Bill Bishop became vice president of real estate and development for The Parker Companies in July 2014. The company operates 44 Parker’s convenience stores in the Southeast, and has ambitious expansion plans. American Builders Quarterly recently spoke with Bishop about his challenges and the importance of the development executive role.
What are some of the biggest challenges that Parker’s faces in terms of expanding its brand?
Although we’re not as large as many convenience store operators, we are highly profitable, especially for the size of our market areas. Many factors affect strategic store growth, not just actual store count. Will you acquire units? Will you concentrate on new-to-industry sites? How long will municipal approvals take? And how receptive will municipalities and residents be to having additional convenience stores built in their neighborhoods? In our industry, the typical convenience store offer is not necessarily welcomed, but if you concentrate on being best in class, eventually you’ll face less resistance.
What design improvements have you implemented to bring a sense of cohesion to your different locations, especially as the brand has its sights set on future growth?
There has been a concerted effort to increase the uniformity of the store size and offer. We’ve developed a new branding image and have updated our building architecture, interior finishes, our logo, and our signage. The offer has also been changed; there will be two basic offers—one featuring a true convenience store, and a second featuring a proprietary food service program. Many will feature food service and a new drive-through concept. We will be building more food service stores in the near future than we currently operate, and many will feature the new drive-through program. The architectural features and appearance of the buildings have changed, and the interior finishes have been upgraded with warmer colors and materials. We’ve also added architectural additions to break up lines of sight inside the store. Signage has been upgraded to feature the new logo, and with the expanded food service program, we’ll be perfecting our menu boards to efficiently purvey those foods as quickly as possible.
From a real estate and development standpoint, what would you say are the keys to Parker’s growth?
The preferred way to grow will always be new-to-industry construction. I think that in these competitive times, with many retailers concerned about the viability of building “bricks and sticks” stores, getting back to the basics of using science and sound site selection will continue to be profitable and desirable. If you know the proper fundamental techniques of how to grow, those skills will transfer across all lines of real estate, and help become a strong base for your asset management plan. Few disciplines have as much determination on corporate profitability as the real estate department.
Given the competitive nature of the industry that you alluded to, how do you think the role of retail development executives will change in the future?
We’re all challenged with growing strategically, and having a solid asset management plan is becoming far more important. You need exposure to more of the population, but you have to do it effectively. You have to know where you are positioned properly in certain markets and perhaps less so in others. You’ll need to make tough decisions about where to increase your capital expenditures or where to save dollars. You also need to cultivate and constantly improve relationships with your architects, general contractors, and other contracted services, such as engineering and environmental firms.
You’ve spoken to us before about the importance of partners and consultants in the work that you do. What do you look for from your consultants?
We work closely with Terracon, a national provider of environmental and geotechnical services that also performs construction special inspections and material testing. We work with one of Terracon’s better offices, under the direction of Bill Anderson, and they have an excellent geologist named Rick Ricci who has helped us resolve some serious environmental issues. For example, he was able to take three potential sites that were contaminated with chlorinated solvents through the brownfield process, allowing us to develop what will become highly profitable stores. Those sites would otherwise have sat vacant, and little would have been done to clean them up. It’s also challenging to manage sites that have underground storage tanks—fuel additives change, and the regulations for retail fuels storage change, you need sound environmental advice. You need good advice from all service providers including civil engineering firms, and we have one of the best in the region in Thomas & Hutton. Building along the coast is always more challenging than building inland. The soils are different, there are wetland issues, and storm water management can be incredibly difficult. Many municipalities require architectural changes such as “low country” architecture, which means your exterior finishes need to be made of hardie board or concrete clapboard, all while remaining hurricane resistant. If you don’t have a knowledgeable civil engineer, you have no chance to be successful.
You mentioned that new stores, including new builds, will have slightly higher than a 20 percent ROI. What steps do you take to ensure that, and how challenging is it to make sure each new store achieves or surpasses that rate?
Having a solid store growth strategy is the first step. A plan to cover your chosen market, which strategically selects the correct sites with the highest traffic and the right combination of daytime population and residential backup; you can’t just pick sites that satisfy the physical characteristics you look for in a site. The due diligence period should also be used to confirm that you selected the proper site and should not just serve as time to seek approval of the development. At that point, if your sales projections are modeled correctly, the ROI takes care of itself. If you have the proper rollout plan, I do believe it will shorten your store maturity time and help new units achieve desired results faster.
What’s been the most surprising challenge you’ve faced since joining Parker’s, and how did you go about navigating or solving it?
The challenge that we face right now is finding qualified general contractors who can help us build faster and more efficiently than we are doing currently. We want to improve our relationships with our existing general contractors but to also develop new ones.
What’s your advice to other real estate and development executives that are trying to build a national presence with their brand?
Perfect your brand image, then develop your relationships with your contracted professionals and listen to their advice. Then use that to develop a better store offer and grow your market share.
What’s your outlook for the next few years?
Many operators grow store count aggressively, but the best operators will also develop their business model while growing. We’ve done just that. Our new units are on progressively better sites with higher visibility and an increased probability of selection. With one or two possible exceptions, the sites we open in 2016 will do significantly higher volume than past years, and that’s the improvement that you strive for.