Saratoga Business Journal Business Journal
By Paul Post
Stewart’s Shops is spending $70 million this year to build new stores and rebrand some of the 45 Jolley convenience stores it recently acquired.
With the acquisition, completed on Dec. 16, the Malta-based company’s footprint now covers a territory from Oswego to Lebanon, N.H., and the Hudson Valley to the Canadian border including its first-ever entry into northern Vermont.
“We’re going to rebrand the stores within the geographic area we currently service first, from Central New York to southern Vermont,” Chief Operating Officer Chad Kiesow said. “Once that’s done, we’ll go north from Rutland into Burlington, St. Albans and northern Vermont.”
There are 48 Jolley stores in Vermont, two in New Hampshire and five in New York including three in Queensbury, one at 777 Upper Glen Street, another on Aviation Road near Northway Exit 19 and a third on Route 9 near Exit 20 across from Lake George Outlets. Albany Business Review has reported that Stewart’s paid $9.6 million for the five New York stores alone.
But under terms of the acquisition, the Federal Trade Commission has required Stewart’s to divest itself of five Jolley stores to prevent unfair competition. This includes the ones on Aviation Road and Route 9, which Stewart’s paid more than $2.9 million and $3.2 million for, respectively.
Stewart’s already has shops in close to proximity to each of those Jolley stores.
“We are currently in discussions with a dozen interested parties, all of which are good operators,” Kiesow said.
Some potential buyers want to buy all five Jolley stores, others just one. The sales are expected to be completed late this spring, he said.
Stewart’s will have 402 shops when the five Jolley’s are sold, retaining its 2024 ranking as America’s 23rd largest convenience store chain, close behind No. 21 Global Partners LP/Alltown Fresh (405) and No. 22 United Refining Co. (404), which operates the Kwik Fill/Red Apple and Country Fair brands.
Industry leader 7-Eleven has 13,000 stores, almost double second-place Alimentation Couche-Tard (Circle K) Inc.
Cumberland Farms, one of Stewart’s primary local competitors, is owned by No. 7 EG America LLC, which has 1,578 stores, according to cspdailynews.com.
An online January 2023 Stewart’s Personnel Manual says Stewart’s has more than $1.5 billion in sales annually.
Kiesow said all 450 Jolley employees will be retained by Stewarts, giving it a total workforce of 5,500 people. “We have plenty of stores to put anyone,” he said. “No one is left without an employment opportunity.”
Each shop typically employs about 15 people.
This year’s $70 million capital expense budget is $20 million more than Stewart’s normally spends, due largely to the multi-year Jolley rebranding.
On December 31, Stewart’s opened a new store at Wellness Way and Route 9 in Colonie and plans call for opening another new Colonie shop on Central Avenue, at the site of a former well-known Grandma’s Pies restaurant.
On January 21, a relocated new Stewart’s opened in Hoosick Falls.
This year’s projects call for new-to-market stores on Highbridge Road in Rotterdam and in Cicero, near Syracuse. In addition, several existing stores will be replaced by new larger shops at Sherman Avenue in Glens Falls, Curry Road in Rotterdam and Watervliet-Shaker Road in Colonie along with others in Mayfield, Oswego, Watertown, Massena and North Plattsburgh.
Stewart’s corporate offices are on Route 9 in Malta, near Exit 13.
Its milk bottling plant, commissary and distribution facilities are off Route 9N in Greenfield, just outside Saratoga Springs.
“Part of that $70 million is for growing support systems in the plant,” Kiesow said. “This year we’re doing phase one of multi-phase improvement, expanding our cross dock where trucks come and go after they deliver to shops. We’re going to improve our ability to work more efficiently there and then expand our central kitchen. As we become more and more of a diner the demand for prepared foods continues to grow. A good chunk of that comes out of our central kitchen.”
“We really are expanding on that word, convenience, on being a multi-service stop,” Kiesow said. “We’re the social spot, the coffee shop, the ice cream shop, the diner. We’re filling the gap as a small grocer versus making a trip to a big supermarket. We’re also the place you can fill your gas tank or charge your car. The piece that’s growing the most is the diner aspect of it.”
“People continue to be grazers,” he said. “Not everyone’s doing that three squares a day any more. Everyone’s eating when their schedule allows them to eat. With the expansion of our central kitchen, the variety of breakfast, lunch and dinner items continues to grow. We’re always trying to find something new for lunch or dinner.”
Stewart’s will distribute product to the farthest reaches of its new territory the same way it does now. At present, for example, fully loaded trucks are sent from Greenfield to a district office in Watertown. The empty trailer returns home, while drivers in the local market make deliveries to shops in that area. The same thing will be done to former Jolley stores in northern Vermont.
Kiesow said the acquisition of Jolley stores was a result of good timing and similar philosophies between the two companies.
“We are always looking for markets we aren’t in,” he said. “The Jolley opportunity presented itself as it was a family-owned and run business that didn’t have the next generation in place, ready to take over. As we connected, one of the greatest assets that brought us together was that our origin stories are very similar and that we both care about people.”
Stewart’s was founded by the Dake family in 1945. Bill Dake, a second generation family member, is chairman of Stewart’s and his son, Gary, is company president.
Jolley Associates was founded 51 years ago by brothers Bruce and Robert Jolley.
“I think the Jolleys realized their folks would be taken care of with Stweart’s,” Kiesow said. “Being an ESOP (employee stock ownership plan) company we’re all in it for the betterment of everyone who works here.”
An ESOP company is one that allows employees to own part or all of the company, which typically helps motivate workers, increases productivity and improves retention.
Like many firms, the labor market was somewhat challenging for Stewart’s in recent years. But Kiesow said, “We’re in a pretty good spot right now with both the quality and quantity of workers out there. Everyone went through a work-from-home phase during the pandemic, then realized they wanted to be in more of a social environment. Our shops are a bit of a social spot.”
One of the company’s biggest challenges is burdensome new state regulations, he said.
“New York State always likes to raise the bar on regulation,” he said. “While they’re often looking for the right intent on fixing a problem, sometimes how we go about it has some unintended consequences and makes doing business or doing it efficiently more difficult. We’re always looking for efficiencies. The more simple we can making running a business, the better product we can put forward.”