Alternate uses of retail spaces, which incorporate motor fuels and don’t involve razing and rebuilding the store, tend to stand out.
By Mark Radosevich
A vendor recently sent me a 2019 calendar featuring graphics of gas stations from a bygone era.
Not one of those months featured an old convenience store. It seems like bay stations are part of Americana, whereas little nostalgia is attributed to c-stores.
As the industry continues to mature and becomes more sophisticated, an increasing number of antiquated stores will either find alternate commercial uses or join their shuttered brethren littering various communities.
Unique are alternate uses that incorporate motor fuels and don’t involve razing and rebuilding the store. I discovered an example of just that when visiting Colorado Springs last year for a branded marketer event.
GAS & GRASS
While navigating the city trying to find a restaurant, we happened upon a Native Roots retail site, with its Gas & Grass retail brand. This location is actually both a gas station and a medical marijuana dispensary, and the company, Native Roots, said the venture is the “first dispensary in the world” to combine the two services.
This three-store medical marijuana distributor recognized the value of property location and existing configuration that were lost as marginal conventional c-stores. The dispensary follows all state-mandated rules, meaning unless you have a medical card, you won’t get in.
The company’s novel branding and design treatment was creative and effective, yet economical to purchase and deploy.
Although the exterior looks like a traditional c-store, the interior has been totally retrofitted. The entry opens to a small waiting room with a glass partitioned desk. A doctor’s prescription is needed for access, where customers have a selection of various product incarnations.
The site manager said plans were underway to convert the adjoining vacant quick-service restaurant (QSR) space into a T-shirt and apparel shop to leverage the popularity of the Grass & Gas brand. The fueling part of the business is unattended.
She added the company plans to expand into other markets, with conversion of existing c-stores as their easiest point of entry due to their optimal locations, wide availability and relatively low cost for fee simple ownership.
In past articles, I’ve noted the widespread expansion of dollar stores and the potential negative impact to traditionally stable rural c-store operations. And, as I have mentioned before, there are two primary dollar store competitors: Dollar General and Dollar Tree, which acquired the Family Dollar chain a couple of years ago. Each company operates about 14,000 locations.
Store sizes typically run around 7,500 square feet but can go as high as 10,000 square feet.
Over the past years, both chains have added beer and cigarettes, which begins to cross over into traditional c-store territory. Research shows that the addition of cigarettes increased customer counts.
I’ve indicated in past writings that both companies typically target rural unincorporated areas on well-traveled roads or in underserved small towns.
The key differentiator between the two businesses has been fuel and food. During a trip through southern Georgia last year, we stopped at a nationally-branded dollar store with fully-integrated fueling under a branded canopy.
National expansion of this motor fuel configuration will surely impact nearby c-stores and leave “food” as the only remaining differentiator between the two businesses.
C-stores without a viable QSR may become irreparably challenged and destined to find alternate uses, or become another boarded-up building lacking in nostalgia.
Mark Radosevich is a strong industry advocate and 39-year petroleum professional. He is president of PetroActive Real Estate Services, LLC, offering confidential mergers & acquisition advisory, representation and financing services exclusively to petroleum wholesalers. Contact him at [email protected] or call (423) 442-1327. His professional bio and other company info can be found at www.petroactive.net.