According to the presentation, The Pantry will spend between $3 million and $4.5 million to upgrade 100 of its stores by the end of the year with an improved coffee bar and expanded offerings for breakfast, lunch and what the company calls "all-day snack [image-nocss] occasions."
Click here to view the presentation, filed with the U.S. Securities & Exchange Commission (SEC).
(Andclick here to read CSP Daily News coverage of The Pantry's new foodservice initiatives.)
The Pantry expects to have converted 400 to 500 stores to the new format by the end of 2011, said the report. With an average conversion price of between $30,000 and $45,000, The Pantry could spend as much as $22.5 million by the end of next year.
The executives said that they believe the investment will produce a 20% return because coffee and food sales offer the best margins of products convenience stores sell, and coffee represents a much smaller slice of The Pantry's revenue than it does of the industry's as a wholecreating a growth opportunity, the report said.
Meanwhile, The Pantry has debuted a standalone website for its Bean Street Coffee Co., at www.beanstreetcoffee.com. The site launches a competition, Battle for Bean Street: "Bean Street Coffee wants to know who has the most passionate basketball fans. UNC? NC State? Duke? We'll let the coffee cups decide."
It urges consumers to visit their local Raleigh-Durham, N.C., Kangaroo Express between November 13, 2010, and April 1, 2011, and look for the special UNC, NC State and Duke coffee cups. The customer picks his or her team's cup to fill with coffee. The school with the most cups sold wins. The Pantry will donate $20,000 to the winner's charity of choice.
The site also says it will soon launch a coffee rewards program called "Roowards."
Headquartered in Cary, N.C., The Pantry is a leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated c-store chains in the country. As of Aug. 2, 2010, the company operated 1,641 stores in 11 states under select banners, including Kangaroo Express, its primary operating banner. The Pantry's stores offer a broad selection of merchandise, as well as fuel and other ancillary services.
The company recorded 2009 net income of $59 million on $6.4 billion in revenue, about 25% of which came from merchandise sales, including food, said the report. Fuel sales accounted for the other 75%, it added.