The Pantry's 100th Subway

Fastest-growing quick-service restaurant brand in Kangaroo stores

Steve Holtz, Editor in Chief, CSP Daily News

SANFORD, N.C. -- September has been a busy month for Ralph Maccarrone, the Subway brand manager for The Pantry Inc., who recently opened five new Subway restaurants in Kangaroo stores, including the chain's 100th Subway location in Cary, N.C., an occasion that both The Pantry and Subway took a moment to recognize. "We have a great relationship with Subway corporate and our development agents," Maccarrone told CSP Daily News. "They're a great fit for us."

"We work really closely with them," said Allison Morrow, global account manager of nontraditional development for Milford, Conn.-based [image-nocss] Subway. "They're excited about it; we are too. They're one of our largest convenience store partners and one of the largest convenience store chains in the country, so we're looking forward to adding another 100 Subway locations."

According to Brad Williams, vice president of field operations for The Pantry, the company will continue to work with its Subway development agents across the Southeast and is looking forward to future growth. Williams is responsible for the company's three operating divisions made up of 1,662 company-operated c-stores and 241 company-operated quick-service restaurants.

"We are one of Subway's largest franchisees in the country," Williams told CSP Daily News. "We also have Hardee's, Church's, Krystals, Dairy Queen, Quizno's, Bojangles' and Aunt M's, which is a proprietary, in-house foodservice brand. We believe there continues to be opportunities to add more quick-service restaurants to our existing stores in the future. This will differentiate us from our competition and strengthen our customer value proposition by providing one-stop shopping for food, merchandise and fuel."

The fastest-growing QSR in The Pantry's Kangaroo stores is Subway by far. "I came into The Pantry three years ago, and we've elevated our development from three or four a year to upwards of almost 15 in 2008 and planned openings of over 20 in 2009," said Maccarrone. "So we're pretty excited."

In fact, very few new Kangaroo sites are built these days that don't have some sort of quick-service restaurant presence.

Maccarrone says The Pantry 's new builds with a Subway component typically include a separate entrance for both the store and the QSR. "We want to make a statement to our customers that we are in the foodservice business."

Morrow said that's becoming increasingly popular among Subway's c-store partners when they build brand new stores. "Like many of our convenience store partners, The Pantry is building new sites that have a separate entrance for the Subway and then a common walk-though area so customers can go from the convenience store to the Subway without having to go outside," she said, noting that Subway now has restaurants in about 2,900 c-stores in North America and more than 3,100 worldwide.

And while Maccarrone and The Pantry are currently focusing almost all of its foodservice energy on adding Subway locations—"That's the brand we really want to foster"—he said, "Our chain is open to looking at other new foodservice offerings in the future."

Based in Sanford, N.C., The Pantry is one of the largest independently operated c-store chains in the country, with revenues for fiscal 2007 of approximately $6.9 billion. As of July 24, 2008, the company operated 1,662 stores in 11 states under select banners, including Kangaroo Express, its primary operating banner.

Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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