Newspaper article THE JOURNAL RECORD

More Than a Dozen OKC Area Convenience Stores Sold since January

Newspaper article THE JOURNAL RECORD

More Than a Dozen OKC Area Convenience Stores Sold since January

Article excerpt

Slim profit margins at the pump are causing oil companies to withdraw from the retail side of the business. More than a dozen convenience stores with gas stations have been sold in Oklahoma County since late January.

Jeff Lenard, director of communications for the National Association of Convenience Stores, said out of Oklahoma's 2,681 convenience stores, 2,488 also sell gasoline.

In some respects, we're seeing major oil companies get out of retail, Lenard said. Profit margins in selling gas are slim. Oil companies make more money from drilling.

Because of some of the mergers we've seen, some major oil companies have divested properties, he said. I know that's hard to believe with gas prices pushing nearly $3 per gallon, but it is the guy selling the gas who is really raking in the money.

And convenience store owners aren't collecting that much these days. Lenard said retailers have a pre-tax profit of 3 or 4 cents per gallon, but even though 70 percent of a convenience store's revenue comes from gas sales, they result in just 35 percent of their profits. This has created a growing need to change the retail concept to emphasize convenience.

We are seeing convenience stores getting bigger because retailers are putting more emphasis on what's inside the store, he said. Traditionally, they were between 2,500 to 2,600 square feet. Today, we're seeing 5,000 square feet and 10,000 square feet is not unique.

To be as competitive as possible, you need to be as unique as possible in addressing that specific customer base that comes from a mile or two away, he said.

Lenard said many convenience stores have wider isles and lower rack sizes, in addition to being more welcoming to female shoppers.

Instead of looking like mini-marts, which was all right angles and a small grocery store, you see stores where there are no right angles, he said. It is more about destinations, like a coffee island or sandwich area, than mimicking a small grocery store - straight lines of the old model don't work. …

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