Commercial real estate market said to enable better deals for new locations

Anna Huddleston reports in Las Vegas Business Press that while other retailers are scrapping growth plans, the $624 billion convenience-store industry is getting even more aggressive in pursuit of new markets.

7-Eleven recently announced plans to add 200 stores nationwide by the end of the year. Drugstore chain Walgreens is refurbishing its stores to sell liquor and wine. Las Vegas chains are adding properties as the weak commercial real estate market opens new areas and technology makes it easier to tailor inventory to each store.

From brand-name coffee to signature products, the idea is not to just sell time (the average shopping experience is less than four minutes) but to make this pit stop part of daily routine.

 Co-owner Gary Yousef takes inventory at his All Star Mini Mart convenience store on Jones Boulevard in Las Vegas. Convenience stores say they are thriving in Las Vegas and across the nation during the economic downturn.

“Convenience stores have changed a lot in the last couple of years,” said Michael Lawshe, president of retail design firm Paragon Solutions. “We are getting more into quick consumable foods and less into grocery lines. It’s almost like a consolidation of consumer preferences, a hybrid of a fast-food chain and a convenience store melted together to offer everything you want.”

Convenience-store industry leaders will be in Las Vegas to discuss this and other trends from Oct. 20-23 at the National Association of Convenience Stores expo at the Las Vegas Convention Center.

Lawshe recently worked with Green Valley Grocery, a Las Vegas-based convenience store and gasoline station chain that remodeled some of its existing 41 stores as well as opened a prototype store that could qualify for a Leadership in Energy and Environmental Design certification. Green Valley Grocery has at least four new stores in the works.

Las Vegas-based City Stop convenience chain opened its 11th store last month and is under contract for a 12th. Sales have suffered as construction workers, a core customer base, lost jobs. And stores didn’t gain new patrons as homes went into foreclosure. However, thanks to fiscal responsibility early on, the crisis wasn’t as damaging as it could have been, and sales got back up in eight out of 10 stores this year.

“The first thing we did when we realized that we were facing difficult economic times was that we did everything possible to conserve cash and made sure we were as debt free as possible,” co-founder Jon Athey said. “That allowed us to reduce operating expenses and we didn’t have to lay off anybody.”

National convenience store franchisor 7-Eleven, based in Dallas, operates 164 stores in Las Vegas. It opened five new stores in 2009, with up to six in the planning stage.

“We have a very aggressive growth plan,” said Jim Girard, market manager for Las Vegas. “There are new opportunities in the recession because leasing is less expensive and we are in a strong position.”

One of the company’s new strategies in Las Vegas this year is business conversions. Struggling mom and pop stores join the franchise and the facility gets a $280,000 design and branding facelift. It’s a “win-win” situation because a conversion is significantly cheaper than opening a ground-up store and the store gets to leverage the brand, Girard said.

Revamping the food-service program is also a top priority, especially as cigarette sales continue to drop. Several other markets already have rolled out an expanded selection of hot foods that includes chicken wings and chicken tenders and oven-baked pizzas. Las Vegas will likely get this upgrade soon. The company already delivers salads and sandwiches daily.

“Customers are getting used to the perception that they can have a hot quality meal at a moderate price here,” Girard said.

The average convenience store has more than $20,000 a month in food-service sales, according to the National Association of Convenience Stores. This includes prepared food ($11,600 per month), hot dispensed beverages, such as coffee ($6,900 per month), commissary packaged sandwiches ($2,900 per month), cold dispensed beverages ($2,200 per month) and frozen dispensed beverages ($2,000 per month).

Read more at:  Las Vegas Business Press