What does it mean to lead a convenience-store chain today?
For Arko Corp. President and CEO Arie Kotler, it means thinking like an entrepreneur—and knowing when to pause and plan for the next decade.
After years of rapid acquisition, the Richmond, Virginia-based operator recently took a step back to realign its portfolio.
The result: a multi-year transformation plan focused on dealerization, foodservice expansion, loyalty, energy efficiency and disciplined capital development—moves Kotler believes will position Arko for profitable, sustainable growth in a changing convenience retail landscape.
“We’ve acquired a variety of businesses over the years, and I see our company as highly entrepreneurial,” Kotler said. “Because of that, we decided in 2024 to pause—not to stop pursuing acquisitions, but to take stock, reassess and determine where we want to be in one, two and five years.”
Since the third quarter of 2025, Arko has converted 374 locations to dealer sites, installed backer board at 1,000 stores to promote its other tobacco products (OTP) assortment and advanced several other initiatives tied to its reset. Arko also announced in February that its subsidiary, Arko Petroleum Corp., began marketing its planned initial public offering (IPO). Later that month, it priced its initial public offering at $18 per share and was listed on the Nasdaq under the ticker symbol “APC."
- GPM Investments is No. 10 on CSP’s 2026 Top 40 update to the 2025 Top 202 ranking of U.S. c-store chains by store count. Watch for the full 2026 Top 202 ranking in June.
Arko operates in four reportable segments: retail, wholesale, fleet fueling and GPM Petroleum, which sells and supplies fuel to its retail and wholesale sites. As of Sept. 30, Arko’s subsidiary and convenience arm GPM Investments operated 1,182 retail convenience stores, supplied fuel to 2,053 gas stations operated by dealers and operated 288 cardlock locations. Its c-stores are under the brand names: fas mart, shore stop, Scotchman, BreadBox, Young's, Li'l Cricket, Next Door Store, Village Pantry, Apple Market, Jiffi Stop, Admiral, Roadrunner Markets, Jiffy Food Marts, E-Z Mart, 1 Stop, TownStar, ExpressStop and Handy Mart.
CSP spoke with Kotler and his leadership team about the company’s transformation plan and how it is progressing as one of the top 10 largest c-store chains by store count in the country.
Accidental entry to c-store empire
Kotler, who describes himself as an entrepreneur, says he got into the c-store industry by mistake back in the 2000s, when many companies in the industry went bankrupt.
In 2003, he orchestrated the purchase of the fas mart c-store chain, rescuing it from bankruptcy and creating GPM Investments. He stepped away from the company in 2006, then came back in 2011.
“My dream has always been to do what we’re doing today. If you were to ask me in 2011, when I came back, that we’re going to end up with almost 3,500 locations under our belt, I would tell you there is no chance.” -Arie Kotler
Getting to this point, however, has had its challenges.
In 2024, the company reported same-store merchandise sales, excluding cigarettes, were down 2.1% versus the same period a year ago on the company’s fourth-quarter and full fiscal year earnings call. Net loss for the 2024 fourth-quarter was $2.3 million compared with net income of $1.1 million in the prior year’s quarter. For the year, the company reported net income of $20.8 million compared with $34.6 million.
The numbers began to improve, though, following the introduction of the transformation plan. Net income for third-quarter 2025 was $13.5 million compared with $9.7 million during the same period in 2024, the company said. Merchandise margin for third-quarter 2025 increased to 33.7% compared with 32.8% during the same period in 2024.
“Our third-quarter results demonstrate continued and steady progress as we execute our transformation plan,” Kotler said.
While the company continues its evolution, it reported on Feb. 3 that based on preliminary financial data, full-year 2025 net income is expected to be between $19.1 million and $21.3 million, and full-year 2025 adjusted EBITDA is expected to be between $246 million and $249 million. The full earnings report was released Feb. 25.
In December, the company named former Murphy USA CFO Galagher Jeff executive vice president and CFO.
Jeff said he sees tremendous opportunity as the company advances its multi-year strategic refresh.
“One thing that was very attractive to me about Arko is that the transformation is real. I believe the potential for step-function growth is absolutely at our fingertips.” -Galagher Jeff
Having held senior and executive finance roles with retailers including Dollar Tree, Advance Auto Parts and Walmart, Jeff says Arko’s reset stands out.
“My 20 years in retail, supplemented with the last several years in fuel, positions Arko to make better integrated decisions and help invest where we know we’re going to win,” he said.
