Options for the Pantry Incorporated Company

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10 December 2011

The Pantry, Incorporated

The Pantry, Inc. is the leading convenience store chain in the southeastern United States. The company is in the business of merchandise, fuel, and ancillary products and services. Fuel accounts for about three quarters of the company's total sales. It operates stores under various selected banners, which primarily include Kangaroo Express. As of November 1, 2010, the Company owns nearly 1700 stores in thirteen states which include Florida, North Carolina, South Carolina, Georgia, Alabama, Tennessee, Mississippi, Virginia, Kansas, Kentucky, Louisiana, Indiana, and Missouri. Company’s nearly $379 million in revenues and its employees numbered 14419 in 2010. The Pantry Inc. was founded in 1967 by Sam Wornom and Truby Proctor, Jr. and its shares are being publicly traded since 1999. The company’s headquarters are located in Cary, North Carolina (Yahoofinance).

1. Company analysis

The company’s corporate strategy is based on growth and acquisitions. The Pantry, Inc. considers acquisitions a way to bring new capabilities which helps the company to create value for its investors as well as for its customers. It started has been following this strategy since 1997 when it acquired Lil’ Champ of Jacksonville. The company acquired the 47-store Presto chain in December 2010 following its strategy and expanded its footprint into the Midwest (Annual Report).

The Pantry, Inc. is the leading independent chain of convenience store chain in the southeast of the country. It is the third largest independently operated convenience store chain in the US. Kangaroo Express ® is the primary operating banner. The company’s stores offer a range of merchandise, fuel and ancillary products and services. Its merchandise products include tobacco products, packaged beverages, beer and wine, general merchandise, health and beauty care products, self service fast foods and beverages, salty snacks, fast food service, candy, dairy products, bread and cakes, grocery and other merchandise, and newspapers and magazines.

The company offers both branded and private branded fuel based according to the requirements of local market. There are approximately 50 fuel terminals in company’s operating areas which allows the company to choose from more than one distribution point for most of its stores. It also earns money from the services which include sales of lottery tickets, prepaid products, money orders, services such as public telephones, ATMs, amusement and video gaming and other ancillary product and service offerings.

McLane Company, Inc., a wholly owned subsidiary of Berkshire Hathaway Inc. is the major supplier of the company. In its last