Sands Petroleum Builds a Brand
Florida c-store developer mulls proprietary vs. franchise in expanding retail presence
PINECREST, Fla. -- One path is signing on with a national convenience store franchise; the other, developing a proprietary "gourmet deli" concept. At the end of both sits the potential for healthy profits—and perhaps more importantly for Sands Petroleum, the opportunity to build a brand in the South Florida market.
"We're caught in a position of going with the standard concept of what a c-store is vs. where it seems the possibility is for where our business could go in the future," said Warren Sands, CEO of Sands Petroleum Corp., a "one-stop gas-station developer" based in Pinecrest, [image-nocss] Fla., and a man responsible for constructing, developing and redeveloping some 120 stations in South Florida over the past 20 years. In addition to its development activity—Sands Petroleum handles plans, permitting and processing in-house—the company owns six c-stores, three leased and two with car washes.
"My specialty is bringing new gallons to the market," Sands told CSP Daily News. "I've always specialized in finding corners and developing them, and we're looking to continue that."
Now with plans to build 14 new-to-the-industry sites in Miami-Dade, Broward, Palm Beach and Lee counties in 2008, Sands Petroleum—which Sands owns with partner Rodney Barreto—is looking to make a name for itself. The new c-stores, which will measure around 4,000 square feet, will either adopt the name of a national chain or embrace a proprietary concept. Sands declined to name the national franchise; he described the proprietary concept, being developed in-house, as a "gourmet deli" similar to the new White Hen Pantry "Pantry Gourmet" concept from master franchisor New England Pantry Inc.
In making the decision, Sands Petroleum is weighing the ability to generate profits and build a brand. "I'm looking to come out of this with a recognizable image through South Florida, that people know when they come into one of our stores the product quality and service they'll get," said Sands.
"That's the biggest challenge in today's market," he continued. "A lot of us have been in this business long enough to know what a great piece of property is and what's going to sell gas, and we all know that right now, selling fuel does not pay your mortgage."
Sands Petroleum is also currently deciding its fuel branding for the new stores, which will host four to 10 multiple product dispensers (MPDs); its current sites fly the Chevron and Texaco flags. Seven of the 14 sites will have car washes. The retailer will be hiring 120 to 150 employees over the next 24 months to staff the stores.
These are decisions the retailer must make soon: The first new store is scheduled to open by the end of May in Fort Lauderdale.
In favor of the proprietary, gourmet-deli route is its potential to win that most coveted shopper: the soccer mom. The concept would feature a light, bright, rich interior, gourmet sandwiches and a branded coffee program.
"If you make it look like Starbucks, it seems you get moms, and if you get moms who are busy and the soccer crowd in that whole loop, it gives you an infinitely better ability to sell a more high-end, more profitable product inside your store," said Sands. "But you're also going out on a limb."
On the side of the national chain: an established, proven operating model, a well-known name and a projection for strong sales at the high-traffic corner lots that will carry the new stores.
Regardless which model Sands Petroleum chooses, growth is its ultimate goal. The retailer plans to build six to 10 new locations each year, "for as far as we can see into the future."
And with a depressed real-estate market, there's much more affordable property than in the past.
"There's a lot of property out there that was emotionally overpriced—people were caught up in this bull-market run-up on commercial land, and for a while, they were pricing us out of the market," said Sands. "A good, solid gas-station/c-store developer cannot compete with either a bank or CVS or Walgreens format. They literally are willing to pay twice what we can afford to pay for a site."
But thanks to the buyer's market, prices have fallen to the point where Sands Petroleum is now able to afford choice corner sites seeing 40,000 to 50,000 cars per day, with no nearby competition. It's a nice position to be in and certainly an exciting time for the company. But Sands is practical about his company's role in the South Florida market.
"In this business, it's like being a pimple on an elephant," said Sands. "A 20-station distributorship is nothing. We may hope to be the most recognizable, highly visible alternative to the fueling/c-store business down here. Big is nothing. I just want to be well thought of and popular."