Store Count: What’s in a Number?

Angel Abcede, Senior Editor/Tobacco, CSP


CHICAGO -- While growth in store count is impressive unto itself, what retailers reviewing CSP's newly expanded Top 202 list of convenience chains should consider is the actual business formats and competitive advantage they bring to the street, according to observers.

Multiple dynamics factor into whether companies grow, stay put or sell out, said David Bishop, managing partner for Balvor LLC, a sales and marketing consultancy in Barrington, Ill. Access to capital, supply-chain logistics and the chain’s cultural composition all drive growth—or lack thereof.

Yet another critical piece that makes store count relevant is actual competitiveness. Growth through acquisition can bring buying power, administrative efficiencies and new revenue, but true competitiveness precludes chain size.

Here are some differentiators that observers say outshine the numbers when it comes to winning on the street …

Knowing the customer


Sometimes retailers can fall into a trap of being “process driven,” Bishop of Balvor explained, forgetting the job of understanding their customers. “They are more in the merchandising camp, stocking the basic stuff, the top sellers, getting deals from vendors.

“Others are more of a marketer, giving customers what they want when they want it,” he continued.

“They have a single-minded focus, keep their eye on the ball and put everything they have into their businesses,” said Joseph Bona, president of MoseleyBona Retail, Franklin, Mass. “Anyone who wants to go into [their] markets, I wish you luck.”

Employee focus

C-store employee

Many successful c-store operators focus on their employees. “While the store may not be sexy, the people are nice,” Bishop said. “They have a strong, family culture; employees get paid more; and people have worked there for a long time.”

David vs. Goliath

Independent retailer

Though success may have little to do with chain size, Bona of MoseleyBona Retail said smaller companies do face pressures of consolidation and issues of scale. “[Larger] retailers can offer better prices, hire the right people, get the supplier deals … it snowballs [for independents],” Bona said. “However, innovation is not going to come from the big guys. Somebody that’s got hundreds or thousands of stores will find it hard to come up with something groundbreaking that they can replicate.”

Independents, Bona said, “are more nimble and under greater pressure to come up with ways to go up against the big guys.”

The rollup trap


A growing factor tied to c-store consolidation is outside financing. Whether it’s a public company beholden to shareholders or a chain with private-equity interests, returns become a priority. “Some could argue they’ll tend to manage the business to [investors’] interests vs. the best interests of the company,” Bishop said. “[Others] say it makes the company leaner and meaner.”

Ultimately, a well-run c-store delivers on a brand promise consistently over time, Bishop said. “It takes time, commitment and money. Unfortunately, I’ve seen strong marketers gut their internal organizations, where an average teams’ tenure on categories goes from 10-15 years to two. You devalue people over process and lose a lot of your organizational memory.”