ROCKFORD, Ill. -- Dan Arnold, owner and president of Ranger Enterprises Inc., which operates the 48-unit Road Ranger chain of convenience stores and travel centers, told the Rockford (Ill.) Register Star that its next growth spurt will be through acquisitions of smaller gas station chains rather than building new stores.
The plan is picking up speed, said the report. Illinois-based Road Ranger is seeking opportunities to expand in Michigan, Ohio, Kentucky and Tennessee, as well as Missouri, where it has two locations. It also has a presence in Wisconsin, [image-nocss] Iowa and Indiana.
It will add a McDonald's in Champaign-Urbana, Ill. The South Beloit, Ill., Road Ranger Travel Center will include a BeefaRoo restaurant set to open by September 1.
And by the end of July, all of Road Ranger's CITGO-branded stations no longer carried the CITGO name. It will also introduce Road Ranger credit cards and gift cards, the report said, and CITGO cards will no longer be accepted.
The company's last major milestone was in 2004, when it bought 10 Clark stations and c-store operations and five travel centers under the Pilot name, the report said. That year, Road Ranger hit about $400 million in annual sales. Although they now are a larger Midwest chain, Arnold said we're still a wannabe, a scrapper.
At the forefront of all these acquisitions and sales remains the rising cost of gasoline, which Arnold and Michael O'Brien, the company's director of acquisitions, said fluctuates rapidly without much control.
Arnold said he believes Road Ranger offers the lowest prices among any other station in the Rock River Valley. We wouldn't be here today if we let anyone undersell us. We buy as well as anybody, and we price aggressively, he told the newspaper.
O'Brien said gas operators' costs have been rising for three years straight at a rapid rate, while demand for fuel is one of its highest points. Road Ranger pumps out about 700,000 gallons of gasoline per day.
Arnold and O'Brien said their sales come primarily from in-store products of coffee, drinks and snacks, and gasoline sales are second. Any operator that solely depends on gasoline to drive profit probably won't be in business within the next few years, O'Brien said. Arnold said Road Ranger has started offering 59-cent canned pop inside its c-stores in response to customers' requests.
The company also sees a boon in travel centers, a niche that Arnold said is a growth market many retailers are not pursuing. Road Ranger falls within the six largest grouping of travel centers in the country, according to the report. In 2005, the company had about $650 million in annual sales.
By the end of the year, Road Ranger officials have set a goal to double its number of stores while hittingand possibly surpassing$1 billion in annual sales.
O'Brien said the goal is attainable for Road Ranger, since the company switched its focus from the selling gasoline to in-store sales of food, drinks and snacks. So far, Road Ranger says the strategy is working. We make more profit on one of these than a full tank of gas, Arnold said, referring to a 32 oz. fountain drink for 59 cents.
Gasoline is not where you make your money [anymore], Arnold told the paper.
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