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VIEWPOINT By Don Longo, Editor-in-Chief
A Day at the Auto Show Electric-powered vehicles gaining but still have long way to go
W
ith gasoline prices soaring to their highest levels since the summer of 2008, I expected to see lots of vehicles featuring flex fuels and electric hybrid and other advanced technologies at this year’s New York International Auto Show, held at the Jacob Javits Center in New York City last month. I wasn’t disappointed. A major theme of the show was energy efficiency — from the totally electricpowered models like the Chevy Volt and Nissan Leaf, to numerous hybrids and cars using higher gas mileage conventional technology. It’s clear that both foreign and domestic auto makers are trying to comply with the new Corporate Average Fuel Economy (CAFÉ) standards that call for an average fleet fuel economy of 35 miles per gallon (mpg) by 2020. I was specifically interested in learning more about electric cars and how they will impact trips to convenience store and petroleum retailers. At the extreme end of the gas consumption spectrum were the all-electric, plug-in vehicles like the Chevy Volt and Nissan Leaf. I took a test drive as a passenger in the Leaf and was very impressed with the interior space, the acceleration and handling of this batterypowered, zero-emission car from Nissan. The company claims the
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Leaf can hit speeds of up to 90 miles per hour and go up to 100 miles between charges. However, I also believe that the driving range can be vastly affected by the type of terrain, weather conditions and use of accessories like air conditioning. That would certainly give me some anxiety about finding the next charging station. At least the Leaf’s price tag
A 93-mpg electric Chevy Volt with home charging station that costs about $2,000
($32,330 before a $7,500 government tax credit) is lower than that of the Chevy Volt. The Volt, another all-electric vehicle, has a manufacturer’s suggested list of $40,280, although the car I saw was loaded with about $4,000 in extra options. At those premiums over standard gas vehicles, it could take years to re-coup the sticker price in savings on gasoline consumption. Of course, there’s also a premium on hybrid cars, like the Toyota
Prius, which has a base price of $23,050 and achieves about 51 mpg city and 48 mpg highway. According to Edmunds.com, the Web site that calculates auto values, the cost for hybrid technology usually adds $4,000 or more to the price of a vehicle over the price of a comparably equipped non-hybrid version of the same model. What most impressed me at the show — besides the $200,000 Bentley — was the large number of conventional gasoline-powered cars with high fuel efficiency. Nissan, Hyundai, Kia, Honda and Volkswagen, to name a few, all had several models claiming high-30s, low-40s mpg. Even larger models, like the upcoming mid-sized 2013 Chevy Malibu Eco, achieve 38 mpg on the highway. I think it is still far from certain how quickly and how rampant electric-vehicle use will become in the U.S. It could take until 2020 before batteries have sufficient range, charge fast enough and cost minimally more than conventional technology. Until then, a lot of car buyers will not pay the electric/hybrid premium if there are several conventional gaspowered options available that get Q almost as good mileage. For comments, please contact Don Longo, Editorin-Chief, at (201) 855-7606 or dlongo@stagnito media.com. May 23, 2011 CONVENIENCE STORE NEWS 3
TABLE OF CONTENTS
20
May 23, 2011
22 COVER STORY 22. Earning Its Stripes Nearly five years since its IPO, Susser Holdings delivers on the promises it made to investors.
FEATURES
43
43. CSNews Top 100 2011: Fractured Assets C-store industry remains fragmented even as several top chains add stores.
Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 15 times per year, monthly with semimonthly exceptions in March, May and July by Stagnito Media, 570 Lake Cook Rd. Deerfield IL 60015. Copyright Š 2011 by Stagnito Media. All rights reserved. Subscriptions: One year, $93; two years, $152. One year, Canada, $110; two years, Canada, $175. One year, foreign, $150. Payable in advance with a bank draft drawn on a U.S. bank in U.S. funds. Single copies, 4 CONVENIENCE STORE NEWS May 23, 2011
$10, except foreign, where postage will be added. Canadian Post International Publications Mail Agreement No: 40031729. Return Undeliverable Canadian Addresses to: DHL Global Mail, 4960-2 Walker Road, Windsor, ON N9A 6J3. Printed in U.S.A. Periodicals postage paid at Deerfield IL, and at additional mailing offices. POSTMASTER: Send address changes to Convenience Store News, P.O. Box 2184, Skokie, IL 60076-7884. WWW.CSNEWS.COM
速
速
TABLE OF CONTENTS
18
May 23, 2011
FEATURES (CONT.) HR LABOR STUDY
52. Employment Down, Turnover and Pay Slightly Up The average number of workers per store falls even as economy rebounds. HR SALARY STUDY
60. What Do C-store People Earn? Compensation inches up for most jobs in the convenience store industry. 80. Retailers Leverage Unusual Locales At stadiums, airports, campuses — opportunities abound off the corner.
