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Rallys, like so many filling stations, growing bigger with the times

Owners Bud Risser, left, and Mark Perreault offer a vast array of items to their Rally Market customers.


Owners Bud Risser, left, and Mark Perreault offer a vast array of items to their Rally Market customers.

A new Rally filling station in St. Petersburg stocks 100 beers, including obscure microbrews. Its wine selection is worthy of a supermarket. One staffer works the cappuccino bar while a full-time cook whips up made-to-order sandwiches, salads, soups and flat-bread pizza.

"We cater to both Bubba and the BMW set," said Mark Perreault, who runs this sprawling 12-pump, 1.5-acre station leased from Risser Oil Corp.

The up-market venture shows how gas station owners are grappling with change dogging this rough-and-tumble industry.

Gas prices are rising again, but retailers typically make just 8 cents a gallon, and that's before paying for expenses like rent. Adjusted for inflation, that's a nickel less than 30 years ago when gas cost a third of what it does today.

Operators make it up on volume with more pumps and more to-go food inside. The Rally at 2200 Fourth St. N in St. Petersburg includes a beer cave, a cigar bar, some produce and a business plan to pump as much gas as all nine stations that once were within 2 miles.

Bud Risser, a St. Petersburg wholesaler, sells 250 million gallons a year to the 80 gas stations he controls that sell a variety of brands from Spring Hill to Naples, including the Northeast Rally.

"You make so little off gas and need so much traffic to get enough people inside the store that these mega-stations are becoming the future," Risser said. "The little guy just cannot do the volume."

Look around. More small, old stations are closing as environmental rules dictate they exhume aged underground tanks. Hess and Racetrac have been on building sprees of 12- to 20-pump locations. Many stations sell branded fast food like Dunkin' Donuts, Subway, Quizno's and Taco Bell. Philadelphia-based Wawa is signing deals to branch into Central Florida in 2012 with even bigger fresh food counters that hand-make so many hoagies that shoppers order by touch screen.

Meanwhile, small stations have tried to fill space with all manner of merchandise: cut flowers, LP gas, pet toys, umbrellas, fishing tackle and men's underwear.

"The challenge is about getting more customers inside," said Neil Z. Stern of McMillan & Doolittle, a Chicago retail consultant.

That's because convenience store staples — beer and cigarettes — are in decline. Cars use less and less gas. Thanks to pay-at-the-pump technology, fewer than half of gas customers come into the store. And they will switch stations over a few cents a gallon.

The industry has been a never-ending evolution for Risser, a nimble second-generation wholesaler and retailer with a Wharton MBA who moved from a Texaco dealer to start his first independent outside brand on the cheap in 1973.

Little more than pumps surrounding a glassed-in cashier hut, he named his first unbranded station Pace. That came from doctoring signs left by a defunct Cocoa Beach chain called Space.

Once the oil giants decided to get out of retail, he became a real estate investor buying and leasing their stations.

Risser launched 15-store Rally a decade ago after he bought some Amoco Split Second stations and saw a need to customize a brand for individual neighborhoods. He added services like check cashing at a working-class Largo store. Three Rallys have cooks and kitchens, down from four a year ago. A midcounty store sells so much fried chicken and gizzards that Risser's people call it the "chicken store."

The $120,000 he paid for one of his first stations in the 1970s ballooned to $2 million plus land costs for the high-traffic corner for the Northeast Rally.

"It took me seven years to get the guts to build this," Risser said. "We used to be able to turn obsolete filling stations into a barber shop, doctor's office or an insurance agency. But these stores are getting so big I don't know what you do with them."

Mark Albright can be reached at [email protected] or (727) 893-8252.

Rallys, like so many filling stations, growing bigger with the times 01/24/11 [Last modified: Wednesday, January 26, 2011 3:07pm]
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