Kwik Trip expands in Twin Ports area, with 8 stores this year and more to comeKwik Trip isn’t just entering the Twin Ports market this year — it’s opening more stores here than anywhere else in the Midwest.
By: Candace Renalls, Duluth News Tribune
Kwik Trip isn’t just entering the Twin Ports market this year — it’s opening more stores here than anywhere else in the Midwest.
Of the chain’s 34 new gas and convenience stores slated to open this year, eight will be in the greater Twin Ports area: two in Duluth, three in Superior, two in Hermantown and one in Scanlon.
But that’s just the beginning.
Six to eight more stores will follow in 2015, bringing the total to 14 to 16 stores in just two years, said Scott Teigen, the Wisconsin-based company’s chief financial officer. He’s one of four Kwik Trip staffers working on the property acquisitions, contracts, permits, variances and tedious negotiations needed to pull it all off.
With the new stores come jobs, lots of them. With 35 employees per store typical, that’s more than 500 new jobs that offer medical plans, 401(k) matches and profit sharing.
Will they stop with 14 to 16 stores?
“We’re never done,” Teigen said last week.
After all, Duluth is a good market, he says.
Some existing convenience stores are bracing for the coming Kwik Trip invasion.
“We’ve been expecting it for a number of years,” said Mike McKinney, co-owner of Best Oil Co. in Cloquet, which operates 19 Little Stores in the region. “They are a very large, well-operated company that is expanding. We’ve been expecting them to enter for a number of years. There’s no surprise with this.”
It’s why his company rebuilt its Spirit Mountain store in Proctor, which has become the prototype for their future stores. And it’s why they’ve remodeled several other Little Stores in the past few years.
“We have been preparing for years, upgrading locations, knowing that Kwik Trip and other possible companies could be coming into the area,” McKinney said. “And Holiday has a sizable presence already.”
With its fresh produce, baked goods and dairy products trucked daily to stores from its headquarters in La Crosse, Wis., Kwik Trip stands to be formidable competition. The family-owned company founded in 1965 takes a sustainable approach to business by recycling, building stores that are LEED-certified, the international standard for green buildings, and by including electric car-charging stations at its new stores.
McKinney expects some of his stores will have to compete directly with new Kwik Trip stores. But, he said, that isn’t all bad.
“An excellent company like Kwik Trip coming to this market raises the bar for the convenience industry and raises the expectations of consumers,” he said. “So it makes us work harder to have better convenience stores.”
Teigen insists Kwik Trip isn’t out to put anyone out of business.
“Many times the competition is working with a lot less overhead,” he said. “Even though they may lose some business to us, we don’t close anyone down. Sure it’s happened, but it’s never our intent.”
Kwik Trip actually views grocery stores more as its competition, Teigen said.
“On the food end we’re strong with our milk, bread, bananas and sandwiches,” he said. “We really look at the big grocery stores as our competitors. And they’re not going to go out of business because of a little convenience store.”
Eight in 2014
Kwik Trip plans to start building the first of eight stores in the Twin Ports area this spring, starting with a store at Tower Avenue and North 28th Street in Superior.
“As these deals close, we’ll demo the old buildings and probably see construction start in May,” Teigen said. “We plan to start a store every two weeks. By July or August, they’ll all be under some phase of construction.”
Two more stores will follow in Superior, at Belknap Street and Banks Avenue, and at U.S. Highway 2 and 30th Avenue East. In Duluth, stores are planned for the 4200 block of Grand Avenue, and 27th Avenue West and Michigan Street. In Hermantown, a store will go in front of Menards on Miller Trunk Highway near Arrowhead Road, and farther up the highway at Sugar Maple Drive. In Scanlon, a store is planned for Minnesota Highway 45 and Interstate 35.
The stores typically are about 4,000 square feet with outside gas islands. The Belknap and Banks and the Miller Trunk Highway/Sugar Maple Drive sites also will offer diesel fuel for trucks.
The new stores will start opening in September, starting with the Tower Avenue store, Teigen said.
“Every few weeks another one will open through the end of December,” he said. “A year from now all eight will be operating,” he said.
More in 2015
Six to eight more stores will follow in 2015, including three more in Duluth, another one in Superior and one on Minnesota Highway 33 in Cloquet, Teigen said.
Because contracts haven’t been signed yet, he declined to say where the Duluth-Superior sites will be.
But in Duluth, the company is trying to put stores in different parts of the city, he said.
At least one site hasn’t worked out — the new BlueStone Commons multiuse development near the University of Minnesota Duluth.
“We were working on BlueStone,” Teigen said. “We could never get together with the numbers. The land is too expensive.”
Kwik Trip is acquiring all its sites in the Twin Ports region.
So why open so many stores so quickly?
“You’re a good market up there,” Teigen said.
But there’s another reason to open more rather than fewer stores.
Kwik Trip supplies its 400 stores in Wisconsin, Minnesota and Iowa with its own dairy products, fresh produce and other fresh foods from its headquarters, warehouse and kitchens in La Crosse. The milk comes from its own dairy farm and is delivered to stores 24 to 36 hours after it comes from the cows.
“We deliver to every store every day so everything that comes into our stores is very fresh,” Teigen said. “Everything comes from La Crosse. We have to make sure we have full truckloads.”
It doesn’t make financial sense to drive all the way from La Crosse to Duluth to deliver to one or two stores. Moreover, he said it’s not any more expensive to advertise for 16 stores in a market than for one.
“It’s all about efficiency,” he said.