75 FOODSERVICE PIZZA
66
CANDY & SNACKS NCA EXPO
66. A Sweet and Savory Preview The 2011 NCA Sweets & Snacks EXPO will be driven by innovation and a renewed sense of fun. CANDY & SNACKS RESEARCH
70. Consumer View of Candy Consumers can’t resist lure of candy and snacks at c-stores. 72. What’s New in Candy & Snacks 6 CONVENIENCE STORE NEWS May 23, 2011
75. The Slice Is Right By adding pizza to its foodservice menu, a convenience store can reach communities that don’t have traditional pizzerias.
NEWS ANALYSIS 12. Wilson Farms to Sell Chain to 7-Eleven 14. Gas Prices Take Center Stage 16. Sheetz Hangs Price Tag on Hometown
TRENDWATCH
20. Consumer & Product Trends from Mintel EXPERT’S VIEW: REAL ESTATE STRATEGY
62. Will Real Estate Values Rebound from the Great Recession? EXPERT’S VIEW: TOBACCO
64. Clearing the Smoke Surrounding E-Cigs CONSUMER TRENDS
106. Consumers’ Diversity Offers Untapped Potential
DEPARTMENTS VIEWPOINT
3. A Day at the Auto Show 6. CSNews Online TOC 18. New Products
72
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CSNEWS ONLINE PRODUCT HIGHLIGHT
Log onto www.csnews.com for daily news.
TOP 5 DAILY NEWS HEADLINES The most viewed articles online.
The most viewed New Product online.
SUPERPRETZEL Mini Pretzel Dogs
RESEARCH CSNews’ proprietary research is available online. NEW for sale! CSNEWS 2011
9th Annual al
C Convenience Store News
Industry t y Forecast Study 2010 Industry Report Expanded Edition
2010 Technology Study Expanded Edition
The latest addition to the SUPERPRETZEL Soft Pretzel product line is suitable for on-the-go snacking, kids’ meals and more, according to the company. SUPERPRETZEL Mini Pretzel Dogs are mini, meaty hot dogs wrapped up in gourmet pretzel dough. They have zero grams of trans fat and come frozen and ready to heat quickly in an oven or Turbo Chef. Other SUPERPRETZEL products include Soft Pretzels, Soft Pretzel Bites, Pizza and Cheddar Cheddar Poppers, and Whole Wheat Soft Pretzels. J&J Snack Foods Pennsauken, N.J. (888) JJSNACK www.jjsnack.com
2010 Foodservice Study
1) Sheetz Helps Hang Price Tag on Hometown
In a nod toward advertising, the c-store operator worked with filmmaker Morgan Spurlock to rename Altoona, Pa., the company reported. 2) Gulf CEO Talks Oil Prices with CNBC
Joe Petrowski predicts prices nearing top, and that they will fall to less than $100 a barrel by July 4. 3) Owner to Gas Thief: Shame on You
Esso operator posts sign out-
Interested in new products? Subscribe to CSNews’ new FREE monthly New Product Alert e-newsletter, at www.csnews.com/ newsletters.
side his station asking driver to stop stealing gas.
2010 Security Study 2010 Human Resources and Labor Study
4) Federal Task Force Focuses on Gas Price Fraud
Expanded Version of 2010 Realities of the Aisle
President Barack Obama wants to “root out” manipulation in the oil markets.
Expanded Version of 2010 Forecast Study
5) Wilson Farms to Sell Chain to 7-Eleven
7-Eleven said it will invest in remodeling the 188 stores, adding proprietary beverages such as Big Gulp fountain and Slurpee drinks, coffee service and fresh foods.
2010 New Product Scorecard Expanded Edition CSN FIRST LOOK 2009 Year-end Category Results 2009 Foodservice Study Expanded Edition 2009 Salary Survey To purchase any of these research reports, go to www.csnews.com/research.
CSNews Launches Mobile Version of Web Site Convenience Store News, the most-respected and most-viewed Web site in the convenience industry, launched a new mobile version of its Web site that is optimized for viewing via smart phones. When viewed using a smart phone such as an Android or iPhone device, the CSNews mobile site shows much of the same award-winning content as the regular Web-version, but in an easier to read format for handheld screens. The mobile version contains: Latest news from CSNews.com (most recent 25 articles) Latest new product introductions (New Product of the Day from the past 25 days) Latest articles from print and online covering trends, research and many special features. You can access the mobile version from your phone by going to http://m.csnews. com, or just to csnews.com (it will auto redirect you to the mobile version)
CONVENIENCE STORE NEWS NEWSLETTER Sign up for daily industry news delivered directly to your computer. To register, log onto www.csnews.com and join the thousands of industry subscribers who depend on CSNews Online for their up-to-the-minute news and informative analysis about the ever-changing convenience store industry. 8 CONVENIENCE STORE NEWS May 23, 2011
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With Aflac, you know that if your employees get hurt or sick they will have a safety net. Aflac helps pay costs that major medical doesn’t cover, by sending cash directly—faster than our
Aflac makes your benefits
even sweeter.
top competitors. Because it’s voluntary, it doesn’t cost your business a penny. Pretty sweet. Visit aflac.com/sweetbenefits, and see what all the buzz is about.
