Outlook 2013: Stewart’s weathers recession, continues to expand
Tom Lewis has been a real estate representative for Stewart’s Shops for more than two decades. During that time, he has seen the number of Stewart’s Shops grow from 189 to 328.
The company has expanded its business and continued its financial success through the Great Recession of 2008 and the sluggish economy of recent years.
New shops are being planned in 2013 — as many as five in the northern part of the state — as the company’s optimism in the future continues.
Tom Mailey, a Stewart’s Shop spokesman, said that the privately held company has seen a 7 percent growth in sales in each of the past four years.
This year the company has looked carefully at pricing and rolled back some prices, including the price of its Stewart’s brand soda.
“Our focus this year is on fresh food to go,” Mailey said. The customers, he said, say they want more soup, sandwiches and fresh-made macaroni and cheese.
Lewis is the company’s frontline person in its property acquisitions.
Stewart’s, with headquarters on Route 9 in Malta and a Saratoga Springs mailing address, has 10 stores in Vermont. The rest of the convenience stores are in the greater Capital Region, the lower Hudson Valley, and upstate New York.
“We don’t buy at silly real estate prices. We figure out the market value,” Lewis said.
His job is to investigate new locations for Stewart’s Shops. He said sometimes it takes as many as 10 years of negotiations with landowners before a final contract is signed.
An example of this is a planned new Stewart’s at the corner of Route 29 and Route 147 in the Saratoga County town of Galway.
For years, this corner was the site of Dick and Jerry’s Minimart, an independently owned and operated store.
When Lewis started talking to the then-owners in 2004 the asking price for the property was $1.2 million.
After years of negotiations and a bankruptcy, the price of the property dropped to $400,000.
Stewart’s signed a contract with the owners before the bankruptcy and the bankruptcy court ruled the offer was fair.
“That literally took nine years.” Lewis said.
The former Dick and Jerry’s has been demolished and a modern new Stewart’s will rise in its place.
Lewis pointed to a map of northwestern Saratoga County. He pointed to Stewart’s shops within eight and 10 miles of the Galway location.
He said he looked at property near Dick and Jerry’s in 2006 but Stewart’s decided that the location would not provide enough business for two convenience stores in the same general area.
“The market wasn’t large enough for Stewart’s and Dick and Jerry’s,” Lewis said.
“Then they went out of business,” he said.
“We very rarely put people out of business. Usually they are going out [of business] before we get there,” Lewis said.
“It’s a very difficult business. It’s very hard for the [independent store owner],” Lewis said.
making its products
Stewart’s has the advantage of manufacturing its own products and having its own dairy operations. The company makes its own soda, juices, ice cream, and other dairy products at its plant off Route 9N in the town of Greenfield.
“Bill and Gary Dake are very smart men,” Lewis said about William Dake, chairman of the board, and his son, Gary Dake, the company president.
“They have a very good business sense. They understand the customers’ behavior,” Lewis said.
“We are there to please the customer. That’s why the Dakes have been so successful. They always try to please the customer,” he said.
The Great Recession of 2008 didn’t impact Stewart’s Shops like it did other businesses in the country.
“From the real estate standpoint, it meant there were more motivated sellers. That certainly didn’t hurt us,” Lewis said.
But during the past decade, the company was very careful about building new shops.
“We don’t have to do deals. We have no quotas,” Lewis said. He said the company decided to acquire property and build “only when it makes sense; it must be a good, good location.”
During the past decade the company has also redeveloped existing stores, meaning the old, smaller Stewart’s is bulldozed and a new, larger store is built on the same site.
The redevelopment projects have been orchestrated by Nancy Trimbur, a Stewart’s senior vice president and Lewis’ boss.
A good example of a redeveloped store is on Loudon Road in the town of Colonie. The company purchased additional land at the site and received town Planning Board approvals.
“We never close a store. We build a new store while the old store is in business,” Lewis said.
The new shop was built on the additional land purchased on Loudon Road. The new store opened just one day after the old shop closed for good.
nine new stores
Since 2008, the company has opened nine new Stewart’s Shops.
The company has a contract signed for land in Colonie on Route 7, not far from a new Target store.
“We have been looking at that site for 10 years,” Lewis said.
The company is also planning a new store in the east end of Cobleskill just off Interstate 88. There is already a Stewart’s Shop in the west end of Cobleskill.
The company is redeveloping — replacing — Stewart’s Shops in Rotterdam, Cohoes and Glenville this year.
Stewart’s also has contracts on five properties in the far northern part of the state. Lewis said he could not disclose these locations until later this year.
Lewis said 2013 looks pretty good. “We are always optimists,” Lewis said.
He said the company’s sales volume goes up every year.
Lewis is also chairman of the Saratoga County Planning Board and vice chairman of the Saratoga Springs Planning Board.
“I see all the growth [in Saratoga County],” he said.
Lewis has gotten approvals for Stewart’s Shops in more than 100 towns over the past 20 years.
“There is a huge difference between a community that is growing by one-half percent each year and a community declining by one-half percent each year,” Lewis said.
“I want to look at the communities that are growing,” he said.
For example, in the Saratoga County town of Halfmoon, Stewart’s opened a store on Route 146 in 2007.
“They had just started to extend water and sewer up Route 146,” Lewis said.
“Business was not good when we opened but given the long-term growth the store has become very successful,” he said.
The Dakes and senior vice president Trimbur were thinking the long term when they opened this shop, he said. The thinking was that this would be a very good store location in 2020.
Lewis spends about 20 percent of his work week on the road, looking at new store locations or dealing with redevelopment details.
“The land has to be large enough and zoned correctly,” Lewis said about a prospective store location.
“It has to be affordable and must be approvable,” he said.
Another key element in site selection is having good access for customers. “It must be easy in and easy out,” he said.
“It all gets back to the customer,” he said.
To read all the stories from the 2013 Outlook special report, click here.