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HomeMy WebLinkAbout1981 07 02 Regular --..... ", ....... - <. 1 ~ wItIa 6laoppIpg c.m.r. n..______ Whal's doWD the road for coDvenieDce stores? 6US/Nt-J?f .f(!(f^I(1~ T[flf(A.J()U)6Y. LYK ( '^~ 0 p()r.?L/~ L... 115,eA..1Z I () L ( (f/ll A. Y' .e I giGS . .( 0 (? A 77 DAt A '- The conve- nience store in- dustry is at a turning point. For years, such chains as The Southland Corp.'s 7-Eleven and National Convenience Stores' Stop n Go could rely on resi- dential, subur- ban locations, fast service and good parking to produce strong sales volumes and high profits at low overheads. Today, how... ever, industry mem bers are faced with flat- tening sales vol- umes and gross margins that have been hovering between 27%-30% over the last few years. And they're quickly discovering that their three traditionally strong suits need to be modified and added to if they're to continue to produce winning convenience store hands. The average store's yearly sales volume for the sector's top 13 pub- liclv held convenience store com- panies increased only 3.8% in 1978, to $274,115, compared to an 8.5% increase in average store sales to $263,895 in 1977, according to con- sultant John F. Roscoe's "Eighth Annual Dollars Per Day Survey of the Small Food Store Industry." Furthermore, the industry's per CHAIN STORE AGE EXECUTIVE. JUNE 1979 "'- -- '" .......,/ m~ ? zd fwCfd- .4il77f (f- Slit> tV S store sales growth pattern has been a checkered one for the last four years, with annual sales increases averaging 8.5% and 9.5% in 1977 and 1975, respectively, and 3.7% in 1976. The profit picture is still bright though, with increases in stores' 1978 aftertax earnings pegged at 14%-19% more than 1977. But with costs rising, there are a number of challenges facing this segment of the food store industry which could create a rocky road in the future if ignored. For one thing, the convenience store industry is beginning to ma- ture. Better sites are now a must to generate the increasingly larger sales figures chains need to cover construc- tion and opera- tions costs. "We're rewrit- ing our site selec- tion book every da~," says Rus- sell C. Fellows, senior vp-mar- keting for Mun- ford Inc., the At- lanta-based com- pany that got stuck with sev- eral hundred Ma- jik Market units in second-tier lo- cations and only recently re- bounded from a $15,000 loss in fis- cal 1977 profits (see related story). Munford ex- ecutives, like most in the business, have set their si~hts on prime cor- ner locations With high visibility and heavy traffic counts. Because Munford is selecting former gas station sites for its new uni~ traf- fic counts have rephu'pcl hnl_eho1i'r' d~ once the sacred cow of the m<Ili'8frY's site selection procedure. In fact, one Majik Market is mar<- " ing $7,000 per week in food sales- . the industry average is $5,257- without a house within a five-mile radius of the store. Secondary sites, mainly at the mouths of suburban subdivisions and in shopping malls, are a thing of the past. "The-subtrrban,resi- "D frr; , ,~,. 1 '1 " 23 ( \ ) -~- , dential convenience store is doomed," explains Tom Ewens, vp-. real estate for Houston-based Na- tional Convenience Stores Inc., "be- , cause the sales volume that those units produce simply can't keep pace with the costs of l~md, con- struction and operation." But the recently sought-after, first-rate corner spots are getting harder for convenience store chains to find due, in part, to in- creased competition from other re- tailers for the same locations. As store sizes creep up to the 3,000-sq.- ft. mark, and lot sizes expand to allow for increased gas and parking facilities, convenience stores are looking for roughly the same size lot that a fast-food unit, drug store, bank or gas station might want. This means that the sector's tradi- tional strength of flexibility in site selection is being somewhat im- paired. And in some markets, notably parts of Arizona, Texas and' Flor- Ida, where convenience stores al- ready account for 10%-12% of gro- cery sales, there just aren't that many choice spots to be found. John C. Nichols II, senior vp and chief financial officer of Con- venient Industries of America Inc., reveals that the Louisville, Ky.- based operator of Convenient Food Marts IS having to look at more sites today than in the past to find good ones, like its industry counter- parts. Three years ago a site might have been selected from two or three. Now it's more likely that seven or eight are considered be- fore a choice is made. What's happening is that conve- nience stores are pinning their hopes for higher sales volumes and profits on primary locations, while coping with higher real estate and Operational costs are much lower than fast food chains operations costs than they faced at former sites. This means that convenience stores' profit and loss statements will likely get tighter and tighter, the line between a winning and los- ing location more thinly drawn. Along with the space race for better store sites, convenience chains are facing increased com- petition for their share of food mar- ket dollars, which currently aver- ages approximately 2.5%. While there's no consensus as to who the 24 small food store's primar~ com- petitor is-some say it's neIghbor- m~ convenience stores, others pOInt to supermarkets-everyone agrees the competition from a number of retail sectors is heating up. Fast-food chains, liquor-delis, gas stations that carry food items, and discount and drug outlets with newly added food lines are among the newest competitors. The latter could pose the most serious future threat to conve- nience stores, reasons Merrill Lynch retail analyst George Quint, because these competitors will probably continue to expand con- venient food lines and carry more high-traffic appliances. Further- more, many drug stores are of a size that gives them some of the convenience store's flexibility of location and they, like the small food units, are open long hours. In response to these myriad challenges, convenience store in- dustry members are scrambling for the ri~ht formula with which to maximIze sales volumes while keeping costs under control. They're developing tougher return V on Investment (ROI) standards; closing low-profit units more speedily; adding new stores at a slower pace; trying to boost the profitability of existing units, and redefining merchandise mix. Four years ago, National Con- ... .......... brig..... .aaford pIcbue "We've done some thin@ in the past few years to hurt our ~rofitability," says Robert D. Blythe, president of Munford Inc., 'but we feel we've done a good Job bouncing back." In 1977, Munford's profitability was hurt to the tune of a 68% operating profits dip, to $2.8 million, against sales of $288 mil- lion, compared to operating profits of $7.6 million the previous year. The drop came on the heels of stead~ annual sales ill- creases, from $221 million in,!974 to $260 mIllion in 1978. A large contributor to Munford's problem was its convenience store business, which lost $15,000 in fiscal '77 against sales of $211 million-90.5% of the company's revenues. At the root of the problem was the Atlanta-based corpora- tion's acquisition policy: At one point the company operated convenience stores under 14 different names. In the J.>rocess it , had picked up a lot of units whose profits were margInal. And Blythe says steadily increasing utility costs and minimum wages made it more difficult for these units to turn a profit Moreover, a number of the acquired outlets were in secondary locations, while Munford's competitors were beginning to snap up prime sites. Because of this these stores suffered deolining customer bases, which, coupled with their rising costs, left the company with a lot of losing locations on its hands. "At some sites," says Munford's vice-chairman Herbert J. Dickson, "20-year-old leases had expired and monthly rents had risen from $120 to $1,500. Between 1976-1978, 400 such stores were closed. ;:-~..~ ';.,,\-~. CHAIN STORE AGE EXECUTIVE, JUNE 1979 ~: .. " '''., .' 4",~ ',' 'i.,lI.Jl"ftll ~jft rl~m"'m1" ijr~' r~.j1nl_11_I'iUl ~._,,,,IlitiM.. ' " "':';,,,,,,,:.,"" " t '" .1 ^~ ~ l ,,' 'J :1 ~ ~ ' ~ ~ " _~i t d, ~k J J I ..!, 'I"; '!!' .... 1'~ -,,'<! .~ ~ .~ j-.J~_..^,~;.