Dealerization, he said, is a critical lever, adding that it “allows us to focus on a smaller base of stores that can win.”
Converting convenience stores into dealer sites within the company’s wholesale segment is also part of Arko's transformation plan. The strategy, which began in 2024, is to enhance profitability, the company said. As of Feb. 4, 374 stores have been converted.
At Dollar Tree, Jeff recalled underperforming stores often consumed disproportionate capital and attention.
Instead of spending significant capital and time on more challenged stores, “What Arko has been able to do is say, ‘Got it—there is a solution now for those stores,’” he said. “As we get a smaller base of directly operated stores after dealerization, we’re going to see our retail sales start to grow, which changes the dynamic of the company.”
Understanding the c-store customer is also key. Convenience, Jeff said, now means meeting customers wherever they are.
“You have to meet evolving customer needs—whether it be an online order, a pickup or what we offer in the stores,” he said.
Relaunch of fas Rewards
To deepen customer engagement and drive incremental traffic, Arko launched its updated fas Rewards app in March. Partnering with mobile app-builder Rovertown, based in St. Louis, the relaunch features enhanced reporting, personalization, gamification and geofencing.
“Loyalty should feel personal,” said Stephanie Daniel, director of loyalty marketing at GPM Investments. “Our new app experience is designed to dynamically focus on a customer’s specific shopping journey with a unique home screen and offers tailored to meet those needs in real time.”
During third-quarter 2025, the company added nearly 35,000 new fas Rewards members, bringing total enrollment to about 2.4 million.
From cigarettes to cravings
As cigarette sales decline, foodservice has become a strategic priority across the c-store industry.
“The timing is perfect for us, our focus on fas craves, especially in today’s retail environment with the customer expectation for quality food without a wait,” said Ruth Ann Lilly, senior vice president of marketing and merchandising at GPM Investments. “Arko’s execution of its transformation plan happened just at the right time.”
Lilly, who previously served as tobacco, beer and wine category manager, noted how dramatically the mix has shifted.
“The industry has always relied on cigarettes,” Lilly said. “Going back to the 1990s, when I first started in this industry, cigarettes were probably more than half of our inside sales.”
Facing a significant cigarette decline, retailers have to make up for the loss somewhere, she said, adding that food is the right way to go.
At the same time, Arko is investing heavily in OTP.
“Everybody’s moving toward OTP,” Kotler said. “Cigarette consumption is down year over year, but the consumption of OTP is up.”
According to third-quarter 2025 earnings, Arko’s OTP basket grew by about 16% compared with the same quarter in 2024. Same-store OTP sales rose 6.6% compared with 2024’s same quarter, along with a margin rate increase of more than 300 basis points.
“Our redesigned back bars deliver better product visibility, a more modern presentation and stronger promotions,” Kotler said. “I believe that we are actually getting market share.”
Pivoting to foodservice
The company is redesigning elsewhere and is undertaking a substantial rethinking of its foodservice program.
GPM Investments’ first fas craves branded food offering location opened in June in a remodeled fas mart convenience store in Ashland, Virginia, outside the company’s hometown of Richmond, Virginia.
This fas craves location is the first of several planned initial sites—three remodels and two new-to-industry builds. As of January, fas craves was in five locations.
GPM decided to focus on food in mid-2024, when it saw opportunity to grow foodservice in the many sites it was acquiring, said Mike Bloom, executive vice president and chief merchandising and marketing officer at GPM.
Some companies GPM was acquiring offered food, while some didn’t.
“Our ultimate goal with acquisitions was to get to expand our footprint, increase scale and customer reach faster than organic expansion,” Bloom said. “Our acquisition strategy was the right strategy at that time. Now we’ve got all these stores, and we know we need to get into the food business.”
GPM worked with outside food consultants to develop and validate “everything from assortment, to equipment, layout, design, colors,” Bloom said. “Warm food versus prepared food versus cold food—you name it, we worked on it. We also did consumer testing on every aspect of the project.”
The “long, lengthy, process” was designed to create a cohesive foodservice brand across many different c-store brands in 33 states, Bloom said.
With fas craves, GPM created a foodservice program that is simple to carry out, Carlos Pinzon, vice president of foodservice and QSR brands, said.
“We are aware of the complexities of foodservice, and part of our design of the fas craves program is simplicity of execution for our team members,” Pinzon said. “We understand the inconsistency in foodservice across the c-store industry is because of the complexity to execute and train and retain employees.”
