The tremendous amount of merger and acquisition activity that’s been going on in the convenience store industry certainly puts a lot of pressure on midsized chains to grow their business, or even achieve acceptable returns on their investment.
Interest rates for buyers have been so low and EBITDA multiples (earnings before interest, taxes, depreciation and amortization) for sellers have been so high that a midsized retailer who’s even thinking of selling, or has no family succession plan, is greatly tempted to sell.
“It made sense to me,” said Jay Ricker, founder and chairman of Ricker Oil Co. when he sold his 56-store family chain to Giant Eagle late last year. “If you don’t grow at a substantial rate, I think you’re going to get left behind.”
However, if you think midsized, family-run chains are disappearing from the convenience store landscape, think again. According to the latest Convenience Store News Top 250 ranking, there are currently 100 individual, freestanding c-store chains that operate between 40 and 90 stores each. Altogether, these 100 chains operate more than 5,820 convenience stores.
That’s a significant force in this industry. The chains include such excellent retailers as Yesway, Tri Star Energy, Toot'n Totum, Spinx, Gate Petroleum, Weigel's, Certified Oil, OnCue, Fastrac, Parker’s, Dash In, Kwik Chek and more.
And that brings us to this month’s cover story on Family Express (FE), the Valparaiso, Ind.-based chain of 74 convenience stores. FE is not only one of the c-store industry’s most successful and profitable retailers, but it also just embarked on the most ambitious growth plan in its 40-year history.
I had an opportunity to take an exclusive tour of the retailer’s headquarters, central distribution center and prototype stores with founder and CEO Gus Olympidis.
I got a firsthand look at:
- Family Express’ “living brand” concept, which has paid off in lower workforce turnover and higher-than-average industry profits;
- The development and growth of the retailer’s proprietary Cravin’s Market Fresh prepared food products and its new bean-to-cup coffee program;
- The planned expansion of the company’s central distribution center and bakery; and
- FE’s plans to create a completely frictionless customer engagement strategy through partnerships with several technology providers that will enable such customer-friendly activities as one-click ordering, curbside delivery and no-wait checkout.
Family Express is certainly “In the Express Lane” as one of the fastest-moving, dynamic midsized convenience store chains in the United States.