# Arko CEO says remodeled stores are generating low double-digit sales growth By MarketScale Newsroom · Published 2026-11-08 · Retail on MarketScale Canonical: https://www.marketscale.com/industries/retail/arko-ceo-says-remodeled-stores-are-generating-low-double-digit-sales-growth > Arko's CEO says remodeled stores are generating low double-digit sales growth; promo spending rose about 16% and merchandise margin hit 34.8%. ## Key points - Arko raised in-store promotional spending about 16% in Q3 2026 and still widened merchandise margin 110 basis points to 34.8%, its 12th straight year-over-year gain. - Early fas craves remodels are generating low double-digit sales growth, but on only 11 stores; the retained portfolio as a whole grew merchandise sales about 0.8% excluding cigarettes, so the lift has yet to reach the totals. - The number to watch is retained-store merchandise growth as the remodel count passes 25: if it climbs, the food-led format is scaling; if it stays near 1%, the early results came from a small sample. Arko Corp. said 11 store remodels had been completed through the third quarter, all featuring fas craves food and beverage elements. On the company's Nov. 5 third-quarter call, Chairman, President and CEO Arie Kotler said remodeled stores are generating low double-digit sales growth based on initial results, Convenience Store News reported. The Richmond, Virginia, operator expects to complete more than 25 store remodels by the end of 2026, according to Mass Market Retailers. The outlet tied the push to Arko's growing emphasis on foodservice as a way to increase customer engagement and drive higher-margin merchandise sales. The remodels are only part of the picture. In the same quarter, Arko widened its merchandise margin. For a c-store operations or merchandising leader deciding where the next remodel dollar goes, the interesting part is how those pieces fit together. ## Inside a fas craves store Arko opened its new-format fas craves flagship in June 2025 and has since been rolling the format out across its retail store base, according to Convenience Store News. Delis are now part of Arko's foodservice offering at approximately 145 stores, where customers get a fuller menu. The wider investment program also includes retail new-to-industry stores, technology and automated ordering. Those numbers sit on different scales. With delis in roughly 145 stores and 11 completed remodels, Arko's food program appears to reach far more locations than the full fas craves format has so far. That leaves plenty of room for the remodel pipeline to grow into stores where food is already on offer. Food is not the only category being reworked. In other tobacco products, Arko widened its assortment and shifted shelf space toward faster-growing products. In packaged beverages, it sharpened its value pitch. Kotler described both as mix moves meant to support sales and margin together, which makes the remodel one part of a full category reset rather than a kitchen bolted onto an old box. Of everything Arko reported, the remodel figure is the closest thing to a before-and-after test, because it compares the same stores against themselves. It is also a small sample, and Arko called the results initial. For chains weighing whether a food-led remodel pays its way, low double-digit growth is a useful early benchmark. It is not yet proof that the format scales. ## Spending more on deals, keeping more margin Arko raised in-store promotional spending by about 16% compared with the year-ago quarter. Kotler said it also redesigned the offers to communicate value more clearly, reach more customers and encourage larger baskets. Each change lines up with one of those goals. Some promotions that had been limited to loyalty members are now open to nonloyalty members as well, which widens reach. Arko also expanded targeted in-app offers. And it teamed with vendor partners on cross-category bundles, so the more qualifying items shoppers put in their baskets, the bigger the fuel savings they earn. Kotler said the design protects merchandise margins. Arko spent roughly 16% more on in-store promotions in the third quarter and still finished with a merchandise margin of 34.8%, up 110 basis points and its 12th straight year-over-year gain. Neither outlet breaks that margin down by lever, so the bundles cannot be credited with it alone. What the pairing does show is that heavier promotion and margin expansion happened in the same quarter, which suggests the structure of the deal matters as much as its size. Fuel is the reward that ties it together. Arko is balancing competitive street pricing against disciplined margin management, and its Fueling America's Future marketing campaign gives customers up to $2.50 per gallon in discounts, extra savings at a time of elevated fuel prices. The program launched in February 2025. Since the