Individual coverage underwritten and offered by American Family Life Assurance Company of Columbus. In New York, coverage underwritten and offered by American Family Life Assurance Company of New York. Some policies may be available as group policies. Group coverage underwritten and offered by Continental American Insurance Company. Policies may not be available in all states. Aflac pays cash benefits direct to the insured, unless assigned. Aflac processes most claims in an average of four days. For Continental American Insurance Company, the average is five days. There may be indirect administrative or other costs. NAD1116
Convenience Store News 111 Town Square Place, Suite 400, Jersey City, New Jersey 07310 (201) 855-7600 Fax: (201) 855-7373 www.csnews.com
EDITORIAL
AWARDS
Editor-in-Chief (201) 855-7606
Don Longo dlongo@stagnitomedia.com
Executive Editor (201) 855-7614
Tammy Mastroberte tmastroberte@stagnitomedia.com
CSNews has been recognized with more editorial awards, including the prestigious Jesse H. Neal Award for business journalism, in the past five years than any other industry publication.
Senior Editor, Convenience Store News & Executive Editor, Single Store Owner Linda Lisanti (201) 855-7608 llisanti@stagnitomedia.com Senior Editor (914) 636-1321
Barbara Grondin Francella barbfrancella@aol.com
Associate Editor 201) 855-7618
Melissa Kress mkress@stagnitomedia.com
Assistant Editor (201) 855-7619
Angela Hanson ahanson@stagnitomedia.com
Contributing Editor (303) 741-3377
Renée M. Covino reneek@aol.com
Contributing Editor (914) 671-6421
W.B. King wbradking@hotmail.com
Art Director (224) 632-8245
Michael Escobedo mescobedo@stagnitomedia.com
Art Director (630) 289-4859
Richard Chung rmc.amc@gmx.com
2008 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2007 2009 Jesse H. Neal Stage II Qualifier, Best Single Article, March 2008 2009 Gold Ozzie Award Folio: magazine Best Use of Illustration, October 2008 2009 Silver Eddie Award Folio: magazine Business to Business, Retail, Full Issue, October 2008 2009 Bronze Eddie Award Folio: magazine Business to Business, Retail, Website 2007 Silver Ozzie Award Folio: magazine Best Use of Typography, November 2006 2008 William D. Littleford Award, American Business Media Corporate Community Service, Journalism (2008 third runner-up) 2007 William D. Littleford Award, American Business Media Corporate Community Service, Journalism (2007 second runner-up)
ADVERTISING SALES & BUSINESS Publisher (201) 855-7610
2010 American Society of Business Publication Editors, Northeast Regional Silver Azbee Award Feature Article Design, November 9, 2010
Michael Hatherill mhatherill@stagnitomedia.com
National Sales Manager (856) 489-3336
Eric Savitch esavitch@stagnitomedia.com
2010 Trade Association Business Publications Intl. Tabbie Awards Honorable Mention, Front Cover, Illustration, October 2009 2009 Trade Association Business Publications Intl. Tabbie Awards Gold, Front Cover, Illustration, February 2008 Honorable Mention, Best Single Issue, October 2008
Western Regional Sales Manager Elizabeth Cherry (310) 546-3815 Fax: (310) 546-4084 echerry@stagnitomedia.com Midwest Regional Sales Manager Tony Vecchie (847) 970-3596 Fax: (847) 970-3599 tvecchie@stagnitomedia.com Southeast Regional Sales Manger Mark Tisdale (770) 490-8091 Fax: (678) 823-6925 mtisdale@stagnitomedia.com
CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor
Account Executive/Classified Advertising Terry Kanganis (201) 855-7615 tkanganis@stagnitomedia.com Classified Production Manager Mary Beth Zeitz (856) 809-0050 marybeth@marybethzeitz.com
STAGNITO MEDIA 570 Lake Cook Road, Suite 106, Deerfield, IL 60015 (224) 632-8200 Fax: (224) 632-8266
Advertising Production Manager Roz Gilman (224) 632-8243 rgilman@stagnitomedia.com
MARKETING & PROMOTION
President & CEO
Harry Stagnito
Director of Market Research Debra Chanil (201) 855-7605 debra.chanil@stagnitomedia.comz
Chief Operating Officer
Kollin Stagnito
Audience Development Manager Shelly Patton (646) 217-1045 spatton@stagnitomedia.com
Senior Vice President, Partner
List Rental (800) 529-9020
The Information Refinery Brian Clotworthy
Reprints and Licensing (877) 652-5295
Wright’s Media sales@wrightsmedia.com
Subscriber Services/Single-copy Purchases
(847) 763-9050
EDITORIAL ADVISORY BOARD Ed Burcher Petro-Canada/ Neighbours Rick Crawford Green Valley Grocery
Steve Loehr Kwik Trip Inc.
