Every day, we see more and more announcements of mergers and acquisitions within the convenience store channel. Convenience Store Decisions, an industry trade publication, tracks c-store acquisition activity closely. Merger and acquisition activity has been especially-high in the last 3-4 years. You can read more about recent industry activity at: https://csnews.com/mergers-and-acquisitions?eiq_2_end=24.
Fortunately, many convenience store operators have been able to obtain lucrative prices for their wholesale and/or retail businesses. There are many reasons that operators sell. These decisions can include economic factors, a desire to retire or lack of successor planning/no interest to continue operations within the family, pending competitive activity, the high cost of regulatory upgrades or EMV, and the recent roller-coaster ride due to the Covid-19 Pandemic. Managing through Covid-19 has also left many operators simply burned-out from the stress of ongoing business operations, trying to protect their associates and customers from the virus, dramatic revenue decreases, the EMV deadline, and the volatility of the fuel market overall. For those companies that have made their way through the fog, “growth” is often at the top of their list of future goals.
Whether you are on the selling or buying side, a major question is “How well is your company positioned for merger or acquisition?” We have put together a few suggestions on operational areas to consider should you be getting ready to “grow” or plan to build up your business to obtain the highest price possible. In addition, with many regional operators run by family members over multiple generations, are you ensuring that you are leaving your faithful associates in a good place as they prepare to take on more responsibility or grow with the new ownership? This dilemma keeps many family-operators up at night.
Some important factors to consider:
Optimize team efficiency through increased automation. No company can afford to have experts in all areas of the business, nor should they. Operators can gain expertise quickly by partnering with solution providers that can bring your company to the forefront of technology. With the right technology in place, you may not need to grow your locations “larger” to compete, you may just need to strive for more-efficient and smarter locations. Often, fuel lanes can be running as low as 50% of their optimum gallon throughput due to many factors, such as slowing flow or dispensers being out of order. Many operators put the burden of reporting such store-level issues on their store managers. Or worse, their customers! Delays in reporting can result in slow flow and down dispensers taking months to report. Immediate, data-secure, and cost-effective solutions do exist to remove this responsibility from your store managers and GM’s, freeing them up for more-important and controllable tasks. In many cases, companies also put corporate staff on the road every month to manually collect compliance reports from all of their locations! Instituting the right remote diagnostic applications can help to increase staff efficiency and decrease the resistance customers suffer through at the fuel lanes. Improving efficiency and throughput can grow your bottom line without the expensive cost and complexities of expansion in the forecourt. Quite-simply, optimize your forecourts to close the gap between your current standards and 100% efficiency. A side benefit, of course, can be higher customer satisfaction. Over time, that can pay off in more customer visits to your fuel lanes as well as those who choose come inside the store. Per NACS, the National Association of Convenience Stores, only 52% of fuel customers come inside of the store. And, that report was released before the impact of the Covid-19 Pandemic. Getting back to 52% soon will be a challenge for many operators. Read more at https://www.nacsmagazine.com/issues/march-2020/2020-nacs-consumer-fuels-survey
Consider forecourt technology upgrades to ATGs and controllers. Equipment, such as Veeder Root 450+ automatic tank gauges and Allied NexGen fuel controllers can revolutionize your business. Along with electronic sensors on lines and tanks, you can almost ensure that you will be immediately-informed of a leak well before it becomes an expensive and business-stopping ordeal. With such equipment in place, the data that can be captured and reported-upon is almost unlimited! Capture ATG alarms, flow rates, meters-out-of-variance, dispenser transaction detail, dispenser dormancy, water-in-tank, and optimum leak detection from simply having the right remote diagnostic applications and equipment in place.
Get your regulatory compliance records in order. Part of any acquisition or merger includes a review of risk and liability related to past and future environmental costs. Having records in disarray can delay or derail a fast-track acquisition. Failing to have the records available at all or disorganized can also pose a risk to getting the larger amounts of liability coverage needed or leave the future company at great risk. Know where you stand before you are asked!
2021 and 2022 will not see a slowdown in merger and acquisition activity! Prepare to grow your business or company’s value by considering some of these tips.
At Warren Rogers, we focus on the above controllable issues as well as many others. With our online portal, fuelWRAp 3.0, and dedicated analyst support, operators can gain a 360 degree view of their forecourt performance. Our exception-based portal and reports are designed with the user in mind….cutting through the “data noise” and unnecessary graphics, report generation time, and page scrolls of other applications. We also provide you with the impact of dispenser downtime so that your maintenance department can prioritize their repairs based on revenue, profits, and impact to your customers.
fuelWRAp 3.0 is also available on mobile, desktop, and tablet. Each one of the issues noted above can be detected and reported upon with fuelWRAp 3.0. You can learn more at www.warrenrogers.com. Ask for a demo today!
About Warren Rogers Associates
Founded in 1979 by Dr. Warren Rogers, Warren Rogers Associates pioneered the development of Statistical Inventory Reconciliation Analysis (SIRA) as a means of monitoring underground fuel tanks and associated lines. SIRA was certified in accordance with EPA requirements and has been used by petroleum marketers for more than thirty years to provide UST leak detection compliance. Warren Rogers also invented Continual Inventory Reconciliation Analysis (CIRA) for fuel management, which has become the industry standard.
Today, Warren Rogers specializes in statistical analysis and precision fuel system diagnostics for the retail petroleum industry. The Warren Rogers system is fully deployed in the cloud to provide customers with real-time access to fueling data anytime and anyplace. Recent initiatives include the deployment of a secure procurement application for delivery forecasting and product dispatch, the development of KPI Measures of the financial impact of tank system maintenance activities, and advanced delivery audit. In addition, all Warren Rogers solutions are PCI compliant and eliminate any reliance upon the use of a customer’s VPN for access to store devices. Warren Rogers holds numerous U.S., European and Canadian patents for these applications. For more information, please visit www.warrenrogers.com