GRAND RAPIDS, Mich. — As many convenience store retailers and distributors are seeking education on how to best expand their businesses, S. Abraham & Sons Inc. (SAS) is going back to school.
Specifically, it's going to the more than 80 universities it services through its campus retail distribution program, which accounts for much of the family-operated wholesaler's growth in recent years.
After 91 years of operation, the Grand Rapids-based company currently services roughly 5,000 c-stores in nine states, as well as 20 hospitals, but it only began focusing on schools three years ago. That’s when Philip Abraham, now manager of campus retail for SAS, returned to the company and began visiting universities, whose on-campus convenience stores typically offer much less square footage than traditional c-stores.
"These schools want to do more. They're just limited on space and storage," Philip Abraham explained to CSNews Online. "Colleges underestimated students' money. When these stores were built, they didn't think it would be as big as it is."
Although campus c-stores don't have attached gas stations as a draw, they attract far more foot traffic — as many as 1,000 students in a day. As a result, sales volume is much higher, prompting campus stores to order multiple cases more than a traditional c-store.
Part of this is due to the captive market. Most students don't want to go off campus to visit a c-store or grocery store, and many school dining halls close earlier in the evening, whereas students are still up and about.
The shopper dollars also come from a different source. "They're all on a meal program," noted Philip Abraham. This frequently results in sales spikes at the end of the semester or quarter. "At a lot of schools, the kids will have to use it or they waste it. [Stores will] sell things by the case and not by the each."
There's considerable opportunity in campus retail and, happily for SAS, very little competition within its market. Rather than run the stores directly, most schools contract their c-stores out to management companies such as Sodexo or Aramark, which prefer to rely on established relationships with vendors and distributors.
For more on S. Abraham & Sons’ campus retail distribution program, look in the April issue of Convenience Store News for the Single Store Owner.