-,:tI~:"J,:r '-"'':'~~.''~).< .~~~,~~~:_.a.,'t'.. ,iJ.... -."'... +' l " (' ~ \ \ r \ \ ",.~., .h " 'II' v \j. " 'e "~ ~ ~ venience Stores waited 12-18 months to see any profit from a new store. Today, its average unit is expected to generate as much as a 20% ROI in its first year of oper- ation. As a result, says vp-stores Boyd Bradfield, the company has been forced to increase its number of field real estate workers even though the company's opening 83.4% fewer units than it did five years ago. Because convenience stores' ROI standards have stiffened, low-vol- ume units are being closed with ~reater dispatch than at any point In the past. Their former reluc- tance to do this has been a stum- bling block for convenience store Growing competition makes corner spots harder to obtain retailers, many of whose entrepre- neurial spirits made it difficult to concede to failing units. Under the reins of president V. H. Van Horn, National Conve- nience Stores has opened 123 units and closed 206. By comparison, 182 stores were opened and only 20 closed in 1974 under the direction of former president and company founder, F. J. Dyke. Since Van Horn joined the company in 1975, As a result, the company's site selection procedure has changed drastically. All new convenience stores are now located on former gas station sites, which comean;v executives say will give the units needed accessibility, viSIbilIty and high-volume traffic. Munford is getting such locations through deals with several oil companies, among them Gulf, with which it now operates 300 UnIts in 13 s~tes, and Texaco. These companies contribute the cost of the land and gas inventory while Munford supplies food store merchandise and is paid a fee for managing the gasoline operations. Lease terms vary by location, at one-, three-, five- and 10-years. \ In addition, 25 food store items are now dIrectly price com- petitive with their supermarket counterparts. Cigarettes, for example, are $0.50 per pack; milk is $1.59 per gallon. This was done because when the first gas station sItes were converted, 70% of Munford's self-service gas customers weren't making food purchases. A question mark looms over the new strategy, however: Some of the tracts-like one downtown Atlanta site worth $1 million- might be used otherwise by the oil companies as property values continue to increase. Blythe claims he's not worried though, because Munford doesn't have enough of the units for it to make a difference. But if the company's after the best spots it can get and yet is forced to accept short-term leases, it's a problem worth considerin~. Besides beefin~ up its convenience stores, Munford is trymg t() boost profitabIlity ,by eliminating its ice and building mate- rials divisions, and by selling Farmbest Foods, for a net loss of $2.1 million. It dropned ice-the original basis of the company-in 1978, because the operation was extremely capital intensive and po- tential profits couldn't Justify the expense. The company's buildmg materials stores, of which only two remain, are being liquidated because they can't keep up with larger home center competitors. Pursuing this business would have meant replacing'exlsting stores in-town with new units on larger sites. . Munford's future financial health remains uncertain. Profits in fiscal '78 increased 119%, to $6.09 million, but have yet to return to past levels of between $7.5-$7.6 million. Furthermorel although company sales for the first quarter of fiscal '79 gainea 9.~ to $63.2 million, there was a $391,000 net profit loss. wnile chairman DIllard Munford projects a 15.3% sales in- crease, to $300 million, in fiscal '79, he and other company officials decline to project profits. In the meantime, Blythe expresses confidence that the year-end earnings picture will buoy Munford's efforts to bounce back. CHAIN STORE AGE EXECUTIVE, JUNE 1979 - ,. I its store fleet has dropped from 808 to 725 units. Similarly, a harder look is being taken at store expansion policy. In the past, the industry rule of thumb was to op'en a lot of units as quickly as pOSSIble. But with sales volumes cooling and competition for sites heating up, the prevailing philosophy today is to boost the profitability of existing units. Convenient Industries of Amer- ica, for instance, measures the per- formance of existing stores against its latest sales standard for new units: a yearly volume of $500,000, which translates into weekly sales of $9,615 per store, 83% greater than the industry's $5,257 weekly average. Though sources at National Convenience Stores say the com- pany isn't content with its current store opening pace of 30-40 units annually, they concede that they won't have the funds to step up that growth rate for several years. The exception to the rule is Southland, whose 7,600-unit 7- Eleven chain has continued to grow at an average 400-500 units for the past 15 years. The pace is a breakneck, if stable one, perhaps because Southland has the money to invest in store openings that some of the other companies don't. Accordin~ to S. R. Dole, vp-stores, the chain s growth rate isn't apt to change in his lifetime (Dole is 41), and with closings expected to number 50-100 per year, net open- ings should remain at 300-400. Generally, however, the focus is on improving profitability of exist- ing units, an approach that wins I ~ Southland's Dole says 7-Eleven's growth rate of 300-400 new units per year won't change In his lifetime. 25 Average sales and profit figure tor top 10 publicly held chains 1978 1977 1976 1975 1974 Yearly sales per store $274,115 $263.895 $240.828 $232.140 $213,890 Weekly sales per store $5,257 $5.061 $4.606 $4,452 $4,113 Profit on pretax sales 3.65% 3.48% 3.64% 3.32% 3.39% Profit on aftertax sales 1.98% 1.8% 1.92% 1.71% 1.77% Yearly pretax profit per store $10,026 $9.194 18,762 $7.723 $7,242 Yearly aftertax profit per store $5,431 $4,752 4,523 $3,978 $3,789 Source: .. Eighth Annual Dollars Per Day Survey of Small Food Store Industry" approval from retail analysts and food chain consultants. They ~oint out that it's more finanCially sound to improve existing stores than to grow by leaps and bounds. And as Gene Gerke, president of Barrington, Ill.-based consulting firm Gerke Economics, notes, there are a lot of 10-year-old stores that need to be updated. Observers expect there will soon be a significant leveling of the in- dustry's store growth 'curve, which has jumped 300% in the last 10 years to 33,000 units, and that con- venience store companies' efforts to shore up existing outlets are in anticipation of that phenomenon. . One way the small food store companies are seeking to boost their profits is by carrying a larger proportion of high-margin mer- chandise like fast foods, which run the gamut from sandwiches, hot- dogs and pizza, to soup, coffee, fruit punch and draft soda. Non- food Impulse items, whose mar- "a, _ J Munford's Fellows says his com- pany Is "rewriting Its site selection book every day." gins average 35%, vs. 27%-30% storewide, are also earning more store space. While fast foods contribute gross margins of, typically, 40.3%, roughly 41% higher than the in- dustry's average margin, critics question the advisability of ap- proximately 78% of the conve- nience store industry making a commitment to the category at a time when fast-food chains are. seeing signs of profit slippage. A comparison of the two busi- nesses is difficult, however, since V convenience stores typically offer a much wider menu than most fast-food chains and because their customers usually buy the snack items on impulse-they go into the store to buy cigarettes and wind up with a sandwich. Also, industry executives point out that their operational costs are much lower than the fast-food chains' since convenience store food is self-service. They also think the shorter, faster lines they offer customers are a strong sell- ing point. And they feel some in- sulation from the performance of the fast-food business since, for them, food-to-go is only one part of a much bigger operation. (Continued on page 60) , ""'lI Soa1hl.lld talDl alleDtloD to olber dlvIIIoDl At $2.6 billion sales, $142.7 million operating operations. profits and $51.3 million net earnings, 7 -Eleven Initially, the Dairies and Special Operations far outpaces any of its 13 publicly held