Susser Holdings Embarks on a Year of Growth
CORPUS CHRISTI, Texas – Susser Holdings Corp. predicted a year of growth for its Stripes convenience store chain during the company’s first-quarter 2013 earnings call today. The c-store retailer opened four new stores during the quarter, plus two more in April, and 14 locations are currently under construction.
In total, the company expects to build 29 to 35 new Stripes locations by the end of this year, Stripes President and CEO Steve DeSutter stated.
Along with these new store openings, the company reported that one store was closed and razed during the first quarter with the intention of it being rebuilt under Stripes' new larger footprint. The chain also closed one smaller store in April. Susser Holdings additionally plans to acquire land for future development, especially in the Waco, Texas, region where it recently broke ground on what will be its first Stripes store there.
Like many other c-store chains, the weather had a somewhat dampening effect on Susser Holdings’ Q1. The chain saw "significantly more cold-weather days than the prior two years, and that's had a measurable effect on our numbers," said Sam Susser, president and CEO of Susser Holdings.
Despite this, same-store merchandise sales increased 4.2 percent during the quarter, compared to 6.7 percent during the first quarter of 2012. Average retail fuel gallons sold per store increased 4.1 percent vs. 5.8 percent a year ago. Total merchandise sales were $247.5 million, a gain of 9.5 percent year over year.
Approximately $9.5 million of the chain’s merchandise sales came from stores open one year or more, with beer, foodservice, packaged beverages, cigarettes and snacks driving most of the sales growth. DeSutter noted that average same-store transaction size also grew thanks to an increase in basket size and some price inflation.
Foodservice will be a focus for the remainder of 2013. Susser Holdings' Laredo Taco Co. quick-service restaurant concept "continues to perform very well," offering a combination of homemade-style, delicious food and compelling prices, according to DeSutter. "It remains a real strength of our business," he commented. Susser will launch initiatives such as sampling and targeted television advertising in certain underdeveloped markets with the goal of improving "one store at a time, one community at a time."
Meanwhile, retail fuel volume grew 7.4 percent during the first quarter from the year-earlier 223.5 million gallons. Total retail fuel revenues were $783 million, up 6.3 percent. The increase in gallons sold was partially offset by a 4-cent-per-gallon decrease in the average selling price of motor fuel year over year.
Susser noted that he is keeping a close eye on the competition, as the good demographics and strong economic outlook in Texas have prompted a number of retailers, including convenience stores, truck stops, dollar stores and drugstores, to expand there. Still, the chief executive presented an overall optimistic outlook on the first quarter and the months to come.
"We delivered another strong quarter with solid year-on-year growth in same-store merchandise sales, higher fuel volumes and increased fuel margins in both retail and wholesale segments," Susser concluded.