Steve Motz Valero Energy Corp.
Harry McHugh Wawa Inc.
Matt Paduano Nice N Easy Grocery Shoppes
(Retired)
Rick Cummings CENEX
Kyle McKeen Alon Brands Inc.
Andrea Jackson Jacksons Food Stores Inc.
Richard Mione VPS Convenience Store Group
Mike Triantafellou Handee Marts Inc.
10 CONVENIENCE STORE NEWS May 23, 2011
Vice President & CFO Vice President/Custom Media Division (224) 632-8229
Kyle Stagnito Ned Bardic Pierce Hollingsworth phollingsworth@stagnitomedia.com
HR/Production Manager Corporate Marketing Director (201) 855-7616 Promotion and Marketing Manager (224) 632-8207 Director, Conferences & eLearning (781) 856-8381 Fax: (224) 632-8266
Anngail Norris Robert Kuwada rkuwada@stagnitomedia.com Ashley Cristman acristman@stagnitomedia.com Amy Walsh awalsh@stagnitomedia.com
Audience Development Director Manager, eMedia Strategy & Development (201) 855-7609
Cindy Cardinal Mehgan Recker mrecker@stagnitomedia.com
STAGNITO MEDIA FOOD GROUP PUBLICATIONS
ConvenienceStoreNews WWW.CSNEWS.COM
AMERICA LOVES
NEWS ANALYSIS “Our company and our team are built for growth. We would atrophy if we weren’t able to keep pursuing growth opportunities.” — Sam L. Susser, Susser Holdings Corp. (see page 22)
Due to rising bean prices, JM Smucker raised the price of its Folgers Coffee by 10 percent. Source: The Hartman Group
Wilson Farms to Sell Chain to 7-Eleven The N.Y.-based chain of 188 stores will be remodeled to 7-Eleven, including proprietary items
7-Eleven will invest in remodeling the Wilson Farms locations and will introduce its proprietary retail information system.
W
FI Acquisition Inc., led by the Nanula family and Bruckmann, Rosser, Sherrill & Co. LLC, executed an agreement for the sale of its 188 Wilson Farms locations in New York to 7-Eleven Inc., the company reported. “Wilson Farms has been a successful convenience chain serving customers and communities in the New York area for over 40 years,” Paul Nanula, president and CEO of Wilson Farms, said in a released statement. “The WFI group has owned the brand for the past six years, making significant progress in growing the business. It is a testament to the entire employee base of Wilson Farms and the business that we operate that 7-Eleven was interested in acquiring our chain. “On behalf of our 2,500 associates, I’d like to thank our loyal customers for their patronage and continued support. I am confident that these stores will continue to serve the public, and that the winning combination of 7-Eleven and
12 CONVENIENCE STORE NEWS May 23, 2011
Wilson Farms will further strengthen the convenience offering for our customers,” Nanula continued. In a separate statement, 7-Eleven said the addition of Wilson Farms significantly increases the brand’s presence in the western New York area. Upon closing, which is expected in the second quarter, 7-Eleven will assume responsibility for all Wilson Farms locations and personnel from the WFI Group, which is led by Bruckmann, Rosser, Sherrill & Co., a private-equity firm, and the Nanula family, which together have managed the stores since 2005. “Wilson Farms has a successful store operation, quality locations and a strong customer-service culture,” stated Stan Reynolds, 7-Eleven’s executive vice president and CFO. “The combination of the two companies will strengthen our convenience offering in the western New York area.” 7-Eleven said it will invest in remodeling the acquired stores, adding proprietary beverages such as Big Gulp fountain and Slurpee drinks, coffee service and fresh foods. Local contractors will be hired for the remodeling program to begin later this year. Additionally, the company will introduce its proprietary retail information system to the Wilson Farms stores to provide store personnel with leading technology to serve their customers’ needs. BMO Capital Markets acted as exclusive financial advisor to Bruckmann, Rosser, Sherrill & Co. and the Nanula family in the sale of Wilson Farms Inc. to 7-Eleven Inc. Q Terms of the deal were not disclosed. WWW.CSNEWS.COM
®
Visit the Kraft Foods Experience Lounge (Booth #1031) at the Sweets & Snacks Expo!