conve- groups were to vertically integrate their activities nience store competitors. In fact, so dominant is with 7-Eleven. But while 7-Eleven's needs will the Dallas-based company in the convenience always be a prime concern of its sister groups, store business, that at the end of fiscal '77 it future corporate thrust will be to expand sales to accounted for approximately 56.2% of the sector's outside companies. sales, 67.8% of Its operating profits and 60.8% of Of the Dairies Group's $400 million sales in its net earnings. fiscal '78, for instance, 65%-$260 million-is Yet despite the resounding success of the 7- from sales to food retailers such as Denny's and Eleven chain, which contributes 90% of The Wendy's. Continued emphasis will be placed on Southland Corp.'s revenues and net earnings and such sales through the development of new high- 92% of its operating profits, the Dallas-based par- margin novelty items such as cheeses, ice cream ent company has not been content to rest on the and the sundae-style yogurts. laurels of its convenience stores' success, and is Similarly, Southland's market research shows now looking to its other divisions to help boost tremendous potential for the Specialty Group to volumes. sell its beverage, bakery and food-coating prod- In addition to its Stores Group, which also in- ucts to restaurants, fast-food chains, militarfi ex- cludes 109 New York City-based Gristede's changes and commissaries. Southland's . del gourmet groceries and Charles & Co. take-out Systems division, a manufacturer of time-de- sandwich shops, and several international food layed access cash registers, is slated for rapid stores, over the years, the Texas concern has di- growth as well, because a good market for the versified into a number of dairy and specialty product exists beyond company confines. \... ~ , 26 .,1' ..... ----.-.---------- CHAIN STORE AGE EXECUTIVE. JUNE 1979 ,,:'>',~!1~:'i"-' ~'''''''.-:'; ,;~:,:....., .'l"""~""" , f r " j -'l ~ I :i J '1 , , 1 ~:~",:,/~tt'I...t --A most decisive role that city government can play is in the location of commercial and it should exercise this role in establishing commercial property best suited to the desires and best interests of all Winter Springs citizens. I Industrial Industrial usage is non-existent in the city at the present time. Industrial zoning in the city includes manufacturing, warehousing, wholesaling and processing activities combined under a Cl category. There are 100 acres currently zoned for industrial use in the city. Some industrial exists in the Winter Springs Planning Area. On S.R. 419 there are three small industries, one manufacturing plant on Highway 17-92, and one processing plant on the south side of S.R. 419 near Tuscawilla. Industrial property is necessary in enlarging employment in the city. In broadening the city's economic base from a residential community to a more balanced entity, industrial development should be encouraged. However, industry can carry with it conditions detrimental to the overall goals of the community. To offset adverse effects associated with industrial development, care should be taken to insure that only clean industry be allowed in by relegating industrial development to outlying areas. In the case of Winter Springs, putting industry north of S.R. 419 lessens the impact on surrounding land uses and traffic. 24 .~ ....." ] ...l..',T.:. __,.' "'~.-:::':::'~'..__.,,--- i~~~~~\r~---lIl...rr .'iiINIIIIJW-"......' ~--'lIlm IliW~ii!'l I I l l - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~\~ ..., -...- ---.---' Goals, objectives and policies have been adopted for each element of this Comprehensive Plan. Each supports the following primary general character goal of this community. IT IS THE GOAL OF THE CITY OF WINTER SPRINGS TO MAINTAIN ITS IDENTITY IN A RAPIDLY URBANIZING , ENVIRONMENT BY PRESERVING ITS QUIET, RURAL CHARACTER AS IT SEEKS TO CREATE A WELL-BALANCED, ECONOMICALLY SOUND COMMUNITY. Following is a su~nary of all goals, objectives and policies from each element of this Comprehensive Development Plan. SUI1MARY OF GOALS, OBJECTIVES, POLICIES LAND USE To protect the quality of the city's "total" environment for pre- sent and future generations by carefully administering land use controls that establish and maintain the most desirable qualities of land classifications including residential, commercial, indus- trial, pUblic and semi-private community facilities. Insure that all development is in harmony with the environment, compatible with adjaQent land use anQ approval for development is contingent upon the availability of adequate public facilities and services. ,-.; TRAFFIC CIRCULATION To provide the rapid and efficient delivery of goods and services while minimizing adverse effects of this activity,on the city. 61 . .. .' . . . . . . . . . . . . . II - - ~.-...--- ~_."J&_. .......:~ B. PROPOSED LAND USE PLAN Introduction The Land Use Plan is the nucleus of the Winter Springs Comprehensive Plan. It represents the official land use policies of the city and provides future direction for public and private land development. Population, Economic Analysis, Present Land Use, Transportation, and the Community Facilities Elements provided input. By investigating and understanding existing conditions, it is possible to identify and preserve those trends that are desirable and eliminate those that are not. This can be done by selectively choosing only objectives and policies that favor desirable growth. The blending of technical information with community goals results in the formulation of official policy. The result of this process is a Land Use Plan that consists of Land Use Objectives, Land Use Policies, a city-wide analysis, and a Land Use Map. ANNEXATION Annexation is a form of growth. While almost all states allow annexation, the procedures vary greatly. A number of states allow municipalities "extraterritorial powers"; that is, the municipali- ties control growth and development in an area anywhere from one- half to three miles beyond city limits. This enables harmonious land use and standards to be in effect at the time of annexation. This is not the case in Florida. Consequently, Winter Springs 64 -,.-- I I I I I I I I I I II . . . . . . . . Planned Unit Development: This category of land use provides for planned residential communities containing a variety of dwelling unit types and arrangements, with complimentary and compatible commercial centers with supportive residential and/or complimentary and com- patible industrial land uses; and planned industrial parks with complimentary and compatible residential and/or commercial land uses -- all designed to promote the public health, safety and general welfare. G 0 A L THE GOAL FOR THE LAND USE ELEMENT RELATES DIRECTLY TO THE GOAL OF THE CO~1PREHENSIVE PLAN BY FURTHER DEFINING THE GOAL AND REk~TING IT TO LAND USE. PROTECT THE QUALITY OF THE CITY'S TOTAL ENVIRON- MENT FOR PRESENT AND FUTURE GENERATIONS. OBJECTIVES Land use objectives were formulated by the Winter Springs City Council and Planning Commission and should be used as a guide in determining growth direction in winter Springs. General Carefully administer land use controls. 72 l I I I I I I I I I I I I I I I I I I Residential Residential areas should be and remain strictly residential as any non-conforming uses are highly undesirable. Upgrade or eliminate substandard residential units by strict enforcement of health and housing codes. Determine a method by which it is possible to salvage or finish uncompleted development$. Establish and maintain codes to protect the desirable quali-. ties of the residential environment (particularly regulate junk cars and the landscaping and maintenance of yards) . Commercial and Industrial Attract a wide variety of persons offering professional ser- vices as well as entrepraneurs and businesses engaged in both retailing and wholesaling activities to stimulate the employment and economic opportunities of the city. Establish modes and districts where commercial development can take place in a well-planned manner, with proper vehicular access, parking ,and buffer areas. 73 SINGLE FAMILY DWELLING Range 6.4 - 16.0 Trip ends per single family dwelling Average 11. 