Conventional Convenience Stores R.I.P.
By George Anderson
“You can no longer have stores that rely on cigarettes, beer and cheap gas,” Clay Hamner, co-founder of the bankrupt Swifty Serve convenience store chain told the News-Observer of Raleigh, North Carolina. “That business model is gone.”
Mr. Hamner and actor Wayne Rogers are heading up an investment group that has made a $93 million dollar bid to buy the top-performing 200 Swifty Serve locations. The chain, which filed for Chapter 11 protection last week, has 420 stores. In its bankruptcy filing, the chain listed debts totaling more than $100 million.
In addition to the group headed by Messrs. Hamner and Rogers, others reportedly interested in Swifty Serve include Alimentation Couche-Tard, MAPCO and The Pantry chain.
Moderator’s Comment: Is Clay Hamner correct? Is the
traditional convenience store business model no longer workable?
Any business that depends almost entirely on slow/no growth
or even declining product categories is setting itself up for failure.
Beer (managed correctly) remains a very good business
to be in. Operating pumps is, essentially, a requirement for entry into convenience
retailing these days, even if the profits are not there. The convenience store
industry’s reliance on tobacco, however, needs to be reduced, if not kicked
Anderson – Moderator]