Give your customers all the brands they want with Kraft Foods—the snacking powerhouse. Experience snacking satisfaction! Only Kraft Foods delivers the innovation, insights expertise, thought leadership, merchandising solutions and more to help grow your sales. Visit KraftInsights.com for 24/7 resources.
©2011, Kraft Foods.
NEWS ANALYSIS
Gas Prices Take Center Stage
A
s gas prices creep closer to the $5 point, the Justice Department is taking the reins in the battle against fraud and manipulation at the pump. Speaking at a renewable energy plant in April, President Barack Obama said U.S. Attorney General Eric Holder was putting together the Financial Fraud Enforcement Working Group, according to the Associated Press. “We are going to make sure that no one is taking advantage of the American people for their own short-term gain,” Obama said. However, Holder suggested legal reasons may be behind the increase in gas pumps, which is reaching $4 in some states and has almost hit the $5 mark in others. “Based upon our work and research to date, it is evident that there are regional differences in gasoline prices, as well as differences in the statutory and other legal tools at the government’s disposal,” Holder said in a memo accompanying the task force announcement. “It is also clear that there are lawful reasons for increases in gas prices, given supply and demand. “Nonetheless, where consumers are harmed by unlawful conduct that has the effect of increasing gas prices, state and federal authorities will take swift action,” he added. Despite the pump prices taking a turn in the national spotlight, Obama acknowledged there may not be much he can do about the price of gas in the short term. As the news outlet reported, gas prices have been on a steady incline because of tensions in the Middle East and northern Africa, and growing demand in emerging economies like China. However, Gulf Oil CEO Joe Petrowski told CNBC in an interview that the price of oil is likely nearing a top and will fall beneath $100 a barrel by July 4. Consumers will put the brakes on car travel when gas reaches an average $4 a gallon, he said. At that price, it costs drivers about $50 to fill a gas tank, he noted, and that psychological level is the tipping point. The national average for the price of gas was $3.99 at press time. “At these prices, and especially over time, people carpool, they bundle their trips,” Petrowski said. “We’re starting to see it at all our 3,500 locations.” The CEO believes the price of oil is currently within 14 CONVENIENCE STORE NEWS May 23, 2011
a few dollars of a top. “I don’t think we’ll hit $125. I think by July 4 we’ll be under $100,” he added. He also said world demand for oil is slowing. There are signs “this market is peaking out. I think we will see the peak, if we haven’t seen it already, in the next three to four weeks.” In an exclusive interview with CSNews, Alon USA CEO Jeff Morris predicted that the strength of the dollar will have a big effect on fuel prices. “Is it going to be stronger, or weaker? If the dollar is going to weaken, then gas will be more expensive,” said Morris. “If the dollar’s value strengthens, then gas will become less expensive. I’ve found that there is a higher correlation between the value of the U.S. dollar and crude oil prices than there is for any other variable. Why is that? Because supply and demand are not good predictors any more. Crude oil has become a financial instrument. Every day one billion barrels of crude are traded on the NYMEX. Every barrel in the U.S. is traded over 50 times per day. Supply and demand don’t count as Q much anymore.” WWW.CSNEWS.COM
draw them in. Pair up with the leader to grow your foodservice business. What category is driving profit growth in convenience retail?1 Foodservice – a category with one of the highest gross margins.1 Yet only 1/3 of convenience retail consumers buy food, while 2/3 buy beverages.2 Build your foodservice sales by bundling meals and snacks with Coke®, the #1 consumer soft drink of choice with food3 and served by 3 out of 4 restaurants.4 So pair up. You could drive up profits – while creating an irresistible shopping experience – every time you draw them in.
Visit www.cokeinsights.com/convenience.html. 1
NACS SOI 2009 2 The NPD Group/Convenience Store Monitor YE May 2010
3
B-Cubed June 2010 4 2009 CCNA Post-Mix Availability Study
© 2011 The Coca-Cola Company.