0 Trip ends per single family dwelling OONVENIENCE S'IORE Range (store open 15-16 Hrs.) *293.6 -*351.7 Average *332.6 Range (store open 24 Hrs.) *480.0 - *699.2 Average *577.5 *Per 1,000'~. ft. of store space Range = walkin vs high volume auto TCYrAL SFDU North Orlando Ranches, Sections 8, 9, 2 & 2a = 283 283 x 11.0 = 3,113.0 + 332.6 3,445.6 Autos per 24 Hr. period SOURCE: ITE ( International Traffic Engineering "Trip Generation Manual", Published 1979) FDOT (Florida Department of Transportation) "Trip Ends Generation Research" Art. I, 9 44.20 APPENDIX A-ZONING Art. I, 9 44.21 ~ ....... .. Section 44.20. Meetings; quorums; records to be kept. The board of adjustment shall meet at least bi-monthly at a time set by its members. Three (3) members shall constitute a quorum. Complete records of all proceedings shall be kept. (Ord. No. 173, 9 1, 9-8-78) Section 44.21. Duties and powers; general. The board of adjustment shall serve to grant any variances or special exceptions as delineated in this code. (1) The board of adjustment shall have the additional following specific powers and duties: ~ a. To hear and decide only appeals where it is alleged there is error in any order, requirement, decision or determination made by an administrative official in the enforcement of any zoning ordinance or regulations adopted. b. To hear and decide special exceptions as authorized under the terms of the city's zoning ordinances; to decide such questions as are involved in determining when special exceptions should be granted; and to grant special exceptions with appropriate conditions and safeguards, or to deny special exceptions when not in harmony with the purpose and intent of the zoning regulations. In granting any special exceptions, the board shall find that such grant will not adversely affect the public interest. In granting any special exception with appropriate conditions and safeguards, violation of such conditions and safeguards, when made a part of the terms under which the special exception is granted, shall be deemed a violation of the ordinance. The board of adjustment may prescribe a reasonable time limit within which the action for which the special exception is required shall be begun or completed, or both. The board of adjustment is authorized to grant special exceptions when the applicant is seeking a minor deviation from zoning requirements so long as the granting of such special exception does not cause a change of character in the neighborhood, does not constitute a rezoning of the property in question or does not create a hardship for any of the adjacent property. The board of adjustment may also grant special exceptions within C-1 Neighborhood Commercial Districts when the applicant has not sought a use listed in Section 44.47, when the use sought will not cause an undue hardship to the area of [the] city, will not create a hazard or threat to the health, safety and welfare of the community, will generally comply with the character of the neighborhood and when the use is in harmony with the intent of the zoning ordinances of the City of Winter Springs. c. To authorize upon appeal such variance from the terms of the ordinance as will not be contrary to the public interest where, owing to special conditions, a literal enforcement of the provisions of the ordinance will ~, Supp. No. 14 954.1 r: '. ~ 6. . , > U - .J 0 a. I- 2 w ~ w 0 c:t 2 7. <t ~ J: I- ~ 0 a: C] > I- 2 :J 0 U W 8. C] 2 ~ a: 0 9. 10. n f t: S:;u/?e<L Roadway commercial uses have evolved over the years into continu- ous ribbons of commercial activity bordering primary and secondary traffic arteries, creating servicing and traffic problems. ' Roadway commercial development often lacks off street loading and parking. As these areas become older, they become characterized by obsolete and unsound structures which lose their markets due to shifting popu- lation and changing traffic patterns. The physical deterioration of roadway com mercial areas can detrimentally affect nearby and often unbuffered residentia1area~ The growing vacancies, decline in qual- ity, and intensity of use, adversely affects the tax base. With the large number of small lots, land owners, transportation and market problems, it is difficult to reshape and rebuild these older areas into viable shopping centers. Reversing these trends in roadside commer- cial development will help to provide a more viable economic climate for commercial growth and development in the County. The present trend in Orange County is for commercial uses to develop in clusters or planned centers. Efforts could be made to encourage and support this trend. Shopping centers, office parks and warehouse/- distribution centers offer considerable advantage over "strip" com- mercial development. Clustering of commercial uses results in signif- icant advantages including: a. Grouping of access points which reduces traffic congestion and accident potential. b. Reduced number of automobile trips due to the diversity of shops and merchandise. c. Increased compatibility with adjacent land uses through buffer- ing. d. Unity in design and aesthetics when developed as a single entity. Existing commercial zoning districts used in Orange County do. not reflect the functions serviced by such uses (i.e. neighborhood commer- cial, highway commercial, shopping centers, commercial/agricultural) nor the site development standards necessary to insure compatibility between commercial uses and the surrounding environment. Orange County has not developed site design standards and guidelines to ad,equately address compatibility with adjacent development. Orange County has become one of the major destinations of tourists in the United States. Tourist commercial uses include such nationally recognized vacation destinations as Walt Disney World and Sea World. In addition to these areas, the demand for tourist commercial acre- age has been affected by the development of Circus World, Wet"N"Wild, Kennedy Space Center, Busch Gardens, Orange County Civic Center, and the redevelopment efforts now underway in downtown Orlando. Furthermore, additional demand will be created by the development of Walt Disney World's - World Showcase and EPCOT (Experimental (' d;CANGf' VI-15 ~U^fr( CkCJ w)N /1AN"^~[J--ttJjr- ~L( ~ I( / If J-o, (( IV 77J/l t.. 'I I.AJUp /)fl- ft- f tL( f-,J;- '> -- -- ._--_::~-~._:.!..:~-_. ^_'.~l~~f~ '~__~ ':..T' --"'- "-'--.-,. , J I t j 1 ,~ l 1 ~ i "Both north and south of the study area are transitional (shatter) zones canposed of a very haphazard mixture of widely varied and often conflicting land uses (ccmnercial, residential, vacant, and others). Within the study area, a severe econanical and lam use disequilibrium causes change to be the daninant characteristic. This damaging instability and the undesirable change that is occurring are causing declining property values and a deteriorating physical, social, and econanic environment." -'- SOURCE: Columb.1s, Ohio Department of Developnent: MARKET STUDY 1977 Orlando Public Library, Urban Documents Microfiche Collection Vol. 8, #C004-0060 o ! n /<f; /f!/ i~ ~~ ~/~ Yk r~~o-<~/ 1{7F>tL~?-1 ~ /-/c:vu-/- c~cf #~ik !.." ~tJ~. IAct' 3 / .LlAcG '#/ ~~ {/Ji/~Ie !~/~~ /, I .Y ~ . 7-7__ ~~/~s /0 /k I~J ~.~ t,r~~~v /~~ K4 I~ ~ ~~V: I I - ~. - A ~ ~ h. ~ ~ ~;r.-/,"z(- I 'Tw!- - J114 ~ G-~ /k-~ i k ~(~7 ~ ~!l ~_. '4 i ~ ~ ~~ !t-c-! ~ / 1 ~ ~ . a ~ _"';<i C7f I,l.B ;I Ii'f ;:;l / ~ , I n~ 7, ~ ~. . t.u.-{ /--c9- ~ I~./~~ ~ ~ ~ Ip~ (~~'., f / I/df' ~~ I . , I y& / M~FS /C~, t87~k ~? / ~. 4> I . I I I I I ,. M /'1) /CC8'1 , ~ .~~.~-/ ~~ ~ II/~~ /Ur L.--.J .tf-y F~ /. 17z~~ r ~. ~.I ~ I~ ~ ~#1/{w0 ~ :) :h?~E I ~/ d3~~n~, tI IY-L. cY ~ ./-'-4. ~~ ~ r r<<' /'-C~ /~! ~CUV ~ . . 1/ ~, ~;,Le -4!, .~/?.c/. /Z' Irl'Ui ~ ~~~ ~ -u~ I /.2~( 4a~' II , ' 11 II II l [ " II I I I y( c? //~~p~ ~o/ ~~if eo!. <t/?~~ ~J' /1*. ~ 2--~ /5 6') Po-J (- 7~ u / 7' a_ ;,,/,,-d ~ Hr/",eJ'1' ~ ~, (I-- /J...{S 0 C 'J ~ . -J;.~ ~ (./'z:.. v-I ~ ,~ 5'~~~ l'-f -~,I ~ ~ ~r-e j-;:~ '-J . -/v--rJ (:J--) /-rls, f'J-&>>---- ~ " Or'J /1--.</5 J i<- fk J /o~ rt..r S (5 /y;--- I "" c..c(,tJ'r~ 0/ rL; t4 kf j)f",",,yh.-<'~ Cr~~, I' , ~ ~st f~ l~vh-/IJ/~ L rpY;.r,<I' ,~ tie Lt7Z-r./ .:---1 "-c6'u,7Ae<-7 ./ , tL~(c 'J~ ~ ~~ /'l(j!}!JJ~ ?