Completing the Circle

MACS almost done with c-store conversion to Circle K brand

Angel Abcede, Senior Editor/Tobacco, CSP

RICHMOND, Va. -- With just 10 stores to go, Mid-Atlantic Convenience Stores (MACS) soon will have all of its 71 company-operated stores branded Circle K.

The effort, which began last summer as reported by CSP Daily News, brought in new coffee, fountain and roller-grill programs, all of which will help define Circle K for markets such as Baltimore, Washington and MACS' own headquarters city of Richmond, Va.

With 30 newly rebranded stores in the Richmond market, the chain of 300 company-operated and dealer stores can move from site-level signage to radio and other media to communicate its brand message, said Derek Gaskins, senior vice president of marketing and merchandising for MACS.

"We can talk about the quality of our roller grill with its Ballpark and Hillshire Farms [products] and the Premium K coffee, telling how the 100% Arabica beans are picked, roasted and brewed," Gaskins told CSP Daily News. "It's the first time we're telling our story."

With this phase of the rebranding drawing to a close, Gaskins said, "Now we can focus on rebranding some of our dealers and the hundreds of other independent operations in [our] exclusive brand-development … region."

What may surprise many in the industry is how little presence Circle K has in the markets that MACS operates in, Gaskins said last summer, after the chain negotiated with Circle K's parent company, Laval, Quebec-based Alimentation Couche-Tard Inc., to be a regional "brand developer." That development territory will cover four Mid-Atlantic regions, basically Virginia, Maryland, Delaware and the District of Columbia.

"We are based in growth corridors," Gaskins said. "When you look at both population density and people moving into the area, income levels, job factors ... it's a very powerful region."

Another compelling factor was the deal struck regarding its brand-developer status. Calling the agreement "flexibility within a framework," officials said it essentially allows MACS access to established Circle K programs with the ability to tweak or develop areas in the store that MACS officials feel they can execute better.

As a bonus, MACS will be able to create stores that represent the best that the regionally focused Circle K has to offer, said Brad Williams, formerly with Cary, N.C.-based The Pantry and now senior vice president of operations for MACS.

"Many of these programs have not been rolled out nationally," Williams said. "We'll be able to take the new initiatives that have become popular in Phoenix and the West Coast and bring them all into the Mid-Atlantic states in a big way."

The decision may lead many to wonder about the nature of the deal and what drove the tactical thinking. "I don't want there to be confusion," said Dan Pastor, CEO for MACS. "We were not acquired by Circle K, nor do they have ownership. We are an independent company. We're now a regional developer for Circle K on an exclusive basis, so no one else can develop stores [in our area]."

Initially formed in mid-2010, MACS was created by the Greenwich, Conn.-based private-equity firm Catterton Partners, which was intent on taking advantage of the fragmented c-store channel and its continuing consolidation.

In June 2010, MACS acquired a majority interest in Uppy's Convenience Stores Inc., Richmond, and 170 c-stores and fuel stations from Houston-based ExxonMobil. Today, MACS is comprised of approximately 300 company-owned and dealer-operated retail locations throughout Maryland and Virginia, along with a wholesale, fuel-distribution network.

The MACS team began exploring brand-development options in earnest in the fourth quarter of 2011. They pursued a two-pronged path: proprietary-brand development and a licensed-brand strategy, eventually seeing its best alternative in the Circle K arrangement.

Today, the company has 300 corporate and dealer sites spanning Virginia and Maryland. The greatest concentration of sites is in Richmond, the northern Virginia suburbs of Washington, D.C., the Maryland suburbs of D.C. and the Baltimore region. The Circle K chain has more than 6,000 stores in the United States and seven other countries.

For more on this story, see the November 2012 issue of CSP magazine.

Angel Abcede, CSP/Winsight By Angel Abcede, Senior Editor/Tobacco, CSP
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