National Petroleum News (NPN) has been the independent voice of the petroleum industry since 1909 as the opposition to Rockefeller’s Standard Oil. So, motor fuels marketing and retail is not just a sideline for us, it’s our core competency.
Issue link: https://read.dmtmag.com/i/38448
RETAIL OPERATIONS BY MAURAKELLER Factors to consider when evaluating a location SITE SELECTION one of the most difficult problems facing many petroleum businesses is selecting a solid site for their first (or fifth) store that is logical, profitable, and competitive. N COMPETITIVE FACTORS Evaluating site selection is not a new concept for today’s c-store owners and operators. “If the num- ber [of c-stores] is 146,000 in the country, 60 per- cent are independently single-store operators,” says Travis Heiser, chief executive officer at IMST Corp. “Nine out of 10 of the projects we work on are single site evaluations. Essentially a client has iden- tified a property that they are interested in. This typically includes two different scenarios—either they are building a new store or they may have an existing store, but it is time to do a major upgrade to it and it is such a significant investment that they are looking for a third party evaluation. The focus of our evaluations is sales forecasting, primarily fuel gallons and convenience store dollars.” That said, Heiser says that site evaluation has become trickier during this challenging economy. “There are some macro things that have changed. People have less discretionary income, there’s not as much impulse buying, miles driven are down, fuel gallons are down, and fuel prices are up,” Heiser says. “People are going in saying, ‘I’m going to put $40 in my tank,’ not ‘I’m going to fill this up.’ When that $40 is gone, it is more difficult to entice them to enter the store to sell them a taco.” So what type of competitive factors must be considered when evaluating a new site? According to Marianne Hillhouse, senior sales representa- tive at Market Planning Solutions Inc. (MPSI), when building a new site, retailers must evaluate 18 JULY/AUGUST 2011 OWHERE IS THE PROVERBIAL REAL ESTATE mantra “location, location, loca- tion,” more apropos than in the con- venience store environment. During this time of economic uncertainty, and understand every component of the “retail value chain” and how their new site compares to the pacesetter within their marketing area for each attribute. HIllhouse says that there are several key com- ponents to the retail value chain that are critical to the success of a new site. These include location, facility, merchandising, price, operations, brand and competition. “Retailers must understand each component and how their new site stacks up to the competition for each component,” Millhouse says. “The most successful new sites do not have any weak links in their retail value chain.” Location. Successful site selection begins with finding the right location. “The old adage ‘location, location, location’ still applies,” Millhouse says. “As consumers are in a hurry to meet the many demands on their limited time, they are looking for a quick way to satisfy their need for certain products. The population base is moving from the inner city to the outlying communities. Consumers are now traveling greater distances to get to work, run errands and attend functions. The importance of traffic cannot be ignored. The location needs to have an adequate number of vehicles passing by each day.” Demographics. C-stores serve very micro geog- raphies. “A new customer may ask us to come to his property in Pittsburgh. But the client is thinking to himself, ‘How can someone from IMST come to my store in Pittsburgh to evaluate it when I have lived here my whole life,’” Heiser says. “But the reality is I have to understand a very small area of Pittsburgh to understand how his convenience store might perform in the future. He is going to influence a relatively small geography.” Heiser says that what has become trickier is that c-stores depend on little niche pockets of demand. “It could be a construction team that starts their day a ½ mile from your site every morning,” Heiser says. “The construction team grabs breakfast at NPN Magazine n www.npnweb.com