--;Ld IJ~~~~~ l-r// 0/11. -k~. ?Of)!J 77. I'*'- .... '. SINGLE FAMILY m'YELLING Ran:1e 6.4 - 16.0 Trip ends per single family dwelling Average 11.0 Trip ends per single family dwelling roNVENIENCE S'lORE Range (store open 15-16 Hrs.) *293.6 -*351.7 Average *332.6 *480.0 - *699.2 Ran:Je (~tore open 24 Hrs.) Average *577.5 *per 1, OOO'-.sq. ft. of store space Rarge = wa1kin vs high volume auto ~ 'roTAL SFDU North Orlar:rlo Ranches, Sections 8, 9, 2. & 2a = 283 283 x 11.0 = 3,113.0 + 332.6 ' . 3,445.6 Autos per 24 Hr. period S'jrr If! - '9-;; ,:0 '1 ',-.J~/. --:-- -- -..L I E Iv' A. . J-/ c:: /I.';: G "...... ~ "Both north and south of the study area are transitional (shatter) zones carp:>sed of a very haphazard mixture of widely varied and often conflicting land uses (carrnercial, residential, vacant, and others). Within the study area, a severe econanical andlaIxi use disequilibrium causes change to be the daninant characteristic. This damaging instability and the umesirable change that is occurring are causing declining property values and a deteriorating physical, social, and econanic envirorunent." . ~ . ~.-...:' . rotJRCE: COluml:us, Ohio Department of Developnent: MARKET STUDY 1977 Orlando Public Library, Urban Documents Microfiche Collection Vol. 8 #C004-0060 (!?-feY!, &'/1 IF' - C(D /..,.', I .,bl....". .. l]g1J ,I"""'. -r- J '.~l.'( '1 >- o - ..J o a. f- 2 w ~ w C!l < Z <( :; 1: f- i Q CE d >- I- 2 :J o tJ W t!J :2 ~ a: o 6. Roadway commercial uses have evolved over the years into continu- ous ribbons of commercial activity bordering primary and secondary traffic arteries, creating servicing and traffic problems.. Roadway commercial development often lacks off street loading and parking. As these areas become older, they become characterized by obsolete and unsound structures which lose their markets due to shifting popu- lation and changing traffic patterns. The physical deterioration of roadway commercial areas can detrimentally affect nearby and often unbuffered residential area~ The growing vacancies, decline in qual- ity, and intensity of use, adversely affects the tax base. With the large number of small lots, land owners, transportation and market problems, it is difficult to reshape and rebuild these older areas into viable shopping centers. Reversing these trends in roadside commer- cial development will help to provide a more viable economic climate for commercial growth and development in the County. The present trend in Orange County is for commercial uses to develop in clusters or planned centers. Efforts could be made to encourage and support this trend. Shopping centers, office parks and warehouse/- distribution centers offer considerable advantage over "strip" com- mercial development. Clustering of commercial uses results in signif- . icant advantages including: a. Grouping of access points which reduces traffic congestion and accident potential. b. Reduced number of automobile trips due to the diversity of shops and merchandise. 7. c. Increased compatibility with adjacent land l}ses through buffer- ing. d. Unity in design and aesthetics when developed as a single entity. 8. Existing commercial zoning districts used in Orange County do. not reflect the functions serviced by such uses (i.e. neighborhood commer- cial, highway commercial, shopping centers, commercial/agricultural) nor the site development standards necessary to insure compatibility between commercial uses and the surrounding environment. 9. Orange County has not developed site design standards and guidelines to ad.equately address compatibility with adjacent development. 10. Orange County has become one of the major destinations of tourists, in the United States. Tourist commercial uses include such nationally recognized vacation destinations as Walt Disney World and Sea World. In addition to these areas, the demand for tourist commercial acre- age has been affected by the development of Circus World, Wet"N"Wild, Kennedy Space Center, Busch Gardens, Orange County Civic Center, and the redevelopment efforts now underway in downtown Orlando. Furthermore, additional demand will be created by the development of Walt Disney World's - World Showcase and EPCOT (Experimental s; Ul'?e~ (: \._---' VI-I5 ff ~...)i/!r' JA NAt;[,I-IcV-r ~(~ <! '{ /r rd. C6ul\.J'r( f9/CC3 c FfA I r eMIl/Ct" '( firrVlti- " , AJ1JJ> tf. f l- . ft.-fl1 f,J; ., (Rul !?hlr?/-7lJ ---- -...---- ~. ------:.-_":.:!.~ :-.-:.:.~ _ __., .r:""'...... - ""__"~.'..._,....."-"-".,.~,o......~..........:....."___',"''''_~~:,,,-,,_~~~ ~ t:\- . -,,'---- , ~ ... I t f ~ ft , ,. j i f a f , l \ , t ~ t J ~ L i I,:,...~,. ,I -:.~._-,- -'- -..-.., ,...." "';-.....,,' .. t. 1 J7Ii M J) ai's down the road for coDvemeDce slores? tvs IN t-J? r ,[C!./ fA/ (t ~ tfl 1(,;)0 L 06Y. C/K ('^~ 0 P{)iSL/~ L... ,iJ,eA..1Z 7 (! /Lt(JltlA. ~ e/~/c:...S . ~ 6(? A. 77bAtIi '- The conve- nience store in- dustry is at a turning point For years, such chains as The Southland Corp.'s 7-Eleven and National Convenience Stores' Stop n Go could rely on resi- dential.subur:- banlocation.s~ fast service ana good parking to produce strong sales vohlmes and high profits at low overheads. Today, how- ever, industry members are faced with flat- tening sales vol- umes and gross margins that , have been. hovering between 27%-30% over the last few years. And they're quickly discovering that their three traditionally strong suits need to be' modified and added to if they're to continue to produce winning convenience store hands. The average store's yearly sales volume for the sector's top 13 pub- licly held convenience store com- panies increased only 3.8% in 1978, to $274,115, compared to an 8.5% increase in average store sales to $263,895 in 1977, according to con- sultant John F. Roscoe's "Eighth Annual Dollars Per Day Survey of the Small Food Store Industry." Furthermore, the industry's per store sales growth pattern has been a checkered one for the last four years, with annual sales increases averaging 8.5% and 9.5% in 1977 and 1975, respectively, and 3.7% in 1976. The profit picture is still bright though, with increases in stores' 1978 aftertax earnings pegged at 14%-19% more than 1977. But with costs rising, there are a number of challenges facing this segment of the food store industry which could create a rocky road in the future if ignored. For one thing, the convenience store industry is beginning to ma- ture. Better sites are now a must to generate the increasingly larger ~. CHAIN STORE AGE EXECUTIVE. JUNE 1979 "'- :, ".--.~' ~-----? ~ zd fz.cqe 4il77fcf- ~dJ. Slie 4.) S g/?jrrl -tb ---- sales figures chains need to cover construe- . tion and opera- tions costs. "We're rewrit- ing our site selec- , tion book every . da~," says Rus- sell C. Fellows, senior vp-mar- keting for Mun- ford Inc.. the At- lanta-based com- pany that got stuck with sev- eral hundred Ma- jik Market units in second-tier lo- cations and only recently re- bounded from a $15,000 loss in fis- cal 1977 profits (see related story). Munford ex- ecutives, like most in the business, have set their si~hts on prime cor- ner locations With high visibility and heavy traffic counts. Because Munford is selecting former gas station sites for its new uni~ traf- fic counts have replAl'pn hm I('hOIit' ~ once the sacred cow of the In ustry's site selection procedure. In fact, one Majik Market is mak- ,: ing $7,000 per week in food sales- the industry average is $5,257- without a house within a five-mile radius of the store. Secondary sites. mainly at the mouths of suburban subdivisions and in shopping malls, are a thing of the past. "The l:Iubul ban, .resi- 'D f,rr, ...~:._...lJ>'.. "- -"-.~--.- -. I, i.:~< f;.~" I . ""'i- I ;', I ,~ I '. , , ;~ ! '. "'~ ~ ~ " ..' .:: I," .-: :.',~ i:,' ~ " "'~ . ~ it I ~, . .. ~ , ~'. .' <. ,~ ; . ~ : : 23 . t ~ I \ ) ~j(~ ,...... .. .. ..: dentjal convenience store Roomed," explains Tom Ewens, vp-. real estate for Houston-based Na- tional Convenience Stores Inc., "be- ' cause the sales volume that those units produce simply can't keep pace with the costs' of land, con- struction and operation." But the recently sought-after, first-rate corner spots are getting harder for convenience store chains to find due, in part, to in- creased competition from other re- tailers for the same locations. As store sizes creep up to the 3,000-sq.