SANFORD, N.C. -- Although The Pantry"which last week agreed to acquire Petro Express Inc. and Carolina Petroleum Distributors of Charlotte Inc. for $275 million"operates more than 1,500 convenience stores primarily in the South, fewer than 10 are in the Charlotte, N.C., area. Privately held Petro Express owns 66 stores in North Carolina and South Carolina. Almost all are in the Charlotte region.
The Pantry had largely steered clear of Charlotte because of Petro Express' dominance in the area, Pantry chairman and CEO Peter Sodini told The Charlotte [image-nocss] Observer.
Sam's Mart, Petro Express and Circle K are the three dominant players in the Charlotte c-store market, according to the report.
Sodini said he didn't foresee any changes in the brands of gasoline sold, and that the Petro Express stores will keep their name. The Pantry operates stores under several names, including Kangaroo, its primary brand.
The Petro Express name is one of the strongest brands in convenience store retailing," Sodini told the newspaper. "It would make little sense to change it."
He said, however, that The Pantry does plan to introduce the "Celeste" and "Kangaroo" store-brand products in those locations.
Most clerical positions would be moved to The Pantrys main office in Sanford, N.C., while such field positions as district managers and security would remain in Charlotte, he said.
Tom Crosby, spokesman for AAA Carolinas, said it was too early to tell what impact the purchase might have on consumers. At issue is how Pantry will use its newly acquired dominance in the market. Crosby said the company could take advantage of economies of scale to lower costs and pass that savings on to customers. Or it could use that dominance to drive up prices, he said.
"If you end up with just a few super-huge players, then it becomes harder to make competition work," he told the paper. "Competition is what keeps prices down."
The sale is expected to close in April, the report said.
The Pantry's purchase of Petro Express' stores is part of an aggressive expansion strategy the company has pursued in recent years. Last year, the company acquired 113 stores from several sellers, according to the report, citing the retailers annual report filed with the Securities & Exchange Commission (SEC). In 2005, it acquired 96 stores. Meanwhile, earnings have soared. Profits last year were $89.2 million, a 54% increase over 2005.
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