NEW YORK -- While of course extremely well-known in the petroleum/convenience store industry, retailers Pilot Travel Centers, QuikTrip and RaceTrac Petroleum have made Forbes magazine's list of "The Biggest Retailers You've Never Heard Of." Other channel retailers on the listmost of which sell gasolineincluded Delhaize America, H.E.B, Meijer, Army Air Force Exchange, Menards, Giant Eagle and Hy-Vee.
The magazine asked: How do you rake in billions without being Macy's, Best Buy or Staples (let alone Target or Home Depot)? Try getting in on the rest-stop space [image-nocss] along America's highways. Or building out a supermarket chain that's big enough to dominate a small region, while not worrying about a large-scale toe-to-toe match with Wal-Mart or Kroger.
The list of largest retailers in America includes plenty of chains that aren't household names, at least not everywhere. Yet some of these nonhousehold namesfrom regional grocery chains to kings of the nation's rest stopspull in as much revenue as Kohl's, Gap and Starbucks.
Click hereto view a slideshow of the retailers featured in the Forbes article.
Among the top 60, according to annual sales figures compiled by the National Retail Federation (NRF), are a trio of gas station-food operatorsKnoxville, Tenn.-based Pilot, Tulsa, Okla.-based QuikTrip and Atlanta-based RaceTracall of which supply the refueling and feeding for families and bleary-eyed truckers. Pilot added hundreds of locations in 2009 after buying competitor Flying J out of bankruptcy. Whether it's through highway travel centers or local corner stores, the money-making formula is as basic as it gets, said the report.
"It's simple. We like to be a destination for people who need gas and who are hungry or thirsty," QuikTrip spokesperson Mike Thornbrugh told the magazine. With the bulk of its 547 locations in the Midwest, the company has a footprint in the heart of driving country. National expansion isn't a prerequisite for capturing the volume needed to offset low margins.
Other multibillion-dollar retailers people don't know unless they live in their areas of operation: Pittsburgh-based Giant Eagle, a regional supermarket power in Pennsylvania, West Virginia and Ohio that's snatched up locations from Stop-n-Shop and other competitors over the years to the tune of $6.8 billion annually, and Menards, a home improvement chain that's held its own against Home Depot and Lowe's in Big Ten country (Wisconsin, Illinois and Indiana, primarily).
Like a lot of store chains, Eau Claire, Wis.-based Menards supplements its annual revenue (some $7.5 billion) with a real-estate business, said the report. Buying oversized land lots with space over and above what's needed for a store, the company will sell or lease the adjacent acreage to banks, restaurants or other retailers. Meijer, a Grand Rapids, Mich.-based Midwestern general merchandise chain that rakes in more than $14 billion annually, does the same thing, it added.
Then there's the advantage of owning those ancillary businesses outright. Pilot, the rest stop giant that sells gasoline to vacationers and traveling salesmen and diesel to truckers at more than 300 locations along major U.S. highways, owns most of the fast-food restaurants that sit on its properties. Pilot is the single largest franchise owner of Subway, with 120 locations. The company also owns all of its Wendy's, T.J. Cinnamon's, Burger King and Taco Bell restaurants, among others, leasing only with Denny's and McDonald's. Then there are the powerful coffee blends that weary truckers kill for, said the report.
"When you own it, you have more flexibility and keep more of the profits," retail investment banker Howard Davidowitz of Davidowitz & Associates told Forbes. "It costs more up front to do it that way, which demonstrates their financial strength."
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