CHICAGO -- Legendary convenience retailer Carl Bolch Jr. once said that if people were like a river, the best place to build a new store was in the middle of it—not steps away or at the water’s edge, hoping to get wet.
As the former CEO of Atlanta-based juggernaut RaceTrac Petroleum, Bolch believed new stores would best blossom smackdab where the people were.
Tracking the shifting rivers of where people live—and want to live—is a critical step in deciding where to build. To help retailers hit that moving target, CSP compiled a list of 10 “hot” markets. Many of them have common qualities, including growing populations, low barriers to entry, favorable business climates and high person-to-c-store ratios.
Of course, different retailers have different priorities. York, Pa.-based Rutter’s Farm Stores needs several acres of land to offer the fuel and products that make its investments worthwhile. Chains such as Casey’s General Stores, Ankeny, Iowa, which recently built a second distribution center in Terre Haute, Ind., seek a strategic center from which to sprawl into surrounding markets.
Some chains want to reinvest in markets they’re already in. “Right now, our focus is to go everywhere we operate and replace older-model stores with our Generation Three [food-centric format],” says Mike
Thornbrugh, manager of public and government affairs for QuikTrip Corp., Tulsa, Okla. “We could probably build forever in Dallas-Fort Worth or the Carolinas, but with 759 stores, it’s going to take time, labor and capital just to replace [our older] stores.”
Ultimately, what makes a market “hot” is a matter of perspective. Jim Fisher, CEO of IMST Corp., Houston, says retailers are constantly looking for “underserved” markets—and that doesn’t necessarily mean there’s not enough stores. Some markets may be saturated with outdated stores and need something fresh.
“It’s about vision,” Fisher says. “Can you see the potential that exists in any area and ask how to modify it to be successful?”
Pros: Population density, business climate, people and cars per c-store
Insight: Anchorage is the largest city in Alaska, a state that by NACS figures has an extraordinarily high rate of people and cars per c-store. In addition to its jobs in the energy sector, tourism in the form of cruise lines has grown exponentially, raising population figures and potential for c-store traffic.
Pros: Growing population, weather, business climate and people per c-store
Insight: Boulder is a burgeoning town on the outskirts of a major city—Denver—and is one of the fastest-growing cities in the state, according to the U.S. Census Bureau. On the whole, the state has the highest rate of people and cars per c-store among surrounding states, according to NACS, which creates an obvious demand for more stores.
Suburban Austin, Texas
Pros: Population growth, weather, pro-business and cosmopolitan appeal
Insight: Like other parts of Texas, Austin represents a collision of opportunity ranging from population growth to a supportive business environment. However, Austin proper has an alarming number of local hurdles that can keep building projects mired in red tape, according to Fisher of IMST. The market’s saving grace is outside city limits in Austin’s suburbs, where the restrictions ease.
Dallas-Fort Worth, Texas
Pros: Population growth, weather, pro-business, fuel consumption and people per c-store
Insight: Many formidable c-store players have taken up residence in this metropolitan area, but with the population so spread out, opportunities exist for a wide array of players. “We could build all day in Dallas-Fort Worth,” says Thornbrugh.
Fort Wayne, Ind.
Pros: Population growth, pro-business, low unemployment and regional c-store expansion
Insight: As the second-largest city in Indiana, Fort Wayne has seen the most growth of cities around Indianapolis, with hospitality and leisure sectors on the rise, according to the Indiana Business Research Center. Local c-store players such as Ricker Oil, Anderson, Ind., are strong, but with its newly completed distribution center in Indiana, Casey’s is poised to stir up the market.
Pros: Population growth, weather, business expansion and cosmopolitan appeal
Insight: Music City has topped Zillow’s most recent list of top housing markets, which is symptomatic of a booming area. Growth in the medical field, education, tourism and entertainment sectors has created a resurgence of construction downtown. While the activity makes for a competitive retail environment, those with the ability to invest can take advantage of a dynamic and lucrative market.
Pros: Stable population, weather, business climate, fuel consumption and people per c-store
Insight: On Florida’s Gulf Coast, Sarasota and its neighboring communities represent a different side of the state. The area boasts a “full-time” community, as opposed to a more transient population that fluctuates throughout the year, according to Forbes. C-store growth has focused in recent years in tourist hot spots such as Orlando and the Atlantic Coast, but the Gulf Coast offers some of the same attributes with greater stability.
Pros: Population growth, weather, business climate, fuel consumption and people per c-store
Insight: Jacksonville posted a 3.8% job growth rate in 2016, which makes it one of the healthiest markets for employment opportunities in the state, according to Forbes. Generally, the state ranks higher than most in fuel consumption, and people per c-store is also high, according to NACS.
Pros: Population growth, weather, pro-business and regional c-store expansion
Insight: Charleston has overtaken Columbia as South Carolina’s fastest-growing city, according to the U.S. Census Bureau, and nearby midsized towns such as Bluffton, Hanahan and Moncks Corner are showing even faster growth. Military, technology and tourism are contributing to growth, with QuikTrip and others taking notice. The Carolinas in general represent a strong opportunity for the chain.
Pros: Population density, sophisticated consumers and the need for a fresh take on retail
Insight:Wawa is developing c-stores in urban areas such as D.C., where people have been moving back into the city and driving the development of “walkable” neighborhoods. Consumers in this market want sophisticated retail offers, so traditional c-stores may struggle against more robust foodservice programs.