SAN FRANCISCO -- Statistics from an online marketer of convenience stores and other businesses for sale paint a picture of a c-store real-estate market hurt by the economy in 2009 with advantages for both buyers and sellers. Data from BizBuySell provided exclusively to CSP Daily News shows the company listed 147 c-stores that sold in 2009, compared to 240 the previous year.
"Overall, it was a really rough year. It was the worst year we've seen since we've been tracking the data," Mike Handelsman, general manager of BizBuySell, told CSP Daily News. "And [image-nocss] it's no surprise that the capital crisis the country is facing is impacting the small-business-transaction market."
In the fourth quarter of 2009, BizBuySell reported 36 c-store sales, compared to 45 the previous year.
"Fundamentally, what we're seeing is the number of transactions [in the fourth quarter] was down by about 20% year over year, which is relatively consistent with what we saw nationally across all [business] sectors," Handelsman said. "If you look at the total year, the numbers are much more dramatic. The number of transactions was down to a much greater degree, about 40%, [which is] certainly worse than all other business types."
One advantage to potential c-store buyers: The median asking price of a c-store listed on BizBuySell.com dropped from $275,000 in 2008 to $230,000 this past year. The median selling price dropped even more significantly, from $250,000 in 2008 to $200,000 a year later.
"The median sale price of convenience stores was down about 20%, which is not great if you're in the business, but if you're an aspiring owner, that's good," Handelsman said. "The median revenue of the businesses [that were sold] was also down."
Specifically, the median revenue of stores sold in 2008 was $700,000. A year later, that figure dropped to $614,972. And for the fourth quarter of 2009, it was $525,749.
So where's the good news for current c-store owners?
"The one funny thing was that the multiple of revenue of cash flow that the units sold for actually increased" in Q4 2009 compared to the previous year, Handelsman said. "It's a little bit surprising. We definitely saw the opposite in terms of data [from other retail channels]."
In Q4 2008, the average multiple of cash flow for stores bought was 3.51. In 2009, it was 4.26. And cash flow remained relatively steady, as well, averaging $104,208 in 2008 and $100,000 in 2009.
"These differences [suggest convenience stores] were a little bit recession-proof," said Handelsman. "At retail convenience stores, people are buying gasoline and [other products] on which they don't necessarily cut back their consumption. Versus something like white-tablecloth restaurants, people stop going out for expensive meals when they don't have as much money, but they don't stop buying milk and candy and other impulse purchase items."
He added, "Those businesses from an operating standpoint, tend to be more recession-proof, but regardless because there isn't capital available for buyers to buy businesses, they still sold for much lower prices than they had sold for before."
For the full year, the multiple of cash flow was relatively flat, according to BizBuySell, averaging 3.37 in 2008 and 3.31 in 2009.
BizBuySell, San Francisco, is an Internet business for sale marketplace. Since 1995, BizBuySell has offered tools to help business owners and brokers sell a business, and potential buyers to find a business. The company's listings typically consist of one c-store being sold at a time.
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