- ft mark, and lot sizes expand to allow for increased gas and parking facilities, conveni~nce stores are looking for roughly the same size ,lot that a fast-food unit, drug store, bank or gas station might want This means that the sector's tradi- tional strength of flexibility in site selection is being so-mew hat im- paired. And in some markets, notably parts of Arizona, Texas ~nd' Flor- Ida, where convenience stores al- ready account for 10%-12% of gro- cery sales, there just aren't that many choice spots to be found. John C. Nichols II, senior vp and chief financial officer of Con- venient Industries of America Inc., reveals that the Louisville, Ky.- based operator of Convenient Food Marts IS having to look at more sites today than in the past to find good ones, like its industry counter- parts. Three years ago a site might have been selected from two or three. Now it's more likely that , seven or eight are considered be- fore a choice is made. What's happening is that conve- nience stores are pinning their hopes for higher sales volumes and profits on primary locations, while coping with higher real estate and Operational costs are much lower than fast food chains operations costs than they faced at former sites. This means that convenience stores' profit and loss statements will likely get tighter and tighter, the line between a winning and los- ing location more thinly drawn. Along with the space race for better store sites, convenience chains are facing increased com- petition for their share of food mar- ket dollars, which currently aver- ages approximately 2.5%. While there's no consensus as to who the 24 i,!~:i~-~ . . . small food store's primarr com- petitor is-some say it's nelghbor- inS;( convenience stores, others pOint to supermarkets-everyone agrees the competition from a number of retail sectors is heating up. Fast-food chains, liquor-delis, gas stations that carry food items, and discount and drug outlets with newly added food lines are among the newest competitors. The latter could pose the most serious future threat to conve- nience stores, reasons Merrill Lynch retail analyst George Quint, because these competitors will probably continue to expand con- venient food lines and carry more high-traffic appliances. Further- "e, many drug stores are of a sIze that gives them some of the convenience store's flexibility of location and they, like the small food units, are open long hours. In response to these myriad challenges, convenience store in- dustry members are scrambling for the ri~ht formula with which to maximIze sales volumes while keeping costs under control. Therre developing tougher return V . on Investment (ROI) standards; closing low-profit units more speedily; adding new stores at a slower pace; trying to boost the profitability of existing units, and redefining merchandise mix. Four years ago, National Con- mew 8II'aI8gIea brlgldea JllIIIford pldare "We've done some thin~ in the past few years to liurtour profitability," says Robert D. Blrthe, president of Munford Inc., 'but we feel we've done a good Job bouncing back." In 1977, Munford's profitability W88 hurt to the tune of a 63% operating profits dip, to $2.8 million. against sales of $233 mil- lion, compared to operating profits of $7.6 million the previous year. The drop came on the heels of stead;.': anl1ual saleem- creases, from $221 million in. 1974 to $260 mlllion in 1978. A large contributor to Munford's problem was its convenience store business, which lost $15,000 in fiscal '77 against sales of $211 million-90.5% of the company's revenues. At the root of the problem was the Atlanta-based corpora- tion's acquisition policy: At one point the company operated convenience stores under 14 different names. In the ~roeess it . had picked up a lot of units whose profits were margmal. And Blythe says steadily increasing utility costs and minimum wages made it more difficult for these units to turn a profit. Moreover, a number of the acquired outlets were in secondary locations, while Munford's competitors were beginning to snap up prime sites. Because of this these stores suffered declining customer bases, which, coupled with their rising costs, left the company with a lot of losing locations on its hands. "At some sites," says Munford's vice-chairman Herbert J. Dickson, "20-year-old leases had expired and monthly rents had risen from $120 to $1,500. , Between 1976-1978, 400 such stores were closed. CHAIN STORE AGE EXECUTIVE. JUNE 1979 1 ~ .~ J J' f '" 1 ;t " ; i: ~ U ~ .i l: ;. ; , ~ ~ . ; . .1 ,i 1 d ; I li j 1 ':t, ,~. .~ ! .' ., i.. I j , ~ ".' .' ~:~ iP: ... ~~ ;'~. .. ,,-,OJ ._;.~ '. '. J".;:ii;.\ ~ftili:~'~, .:,. .,:'-.." ::'~:t~'j"'r;:~~~~.""'~ '~tl';)-'...." . .i.'1~~'~~' . ;, ~~!3;:';' ;:~t~:p~i~", ':~:~4f~~ . ..:': ".~,"f. 'OJ''' ,I~;~~'''' . "f;~ ~~,;r ';"1~~'~~ ,.{ ,:~:/' ,!,.' . '" .~. ,~'~. ':. ~ , ,;,' ~... ..:.....-..t-. :~11'lrru~p:rnil'~[1in11lJ :i~ni~1:lU~l_'fU~ltI..~,_.i ~~ --..-,.....,.-....-- '-"-'-'...'-. ..,,_.~ ;..,~.~". . ...t. .~ ..... . .;~ l\'f 't?J (t , .......,.""".:- ~;'~io \.... '",.a-~~''''.' (, c~ .~ J- ~f "l ',;'1 ~ i \~t ".,~ t 'I;'" ~~~" . l ;\ ~.'l 1e ,1 ~ 1 )i1/ .;. " '~ ,~ J i; ~) I f "~ '.'~,,':' .. '.-~~;' .:'::;;1- '~" ,''<'" :'~)~ -.", ~, .. -. .j "i :~ ,~:~:". \ :~.. ',) ," ~: '., t .~ 1 ~ .~ l ,~ ~ . }' ,..~ :$ .. ";.: ,/1.-' . ".t..' j;l ,t",;~,,, \~~-~"",=J):"..IJ;:.:.:.'..".." tI""--. " <. venience Stores waited 12-18 months to see any profit from a new store. Today, its average unit is expected to generate as much as a 20% ROI in its first year of oper- ation. As a result, says vp-stores Boyd Bradfield, the company has been forced to increase its number of field real estate workers even though the company's opening 83.4% fewer units than it did five years ago. Because convenience stores' ROI standards have stiffened, low-vol- ume units are being closed with ~ater dispatch than at any point In the past. Their former reluc- tance to do this has been a stum- bling block for convenience store Growing competition makes corner spots harder to obtain retailers, many of whose entrepre- neurial spirits made it difficult to concede to failing units. Under the reins of president V. H. Van Horn, National Conve- nience Stores has opened 123 units and closed 206. By comparison, 182 stores were opened and only 20 closed in 1974 under the direction of former president and company founder, F. J. Dyke. Since Van Horn joined the company in 1975, As a result, the company's site selection procedure has changed drastically. All new convenience stores are now located on former gas station sites, which comJ?anr executives say will give the units needed accessibility, viSibilIty and high-volume traffic. Munford is getting such locations through deals with several oil companies, among them Gulf, with which it now operates 300 umts in 13 states, and Texaco. These companies contribute the cost of the land and gas inventol')j while Munford supplies food store merchandise and is paid a lee for managing the gasoline operations. Lease terms vary by location, at one-, three-, five- and 10-years. \ In addition, 25 food store' items are now dIrectly price com- petitive with their supermarket counterparts. Cigarettes, for example, are $0.50 per pack; milk is $1.59 per gallon. This was done because when the first gas station SItes were converted, 70%, of Munford's self-service gas customers weren't making food purchases. _ A question mark looms over the new strategy, however: Some of the tracts-like One downtown Atlanta site worth $1 million- might be used otherwise by the oil companies as property values continue to increase. Blythe claims he's not worried though, because Munford doesn't have enough of the units for it to make a difference. But if the company's after the best spots it can get and yet is forced to acc~pt short,-term l~ase.s'.,it'8 ~ problem worth consi~erin~. BeSIdes beefm~ up Its convemence stotes, Munford IS trymg to boost profitabIlity ,by eliminating its ice and building mate- rials divisions, and by selting Farmbest Foods, for a net loss of $2.1 million. '. , It dropped ice-the original basis of the company-in 1978, because the operation Was extremely capital intensive and po- tential profits couldn't Justify the expense. The company's buildmg materials stores, of which only two remain, are being liquidated because they can't keep up with larger home center competitors. Pursuing this business would have meant replacing'exJsting stores in-town with new units on larger sites. . Munford's future financial health remains uncertain. Profits in fiscal '78 increased 119%, to $6.09 million, but have yet to return to past levels of between $7.5-$7:6 million. Furthermore although companY' sales for the first quarter of fiscal '79 gained 9.2%, to $63.2 million, there was a $391,000 net profit loss. While chairman DIllard Munford projects a 15.3% sales in- crease to $300 million, in fiscal '79, he and other company officials decline to project profits. In the meantime, Blythe expresses confidence that the year-end earnings picture will buoy Munford's efforts to bounce back. t>... ~......