ROCKFORD, Ill. -- With Road Ranger's recent acquisition of 15 stores in the Louisville area, the chain is well on its way to attaining its goal of owning and operating 100 stores by year's end. The Rockford, Ill.-based gas station and convenience store chain recently signed an operating lease for 15 Fast Break Food Mart locations there. It also hired Food Mart's owner, industry veteran Jack Helmick, as senior vice president of operations and marketing.
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Road Ranger now operates 87 locations in seven states, and company officials said that hope to reach 100 in the next year.
"We want to keep gaining scale for a lot of reasons," CFO David Saporta told The Rockford Register Star. "It allows us to recruit the best talent in the country. It also gives us buying power with suppliers and vendors."
But Road Ranger's expansion is not fueled by prices at the pump. The company made about the same profits in 2008 as it did in 2007. It had weaker profits in the first half of the year, when prices soared, and saw better returns in the second half, when prices fell.
"The wholesale price of fuel products change more rapidly than the price on the street, so when it goes up, it's tougher on the retailer, and when it goes down, we do better," Saporta said.
Instead, its growth was funded by selling most of its properties in 2006 and leasing them from the new owners. That made the company tens of millions of dollars to use to expand. It also got Road Ranger out of the real-estate business before the bubble burst, said the report.
"I wish we could say we knew that would happen," Saporta added. "We did know that values were very high and somewhat inflated. We wanted a quicker way to grow."
The company added locations in Illinois, Kentucky and Ohio last year, increasing its annual sales from $680 million in 2007 to $875 million in 2008, the report said, but it saw gasoline sales drop from 800,000 gallons a day last year to 750,000 now. The chain has put increased importance on selling products inside its stores, following a national trend where fuel sales make a smaller percentage of retailers' profits.
Saporta said Road Ranger will keep looking for other locations to take over, but will be conservative because of the financial climate. It recently opened a new store in Marengo, Ill., and Saporta said others could follow in that part of the Chicago suburbs.
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