Town & Country Earns Its Stripes

Susser Holdings begins 18-month project to rebrand 161 stores acquired last year

Published in CSP Daily News

By  Linda Abu-Shalback Zid, Senior Editor

ORLANDO -- After receiving positive feedback on three prototypes, rebranded Stripes stores, Susser Holdings Corp. is ready to go all the way with the transition with rebranding on the remaining 158 acquired Town & Country stores slated to start in the first quarter of 2009. "We just completed [the three reimages], so it is a little early to look at a lot of results, but word of mouth has been very positive," executive vice president and CFO Mary Sullivan told CSP Daily News.

Two of the rebranded stores are in Brady, Texas, and one in Abilene, Texas. The prototypes [image-nocss] represent three of the basic styles of Town & Country stores. "We want to make sure that we like what we see, before we take off and do the rest of the stores," Sullivan said. Changes include adding the Stripes logo on signage, some basic "refreshing on the stores," and the addition of Susser's Laredo Taco Co. foodservice brand.

"We want to manage one brand on our c-stores throughout our system," she said about the transformation. Sullivan said that there were no plans at this point, however, to rebrand the seven west Texas Village Market grocery stores, which were also part of the Town & Country acquisition completed one year ago.

As for the positive feedback on the prototypes, she said, "It certainly helps when you do something different to a store to freshen it up and brighten it up... People notice it, and people like the attention that comes with a fresh new store."

In a Thursday presentation at the Bank of America 2008 Credit Conference in Orlando, Fla., Sullivan said, "We're getting calls from customers that are maybe driving from Abilene to Austin, and they have to go through Brady, Texas, and they see what we've done to the store there." She added, "And they're calling back to our office and wanting to know when their store in Abilene is going to get that [new look]." She said that store managers are also calling in with the same request.

Sullivan said the rebranding efforts will begin early next year and could take 12 to18 months to complete, adding that there's not a big push to rebrand more quickly.

"We could certainly do it faster," she said, adding that when the company's Circle K license expired in November of 2006, Susser was able to change those stores to the new Stripes brand within a 6-month span. "This is not as urgent, and we'd like to be prudent in spending the capital dollars," she said. "We want to take our time and do it right."

The Town & Country acquisition itself also took a bit longer to complete. Sullivan said the company put a bid in nine or 10 years ago, but that the company was sold to a family and employee group at that time. "You wait around long enough, and a lot of these [opportunities] you see coming back." She said that Susser was "very fortunate" to finalize the acquisition in November of 2007.

Aside from the rebranding, Sullivan said most of the integration is complete, including having all the POS systems on the same platform, all the people at the right locations, all the merchandise and fuel contracts worked out and the "synergies in place."

In order to focus on the integration, Susser slowed down the pace of its new store constructions. The company had added 16 new big-box stores in 2006 and 18 in 2007, but is on track for only 11 or 12 in 2008, according to Sullivan.

But the Town & Country acquisition fit in nicely with Susser's typical new-store construction size and format. Since 1999, new construction lot size has increased in size from an average 20,000 square feet to 50,000 square feet, including increased building size (4,800 square feet on average), parking spaces, fueling positions and the addition of Laredo Taco Cos. Sullivan said that some of the newer Town & Country stores that were acquired actually are even larger.

"What everybody used to build was the 2,400-sq.-ft. 7-Eleven," she said, adding that many of Susser's stores actually started out as 7-Elevens. "People today are building bigger stores and wanting more land for fueling positions and foodservice.... If you [a consumer] see a line at the pumps or no parking spaces, you're not going to stop. You're going to keep on going."

As for the new sizes, she said, "So with this format, you're able to get a lot of cars in the lot and let them get their gasoline, their food, whatever they came for, and get on with their day.VbCrLf

Sullivan said that Susser closes a few of its older-format stores each year, and that every time the company builds a new store, it will be the larger new-format design.

Corpus Christi, Texas-based Susser Holdings Corp. is a third-generation, family-led business that currently operates 511 c-stores in Texas, New Mexico and Oklahoma under the Stripes and Town & Country banners. Restaurant service is available in 290 of its stores, primarily under the proprietary Laredo Taco Co. and Country Cookin' brands. The company also supplies branded motor fuel to approximately 375 independent dealers through its wholesale fuel division.