Fas Mart has been in Virginia for over 40 years, and “it’s going to be there forever.” But it’s parent company, GPM Investments, is involved in some major deals that are paving the way for changes, explained Arie Kotler, CEO of GPM.
Recently, GPM acquired Empire Petroleum Partners, marking its 18th -- and largest-- acquisition to date. Empire’s portfolio includes a fuel distribution business as well as retail stores.
With that deal complete, ARKO Holdings, which owns the controlling stake of GPM, is preparing to merge with Haymaker Acquisition Corp, and that combined operation will be listed on the Nasdaq.
Acquiring Empire Petroleum Partners increases GPM’s cash flow through consistent revenue from the wholesale fuel distribution business, and the ARKO-Haymaker merger provides access to the stock market.
“The reason we are doing the merger is to have more liquidity because we plan to make major investments in our stores and invest the communities where we are doing business,” said Kotler.
Prototypes and upgrades
He started GPM in Richmond and is committed to remaining deeply rooted in Virginia, which is why the company is working on two new Fas Mart prototype stores that’ll open in the state. The exact locations haven’t been chosen yet.
The focus of those prototype stores will include offering a modern design, expanding foodservice and shifting to foods that are on-trend with consumer demand.
And there will also be focus on including elements to address the realities of operating amid COVID-19, such as providing more touchless capabilities. These are going to be state-of-the art, 21st century stores, Kotler said.
GPM will use what it learns from the prototypes to consider what to roll out to its existing Fas Mart stores and its other banners. But Fas Mart customers won’t have to wait on the prototypes to start seeing changes. GPM is already responding to consumers’ demands.
“We get a lot of requests for frozen foods. Customers are looking for more ready-to-eat items. A lot of customers use Fas Mart as a convenient alternative to the grocery store, so we’re rolling out freezers to all of our stores,” said Kotler.
One benefit of the acquisition of Empire Petroleum is that it allowed us to expand into southwestern states, and that creates the opportunity to bring customers products from other states.
Another major benefit is that increasing the scale of the business allows the company to expand in the private-label market. “So, we’re going to be able to bring more private-label items to the consumer, which offers a better price point,” Kotler added.
GPM has also started upgrading its stores. That project will include replacing floors, remodeling bathrooms, and increasing interior and exterior lighting. With better exterior lighting, the hope is to make the stores more inviting to women.
Additionally, the acquisition helps GPM make its Fas Rewards program increasingly more attractive by offering better benefits to customers and employees. The rewards program spans across GPM’s entire portfolio, and with the Empire Petroleum deal, GPM’s footprint is now about 3,000 sites across 33 states, including Washington DC.
Sometimes GPM rewards employees for strong performance by adding bonus points for products or gas or by making free products available through their Fas Rewards account. When the company’s scale increases, the company can offer more of those benefits. And as GPM is now considering adding new products, the company may use its rewards program to allow employees to test some of those products, Kotler said.
Focused on Covid-19
GPM is also investing in making sure its stores are sanitized and cleaned and that all of the recommended safety measures are underway. “Safety is the number one importance,” Kotler said.
He explained that GPM was an early mover on the issue. “After I saw what happened in Europe in January, I knew that there was no way the coronavirus wouldn’t come here.”
With that in mind, he found a perfume company in Miami and convinced the company to convert one of its lines to make hand sanitizer. Kotler said GPM was the first convenience store company in the country to form that type of relationship, and because of it, they were first to be able to bring hand sanitizer to customers, offering products by the middle of March.
GPM is focused on maintaining its standing as a reliable supplier of products to help fight the spread of the virus. All stores sell essential products, including masks, and antiseptic wipes at “very, very good prices,” Kotler said.
“As the winter approaches, we’re assuming that this virus isn’t going anywhere. We are making sure we have plenty of product in our stores and we don’t believe we’re going to have any shortage.”
“Ultimately it’s our priority to make making sure that the products and the environment in our stores suit the new realities of COVID-19,” he added.