CORPUS CHRISTI, Texas -- Just as Susser Holdings Corp. is anxious to grow its chain of Stripes Convenience Stores, it's just as determined not to pay too much money for any acquisition, CEO Sam Susser said this past week.
"There have been some trades this past year at what we believe were extraordinary valuations," he said on an earnings conference call with analysts this past week. Those high valuations were "based on the assumption of these record-high fuel margins being sustained for years to come."
Susser isn't willing to make that same assumption.
"We are more than ever looking to grow and take advantage of our scale and our technology platform but remain very, very disciplined on price," he said. "And we think that fuel margins in the long term are going to be average. … We certainly are grateful of the great fuel margins of the past year, but we're not planning on that moving forward."
Susser Holdings' retail fuel margin was 23.2 cents per gallon in 2011, compared with 18.4 cents the year before.
"We're not dialing that into our acquisition model so that we can say to ourselves that it was a great buy," Susser said. "Our sense is that there's cheap capital out there, and it is driving valuations way north."
Susser offered this take on the merger-and-acquisition environment for the c-store industry for 2012: "There will continue to be some consolidation over the next year, but the business climate is pretty good and people probably don't have to sell in this climate. So there's some M&A opportunity but we're not on the edge of a giant wave of it."
For Susser Holdings itself, Susser said purchases are more likely on the wholesale side of the business rather than retail.
"Pricing on retail [properties] has really gone up, and the number of operators with a size and quality of real estate that is attractive to us, it's a shorter list. There are some merger partners that we think have wonderful portfolios, but there's a lot of stuff that really wouldn't fit with the Stripes model," he said. "So on the wholesale side, we think we can add value to a wide variety of networks, and we are very actively looking and hope to continue to add to that network in 2012."
Corpus Christi, Texas-based Susser Holdings Corp. is a third-generation, family-led business with approximately 1,100 company-operated or contracted locations. The company operates more than 540 convenience stores in Texas, New Mexico and Oklahoma under the Stripes banner.