Real Estate Roundup is a weekly rundown of developments in the world of industrial real estate used for logistics and transportation. This week: a gas station chain scouts sites; Rite Aid unloads facilities; is micro-fulfillment a way to cut costs?
Casey’s General Stores, one of the largest convenience store and gas station chains in the Midwest, is running out of room at its two distribution centers and is scouting sites for a new facility.
One big remaining question is where will it be located? Oklahoma appears to be on the short list of sites under consideration.
The need for more real estate comes after Casey’s expanded in recent years into new markets, in Kansas and Oklahoma, south of its traditional base of Iowa and the upper Midwest. A new facility would “alleviate pressure off of our current distribution centers, enabling our entire network to become more efficient,” CEO Darren Rebelez said during a recent conference call with Wall Street analysts.
The expansion created “a bit of inefficiencies as we try to self-distribute into that geography and we measure that by the cost-per-pound to distribute,” Rebelez said. “We saw that cost-per-pound go up because we’re driving further to support those stores.”
Casey’s existing distribution centers are a facility next to its headquarters in Ankeny, Iowa, and a 300,000-square-foot warehouse and logistics center in Terre Haute, Indiana.
“The Ankeny distribution center is overcapacity right now, so we’ve had to lease some extra space to be able to support the stores,” Rebelez explained.
Casey’s has not disclosed the states it’s considering, but William Walljasper, chief financial officer, suggested during the conference call that Oklahoma could make sense.
“We penetrated Oklahoma in the last year or so and that state is doing exceptionally well for us,” Walljasper said. “And we have quite a few more sites going up in that area.”
A new hub in the southern Great Plans could also allow Casey’s to expand into more new states, he said.
Casey’s is aiming to break ground on the new distribution center in the near future, Rebelez said.
Rite-Aid looks to unload centers
As Casey’s looks to expand, drug store chain Rite-Aid plans to close two of its distribution centers in Pennsylvania.
The Camp Hill, Pennsylvania-based company will close facilities in Fairless Hills and Langhorne, Pennsylvania, in December, according to the Philadelphia Inquirer. As part of the closures, the company will eliminate about 350 jobs, mostly shipping and loading staff and forklift operators, according to the Bucks County Courier Times. The Langhorne facility is located inside the Bucks County Business Park.
Rite-Aid in 2017 agreed to sell about 2,000 stores and other assets to Walgreens Boots Alliance, including the two Pennsylvania logistics centers. As part of that deal, Walgreens Boots has decided to shut down the two hubs.
Dematic’s in-store fulfilment system can help trim real estate costs
Want to save on real estate costs? One solution is to use less real estate.
That’s what Dematic has in mind with its new micro-fulfillment system for brick-and-mortar retailers. The Atlanta company’s solution helps retailers complete order turnarounds within hours, and in a space that’s a fraction of the size of a traditional distribution facility.
Dematic’s micro-fulfillment system is usually installed within a retailer’s existing store. It can be installed in a space as small as 10,000 square feet, meaning that the overall cost is far less than traditional distribution center, the company said
One of Dematic’s first installations is underway at a Meijer store, an executive at the supermarket chain told Packaging Revolution, an online news publication.
“We’re driven to make shopping at Meijer easy and convenient, so micro-fulfilment is another way our company is leaning into the future of retail,” Sid Handa, director of strategic supply chain initiatives at Meijer, told Packaging Revolution.
