own story with the company goes back more than 10 years, when the recent college graduate started out as a real estate administrative assistant. At the time, she admits, she knew nothing about real estate, but a crash course in “real estate 101” grounded her in the fundamentals. The department was small at the time, so DePhillips soon got the chance to involve herself in all aspects of store planning and site selection as Kum & Go began to work toward its goal of opening 25 new stores per year.

As a result, “I’ve done a little bit of everything,” she said. DePhillips is well equipped to lead the real estate department and oversee new store builds because she has filled most of the department’s roles throughout her career.

While all new Kum & Go stores use the 5K model, the company makes adjustments every year; for example, adding more dry storage or lockers for store associates. In-person store visits make it easier to see what adjustments need to be made, both in and out of customers’ views.

“We’re a pretty innovative company,” DePhillips said. “We’ll keep looking at different options and evaluating whether we should test different concepts within the store.”

Getting city approvals for new locations is the biggest challenge the real estate department faces, since every city is different and there’s no single process that works everywhere. “That’s why relationships with the community are so important,” she noted. “Some cities request certain kinds of stores in certain areas, and we work with them to find a successful solution for both parties.”

Prevailing stigmas against convenience stores are another challenge, but working to overcome that and demonstrate how good c-stores can positively impact the community is a win for the industry, as well as for Kum & Go in particular.

While learning the ropes of real estate, DePhillips got the chance to work directly with late Kum & Go co-founder Bill Krause. “He definitely had an impact on my life,” she said. “He was so great with people and he could make you feel so special.”

In particular, the elder Krause stood out for the way he would recall people’s individual accomplishments and made sure to show his appreciation for a job well done. Instead of using e-mail himself, his secretary would print out certain e-mails, on which Krause would write notes and compliments. DePhillips recounted one time when Krause sent a note to both her and the associate who’d brought her to the Kum & Go team. The note instructed them to each buy a new business suit on his dime, in thanks for DePhillips’ good work.

“His legacy is the way he touched people and inspired them to do things that maybe they didn’t even know they could do,” she said.

Since Bill Krause’s passing in June, she’s found herself inspired to carry on his way of doing business and strive to have the same kind of impact on others. “His legacy will really be memorialized in everybody. It’s going to be people living that every day and carrying that on.”