Arko Announces Transformation Plan to Convert Some C-Stores

The company sees wholesale dealer sites as a route to profitability.

May 09, 2024

During Arko Corp.’s first-quarter earnings call, the company announced that it has “identified a meaningful number of locations that we believe will deliver more profitability as dealer sites within our wholesale segment than by continuing to operate as retail sites.” According to a company press release, the transformation plan includes the following:

  • The company aims to drive traffic and improve profitability with more aggressive and targeted capital allocation toward strategic sub-segments of its retail stores.
  • Arko looks to continue its development and execution of a pilot program to improve customer experience and value proposition with plans to expand a refined offering across the larger store network.
  • The retailer aims to fully leverage the company’s multi-segment operating model through more active conversion of retail stores to dealer sites within its wholesale segment to improve profitability.

Arie Kotler, chairman, president, and CEO of Arko, said in the earnings call that "over the last three years, we converted more than 40 retail stores to our wholesale network.” The conversion of the c-store sites is due to the company’s belief that these locations “will deliver more profitability as dealer sites” and offers the opportunity to “significantly reduce sites operating expenses and corporate G&A.”

“Over the past decade, our focus has been acquisitive as we have scaled to become one of the leaders in the convenience store industry. We now believe it is the right time to leverage our unique multi-segment operating model to more fully unlock the embedded value within our retail store network,” Kotler said.

Kotler stated that the company will share more details on the transformation plan during Arko’s Investor Day later this year.