Pak-A-Sak Finds Success With Express

Chain's 2008 store redesign leads to new drive-thru opportunities

In the December 2009 issue of Convenience Store News, Brian McKee, vice president of merchandising and co-owner of Pak-A-Sak Inc., spoke about the Amarillo-Texas-based chain's success with a 2008 store redesign. Working with design firm Paragon Solutions, Pak-A-Sak had built a large, upscale store featuring drive-thru service. Shoppers who pulled up to the drive-thru could view a mini c-store, complete with a six-door beverage cooler holding a sample of everything in the 5,000-square-foot building's main cold vault. That drive-thru accounted for one-third of the location's total inside sales.

The design, used to build two new stores as of last December, features brick and natural-toned materials, wrought iron Texas stars and brightly colored graphics — a significant change from Pak-A-Sak's bold graphics and heavier neon use. The store spotlighted Pak-A-Sak's well-known fountain offer, which was branded "Fizzy's." A companion frozen beverage offer was branded "Flurry's." The store also incorporated LCD screens for general programming and promotional use.

This year, 18-store Pak-A-Sak leveraged the success of the drive-thru, retrofitting its highest-volume location and opening a third large store with drive-thru window in Pampa, Texas. Perhaps more importantly, McKee and his team created an entirely new concept — Pak-A-Sak Express.

"The store in Tampa opened with a bang and is doing really well," McKee told CSNews. "We've had so much success with the drive-thru window, we leased two buildings that were designed to be Starbucks here in Amarillo, put our own touch on them, and turned them into c-stores."

The 1,700-square-foot buildings, complete with drive-thru's, were left unfinished when Starbucks pulled back on its expansion plans earlier this year. Though the buildings had only one-third the space of the newest Pak-A-Sak stores, the Express locations still carry a wide variety of immediate consumables and other convenience products.

"People are impressed with how much we offer inside these stores," he said. "But it's taking a bit longer for customers to catch on to the concept — that they can come inside and buy products too. At the same time, we're educating them that they can buy anything offered in the store through the drive-thru. Though we need to change people's habits, the concept has been very good for us."

The chain is using electronic signage outside the stores, in part, to spread the product-offer message. At their openings, the Pak-A-Sak Express stores promoted fountain drinks at 79 cents.

Costing much less to open than the chain's larger stores, the Pak-A-Sak Express sites boast very healthy profit margins per square foot since the best sellers are fountain drinks. Beer and cigarettes are also selling well.

"Bigger stores can cost $3 million to $5 million to build," McKee said. "If you pick a location that turns out to be not-so-good, it can really hurt you, especially if you are not a really big company."

McKee and company are contemplating building more Pak-A-Sak Express stores, this time from the ground up. "We can get into them fairly cheaply and get some cash flow going without incurring any more debt," the retailer noted.

Though somewhat limited by the Starbucks building's existing footprint, McKee said any new Express sites would feature only a few minor tweaks to the initial concept, including a few extra feet, putting them closer to 1,800 square feet.

"The good thing is these new stores have no gasoline to worry about," he said, noting they are typically staffed with at least two employees, one working the store, the other the drive-thru window.

"Everyone is trying to go after our business, whether it's Walgreens or Sonic. This is one reason I wanted drive-thru windows on our big stores in the first place — to better compete against the fast feeders. It's been very successful so far."

For comments, please contact Barbara Grondin Francella, Senior Editor, at [email protected].