In a time when mergers and acquisitions are sweeping the convenience store landscape and, as a result, large companies are growing even larger, independent c-store operators must be savvier than ever to determine the best moves to make for their stores.

Retailers looking to add to their store count or enter the market for the first time need to be strategic about their process.

The question, Ray McIntosh, president of McIntosh Energy, which operates four MacFood Mart sites in Fort Wayne, Ind., said, is whether a retailer is looking to build a convenience store from the ground up or purchase an existing location from somebody else.

“If you’re going to buy bare ground and build, then obviously you’re talking millions of dollars of investment, so you’ve got to make sure the location is right demographically, traffic count-wise; you really can’t afford hitting less than a homerun,” he continued. “Now, if you’re acquiring another store, provided it’s a decent store, then your cost of entry could be less. … Make sure if you’re going to build to have one that can provide the cash flow that you need to pay the bills.”

Small-Chain Perks

Whether independent retailers are looking to expand or maintain the status quo, their smaller footprint is advantageous in certain areas.

For example, upper management is able to work closely with employees.

“The personal attention we can give to our staff allows us to nurture their strengths and help them build from weaknesses,” said Kim King, owner, Go Time, which operates eight locations in Kentucky.

McIntosh agreed. He’s created a bond with his employees, and when they go to him, they know they’re speaking with ownership. “I know them, and they know me,” he said.

Additionally, running a smaller number of stores can allow c-store retailers to engage with customers more intently.

“There are a lot of rewarding factors about running our own stores. One of the most rewarding is seeing the impact our stores have on the communities we are part of and hearing the complementary stories we get from our customers. We love seeing growth and progress at all our locations, watching the business grow and be successful,” said King.

Being a smaller chain allows Go Time to better cater to individual stores, too. With each site located in a different area, community needs are also different, and Go Time provides each store with distinct attention and a more personal touch, as opposed to implementing standardized plans that might not suit each store.

At MacFood Mart, an advantage to its size is that adjustments can be made in stores more quickly, if needed. Independent operators, McIntosh noted, can monitor vendor arrangements daily and make changes swiftly.

Babir Sultan, president of four-store chain FavTrip in Missouri, concurred that faster decisions can be made as an independent.

“If we like something (a corporate store) is doing, it’s research and development (R&D) for us, and we can replicate that,” he said. “Where they take years to do R&D — something that’s working for us — we follow along; we just do it in a matter of weeks.”

Overcoming Challenges

Being an independent c-store operator doesn’t come without its challenges, however.

“Our biggest challenge in some areas is brand recognition. All our locations are non-branded, and sometimes people are reluctant to switch to a brand they aren’t familiar with,” said King.

To combat this, Go Time focuses on its image as a small chain. Having clean stores with a modern look is important, and Go Time strives to keep its signs and graphics fresh and updated.

For MacFood Mart, as far as competition from other c-store chains goes, it isn’t feeling the pressure just yet.

“As of right now, I’m mainly dealing with local competition,” said McIntosh. “… I don’t feel that I can’t compete.”

However, one of the chain’s biggest challenges is labor, which McIntosh attested is an issue for retailers of all sizes.

Sultan too, noted there could be days where the chain is overstaffed, allowing other problems to be handled, but there can also be days where there isn’t enough help.

“Any given day, I think you’ve got different challenges, whether it’s dealing with vendors, fuel supply. …” he continued. “You can never know what you’re going to see, but you’re just going to come up with a system and processes and try to tackle them accordingly.”

When it comes to vendors, independent operators might have to shop around, especially if pricing becomes an issue. Many chains have felt the effects of inflation in the past year.

FavTrip can’t always be tied into one vendor, Sultan explained, since that may be counterproductive to its goal to do what’s best for customers and employees. This also allowed the chain to be able to maneuver more quickly during the pandemic.

Despite these challenges and others, independent operators must be ready to invest time into the business. Time and consistency, King said, are crucial to being successful and keeping customers coming back.