bundled offers increase fuel savings as customers add qualifying items, the pump could become a reason to buy more inside the store. Loyalty sits underneath the whole promotional design. Arko's figures for its fas REWARDS program show why reaching more shoppers is worth paying for: Block Field Those figures sharpen the tradeoff in the eligibility change. Members are plainly Arko's most valuable shoppers, yet some offers now go to people outside the program. If open offers work as a sampler that pulls shoppers into enrollment, the quarterly sign-up count is where that would show. For chains whose loyalty programs keep every deal behind enrollment, Arko's choice to open selected offers is a model worth tracking over the next few quarters. Block Field ## Fewer stores, better-performing ones Dealerization is central to what Arko calls its retail transformation, shifting focus and capital toward its stronger core portfolio of company-operated stores. In practice, the remodel money is going into a shrinking set of company-run stores. Through the program, Arko converted 17 company-operated stores to dealer locations in the third quarter, bringing the total to 488 since the program began in 2024. About 55 more sites were under letters of intent, under contract or already converted after the quarter closed. Arko expects the program to be largely complete by the end of 2027. Kotler said the retained portfolio keeps outperforming the stores slated for conversion and produces most of the retail segment's operating profit. Read alongside the remodel plan, that indicates Arko is concentrating food investment in the stores it plans to keep running and that already earn the most. Block Field The fuel side is growing alongside the stores. Arko opened five fleet-fueling locations during the first nine months of 2026. It added another two in October and has 16 more sites in planning or development. In August, subsidiary Arko Petroleum Corp. agreed to acquire the business of U.S. Petroleum Partners LLC to bring more scale and infrastructure to its fuel distribution operation. Mass Market Retailers described these moves as one strategy with three tracks: concentrate resources on higher-margin convenience retail, expand foodservice and grow fuel distribution. Seen that way, dealerization and the remodels are two halves of the same decision. Stores that leave company operation free up capital, and the stores that stay get the food investment. ## When the remodel lift reaches the totals The strongest test of the remodel story sits in Arko's own numbers. Excluding cigarettes, the retained portfolio grew merchandise sales about 0.8% in the third quarter, and it has posted year-over-year merchandise sales growth in each quarter of 2026. Next to low double-digit gains at remodeled stores, that gap suggests 11 stores are not yet enough to move the whole base. The format's real proof comes when there are enough fas craves locations to show up in that number. Company-wide, the quarter was steady. Net income rose to $14.3 million from $13.5 million a year earlier, and adjusted EBITDA came in at $75.7 million against $75.2 million. Arko raised the low end of its full-year adjusted EBITDA guidance, which now runs from $250 million to $265 million. That came as industrywide fuel gallons declined and credit card fees climbed, conditions Arko worked around by lifting same-store fuel margin 4.6 cents to 48.8 cents per gallon, a 2.7% or $2.6 million increase in same-store fuel contribution over the third quarter of 2025. Two numbers in the fourth-quarter report will show whether the food-led format is scaling: whether the remodel count clears 25 as promised, and whether retained-store merchandise growth starts climbing above that 0.8% as more fas craves stores reopen. If the second number rises with the first, the format is spreading. If it stays flat, the early lift came from a small and favorable sample. ## Sources - [Arko advances foodservice strategy amid profit growth](https://massmarketretailers.com/arko-advances-foodservice-strategy-amid-profit-growth/) - [ARKO Boosts Promotional Spending to Drive In-Store Sales](https://csnews.com/arko-boosts-promotional-spending-drive-store-sales) (Convenience Store News) - [C-Store People News Roundup: Dana Moloney is now CEO of ...](https://www.cspdailynews.com/company-news/c-store-people-news-roundup-dana-moloney-now-ceo-warrenton-oil-co) (CSP Daily News) Tags: Arko Corp., fas craves, convenience stores, foodservice, store remodels, dealerization, loyalty programs, fas REWARDS, merchandising, retail operations, promotions, fuel retail --- Source: MarketScale, https://www.marketscale.com/industries/retail/arko-ceo-says-remodeled-stores-are-generating-low-double-digit-sales-growth. Published for AI indexing and citation; cite the canonical URL. 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