SANFORD, N.C. -- It's no surprise that growth is on the minds of the leadership at The Pantry, but now the public company is putting more emphasis on building new sites as well as acquiring stores.
We've been remiss on putting such heavy reliance on acquisitions, chairman and CEO Pete Sodini said during the company's third-quarter earnings call yesterday. [For more on The Pantry's third-quarter results, see story at left.] We've opened four new, large-format stores so far this year, and we expect to open two or three more by the end of the fiscal year. [image-nocss] Next year, we're planning for 12 to 15 new openings, with 20 to 25 a year thereafter.
These large-format stores are about 4,000 square feet and include state-of-the-art facilities with features like QSRs and car washes, Sodini said. They have the ability in most cases to generate roughly twice as much profit as our current average store.
This refocus by the Sanford, N.C., company, which now owns 1,499 stores in the Southeast, doesn't mean the chain is any less interested in growing through acquisition. In fact through the end of the its fiscal third quarter, the company has purchased 111 stores, more than the 96 sites bought during all of 2005.
[This ground-up] effort really complements our ongoing acquisition programs and adds another dimension to our growth, Sodini said. It opens up opportunities for us to fill in gaps in our existing markets, level our regional management and other infrastructure, and enhance the presence of our brand name.
And growth through acquisition remains a vital part of the company's strategy. The acquisition market remains active and we see lots of potential opportunities to acquire smaller chains in existing or contiguous markets, Sodini said, adding that he sees Alabama as a growth opportunity. Our biggest challenge in this aspect of the business is to remain disciplined and focused on quality locations and merchandise yield.
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