Convenience Stores In The Sunshine Economy
The list of names reads like a busy rest stop on the Turnpike.
7-11. Circle K. Thortons. Sunshine Distributors. RaceTrac. Cumberland Farms. Wawa.
Add Buc-ee's to the list of convenience store chains expanding in Florida.
When the Texas company broke ground on its first store in Florida last month, it was deemed an important enough addition to the Florida economy that Gov. Ron DeSantis was there with shovel in hand, hard hat on his head and the Buc-ee beaver mascot next to him.
Buc-ee's enters a competitive landscape.
Almost 11 cents of every dollar spent at a retail or food service stores in the United States is spent at a convenience store.
While total retail and food service sales were up barely one percent last year, convenience store sales jumped almost 9 percent, according to the industry’s national trade group. Much of that was fueled by fuel--gasoline sales. Inside sales were up a more modest 2.2 percent. The market build-out has been slowing a little, though. The number of stores in Florida is about the same today as it was in 2015, yet new operators keep looking to Florida to expand.
"You don't see too many of the operators going into Connecticut or Illinois or northern states to grow or build stores," said Ned Bowman, executive director of Florida Petroleum Marketers and Convenience Store Association.
Population and tourism grow are fueling the interest by convenience stores, including Buc-ee's. "We cater to families," said General Counsel jeff Nadalo. "We cater to children and so it was a natural location for us to pick." After growing slowly for its first 36 years, and sticking to its home state of Texas, Buc-ee’s started its out-of-state expansion plans, first in Alabama earlier this year, quickly followed by three planned stores in Florida. It broke ground on the first one last month in Daytona. There are plans for Buc-ee’s near St. Augustine, Fort Myers and Ocala areas as it begins its Florida expansion.
"The growth opportunity is somewhat limited now in Texas because our stores are so large," said Nadalo.
Large may be an understatement. A Buc'ee's store can have scores of gas pumps, dozens of beef jerky flavors for sale, thousands of items in a store that stretches over 60,000 square feet. There’s also the bathrooms -- rows of stalls, staffed 24 hours by cleaning crews.
"Our customer is travelling from one large city to another. So we are now bringing that to some of the states that haven't experienced it," said Nadalo.
It’s a model that requires a lot of traffic, and a lot of space. South Florida has the traffic certainly, but land prices are expensive with more people squeezed between the Everglades and the Atlantic Ocean. And more convenience store operators looking to grow.
Wawa from Pennsylvania began opening stores here in 2017 and now has more than a dozen stores across South Florida. Racetrac out of Atlanta has been adding stops. Almost half of its more than 400 stores are in Florida. Cumberland Farms out of Massachusetts has added a few stores. And these are in addition to long-time market operators.
"There is certainly risk and I think that it's measured, controlled growth," said Nadalo. "We're being methodical about it but these are huge projects."
In Daytona Beach, Buc-ee’s paid almost $14 million for 35-acres to build its first Florida store. The local economic development agency there says the store will create 205 jobs paying over $31,000 a year on average. According to Census Bureau data, that’s about two-thirds of the median household income in the Daytona Beach area.
The company is actively looking throughout Florida for more sites, and Nadalo calls looking for potential locations in South Florida a "challenge."