Sales of C-stores Continue Their Upward Trajectory

JERSEY CITY, N.J. – Completed sales of convenience stores continued their upward trend during the second quarter of 2013, according to BizBuySell.com's latest Insight Report. Ninety stores were sold during the quarter, up from 81 stores the previous quarter and 75 during the second quarter of 2012.

C-store sale prices likewise saw an increase during the latest quarter. The median asking price was $199,500, up from $159,000 in the first quarter and $119,500 during the year-ago period, while the median sale price was $175,000, up from $125,000 the previous quarter and $109,500 during Q2 2012.

Outside of the c-store segment, small business transactions also continued a strong upward trend by jumping 61.8 percent during Q2 2013 compared to Q2 2012. This follows a strong first quarter of the year, during which time small business transactions saw a 55.7-percent increase.

The numbers are "very, very strong," Curtis Kroeker, group general manager of BizBuySell, told CSNews Online. He said three primary factors are driving them: an incredible latent amount of supply and demand; continued improvements in business and economic performance; and some carryover from the end of 2012, when business owners were worried about the country falling off the “fiscal cliff.”

In other words, many people likely wanted to buy or sell a business, but couldn't due to economic uncertainty, inability to get financing and a general reluctance to take a chance, resulting in a slower pace of sales than would occur in a healthy economy, Kroeker explained.

As the economy has improved and bankers have begun to lend more, optimism is up among both buyers and sellers. The result is that "sellers are now able to sell their business and buyers are now willing to take the entrepreneurial step," he said.

Additionally, some retailers who were worried about paying higher taxes if the United States fell over the fiscal cliff put their businesses up for sale toward the end of 2012 and are just now completing the transactions, providing more lift to the sales figures.

Kroeker predicted that sales figures will likely remain strong over the next few quarters as the industry works through several years of supply/demand buildup, with the drop-off in year-over-year comparisons coming only because of consistently strong actual numbers.

"It's still very much a buyer's market," he noted, adding that financing is generally more available and getting the money together for a down payment is easier.