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Why is SGF so enticing to Kum & Go?

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First entering the Springfield market 15 years ago, West Des Moines, Iowa-based Kum & Go LC’s local construction activity is hard to miss these days.

Beginning in 2012, the convenience store chain started building new stores – in some cases, tearing down stores to construct new ones in their place.

“We’ve spent a lot of time rebuilding the market,” said Niki DePhillips, senior vice president of store development at Kum & Go. “We’re nearing a completion of that plan.”

From 2012 through next year, the company will have invested about $140 million in the Springfield metropolitan statistical area for construction projects, DePhillips said.

With dozens of area stores added to Kum & Go’s portfolio via acquisitions, company officials say the appeal of the Springfield market is a strong employee base and several major routes to draw vehicles needing to fuel up.

The company has bolstered its market presence in the area to 46 stores, including the towns of Ozark, Republic and Clever. That’s 11 percent of its total store count and just one behind the 47 operating in its hometown market of West Des Moines. Eighteen new stores have been built during the past seven years, with four more currently under construction this year, DePhillips said. Two more stores are on tap next year, she added.

“We’re still working to fill the 2020 pipeline, so there could be additional ones we’ll be adding,” DePhillips said.

Market entry
Kum & Go first arrived in the Springfield market in 2004 via a $9 million acquisition of all but four of Tulsa, Oklahoma-based Git-N-Go stores in bankruptcy court. Five years later, Kum & Go purchased 37 area stores from Springfield-based Cody’s Convenience Stores. That 2009 acquisition was a chance for the company to build out its brand, as DePhillips said a lot of the Cody stores were older assets and targets for renovations or teardowns for new construction.

“We had the opportunity for both companies,” she said of Git-N-Go and Cody’s. “It was a market we saw a lot of potential in.”

In 2018, Kum & Go ranked 192nd on Forbes magazine’s list of America’s largest private companies, with $2.4 billion in annual sales.

As Kum & Go is based in the Midwest – tallying over 430 stores in 11 states – DePhillips said demographics and population growth influences where the company establishes its footprint. The Springfield area being surrounded by several major routes, such as Highway 60, Highway 65 and Interstate 44, also was attractive.“It fit nicely in with the other markets we have in the Midwest,” DePhillips added.

Companywide, Kum & Go is building 18 stores this year. Five of those are in the Springfield market.

‘Big boom’
Sarah Davis, stormwater specialist for the city of Springfield, is rather familiar with Kum & Go’s construction projects.

“I’ve been very involved with them because I have to review every one of their plans,” Davis said.

Any construction site over an acre is required to receive a city land disturbance permit.

Davis reviewed four permits from Kum & Go in 2017 and another five of them last year for projects that allowed the company to demolish old stores and build new ones from the ground up.

“We’ve been seeing a big boom in Kum & Go development over the past five years,” she said.

While a fast turnaround for securing a permit is two weeks, Davis said the approval process typically averages a couple of months. She noted Kum & Go usually submits its permit requests well in advance.

“They’re not in a time crunch,” she said. “They’ve been pretty good to work with overall. It seems to be a very streamlined process.”

Construction of the company’s Kum & Go Marketplace stores, which include an open kitchen layout, indoor seating area, complimentary Wi-Fi and charging stations, are incorporated in new store projects, DePhillips said. The company’s initial Marketplace concept opened in February 2016, with the first in the Springfield market arriving the following month, she said. Two more Marketplace stores, each roughly 6,000 square feet, opened in Springfield later in 2016.

As store growth continues, DePhillips said the company requires a strong workforce.

“Our business is built on people, and there has to be people to fill our stores,” she said, adding of the company’s more than 5,000 employees, over 530 are employed in the Springfield area.

Kum & Go’s local competitors for employees and customers include Rapid Roberts Inc. and Fast N Friendly – both based in Springfield – and Ankeny-Iowa based Casey’s General Store Inc. (Nasdaq: CASY). Rapid Roberts operates 11 stores in the Queen City, with Fast N Friendly at 10 and Casey’s eight, according to the companies’ websites.

The National Association of Convenience Stores reports c-store growth almost every year since 2010. Though 2018 dipped 1%, the 153,237 c-stores operating in the U.S. by the end of the year represented a 6% increase from 2010, according to the 2019 NACS/Nielsen Convenience Industry Store Count.

Tangible results
Building in a big city like Chicago isn’t part of the company strategy, DePhillips said, as Kum & Go looks for places where it can be entrenched in the community.

Still, in cities larger than Springfield’s 167,000 population, the company doesn’t have quite the market penetration. For instance, Kum & Go operates 11 stores in Colorado Springs, Colorado, a city of roughly 464,000 people, and nine stores in Tulsa, Oklahoma, population over 400,000.

In Springfield, the company’s worked to connect with the public schools through the annual Gallons for Growth program.

The most recent effort was April 25, said Pamela Anderson, director of development for the Foundation for Springfield Public Schools. As part of the 24-hour fundraiser, Kum & Go donates 3 cents for every gallon of gas sold in the Springfield area. It also donates $5 for every new Kum & Go rewards member who signs up at the stores during the fundraising day.

Kum & Go has donated nearly $60,000 to SPS through the program, now in its 10th year. The total from last month’s event is still being tabulated, but Anderson said it should eclipse $5,000. Last year’s Gallons for Growth raised $7,200.

“It’s always been a great event for us,” Anderson said. “They put a lot of weight behind it, and I appreciate the fact that they are so community minded.”

Money raised goes back into the foundation’s back to school grant program, which is funded through community donations and helps pay for classroom projects, community engagement and field trips. Nearly $240,000 was distributed to 80 grant recipients last September by 40 volunteers, including foundation and Kum & Go representatives.

“It just proves when companies support a cause that’s important to the community, they see tangible results,” Anderson said. “In this case, it’s tangible results for the teachers and the students in the classroom.”

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