Gas station convenience stores on the rise in Florida

Cox NewspapersMarch 28, 2013 

In 1927, Southland Ice Co. decided to try offering such staples as bread, milk and eggs. The concept worked, and 7-Eleven was born.

Fast forward to 2013 when the number of convenience stores in the United States exceeds the number of drug stores, supermarkets and dollar stores combined, according to Nielsen data. Most are open 24 hours a day.

Atlanta-based RaceTrac, among convenience stores expanding in Florida and other states, is known for selling gasoline at some of the lowest prices around. Its stores are becoming larger and offering more food, including sandwiches, salads and fresh fruit.

"Convenience stores are getting the shoppers who want hassle-free. They have a need. We're filling it and giving them their day back. They expect a Disney experience, a Wal-Mart price and inventory, at the speed of convenience," said Jeff Lenard, spokesman for the Association of Convenience and Fuel Retailing.

The U.S. convenience store count grew to a record 149,220 stores as of December, according to Nielsen. More than 82 percent sell gasoline.

RaceTrac has 158 convenience stores in Florida, out of its total of more than 630. That includes its company-operated stores and those under the RaceWay flag, run by independent contractors. It has opened 80 stores in the past three years. In 2012, 10 of the 25 new stores were in Florida, said company

spokeswoman Amanda Rodriguez.

Florida's growing population, soft real estate market and business-friendly environment are fueling the expansions, experts say.

Such other regional players as Wawa, Pa.-based Wawa and Thornton's, headquartered in Louisville, Ky., have recently entered the Florida market, but so far are confining their new stores to the Orlando and Tampa Bay areas.

RaceTrac waded into Palm Beach County in the mid-90s when it built stores in West Palm Beach, Riviera Beach and Boynton Beach. It wants to build another store, which would be a RaceWay, in the Greenacres area, where it purchased a tract just under 2 acres in 2011. The company is seeking a land-use change.

In a scenario that is not unusual, the retailer is encountering resistance from residents near the proposed station. Nautica Isles residents have told Palm Beach County officials that a 24-hour convenience store could bring bright lights, late-night activity and possibly crime.

Residents also have opposed RaceTrac stations in Port St. Lucie, Cocoa Beach, Cape Coral, the Tampa area and in other states.

Along with demand from consumers in a rush, the convenience store sector's growth has been helped by real estate prices.

"Property values have taken a little dip," said Marc Gomes, a suburban Lake Worth broker whose company, Petro Preneur LLC, specializes in the properties. "You have to buy the land right.

"RaceTrac's business model is big front courts. The front of the station -- the canopy -- has 15 to 24 fuel dispensers. You are drawn into it. The stores are definitely getting bigger right now. The big influx is RaceTrac here and Wawa in Orlando and Tampa," Gomes said.

The food service is growing the most, with the profit margins in yogurt bars, coffee or smoothies much higher than in gasoline.

"RaceTrac's competitor is anybody within a mile of them. People are very price-sensitive," Gomes said. "There are pockets where Raceway can take volume away from other people."

The business model the innovative company has tweaked over the years -- keeping things simple with well-defined areas for coffee, candy and cigarettes -- seems to be working.

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