NEWS ANALYSIS
Sheetz Hangs Price Tag on Hometown
P
lanning a road trip to Altoona? Not so fast. On April 27 the city nestled in the Allegheny Mountains officially changed its name to “Pom Wonderful Presents: The Greatest Movie Ever Sold.” No need to panic; the move is part of a promotion for Morgan Spurlock’s new documentary by the same name, and will only last 60 days. The Altoona City Council unanimously approved a resolution allowing Spurlock, an Oscar-nominated filmmaker probably best known for his film “Supersize Me,” to purchase the naming rights of the municipality. Locally based Sheetz joined with Spurlock to lobby the council members to give the deal a thumbs up. According to the Philadelphia Inquirer, Spurlock paid $25,000 for the rights, which the governing body will use to benefit the police department in the town located 85 miles east of Pittsburgh. Spurlock’s new movie takes a satirical look at advertising and product placement in the film industry. In fact, the film itself is entirely funded by product placement and advertising. Sheetz is a top sponsor of the film. “We didn’t really know quite what to expect when we first started this thing. We took a chance getting involved in this project,” said Stan Sheetz, president and CEO, Sheetz Inc. “We could look like total idiots or complete geniuses when it’s all said and done... so far it’s working out in our favor.” As for Altoona’s name change, “Practically everything in America is for sale these days,” Altoona 16 CONVENIENCE STORE NEWS May 23, 2011
Mayor Bob Schirf added. “Sporting events, stadium names, they all have a price tag, so we thought, ‘why wouldn’t we market our town the same way?’ It’s all in good fun.” The film, which opened in theaters on April 22, points out that everything is for sale, even a small town in Pennsylvania. In the film, Spurlock visits the Sheetz Inc. corporate office in Altoona and has a meeting with company executives Stan, Louie and Joe Sheetz. During the meeting, company President and CEO Stan Sheetz asks Spurlock one of the more pertinent questions in the film, according to the Altoona Mirror’s report. “Is there a plot or just shameless marketing?” Stan Sheetz asked. He also expresses concern over potential negative publicity during that scene, which lasts about 3 1/2
minutes and represents the majority of Sheetz’s onscreen exposure. At the conclusion of the scene, Sheetz agrees to make a baseline investment of $100,000 to be part of the film. The company has committed to an additional $150,000 if the film reaches certain criteria such as number of theaters that show it and DVD sales. In the end, Sheetz officials considered the investment money well spent. “It is absolutely worth the investment,” said Fred McConnell, director of brand development. “We’ve all been pleased with the amount of exposure we have received. It goes a long way in helping us to redefine our stores as not the typical gas and convenience store. It lets people know they can buy restaurant-quality Q food at a gas station.” WWW.CSNEWS.COM
NO MATTER WHAT THE FLAVOR, YOU’LL ONLY
TASTE SUCCESS. The moist snuff category is growing at more than 7%,* and Grizzly® is driving that increase. We’ve become America’s best-selling smokeless brand — making up more than 25%** of the total smokeless sales volume. So don’t let down the customers that made us #1. Keep your shelves full of Grizzly and your pockets full of profits.
MOIST SNUFF *CSIP Wholesale Shipments to Retail, Jan.–June 2010 **Jan.–June 2010 vs. YAGO Period
WEBSITE RESTRICTED TO AGE 21+ TOBACCO CONSUMERS.
WARNING: This product can cause gum disease and tooth loss.
NEW PRODUCTS For more new products, visit our Web site at www.csnews.com.
FUZE Juice Drinks
U
FUZE juice drinks are new and improved in 12 different flavors. In addition to being a tasty liquid treat, each bottle provides plenty of antioxidant vitamins A, C and E, plus nutrients specific to the individual fruits used. It is suggested that each 16.9-fluidounce bottle sell for $1.59. Regular flavors include Banana Colada, Orange Mango, Mixed Berry and more; five low-calorie FUZE Slenderize flavors are also available in flavors such as Tropical Punch and Pomegranate Acai Berry.
The Coca-Cola Co. Atlanta (800) 438-2653 www.drinkfuze.com
Lagunas Cigarettes
UĂŠKretek International Inc.
launched the U.S. sales of Djarum’s Lagunas brand premium imported cigarettes. A combination of tobaccos from the U.S., Brazil, Indonesia, Turkey and Greece, Lagunas is available in two styles: Smooth Select and Menthol select. Lagunas comes in a wide, Europeanstyle 20-stick flip-top box that has double-bundled sections of 10 sticks each and 10 boxes per carton.
