Other c-store, gas station and [image-nocss] travel center chains making the list include: Pilot Travel Centers (N0. 23), Knoxville, Tenn., with revenues of $16.5 billion in 2008, up 32% from the previous year. Alimentation Couche-Tard (No. 25), Laval, Quebec, with revenues of $15.58 billion, up 1.4%. Love's Travel Stops (No. 31), Oklahoma City, with revenues of $12.45 billion, up 8.6%. Valero Energy (No. 34), San Antonio, Texas, with revenues of $10.53 billion, up 18.5%. The Pantry (No. 43), Sanford, N.C., with revenues of $9 billion, up 30.2%. QuikTrip (No. 45), Tulsa, Okla., with revenues of $8.6 billion, up 4.1%. RaceTrac Petroleum (No. 47), Atlanta, with revenues of $8 billion, up 27%. TravelCenters of America (No. 49), Westlake, Ohio, with revenues of $7.66 billion, up 24.2%. Casey's General Stores (No. 77), Ankeny, Iowa, with revenues of $4.69 billion, down 2.9%. Susser Holdings (No. 80), Corpus Christi, Texas, with revenues of $4.24 billion, up 56%. Sheetz (No. 83), Altoona, Pa., with revenues of $4.11 billion, up 5.3%. Wawa (No. 99), Wawa, Pa., with revenues of $3.4 billion, up 2.9%. Click hereto view the complete story, segment analysis and chart. STORES does not break c-stores out separately for analysis.
Because of the bad economy, this is the time of the supercenter, the dollar store, price-impact grocers and others with an off-price or deep discount business model, the report said. Food retailing has been driving the industry, along with merchants who say to consumers, "Come pinch your pennies with us."
"People still have to eat" goes the adage used to describe why the supermarket segment is seemingly recession-proof. This year, however, many traditional supermarkets found they are not quite so impervious after all. It is the discount food sellers that are prospering, and as the largest supercenter operator in the country, Wal-Mart is riding this wave, along with limited-assortment grocers like Aldi, Save-A-Lot and Kroger's Food4Less.
Supermarkets are losing the battle for consumers' food dollars, said the report. Adjusted for inflation, sales declined 0.5% and same-store sales dropped 1.2% year-over-year, according to STORES, citing the Food Marketing Institute (FMI).
Supermarket operators have been forced to adopt tactics to battle the recession, as well as strategies that will keep them competitive for the long haul. Short term, grocery chains are discounting products via promotions and couponing, while increasing private-label goods.
Longer-term planning involves diverse strategies. Kroger is maintaining an aggressive campaign of format diversification led by its Marketplace concept. These stores are typically in the 120,000- to 130,000-sq.-ft. range, combining a full-service supermarket that includes such amenities as a drive-through pharmacy window and a wine store with general merchandise offerings that could include a Fred Meyer jewelry department or a Kitchenplace with cookware and gadgets.
Safeway is taking its tradition of making and selling private-label goods to a new level with its O Organics and Eating Right house brands.
Cost-cutting is another tool supermarkets use to compete with supercenters. Ahold USA's Stop & Shop division in New England and Giant Foods in the mid-Atlantic are counting on technology to assist in reducing labor costs while improving the customer shopping experience. The chains are providing handheld scanners for customers to use as they move through the store, selecting items, scanning bar codes and bagging as they go. The devices also call attention to sale prices and promotions as the shoppers move into range of the products.
The drug store segment is contracting and could consolidate further. Drug stores are not the only source for prescription drugs: big-box operators, supermarkets and even small-footprint discounters like Fred's have pharmacy counters.
What happens on the national level with health care reform could drastically alter how drug stores do business, and retailers are already adjusting their business models--CVS by integrating its retail operations with Caremark's pharmacy benefits management expertise, and Walgreen by slowing the pace of expansion to squeeze more productivity out of existing units.
Walgreen is in the midst of reconfiguring up to 400 stores this year by lowering fixtures, reducing front-end SKUs by 15% to 20% and replacing slower-moving merchandise in favor of "affordable essentials" that focus on health, wellness and convenience.
Combining discount pricing with groceries and convenience is a formula for flourishing in a recession, said the report. Nielsen has figures to back that up, showing that dollar stores have enjoyed more sales growth than any other retail segment--growth that is being driven by consumers of all income levels, but is highest among shoppers with family income in excess of $100,000 annually. In the last six months of 2008, those high-income households spent 18% more at dollar stores than they had during the same period the year before.
Family Dollar is the star of this group, finishing 2008 with the best-performing stock in the S&P 500 index (the value of Family Dollar's common stock increased 33% last year). Approximately 60% of Family Dollar's sales are generated by food and other consumables.
Food's growing importance as part of the merchandise mix coincided with Family Dollar's push away from the small-town South and into urban markets in the Northeast and Midwest. For the past three years, the company has been upgrading its merchandise management technology, an effort scheduled to be completed by the end of this year.
Though not a dollar store, Big Lots operates in the same niche with its closeout merchandise. The company has turned around under chairman/president/CEO Steve Fishman and will open more new stores in 2009 than it did over the last three years combined, the report said.
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