From Dollar General to CVS and Wal-Mart to Kum & Go, the Springfield area has garnered tens of millions of dollars in investments in recent years by companies seeking to gain traction with Ozarks’ consumers.
CVS Health Corp. (NYSE: CVS) has spent around $10 million for retail pharmacies in Springfield and Nixa over the past two years, and since 2012, Wal-Mart Stores Inc. (NYSE: WMT) has shelled out nearly $9 million in the Queen City, according to Springfield Business Journal research.
And during the past two years, Kum & Go has budgeted some $24 million on store improvements and new locations across Greene County. The latest plan, turned over to Springfield City Council on Feb. 23, is to build a new convenience store at the southeast corner of Sunset Street and Campbell Avenue.
While their collective efforts to grow their presence in the area has been highly visible, the trend represents business as usual for multistate brands, said Drury University economics professor Bill Rohlf.
And the impacts aren’t all positive.
“What you’re seeing in Springfield is very consistent with what you’re seeing going on nationally,” Rohlf said. “It’s a result of national strategies and some changing national trends.
“Wal-Mart, for example, at least domestically, has decided its major growth opportunity is through these Neighborhood Market stores.”
Since 2012, the company has built five Neighborhood Markets in Springfield and has plans for a sixth at the corner of Grand Street and Campbell Avenue. The stores also have an impact on local employment to the tune of roughly 450 new hires, according to SBJ archives.
While that economic activity is positive, Rohlf said the moves made the market more competitive, spurring on Dillons’ decision to close four stores and leave Springfield after roughly four decades.
“What’s the net impact on employment? Probably not very significant,” Rohlf said. “The fact that you have new entrants into a market doesn’t mean growth is going to (occur). It is just a shaking out of competitors.
“Sales are going to be pulled from somebody.”
Hungry for lower-costs
Ankeny, Iowa-based Casey’s General Stores Inc. (Nasdaq: CASY) grew its local footprint in 2011 when it purchased five Springfield-area QuikTrip Corp. convenience stores for an undisclosed amount. Since that time, Brian Johnson, vice president of finance for Casey’s, said the company has spent millions of dollars converting the QT stores to incorporate the chain’s pizza-centered kitchens.
“Missouri is very significant to Casey’s. It’s our third-largest state from a store-count perspective,” Johnson said.
Casey’s operates 326 stores across the Show-Me State, almost one-fifth of the company’s 1,869 stores. The Missouri figure is up 27 stores since 2011, and Casey’s isn’t done.
In line with annual unit growth over 4 percent, the chain currently is building two stores in Branson. Johnson said its broader focus is in southern Missouri and Arkansas as the company extends its footprint to the south and east.
The convenience store chain targets rural areas – 57 percent of stores are in towns of 5,000 or less – and about half of its stores take on the Casey’s name via acquisitions, Johnson said.
“We’re not concerned about owning the town, if you will. But we are concerned about getting the best location we can in a community. We want to be by rooftops. We want to be in that town, and invested in our communities, because, quite frankly, for our prepared food program to succeed, it needs to have those rooftops.
“Our carryout pizza business in the evenings, when people are taking pizza home to their families, is a big part of our story,” Johnson said.
In the post-recession Springfield market, Rohlf said consumers are hungry for lower-cost groceries and retailers.
Dollar General Corp. has added three stores in Springfield over the past two years, as well as new locations in Fordland and Nixa.
Dollar General spokeswoman Crystal Ghassemi has said local stores, such as the $600,000 Nixa store, were constructed by West Plains developer Team Overland LLC, which then leases the properties to Dollar General.
“In this most recent downturn, I think you saw lots of consumers downshifting with people shopping at more lower-tier stores than they might have frequented before. And I think what you’re seeing is the stores responding to the frankly slow growth in per capita income,” Rohlf said.
Winners and losers
Still, an economy without high peaks and low valleys is appealing to the West Des Moines, Iowa-based Kum & Go LC convenience store chain.
Springfield is its No. 2 market, behind the headquarters, when it comes to store penetration.
“Only the greater Des Moines metropolitan area has more locations,” Kum & Go spokeswoman Megan Elfers said via email.
In 2009, Kum & Go made a splash in the market when it bought 37 Cody’s Convenience Stores for an undisclosed amount.
Elfers declined to disclose local revenues for the privately held chain of over 430 stores.
Less populated but always popping up on the busiest corners – Battlefield and Campbell, for instance, and Republic and National – CVS is looking to grow its retail pharmacies locally and nationally, said spokesman Mike DeAngelis. CVS added 50 stores in the last quarter to bring its total to roughly 7,900. The company operates 87 stores in Missouri, and he said highly visible intersections are clearly its targets.
“Our new Springfield sites meet our new store location criteria of being highly visible and convenient for customers to access,” he said by email.
The company currently is planning to build a store near Missouri State University at National Avenue and Elm Street, where a long-standing Hardee’s restaurant was torn down in February. DeAngelis said the new CVS, which will cost about $2 million to build, should be open by the end of the year.
For Rohlf, area investments and national strategies ultimately create a mixed bag of impacts.
“I think you see winners and losers,” Rohlf said.
“It’s not all positive, but it’s the way markets work.”[[In-content Ad]]
