LAS VEGAS – When business is booming, convenience store retailers are happy. They even may be overcome with the desire—and the opportunity— to expand. Thus begins the biggest challenge of expansion: deciding what pace and path is the best route to success.
The NACS Show session “Expanding Wisely—Dos and Don’ts” guided retailers through c-store expansion. At the heart of the discussion was a comparative look at expansion through organic growth versus acquisition. Kolby Jones, session speaker and regional director of acquisitions for Yesway, shared his store’s account of growth through acquisitions.
Yesway is a rapidly growing convenience store chain headquartered in Des Moines, Iowa, with 150 locations across the Midwest. The Yesway brand was launched in December 2015. Its business growth strategy is built on the goal to acquire, improve and rebrand approximately 500 convenience stores.
During the session, which was geared toward mid-sized, fast-growing companies, Jones discussed the pros and cons of expansion through acquisition, and how Yesway navigated challenges along the way.
“We made the decision to grow our business through acquiring existing convenience stores. We are not doing any ground-up development, yet,” Jones said. “The challenges we have faced in doing it this way is that we get a mix of existing stores with different product offerings. And that makes maintaining consistency a challenge.”
Jones said it’s important for retailers to do their homework before choosing between ground-up growth and expansion through acquisition. To-dos include:
- Dig deep into the seller’s financials when considering the acquisition of another store
- Meet with brokers or other owners in the geographic market in which you are looking to expand
- Understand potential in-store and gas sales
First and foremost, Jones urged retailers to assess whether they are good candidates—and prepared—for expansion before making any type of move. “If a c-store owner feels they have the capacity for more stores and that they have a solid understanding of operations, they would be a good candidate for expansion,” Jones said. “It’s that simple.”