Hale Holden's questions to ARKO (ARKO) leadership • Q2 2025
Question
Hale Holden from Barclays inquired about the status of the Other Tobacco Products (OTP) back-bar refresh, asking if the project was complete. He also asked what key performance indicators, such as merchandise sales lift, would define a successful new store format conversion.
Answer
CEO Arie Kotler confirmed that the back-bar refresh project, covering around 1,000 stores, was completed by the end of Q1/beginning of Q2. For the new store format, Kotler defined success as increased store traffic, a larger basket size, and expanded inside margin from higher-margin foodservice sales. He cited the first remodeled store as seeing a 6% lift in ex-cigarette sales in July year-over-year.