PLEASANT PRAIRIE, Wis.-- Open Pantry is getting rid of stores and not all of them are dogs. Where much of the industry is letting go of underperforming assets, Open Pantry Food Marts of Wisconsin Inc. is getting rid of 10 stores in the 900- to 6,750-square-foot range because they don't fit with the upscale image the chain is going for.
We could hang onto these stores; they're good cash-flow generators and have a strong image, Robert Buhler, president and CEO of Open Pantry told CSP Daily News. But as you look at our group [of 33 company-operated stores], [image-nocss] two-thirds are significantly upgraded on the inside with our coffee and food presence.
The sites Open Pantry is divesting itself of are by anyone's standards pretty good c-stores, but they just don't fit into what we've worked so hard to build for the upscale image of our Open Pantry brand, Buhler said.
So rather than try to tear down and rebuild the sites or expand the box, Buhler said the company decided to use the proceeds they'll get from selling the 10 stores to finance the growth of new locations, predicting 10 to 30 sites in the Milwaukee-Madison markets with an emphasis on urban and suburban areas. The new sites would duplicate the prototype layout that received a design award earlier this year from CSP at the Convenience Retailing Conference.
The company's gourmet coffee and food options have over the past two years turned in numbers even better than our most bullish expectations, Buhler said, adding the recent successes are fueling the company's renewed focus on replicating its upscale prototype. What we've learned is that you probably go through two summers before you get a full feel for the magnitude of a new store, if you do the right things.
Buhler said opportunities definitely lie in Milwaukee's western suburbs, where property values have risen and independents may be sitting on corners that have grown in terms of traffic count. We want to be able to able buy one, three, five, seven stores from various players who are ready to move on and evolve the sites by letting our chain come in, Buhler said. We've been able to cleverly modify these locations into stores that work well with customers.
As for the locations the chain is currently giving up, Mark Raccuia, executive vice president of The Energy Exchange, a Chicago-based firm handling the sale, told CSP Daily News that the 10 units are good performers that have been recently re-imaged, with most rebuilt or rehabbed within last three years.
Raccuia expected the sites to do well on the open market, mainly due to demand from the independent owner-operators. The Midwest is seeing many independents trading up locations, Raccuia said. Where one independent may have entered into the industry with a low-volume site, that operator is now interested in moving into a larger location, with yet another new-to-the-industry independent moving into the initial entry level site.
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