- ~~ ~^._--~. ~- _.~._-~ ,. I its store fleet has dropped from 808 to 725 units. Similarly, a harder look is being taken at store expansion policy. In the past, the industry rule of thumb was to op,en a lot of units as quickly as poSSIble. But with sales volumes cooling and competition for sites heating up, the prevailing philosophr today is to boost the profitabihty of existing units. Convenient Industries of Amer- ica, for instance, measures the per- formance of existing stores against its latest sales standard for new units: a yearly volume of $500,000, which translates into weekly sales of $9,615 per store, 83% greater than the industry's $5,257 weekly average. Though sources at National Convenience Stores say the com- pany isn't content with its current store opening pace of 3(H0 units annually, they concede that they won't have the funds to step up that growth rate for several years. The exception to the rule is Southland, whose 7,600-unit 7- Eleven chain has continued to grow at an average 400-500 units for the past 15 years. The pace is a breakneck, if stable one, perhaps because Southland has the money to invest in store openings that some of the other companies don't Accordin~,to S. R. Dole, vp-stores, the chain s ~rowth rate isn't apt to change in hiS lifetime (Dole is 41), and with closings expected to number 50-100 per :rear, net open- ings should remain at 300-400. Generally, however, the.focus is on improving profitability of exist- ing units, an approach that wins ~ t Southland's Dole says 7-Eleven's growth rate of 300-400 new units per year won't change In his lifetime. 25 .ii':"'n:!;~{~~ t~ ;" r f t, 1 ,........", Average sales and profit figure for top 10 publlc..o..- held chains 1978 1977 1976 1975 1974 Yearly sales per store $274,115 $263,895 $240,828 $232,140 $213,890 Weekly 8ales per store $5.257 $5,061 $4,606 $4,452 $4.113 Profit on pretax 8ales 3.65% 3.48% 3.64% 3.32% 3.39% Profit on aftertax 8ale8 1.98% 1.8% 1.92% 1.71% 1.77% Yearly pretax profit per store $10,026 $9,194 $8,762 $7,723 $7,242 Yearly aftertax profit per store $5.431 $4,752 $4.523 $3.978 $3.789 Source: .. Eighth Annual Dollars Per Day Survey of Small Food Store Industry" approval from retail analysts and food chain consultants. They ~int out that it's more finanCially sound to improve existing stores than to grow by leaps and bounds. And as Gene Gerke. president of ~arrington, Ill.-based. consulting fIrm Gerke EconomIcs. notes. there are a lot oflO-year-old stores that need to be updated. Observers expect there will soon be a significant leveling of the in- dustry's store growth 'curve, which has jumped 300% in the last 10 years to 33.000 units, and that con- venience store companies' efforts to shore up existing outlets are in anticipation of that phenomenon. . . One way the small food store companies are seeking to boost their profits is by carrying a larger proportion of high-margin mer- chandise like fast foods. which run the gamut from sandwiches, hot- dogs and pizza. to soup, coffee, fruit punch and draft soda. Non- food Impulse items, whose mar- gins average 35%, vs. 27%-30% storewide, are also earning more store space. While fast foods contribute gross margins of, typically, 40.3%, roughly 41% higher than the in- dustry's average margin, critics questiOn the advisability of ap- proximately 78% of the conve- nience store industry making a commitment to the category at a time when fast-food chains are. seeing signs of profit slippage. A comparison of the two busi- nesses is difficult, however. since V convenience stores typically offer a much wider menu than most fast-food chains and because their customers usually buy the snack items on impulse-they go into the store to buy cigarettes and wind up with a sandwich. 'f Also, industry executives point out that their operational costs are much lower than the fast-food chains' since convenience store food is self-service. They also think the shorter, faster lines they offer customers are a strong sell- ing point. And they feel some in- sulation from the performance of the fast-food business since. for them, food-to-go is only one part of a much bigger operation. (Continued on page 60) ;j ~ 1 .~ "I ~ ,~ f:] J j ~ ~ ~ ,lj ;.~ ,.. "'" Soathl,-I'ld larDS atleatloa to other dlvIsIoas At $2.6 billion sales, $142.7 million operating operations. ~rofits and $51.3 million net earnings, 7-Eleven Initially, the Dairies and Special Operations ar outpaces any of its 13 publicly held conve- groups were to vertically integrate their activities nience store comsetitors. In fact, so dominant is with 7-Eleven. But while 7-Eleven's needs will the Dallas-base company in the convenience always be a prime concern of its sister groups. store business. that at the end of fiscal '77 it future corporate thrust will be to expand sales tQ accounted for approximately 56.2% of the sector's outside companies. sales, 67.8% of Its operating profits and 60.8% of Of the Dairies Group's $400 million sales in its net earnings. fiscal '78, for instance, 65%-$260 million-is Yet despite the resoundin~ success of the 7- from sales to food retailers such as Denny's and Eleven chain, which contrIbutes 90% of The Wendy's. Continued emphasis will be placed on Southland Corp.'s revenues and net earnings and such sales through the development of new high- 92% of its operating profits, the Dallas-based par- margin novelty items such as cheeses, ice cream ent company has not been content to rest on the and the sundae-style yogurts. laurels of its convenience stores' success, and is Similarly, Southland's market research shows now looking to its other divisions to help boost tremendous potential for the Specialty Group to volumes. sell its beverage. bakery and food-coating prod- In addition to its Stores Group, which also in- ucts to restaurants. fast-food chains, military ex- cludes 109 New York City-based Gristede's changes and commissaries. Southland's Tidel gourmet groceries and Charles & Co. take-out Systems division, a manufacturer of time-de- sandwich shops, and several international food layed access cash registers, is slated for rapid stores, over the years, the Texas concern has di- growth as well. because a good market for the versified into a number of dairy and specialty product exists beyond company confines. ~ , 26 .~' ..-.........--,.- ~:;"'_'.';i~>....;:';~~ .......,-....' CHAIN STORE AGE EXECUTIVE, JUNE 1979 , , .~ 1 1 , ~ ,p.-~!t. ~...,."I"" ~~: ..,"""''''.--:1''~''.':oO''' ",";~~t~", '<t....~.. ",. """,,;. , ,,:''''' - ,...,-.. ............. -:L 1/;:/1/; /' /Aft. I, ~ 44.21 .