GPM Remodeling Strategy on the ‘Fas’ Track

RICHMOND, Va. — GPM Investments LLC in June reopened a fas mart convenience store in Collinsville, Va., the first of 10 remodels planned for 2021 as part of parent company ARKO Corp.’s initiative to remodel 360 of its 1,400 company-operated stores. ARKO anticipates investing approximately $360 million over three to five years to unify the stores in design while maintaining the local well-known banners in each area.

The goal of this initiative is to enhance the overall customer experience and value offering as well as expand the product assortment.

Click here for more details on this remodeling initiative …

The Collinsville, Va., “remodeled store features a fresh look from the inside out including an easy-to-navigate format and expanded food and beverage offerings,” said Michael Bloom, executive vice president and chief marketing and merchandising officer at GPM.

Arie Kotler, CEO of ARKO and GPM, said, “We have been working on this prototype over the last year and are very excited about the extensive remodel program and the benefits it will bring to our existing customers, as well as new customers who will be drawn in by the fresh new look. Over the past few months, we have had the opportunity to take learnings from our customers’ shopping behaviors as well as the changing consumer environment and implement key updates to our remodel program and in-store offering to provide an enhanced customer experience emphasizing the local regional brand.”

He added, “We believe this remodel program will generate approximately $72 million of incremental EBITDA over the next three to five years. In addition to our other strategic initiatives, including our continued core acquisition strategy … this aggressive remodeling program underlies our confidence in our ability to continue to drive strong and consistent growth and returns for all our stakeholders.”

This remodel program across the company’s entire portfolio of brands will expand the product assortment and enhance the customer experience through new design, assortment, navigation and layout, including:

• An expanded freezers for frozen foods.
• An expanded grab-and-go open-air coolers for prepared foods.
• Roller grills for hot dogs and Tornados.
• A hot grab-and-go area for breakfast sandwiches and bakery items.
• Walk-in beer caves.
• An expanded fountain drink assortment with chewy ice.
• Frazil frozen drinks in more than 800 stores.
• Expanded coolers for water, soda, energy drinks and beer.
• Bean-to-cup coffee.
• Essential safety items including hand sanitizers, pump soap, masks, gloves and wipes.
• A new checkout experience.
• Delivery is available at 20 sites, rolling out delivery via DoorDash at more than 300 additional stores this year.

In July, GPM completed the second remodel as part of the initiative, a fas mart c-store in Mechanicsville, Va. It focuses on the fas brand to include fas Drinks, fas Eats and the newly relaunched fas Rewards loyalty program. It offers DoorDash delivery including beer. It also has a “What’s Up Mechanicsville” community wall.

Key enhancements include …

The store has a new interior and exterior design, including a controlled path for queuing at the register that avoids clutter and allows for last-minute high-impulse shopping.

The store uses digital deli menu boards.

A newly incorporated store deli features fried chicken, pizza and hot grab-and-go snacking items, and an expanded grab-and-go area for prepared foods including hot dogs, Tornados, nacho cheese, chili and chips, breakfast and lunch sandwiches, burritos, pizza, wings and more.

The store includes expanded roller grills with new offerings.

The store features two bean-to-cup coffee machines with Colombian, house, dark and decaf roast coffee.

A walk-in beer cave is new to this location and offers easy access to a wide variety of cold beer, including larger value packs, craft beer and seltzers.

The store has an expanded fountain assortment featuring 16 flavors and chewy ice, as well as a Frazil frozen non-carbonated drink machine with Tiger’s Blood and Tangerango flavors. It also offers an expanded hot, cold and frozen beverage assortment.

The store includes two expanded freezers for frozen foods including DiGiorno pizzas, Totino’s Pizza Rolls, Stouffer’s pizzas and frozen meals, Hot Pockets, Bagel Bites, Devour frozen meals and White Castle Cheeseburgers.

Breakfast offerings include a warm grab-and-go area at the checkout for breakfast sandwiches and a self-serve individually wrapped doughnut assortment next to the coffee.

In late August, GPM kicked off resets of its Wisconsin c-stores operating under the R Store, Jetz and Bread & Butter Shop banners.

The updated layout of the center store planogram resets includes more than 300 new items and the latest 2021 expanded assortments across candy, grocery, frozen foods, health and beauty care, automotive, salty snacks and more. The reset also includes improved merchandising and adjacencies and updated endcap displays.

As stores are reset, they will transition to Core-Mark International Inc., Westlake, Texas, for delivery of fresh food and a broad array of center store planogram merchandise, following ARKO’s extended wholesale agreement earlier this year.

The store planogram resets are separate and in addition to ARKO’s existing remodeling initiative.

"Our planogram reset program focuses on updating the layout and assortments in stores to enhance the overall shopping experience for our customers,” said Jennifer Colley, space planning manager at GPM. “From salty snacks to candy to automotive items, shoppers will have easy access to even more products that meet their needs in an easy to navigate layout.”

“Nothing is going to slow us down,” CEO Kotler said in mid-August on ARKO's second-quarter 2021 earnings call regarding the remodeling initiative.

“What we’re dealing over the past few months is really, we’re making sure we have the right concept in place. And then we’re basically going to increase the pace,” he said. “However, we want to make sure that we see at least 20% return on investment on the concept and those things take some time.”

He said the company expects a third remodeled site, a raze-and-rebuild location, to open within the next two months.

The site “will be a 5,600-square-foot travel center, nearly two times larger than our average store with 26 fueling position located on six acres of land in Rock Hill, S.C., just off Interstate I-77,” he said. “Two additional sites have completed the design phase and are in the permitting process. Construction on those sites is planned to begin by the end of the third quarter. Three additional sites are in the design phase, and we’ll be moving to permitting shortly. Planning for 2022 has already begun, including the addition of resources to increase the scale and pace of remodels.”