The premium brand is priced slightly below other specialty brands, according to Kretek. Kretek International Inc. Moorpark, Calif. (800) 53-CIGAR www.kretek.com
CP40 Industrial Mobile Computer
UĂŠ
CipherLab’s CP40 Industrial Mobile computer is a handy tool for the retail, warehouse and distribution industries and comes with a built-in scanner, camera, phone and Internet access. The retail version comes with a pistol grip option for fast scanning and
can use a WPAN connection to generate receipts using a portable printer. Each lightweight computer is bundled with a communication/charging cradle, USB cable, power supply, spare battery, extra stylus and headphones. CipherLab Plano, Texas (888) 300-9779 www.cipherlab.com
Forgiven Alcohol Burner
s
Consumers who drink alcohol can get some pre-emptive relief with Forgiven, an all-natural, chemical-free alcohol metabolizer that works to ease hangovers, according to the company. The remedy comes in individual packages that should be taken when finished drinking. Each packet contains 150 milligrams of vitamin B1, extract of the plant Rhodiola Rosea and a proprietary blend of organic acids, L-Cysteine and L-Glutamine, and has a suggested retail price of $3.99. Forgiven Bottling Group LLC Las Vegas www.takeforgiven.com
SUPERPRETZEL Mini Pretzel Dogs
UĂŠ
The latest addition to the SUPERPRETZEL Soft Pretzel product line is suitable for onthe-go snacking, kids’ meals, and more. SUPERPRETZEL Mini Pretzel Dogs are mini, meaty hot dogs wrapped up in gourmet pretzel dough. They have zero grams of trans fat and come frozen and ready to heat quickly in an oven or Turbo Chef. Other SUPERPRETZEL products include Soft Pretzels, Soft Pretzel Bites, Pizza and Cheddar Cheddar Poppers, and Whole Wheat Soft Pretzels. J&J Snack Foods Pennsauken, N.J. (888) JJSNACK www.jjsnack.com
Convenience Store News New Products Alert newsletter. Sign up to receive the hottest products every month, Introducing plus a featured category report. Go to www.csnews.com/newsletters. 18 CONVENIENCE STORE NEWS May 23, 2011
WWW.CSNEWS.COM
(the mark of a really healthy c-store)
As the world leader of whole and fresh-cut fruits and vegetables, Del Monte Fresh adds value that really makes a difference to your bottom line
E AT
Healthy single-servings Innovative grab-and-go packaging and product line B[WZ[h _d category management Fresh-cut facilities around the country for faster delivery
H E A L T H Y.
LIVE
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www.freshdelmonte.com 1.800.950.3683 www.fruits.com visit our facebook page
TRENDWATCH Consumer and Product Trends from Mintel
www.mintel .com (312) 932-0400
A Look at Seasonal Confectionery Trends
NUMBER OF NEW CHOCOLATE CONFECTIONERY PRODUCTS LAUNCHED IN U.S. Sub-Category 2009
Chocolate Countlines Chocolate Tablets
2010
2011*
71
70
10
182
270
88
Individually Wrapped Chocolate Pieces
108
120
44
Non-Individually Wrapped Chocolate Pieces
310
329
127
36
33
26
256
396
195
Other Chocolate Confectionery Seasonal Chocolate
Source: Mintel Global New Products Database (GNPD) *2011 refers to the period between January 1, 2011 and the current date, April 29, 2011.
SEASONAL CHOCOLATE USAGE AND PURCHASE BEHAVIOR Purchase of seasonal chocolate and non-chocolate candy, by gender, April 2010 Chocolate candy:
Total
Male
Female
%
%
%
Christmas
66
61
71
Easter
66
61
71
Halloween
65
61
69
Valentine’s Day
63
57
69
Other holiday
23
23
24
7
8
6
None of the above
18
23
13
Any seasonal chocolate candy purchase
82
77
87
Halloween
52
47
56
Christmas
42
38
45
Easter
39
34
44
Valentine’s Day
23
19
27
Other holiday
17
17
17
Hanukkah
10
12
8
None of the above
31
36
26
Any seasonal non-chocolate candy purchase
69
64
74
Any seasonal candy purchase
84
79
89
Hanukkah
Non-chocolate candy:
Source: Mintel
20 CONVENIENCE STORE NEWS MAY 23, 2011
Easter, with its perennial favorites of chocolate Easter bunnies and chocolate Easter eggs, seems recession-proof, especially as manufacturers continue to innovate and add new flavors to the molded characters. For Christmas, manufacturers and retailers alike make chocolate an appealing gift and stocking-filler choice, keeping its popularity alive. Chocolate remains a ‘treat’ and this has been recognized in the further development of premium ‘indulgence’ lines. In the current economic climate chocolate offers a permissible luxury. The premium claim maintained a consistent 5 percent share of the market during the six months to December 2010. The presence of children in a household is a driver of purchase; children are massively important consumers. However, with growing concern about obesity, and especially childhood obesity, chocolate is cast in an unfavorable light. Sugar confectionery has the benefit of containing less fat than chocolate and sometimes less sugar, but it has yet to enjoy a real premiumization of the category or expansion into other areas such as Fair Trade or organic, that chocolate has seen. The organic claim maintained a consistent 4 percent proportion of the market during the latter half of 2010. The takeover of Cadbury by Kraft Foods should bring new innovation in the chocolate confectionery category, helped by investment in new product innovation and marketing resources, as well as the synergies created from their shared expertise. Source: Mintel WWW.CSNEWS.COM
Earning Its By Linda Lisanti
F
