BONHAM, Texas – When Kwik Chek Convenience Stores Inc. purchased Carrizo Springs, Texas-based Cleo Bustamante Enterprises Inc.’s chain of eight convenience stores in a deal that closed on Jan. 4, it was more than just another acquisition. The stores became part of a cycle of remodeling and new-builds as the retailer executes its growth strategy.
“We acquired the stores primarily due to their location in the state, and also because of the size of towns they are located in,” Kevin Smartt, CEO of Kwik Chek, told CSP Daily News, “as well as the size of the stores and the quality of the assets. We operate two stores in Laredo, Texas, and so this allowed us to fill in an area that made it more efficient to operate in that part of the state. So it gives us now a nice pocket of stores in that south, southwest Texas area.”
The Cleo’s Convenience Stores are located in Asherton, Carrizo Springs, Crystal City, Eagle Pass and La Pryor in southern Texas. Seven of the stores market Valero-branded gasoline and one markets Shell-branded gasoline. Four are cobranded with Subway quick-service restaurants (QSRs), one is cobranded with both a Subway and a Church’s Chicken and one is cobranded with a Subway and a Papa John’s. Four have laundromats and one has an automatic car wash.
Bonham, Texas-based Kwik Chek has 36 c-stores and grocery stores in Texas and Oklahoma. It ranked No. 164 in CSP's 2017 Top 202 list of the largest c-store chains in the United States.
For its size, the Kwik Chek chain covers more territory than many other chains, Smartt said. “We’re 1,250 miles north to south, and 950 miles east to west,” he said. “We cover North Texas, and we surround some of the Dallas-Fort Worth market. We are in Temple, Texas, we’re in Austin, Texas, and a lot of the hill country towns in and around. We have some scattered around the outskirts of San Antonio down to Laredo. And we go out to West Texas. We’re in Midland, Texas, as well. So there’s a large swath of territory that we cover.”
He said the company will rebrand the Cleo’s stores to Kwik Chek and is evaluating which will get its proprietary Kwikcafe foodservice concept and which will keep the existing cobranding. Kwikcafe offers a fajita, taco and fried chicken program. It takes fresh tortillas, presses them out and cooks them fresh in front of the customer. All the meat is cooked fresh in the store in an open, “theater-type” of concept for the consumer to see everything that’s going on in the kitchen.
“We think that food concept we operate works very well in the Texas market,” said Smartt. “Right now, we estimate that five of the eight stores we would end up converting to the full Kwik Chek with a Kwikcafe.”
The company is planning further expansion, he said. It will begin building and expects to complete two new stores in the Austin, Texas, metropolitan area this year. “We are having discussions on a potential acquisition that might fall into 2018,” he said.
“We have come to the point where we’re going to try to have some new-builds annually, and keep acquiring,” Smartt said. “We hope to get a balance of both. I think the new-builds will also really help us fully develop our brand.”
He detailed the upward, cyclical strategy. “We’re going through a process of taking our new reimage one by one through the chain—that’s really a full remodel. We’re going to take some of those elements into the new-builds. But at the same time, we’re trying to raise the bar in the new-builds in terms of the brand and the offering, and then we want to take some of those elements back into the new generation of remodels.”