RICHMOND, Va.—ARKO Corp., which owns GPM Investments, said it has continued to expand its delivery services partnership with DoorDash, which now operates in nearly half of all the convenience stores the company operates.
Offering delivery services has grown to be a key way c-stores are delivering convenience and reaching customers as the pandemic wears on. ARKO last month completed one of its latest store remodels. The fas mart store in Mechanicsville, Virginia, is among the 684 ARKO stores that offer DoorDash delivery. The Mechanicsville fas mart’s partnership with DoorDash includes beer delivery.
ARKO plans to remodel 360 out of 1,400 company-operated stores across its family of community brands and plans to invest about $360 million over three to five years to unify the stores in design while maintaining local well-known banners in each area. The goal is to enhance the overall customer experience and value offering, as well as expand the product assortment. (Read more about the strategy in “Tying It All Together” in NACS Magazine.)
ARKO had 1,381 retail sites at the end of its fiscal second quarter, the company said yesterday in reporting quarterly results.
Same-store merchandise sales rose 2.4% compared with the year-ago quarter and climbed 7.4% on a two-year stack basis. Excluding cigarettes, same-store merchandise sales increased 4.3% compared with the year-ago period and were up 10.2% on a two-year stack basis. Merchandise margin increased 140 basis points to 28.7% from 27.3%.
ARKO reported a 19% decline in retail fuel margin cents per gallon to 34.3 cents per gallon compared with the year-ago quarter, while same-store fuel gallons sold increased 11.9%.
ARKO said it extended its wholesale merchandise agreement with Core-Mark International and expanded coverage to include 1,055 locations, up from 865 previously.
“Not only was our in-store merchandising strategy on full display, but our M&A engine also proved to be highly productive, led by the continued successful integration of Empire and the acquisition of the ExpressStop stores,” said Arie Kotler, chairman, president and CEO of ARKO, in a press release.
“Integration efforts for the differentiated wholesale asset are running ahead of expectations as we’ve managed to extract notable cost synergies and generate incremental growth. With a strong balance sheet and clear strategic vision, we are excited to continue the strong execution of our priorities as we aim to drive growth and increase shareholder value,” Kotler said.
DoorDash, meanwhile, is now the largest provider of third-party food delivery services in the U.S. Besides ARKO, the San Francisco-based company’s convenience store partners include 7-Eleven, Casey’s, Circle K, Wawa and more.
Yesterday, DoorDash reported that revenue in its fiscal second quarter nearly doubled based on strong demand for its delivery services from everything to food to household and health and beauty goods.
In an interview with the Wall Street Journal, Prabir Adarkar, chief financial officer, said the company will continue to grow, albeit at a slower pace than in 2020. “What’s encouraging is that you’re seeing continued stickiness in terms of consumer behavior. New habits and behaviors have formed,” he said.
NACS Research last year released its landmark “NACS Last Mile Fulfillment in Convenience Retail” study, outlining the opportunity for convenience retailers to grow sales and expand customer reach as the market evolves. Download it free here.
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Register to attend the 2021 NACS Show October 5-8, at McCormick Place in Chicago and take advantage of the education sessions on technology, including the sessions Meeting Consumers Where They Are—Everywhere on October 5 and Drive-Thru and Curbside: Is This the Future for C-Stores? on October 6.