Two Iowa-based companies have positioned themselves as front-runners in the race for convenience store market share in Springfield.
Ankeny, Iowa-based Casey’s General Stores Inc. (Nasdaq: CASY) has agreed to purchase five Springfield area QuikTrip Corp. convenience stores for an undisclosed amount. The transaction is expected to close by August.
The move would double publicly traded Casey’s Springfield stores to eight and place it in the No. 3 spot among c-store operators in the city, though still well behind West Des Moines, Iowa-based Kum & Go LC’s 38 stores. Casey’s would pull ahead of competitor Rapid Robert’s, and just behind Fast N Friendly’s nine locations in Springfield.
Kum & Go made its market entry in 2004 by purchasing all but four of Oklahoma-based Git-N-Go’s stores – 36 in Springfield – for $9 million in bankruptcy court. Kum & Go then purchased 37 area Cody’s Convenience Stores in 2009, and it now operates 38 within city limits.
Casey’s jumped at the expansion opportunity when last fall privately held QuikTrip put on the market its five area stores, including one in Ozark.
The five c-store and gas stations to be converted to Casey’s are at 1510 N. Glenstone Ave., 2715 W. Chestnut Expressway, 2805 N. Kansas Expressway, 325 W. Cardinal Drive in Springfield and 1910 W. Jackson St. in Ozark. QuikTrip is selling another 21 locations across the country, according to www.quiktrip.com
, under a corporate initiative targeting more densely populated areas.
“With our new strategy and where we are headed now, we just didn’t see the opportunity for QuikTrip to grow in Springfield,” said Mike Thornbrugh, QuikTrip’s manager of public and government affairs, noting the company is seeking metropolitan areas with populations between 4 million and 7 million. “Our model is high volume and low margin.”
Thornbrugh declined to disclose the purchase price of the local sites but said the recent spike in gasoline prices – above $100 per barrel for crude oil for the first time since fall 2008 – did not factor into the decision to sell. He said local employees would have an opportunity to stay with the company through job transfers.
Brian Johnson, vice president of finance for Casey’s General Stores, said Kum & Go’s market dominance was not a determining factor in its agreement to purchase the QuikTrip sites.
“We don’t really decide to go into a location for fear of another chain getting larger. It’s not like when this opportunity presented itself, we said, ‘Well, we better jump on this because if we don’t, Kum & Go will,’” Johnson said.
Kum & Go spokeswoman Catherine Huggins declined to comment on Casey’s purchase agreement and its impact on the market.
Johnson said Casey’s operates 1,618 stores in 10 states, and Missouri is the third largest state in the chain with 299 stores. He said the company is currently planning two Arkansas locations, in Bella Vista and Springdale.
The QuikTrip stores will be rebranded once the transaction is finalized during Casey’s fiscal first quarter, which ends July 31, according to Johnson. He said the company would expand on its food service with the local QuikTrip buys.
“QuikTrip is a great operator. They select tremendous locations and train their people very well. Our food service program is where we think we can improve on their operations,” he said.
Johnson said each of the new stores would add kitchens within six to 12 months of the closing date. He said employees of the QuikTrip stores also would have an opportunity to be employed by Casey’s.
Todd Wilson, director of marketing for Rapid Robert’s, which has seven locations in town, said he is not concerned about Casey’s expansion.
“We compete against them in some other markets, and they are a strong competitor, but QuikTrip was also a good operator,” Wilson said. “I don’t see things changing much.”
Steve Naegler, owner of Fast N Friendly said he would rather see Casey’s pick up the locations compared to an unknown competitor.
“I never understood why QuikTrip came in and built five stores and then sat on them for 15 years. That’s not typically their model,” Naegler said adding he thought both Casey’s and Quik Trip were upstanding operators.