VPS Convenience Store Group Plans Aggressive Expansion

Sun Capital’s c-store division is bulking up its foodservice operations and rolling out new tobacco stores across the Southeast.

Erin Rigik

With two acquisitions under its belt already this year, VPS Convenience Store Group, an affiliate of Sun Capital Partners Inc., is poised for additional growth, with its eyes focused on opportunities in the Mid–Atlantic region.

The year began with a momentous start for VPS when in January it acquired 22 stores in northeastern Tennessee and southwestern Virginia that were formerly operated by APPCO Convenience Stores. Most recently, in May, it picked up 17 Everyday Shops in Charlottesville, Va., from Virginia Oil Co., bringing its total store count to 420 stores in seven states: Indiana, Michigan, Ohio, North Carolina, South Carolina, Tennessee and Virginia.

The company continues to seek expansion opportunities in the form of acquisitions, particularly in the Mid–Atlantic, but also across its entire footprint, including in the Midwest. It also plans to beef up its foodservice program across the Southeast.

Headquartered in Wilmington, N.C., VPS currently owns and operates convenience stores under six brand names, including Scotchman, Village Pantry, Lil Cricket, Young’s, Next Door Stores and Everyday Shops. It markets fuel under nine brands including its proprietary Carolina Petro brand.

In addition to its c–store operations, VPS also operates two tobacco shops in the Wilmington, N.C., area under the Cigarette City brand. At presstime, the company was set to open a third Cigarette City location.

A Tale of Two Chains
VPS’ history dates back to the 1960s, when Village Pantry was founded as the c–store chain division of Marsh Supermarkets in Yorktown, Ind.
“It was an effort by Mr. Marsh to serve smaller markets with convenience stores that offered more grocery products,”said VPS Chairman and CEO Jeff Turpin.

In September 2006, Marsh Supermarkets and the Village Pantry Group were acquired by Sun Capital Partners.

“The primary acquisition target was the supermarket business, but Sun Capital recognized the convenience store group as a valuable asset and, in May of 2007, separated the supermarket business and the c–stores into two groups, and hired a management team specifically for the c–store group,” Turpin said.

In December 2007, Village Pantry expanded with the acquisition of 33 Next Door Stores in Michigan and Indiana, and shortly after in March 2008 acquired nine Marathon stores in a bankruptcy auction.

Also, in March 2008, Sun Capital Partners purchased the 122 Scotchman stores operated by the Worsley family, which had introduced the Scotchman brand in 1974. Village Pantry continued to manage the c–stores in the Indiana market, while Worsley’s Scotchman team managed the Southeast locations out of Wilmington.

In May 2008, the Worsley branch acquired 88 Lil Cricket sites in Spartanburg, S.C., boosting the store count to 210 stores in the Southeast and 170 in Indiana, Ohio and Michigan.

In May of 2009, the management of the two companies merged and the corporate operations of all 383 stores was consolidated to the Wilmington office under the name VPS Convenience Store Group.

Foodservice Initiative
As the company expanded through acquisitions it was introduced to different aspects of the industry. For example, the Virginia Oil acquisition came with several fast food partnerships, including McDonald’s, Blimpie and Dairy Queen. In addition, Virginia Oil has its own proprietary food brand, Everyday Café, a deli operation.

“With every acquisition, we learn a little more about serving our customers,” Turpin said. “We have a lot to learn from Everyday Shops and we hope to expand its very successful Everyday Café operation into other areas of the company.”

Village Pantry stores in the Midwest already offer a robust food operation, but VPS brands in the Southeast have been slower to implement a significant foodservice operation due to a difference in consumer demand.

“It’s a completely different market,” Turpin said. “There is a McDonald’s or other fast food restaurant on just about every corner in the Southeast. You don’t see that composition of restaurants in other areas of the country. Our aim is to integrate more foodservice into this market at our c– stores, but do it smartly so we can capture more of those customer dollars once they’re in the door.”

In the Midwest, Village Pantry stores feature three proprietary programs, including 35 Village Cafés that focus in breakfast and lunch; 134 Village Delis; and 104 Village Bakeries that serve fresh doughnuts and pastries. Village Pantry also manages some national food brands through partnerships with Hunt Bros. Pizza, Chester’s Chicken and Subway.

In the Southeast VPS, including at its newest Virginia Stores, offers a host of proprietary deli and bakery program in addition to national brands, such as Hunt Brothers, Perky’s Pizza, Quiznos, Dairy Queen and Blimpie. Two other stores lease space to McDonald’s and Burger King.

Social Responsibility
VPS has a long history of hosting major charity events under each of its banners in the various markets it serves to give back to the community. Most recently it raised more than $85,000 for Boy Scouts of America through its annual Summer Swing Golf Tournament and Auction in June. To date, VPS has contributed more than $1.1 million to the Cape Fear Council’s Boy Scout program, which covers an eight–county area of North Carolina.

Under the Umbrella
VPS’ management group maintains a great deal of consistency across its six store brands, including common marketing programs and accounting systems, but it aims to remain flexible and unique enough to offer what customers are demanding in each given market. “Our goal across the whole c–store group is to provide excellent value to our customers and offer locations that are very clean and in good order.” With those steps in place Turpin is confident VPS can attract and retain loyal customers for years to come.

At a Glance: VPS Convenience Store Group
Store Count: 420 stores in Indiana, Michigan, Ohio, North Carolina, South Carolina, Tennessee and Virginia.
C–Store Brands: VPS operates six brand names including Scotchman, Village Pantry, Lil Cricket, Young’s, Next Door Stores and Everyday
Shops, as well three Cigarette City tobacco outlets and two truck stops under the Scotchman banner.
Fuel Brands: Exxon, Mobil, BP, CITGO, Liberty, Shell, Valero, Marathon and its proprietary Carolina Petro brand.
Employee count: More than 3,200
Senior Leadership: Jeff Turpin, Chairman and CEO; Jim Zuber, Chief Financial Officer; Neal Leonhardt, Senior Vice President of Marketing and Merchandising; Mike Emmons, Vice President of Midwest Operations; Don Muscatell, Vice President of Southeast Operations;
Naill Alnatour, Director of Fuel Supply; and Fred Wine, Director of Human Resources