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COLD SPRING, Ky. -- Ohio Valley AFM Inc., parent company to the 140-store AmeriStop superette and convenience chain, has come upon two separate problems that are causing local media to question the chain's operations.
At a few franchise locations, including the AmeriStop in Wilder, Ky., the company has stopped deliveries of gas because those franchisees have not signed lease agreements, Ray Lynch, buyer for AmeriStop, told CSNews Online. And without lease or franchise agreements, the operators are not making deposits either.
"We own the gas equipment, and we have a dispute between a few stores, so we withheld gas from them. It's just a dispute issue," he said, clarifying previously published local reports that stated the company was not paying its vendors or creditors.
However, Lynch was confident that the matter would be resolved quickly, even as soon as today, once the franchisees resume their deposits.
A separate issue over contracts with Coca-Cola is also plaguing the chain.
"Coke has decided to use [Ohio] as a test state of a 12-pack versus an eight-pack of cans," said Lynch. "We sell a tremendous amount of 12-packs. They told us the 8-pack 'convenience cans' are wonderful and our retail customers will love it. We asked 'What's Kroger going to be selling these for?' And they said Kroger will not be selling these, they are strictly for convenience."
Some of the AmeriStop stores are best defined as a superette, and their competition is Kroger, Walgreens, IGA and a number of other regional grocery chains, according to Lynch. Due to the amount of grocery items AmeriStop stores sell, Lynch said it's not right that their competitors have the 12-packs, while the AmeriStops can not. "Some small IGAs, where we are bigger in square footage and sales volume, still have 12-packs," he added.
While AmeriStop wanted to stock both package sizes to let consumers decide, Coke refused and told the chain it would raise prices to $13 per case, double what it should be, according to Lynch. A call for more information to Coca-Cola by CSNews Online was returned; however, no additional information or comments are available at this time.
"We are in a major dispute with them. Coke has a small market share here, less than 10 percent of our sales. We're going to live without Coke. They've gone to an area where they shouldn't have gone."
Lynch explained that despite the trouble, the beverage category at AmeriStop stores has seen fine sales growth. "We've determined that you need Coke and Diet Coke, and that's about it. We don't need all the auxiliary brands."