-/' t::- Art. I, ~ 44.20 APPENDIX A-ZONING ~ " Section 44.20. Meetings; quorums; re~l'.d.lJ-~-mfKept. The board of adjustment shall meet at least bi-monthly at a time set by its members. Three (3) members shall constitute a quorum. Complete records of all proceedings shall be kept. (Ord. No. 173, i 1,9-8-78) Section 44.21. Duties and powers; general. The board of adjustment shall serve to grant any variances ~r special exceptions as delineated in this code. ,/'--\ (1) The board of adjustment shall have the additional following specific powers and duties: a. To hear and decide only appeals where it is alleged there is error in any order, requirement, decision or determination made by an aqministrative ,official in the enforcement of any zoning ordinance or regulations adopted. b. To hear and decide special exceptions as authorized under the terms of the city's zoning ordinances; to decide such questions as are involved in determining when special exceptions should be granted; and to grant special exceptions with appropriate conditions and safeguards, or to deny special exceptions when not in harmony with the purpose and inteni of the zoning regulations. Ingrantini anyspeelal exceptions, the board'8l1all find ~t.,suchgrant 'will .I.1()tadversely . affect the public interest! In granting any special exception with appropriate conditions and safeguards, violation of such conditions and safeguards, when made a part of the terms under which the special exception is granted, shall be deemed a violation of the ordinance. The board of adjustment may prescribe a reasonable time limit within which the action for which the special exception is required shall be begun or completed, OJ; both. The board of J adjustment is authorized to grant special exceptions when the applicant is. seeking a minor deviation from zoning requirements so long 88 the granting of such special exception does not cause a change of character in . the neighborhood, . does not constitute a rezoning of the property in question or does not create a hardship' for any of the adjacent property~ The board of adjustment may also grant special exceptions within C-l Neighborhood Commercial Districts when the applicant has not sought a use listed in Section 44.47, when the use sought will not cause an undue hardship to the area. of [the] city, will not create a hazard or threat to the health, safety and welfare of the community, will generally comply with the character of the neighborhood anc when the use is in harmony with the intent of the zoning ordinances of the City of Winter Springs. c. To authorize upon appeal such variance from the terms of the ordinance as will not be contrary ',0 the public interest where, owing to special conditions, a literal enforcement of the provisions of the ordinance will r-', Supp. No. 14 c&JfJ gjrJ /g)- 8J 954.1 . -~ .. ~ " I"'" ::r- --r;. ",1 F ~ ::i"AIl1ostdecisive role that city government can play is in the location of commercial and it should exercise this role int establishing commercial property best suited to the desire$ and best 'interests of all Winter Springs citizens. 1 -.-- Industrial Industrial usage is non-existent in the city at the prese~t time. Industrial zoning in the city includes manufacturing, warehousing, wholesaling and processing activities combined under a Cl category. There are 100 acres currently zoned for industrial use in the city. Some industrial exists in the winter Springs Plannirig Area. On S.R. 419 ~here are three small industries, one manufacturing plant on Highway 17-92, and one processing plant on the south side of S.R. 419 near Tuscawilla. Industrial property is necessary in enlarging employment in the city. In broadening the city's economic Lase from a residential community to a more balanced entity, industrial development should be encouraged. However, industry can carry with it conditions detrimental to the overall g~als of the community. To offset adverse effects associated with industrial development, care should be taken to insure that only clean industry be allowed in by relegating industrial development to out~ying areas. In the case of winter Springs, putting industry north of S.R. 419 lessens the impact on surrounding land uses and traffic. 24 wo!} 7/7 IS /- fb ~- l I I l ~ ~ ] ~ 3 1><" .,.' t:..;..,~_. . ~it, ~' .,'.,'I;.~, '. ~~~. . ',,-' ~" 'ii,' . .'~ b. - ~ .?-:~ '~j ,.".,.....,~ :./l ""f .: ,. r" .~ " Goals, objectives and policies have been adopted for each element of this Comprehensive Plan. Each supports the following primary general character goal of this community. IT IS THE GOAL OF THE CITY OF WI~nER SPRINGS TO ~mINTAIN ITS IDENTITY IN A RAPID~Y URBANIZING ENVIRONMENT BY PRESERVING ITS QUIET, RURAl!. CHARACTER AS IT SEEKS TO CREATE A WELL-BALANCED', ECONOMICALLY SOUNDCOMMONITY~ Following is a suwnary of all goals, objectives and policies from each element of this Comprehensive Development Plan. Sm~RY OF GOALS, OBJECTIVES, POLICIES LAND USE To protect the quality of the city's "totaln environment for pre~ sent and future generations by carefully administering land use1- controls that establish and maintain the most desirable qualities of land classifications including residential, commerciaL, indus-; trial, public and semi-private community facilities. Insure that all development is in harmony with the environment, compatible" with adjacent land use and approval for development is oontingentr r upon the availability of ,adequate public facilities and services~ { -::;:"~....--.." TRAFFIC CIRCULATION To provide the rapid and efficient delivery of goods and services while minimizing adverse effects of this activity.on the city. 61 ij.' . ..,... , '. "-.. - '4 '," I I 3 ~.'.',~' . II J }I . I .,",? . I J I .1 '11"",..".,... ~ 3 I ~.....,',' 41 J ! . , B. r-- PROPOSED LAND JSE PLAN ~ Introduction The Land Use Plan is the nucleus of the Winter Springs Comprehensive Plan. It represents. the official land use policies of the city and provides future direction for public and private land development. Population, Economic Analysis, Present Land Use, Transportation, and the Community Facilities Elements provided input. By investigating and understanding existing conditions, it i~ possible to identify and preserve those trends that are desirab~~ and el.iminate those that are not. This can be done by selectively choos;nq only objectives and policies that favordes:ir~t~;.qr?\'1,~h^t Theblendinq of technical information with community goals results in the formulation of official policy. The result of this process is a Land Use Plan that oonsists of Land Use Objectives, Land Use POlicies, a city-wide analysis, and a Land Use Map. ANNEXATION Annexation is a form of growth. While almost all states allow annexation, the procedures vary greatly. A number of states allow municipalities "extraterritorial powers": that is, the municipali- ties control growth and development in an area anywhere from one- half to three miles beyond city limits. This enables harmonious land use and standards to be in effect at the time of annexation. This is not the case in Florida. Consequently, Winter Springs 64 ~.~.........- ;",;1; . I ~ I I p . I I I.,','.,.';,.,. ,~o _ " I"". ,""'0' I':, .......~,. f"~1 .:,...., 1:-".-, ~'--. .'" ).-.t .,,~,-~ fl" ~.' ill I 'W- . II" ""\" ";',_'4.. .~:....,. ...,', .~ A ;'1l~ ..-\'~,',.,... "\"':'" 't: . \, :.,. .. .. . .. ~. --.., / Planned Unit Development: This category of land use provides for planned residential communities containing a variety of dwelling unit types and arrangements, with complimentary, and compatible commercial centers with supportive residential and/or complimentary and com- patibleindustrial land uses; and planned industrial parks with complimentary and compatible residential and/or commercial land uses -- all designed to promote the public health, safety and general welfare. G 0 A L , THE GOAL FOR THE LAND USE ELEMENT RELATES DIRECTLY TO THE GOAL OF THE COMPREHENSIVE PLAN BY FURTHER DEFINING THE GOAL AND RE~~TING IT TO LAND USE. PROTECT THE QUALITY OF THE CITY'S TOTAL ENVIRO~- MENT FOR PRESENT AND FUTURE GENERATIONS:. OBJECTIVES Land use objectives were formulated by the Winter Springs City Council and. Planning Commission and should be used as a guide in determining growth direction in Winter Springs. General Carefully administer land use controls~ 72 ~ ~ , ..~ , . , I j j , I 1 . I ~ J . '1 j I i 1 j "1 ,1 :l ~ '1 iJ ~ ] ] 1 \o;jt(", ... .:" . - .- -.., Residential Residential areas should be and remain strictly residential as any non-conforming uses are highly undesirable. Upgrade or eliminate'substandard residential units by strict enforcement of health and housing codes. Determine a method by which it is possible to salvage or finish uncompleted developments. Establish ,and maintain codes to protect the desirable quali- ties of the residential environment (particularly regulate junk cars and the landscaping and maintenance of yards). Commercial and Industrial Attract a wide variety of persons offering professional ser- vices as well as entrepreneurs and businesses engaged ip both retailing and wholesaling activities to stimulate ~e employment and economic opportuni ties of the ci'ty:! ' Establish modes and districts where commercial developmen~ can take place in a well-planned manner, with proper vehicular) access, parking .and buffer areas. 73