A Star Among the Bright lights. Real-estate focus helps City Stop shine in Vegas. by Bill Donahue, CSP Independent
“It’s silly to be in the trenches when you can have a castle on the mountain,” saysJon Athey,director of operations and co-owner of City op Inc., a small chain based in Las Vegas, “We’re not about to build a store a location with competitors on every corner.”
Such location-based strategies have helped City Stop become one of Las Vegas’ premier convenience retailers in a short time. Athey and Vegas builder Bruce Familian have grown their store count to 10 since opening store No.1 in 1998. All City Stops feature wide aisles, high ceilings and low gondolas, and each location is uniquely positioned to compete; for its most recent store in the planned community of Aliante, for example, City Stop negotiated exclusive development rights.
Each City Stop offers a variety of traffic drivers, and “all aspects of the store are designed to make money;” says Athey. Among its 10 locations, City Stop operates five self-service Belanger tunnel washes, four Jack in the Box franchises, two Domino’s Pizza locations, a sandwich shop and a small Mexican restaurant. In addition, all City Stops offer Shell branded gasoline, gaming services and U.S. Postal Service contract units.
“When the Postal Service announced it was looking for [retail partners], it took us a year to negotiate;” Athey says. “Our own employees operate the post office units, and our volume has been terrific. But it’s a two-sided sword because it’s very labor-intensive compared to the c-stores. On the other hand, [ the post-office units] have helped us focus on our customer service.”
City Stop, which owns all its real estate, used to have to raise capital via private investors to build new stores, but its last two went up solely out of cash flow. City Stop No. 10 opened only recently, and Athey says further growth for 2006 is unlikely. Next year, however, could spawn one or two more stores, including or in addition to the acquisition of existing locations.
“Many [potential acquisitions] are overpriced and underperforming, so you have to look at them and ask if there’s anything you can do with them that someone else hasn’t done” says Athey. “But you can't risk the farm with unknowns, especially with the cost of land. Bruce is very good at negotiating property deals, and both Bruce and I are very capable of walking away from deals that don’t look right.”
