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- What is Buc-ee's?
Government shutdown? What shutdown? There are too many games this weekend to worry about that. Georgia v Ole Miss! Alabama v Tennessee! Notre Dame v USC! That’s a schedule that’ll make me forget we were supposed to get September’s CPI data yesterday. If you hide under the sheets, the monster can’t get you, right?`
What is Buc-ee’s?
On the surface, Buc-ee’s is a chain of 60 gas stations primarily located in SEC country. I am here to make the argument, though, that Buc-ee’s is so, so much more.
It’s a Beaver!
Founded in Texas in 1982, Buc-ee’s started as modest-sized gas stations with famously clean bathrooms. Over time, Buc-ee’s realized people stopping to use the bathroom on road trips need food too. Being in Texas, they started selling some damn good brisket and BBQ. They added fudge, nuts, and eventually, every snack you could possibly imagine.
The scale is hard to capture in a photo
It didn’t take long for them to realize that once you get people to stop to use the cleanest bathrooms in the world, they’ll wander around and buy anything while waiting for one person (never me) who’s still in the bathroom. This has become a pretty fantastic business model.
Most Buc-ee’s locations are now either 50,000 or 70,000-square-foot behemoths that take up entire exits on the interstate. In fact, Buc-ee’s will literally build a gas station in the middle of nowhere because they know they are the main attraction. If the local government takes too long to build the necessary infrastructure, Buc-ee’s will pay millions of dollars out of pocket to build highway access and open their store a few months sooner. That’s not a joke. I was recently at a job fair where Buc-ee’s had a presentation and booth, and the COO highlighted their aggressive tactics to grow and open more stores.
Since Buc-ee’s is a private company, it is difficult to estimate their average store revenue. Estimates vary wildly. However, some locations reportedly surpass $50 million in annual revenue. To put this in perspective, a typical 7-Eleven franchise averages between $1-2 million in revenue per year. Circle K franchises average $1.3 million in revenue per year.
Buc-ee's is operating in an entirely different stratosphere. Stores do 25-50 times the revenue of traditional convenience stores. All of this with no online sales. In a world moving toward e-commerce, Buc-ee's is staying true to its value proposition: come for the bathrooms, stay for the food, and buy this random beaver-covered Hawaiian shirt.
You want it? They have it.
Their advertising on the freeway is also top-tier. It’s simple, clever, and all crowd-sourced from employees. It works.
And trust me, I do hold it.
Buc-ee’s holds two world records — the largest convenience store at 75,593 square feet in Luling, Texas, and the longest car wash at 255 feet in Katy, Texas.
Allegedly there is an animatronic beaver in the middle
Look, I know this feels like a big advertisement for Buc-ee’s, and it is. I love the store and their culture. During their job fair presentation, the COO showed old YouTube videos from 2014 without making the video full screen (classic boomer move). After the videos, he talked about the culture. He said something like, paraphrasing here, “All of us in the corporate office take money from the company. We can never forget who and what makes the company money. That’s why I require all of us to work in the stores one day per month. I don’t care if it’s cleaning toilets or running a cash register. We need to be doing the jobs that keep people coming back.”
If Buc-ee’s wasn’t private, I would have sold every ETF I own and dumped it all into their stock on the spot.
I recently read Made in America by Sam Walton about the start of Wal-Mart. Buc-ee’s is Wal-Mart in its prime, a never-ending drive to provide for the needs of their customers: clean bathrooms, good food, and a road trip stop that makes the drive worth taking.
If you’ve never been to one, I highly recommend their new store in Brunswick, Georgia, along I-95. Don’t be scared by the line of cars backed up to the interstate. It’s worth it.
Debrief on Deck
Next week, we talk about fixed income. For the aggressive investors (me), this is a bad word. However, it’s still fun to learn what is out there and some fintech trends that could revolutionize fixed income retirement planning.
As always, please reach out to us with any questions or comments you have by replying directly to this email. I don’t like social media at all, sorry Mark.
Until then, stay the course.
Wilson