The fas craves program was designed for GPM’s customer, “but we keep our operations team in mind when it comes to processes and procedures,” Pinzon said.
He added, “Delicious product but very simple to execute.”
The term “fas crave,” which was decided upon after testing with consumers, will be sub-branded under a store’s brand during a remodel—and the term also will be part of newly built stores.
Testing is part of GPM’s strategy, he said, adding that after opening the first store with a fas craves program, they learned and made changes to the second store with the program. Those changes included angling the electronic menu boards differently, adjusting warmers so food would not dry out and adjusting the menu, Bloom said.
“We’re going to constantly learn and tweak and evolve,” he said.
Balancing trends and staples
Part of that process is keeping the fas craves menu on trend and offering value to customers.
“We are focused on making sure we carry the staples, but you’ve got to stay on trend,” Bloom said. “I’ll give you an example: We’re getting ready to introduce egg bites, which is an item that has had success in many QSRs.”
GPM also is preparing to add a hash brown “in a sleeve similar to fast food restaurants,” he said. However, fas craves is not just food, Bloom said.
“We have significantly enhanced our dispensed, hot, cold and frozen-beverage offerings,” he said. “We do dirty sodas now. It’s a hot trend. Customers can grab a Dr Pepper or Pepsi or Coke or Mountain Dew, add various syrup flavors or creamers to create a unique flavored beverage. We added recipe boards in our stores to help the customer.”
Deciding whether to replace an item is like doing a planogram, Bloom said.
“Food and beverage programs should be treated like any other category in the store,” he said. “Every year you should review your planogram, look at what’s selling, what’s not selling, and determine what changes need to be made for the customer.”
He added: “If there’s a hot trend in food, we don’t wait for the planogram, we want to add it as fast as we can once we source the product, test it and train the stores how to prepare it.”
Loyalty plays a part as well.
“If you join our loyalty program, you get the absolute best price on food,” Bloom said, adding that different prices are displayed on in-store menus. For example, a hot dog on the roller grill is $2.69. For a non-member, it’s two for $5, and for a loyalty member, it’s two for $3.
People power the business
In a time when convenience retailers are being asked to do more—serve better food, operate leaner and deliver a frictionless customer experience—execution matters more than ever.
For Don Muscatell, senior vice president of store operations, Arko’s transformation plan is felt most keenly at the store level.
“As a member of our leadership team, I have a front-row seat to our company’s transformation, but the true drivers of this work are our frontline teams,” Muscatell said. “We have a great culture where people want to get up and go to work every day and serve our customers.”
Muscatell also credits the company’s frontline teams for their unwavering commitment to not only the customer but to each other.
“I am deeply grateful for the way they continue to embrace new ways of working and lean into change,” he said. “This transformation isn’t just about strategy or systems—it’s about people, and serving alongside such dedicated team members is a privilege.”
Muscatell isn’t the only one who credits the company’s success to the people around him.
“It doesn’t matter how much money you have,” Kotler said. “It’s about having the right team and the right people in place—I am fortunate to have that.”
Brand strategy
Despite its scale, Arko has resisted consolidating its many regional brands into one national identity.
COO Chris Giacobone, who joined GPM in 2005 as part of the acquisition of DB Marts, said that from a promotional advertising perspective, Arko has been successful managing multiple brands.
He recalled after one acquisition years ago, Arko rebranded the store, but the revamp didn’t resonate with customers who missed the familiar brand. It proved to be a valuable lesson going forward, Giacobone said.
“It would be obviously easier from a marketing perspective if we had one brand, but we’re keeping those brands because they mean something—they’ve been in neighborhoods for generations and people are comfortable with them,” he said.
Giacobone admitted that there have been “many, many discussions” about becoming one brand, but that experience from way back “stuck with us.”
Bloom added, “The only common branding thread through all the stores today is our loyalty program, fas Rewards.”
He said that GPM is looking to bring these brands together as a “family of community” brands. It is not interested in changing the banners of store brands because the brand name is important in the market and many of the banners have been around for 30-plus years.
“As an example, Scotchman stores in North and South Carolina and Tennessee have been around for decades,” Bloom said. “The brand is deeply familiar to customers, so a name change could disrupt established shopping habit[s], create confusion and potentially weaken the sense of trust and loyalty build over time.”
Kotler maintains an “always-on” entrepreneurial mindset—but emphasizes humility.
“If we learn that something isn’t right, we’re going to fix it—there is no ego here,” he said.
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