Editor's note: This is the final segment of a four-part CSP Daily News series highlighting the selling off of retail assets by the major oil companies. To read the previous installments, click here. For a complete picture of how the retail landscape is changing, watch for the March issue of CSP magazine.
OAK BROOK, Ill. -- Big Oil selloffs have created growth opportunities for consolidators such [image-nocss] as Alimentation Couche-Tard and The Pantry, in addition to the large jobbers capable of moving millions of gallons per month. The scenario might also create opportunities for investors based outside of North America, according to Evan Gladstone, executive managing director of Chicago-based NRC Realty Advisors.
We know of two more [Israeli companies] that are looking for acquisitions, besides the few that have already been named, he said. I'm saying this as a third-party consultant, not as an operator, but the c-store industry seems to be an easier entry than maybe other businesses because it's so fragmented.
In the steel business, for example, an investment group would need to purchase one of the top 15 companies just to be competitive. But in the convenience-store world, an investment group can start with as few as 10 to 15 locations and build the business over time.
Unfortunately, smaller retailers and even midsized, established jobbers may not even get a fair bite at the apple. Kerry Katchuk, president of Risser Oil, Clearwater, Fla., said with regards to the Shell deal in his area, the oil company had notified potential buyers of the sale but did not come out with property information in the timeframe announced.
The speculation was that they were working directly with Couche-Tard, and indeed, that Canada-based convenience-retailing giant walked away with the deal. Katchuk believes the sites that were under commissioned contracts have since been replaced by Couche-Tard employees. The dealers involved now get product from their new supplier, again Couche-Tard.
Recently Brian Haldorson, president of A-B Petroleum Co., Denver, witnessed Shell's area multiple-site operator (MSO) sites join the Couche-Tard family and don the Circle K logo. The recent nature of the transactioncombined with what has been a harsh Denver winterhas made it difficult to gauge how the stores have performed in the wake of the changeover.
They just converted in December, so it's still too early to tell; not much has changed in terms of the consumer's outlook, he said. It took some of the stations that were marketer-operated into one companyCouche-Tardand a lot of different marketers downsized their business.
Consolidators such as Couche-Tard bring a lot to the table and provide a formidable competitor for newly divested sites. But before retailers start crying in their soup, Chris Moore, vice president of retail for New West Petroleum, Sacramento, Calif., provides some perspective. Speaking of a similar purchase of major-oil assets his company did in San Diego, Moore said, We learned through our own experiences that you can end up spending [a lot of] money improving the sites you pick up.
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