C-store Sales Boom Continues with 11% Year-To-Date Increase
Operators say A&W brand drives traffic and profits
A&W Restaurants has added another location to its growing convenience store footprint with the recent opening of a unit in Hot Springs, Arkansas. Located in a small strip center that includes a gas station, the restaurant features a drive-thru and 45 seats. Franchisee Mohammad Lone converted an independent restaurant to an A&W. Initial sales are exceeding expectations.
There are nearly 100 A&Ws located in gas and convenience stores and travel centers. C-store unit sales through September are up 11%, following a six percent annual increase last year. A&W is seeing a big uptick in interest from c-store operators, CEO Kevin Bazner said. Some are looking to convert non-branded food operations to A&W, while others are exploring leasing space to A&W franchisees. The venerable chain has commitments for 22 new restaurants, with at least nine expected to be C&Gs. Locations in California and Arizona are scheduled to open before the end of the year.
“C-store retailers are rethinking their businesses, and, at the same time, there are significant headwinds that make building new freestanding restaurants difficult,” Bazner said. He added that A&W is taking a two-prong approach to developing convenience store locations. “We’re working with current c-store operators to bring the A&W brand to their communities, while also helping prospective franchisees find sites to build an A&W. Given the high cost of real estate and how long it takes to get a traditional location permitted and built, c-stores are a very cost-effective alternative.”
Bazner said that A&W’s sales performance also is driving interest in the brand. Average unit sales are up more than 50 percent since franchisees acquired it in late 2011.
One of the top-performing c-store units is located in Montrose, Colorado, generating nearly $1 million in annual sales. Franchisee Greg Parish, who operates Parish Oil Co. c-stores and self-serve gas stations, opened it in 2003. It was the first time one of his c-stores included a quick-service restaurant. “In analyzing our demographic studies for that location, we determined that a quality quick-service restaurant would be a great fit,” Parish said. “This is a needed offering to local residents as well as travelers.”
It was also important to offer a branded venue to ensure profitability, he said. “A&W is an iconic brand with invaluable training and support for franchisees, and advertising to promote its legendary quality to customers,” Parish said. “Opening our A&W franchise gave us an opportunity to provide a famous, quality food offering that’s recognized nationwide.”
The Montrose c-store covers 6,000 square feet, about half of which A&W occupies. Each business is independently owned and operated, which Parish said is necessary for each to do well. The restrooms, water heater and ice machine are shared. The A&W can close off from the c-store to operate different opening and closing times. “I consider it to be a free-standing unit that draws individual customers and families into the facility to choose their beverages, snacks and food,” Parish said. “A non-branded restaurant outlet can’t do that.”
Now in its 102nd year, A&W is America’s first franchised restaurant chain. Known for its All American Food, as well as Root Beer that is made fresh in each restaurant and served in frosty mugs, there are more than 900 A&Ws in the U.S. and Asia.