ive years ago, when touring the country wooing potential investors for the company’s initial public offering, Susser Holdings Corp. President and CEO Sam L. Susser laid out a six-part roadmap for how he and his team would use the capital to grow the business. He vowed they would: Double EBITDA within five years; Q Continue to grow same-store sales and same-store cash flow; Q Continue to build big-box stores with 20 percent unlevered ROIs; Q Switch from a licensed national brand to the new proprietary Stripes brand; Q Grow foodservice sales, decreasing reliance on cigarettes; and Q Continue to execute an acquisition strategy. The plan was ambitious, but one Susser knew his team could execute because they were “hungry for growth” — a hunger that remains just as strong today. “Our company and our team are built for growth. We would atrophy if we weren’t able to keep pursuing growth opportunities,” Susser said. Q
22 CONVENIENCE STORE NEWS May 23, 2011
“A retail company cannot stay at one size and be successful. You grow or you die.” Every decision and every action made over the last five years has aligned with these six growth goals, and in an exclusive interview with Convenience Store News, Susser shared how his Corpus Christi, Texas-based business has not only met its targets, but exceeded them. Susser Holdings operates the Stripes chain of convenience stores and a wholesale fuel division, Susser Petroleum, which is the largest wholesale motor fuel distributor in Texas. Since going public in October 2006, the company has made good on its promises to shareholders by more than doubling its adjusted EBITDA from $45 million in 2006
to $120 million in 2010; turning in its 22nd year of consecutive same-store sales growth last year; and building 53 new big-box stores since 2006, with those open threeplus years producing over 20 percent ROIs. Additionally, the chain grew its foodservice sales to $166 million in 2010, from $71 million in 2006; integrated three acquisitions, bringing its current store count to more than 525 locations in Texas, Oklahoma and New Mexico; and as of this March, the rollout of its Stripes store brand was completed and company research shows it is already the No. 1 recognized c-store brand in its markets. According to Susser — who joined the company in 1988 and is the third generation to lead the WWW.CSNEWS.COM
Exclusive Cover Story
Nearly five years since its IPO, Susser Holdings delivers on the promises it made to investors
business his grandfather founded — achieving these goals did not happen because of any single doing. Rather, it’s resulted from several tenets that have been ingrained over the years. The first being a firm conviction
that there is inflation in operating expenses in the convenience store business. As the cost of utilities, labor, healthcare and so forth goes up each year, the company believes it has to find a way to grow the top line to cover that inflation.
Secondly, Susser Holdings’ executives are big believers in market share as a means to create efficiencies in management, efficiencies in the supply chain and efficiencies in marketing. “Part of the reason we feel a bias toward market share is
RETAIL & WHOLESALE STORE COUNT 1000 900
Successfully integrated 12 major acquisitions, including: s M ACQUISITION OF UNITS IN .OV s UNIT ACQUISITION IN !UG s UNIT ACQUISITION IN 3EPT /CT
891
884
915
957
387
372
390
431
504
512
525
526
2007
2008
2009
2010
800 665
700
627
642
637
639
291
334
332
333
692
600 500
402
420
222
238
173
180
182
1998
1999
2000
346
367
400 300 200 100 0
207 34
Retail WWW.CSNEWS.COM
336
308
305
306
319
325
2001
2002
2003
2004
2005
2006
Wholesale
Source: Susser Holdings Corp. May 23, 2011 CONVENIENCE STORE NEWS 23
The Stripes brand is only five years old, but company research shows it is already the No. 1 recognized convenience store brand in its markets.
because we’re in attractive markets. We’re in a part of the world that’s growing,” Susser said. The state of Texas, which encompasses 90 percent of its business, added four million people in the latest U.S. Census. Lastly, the company’s ownership realizes the importance of investing back in the business, and not just in the front-end where it’s visible to customers or in new builds only. As a matter of fact, Susser said its legacy stores are where its investment back into the business really shows. “A lot of folks think we’re suc-
cessful just because we make acquisitions or because we build new stores, but we are really focused on our old stores. They are the engine of our company. We only want to grow by new stores and acquisitions to the extent that we are doing a good job with our legacy stores. That’s what gives us the license, in our minds, to make other investments,” he said. “We treat every store like a brother. They’re not statistics for us; they’re special. And we try to invest in each store, recognizing that it brings something special to our business.”
A HOUSEHOLD NAME
At the time of the IPO in 2006, Susser Holdings was already in the process of converting its convenience stores from the Circle K brand to its new proprietary Stripes brand. The relationship with Circle K was very positive; however, the company’s ambitions were growing beyond the particular areas where the territory was licensed, and the chain had reached a size where the economics of royalty no longer made sense, Susser explained. The vision for the Stripes brand, according to the CEO, was to be a name the retailer could use for-
The team, from left to right: Steven DeSutter, president and CEO of Stripes; Kevin Mahany, VP of merchandising; Richard Sebastian, senior VP of retail operations; Otis Peaks, VP of human resources; E.V. Chip Bonner, executive VP; Rod Martin, VP of marketing; Sam L. Susser, president and CEO; George Mrvos, VP of IT; David Wishard, VP of business development; Wendell Funk, director of category management; and Ben Hoffmeyer, senior category manager of foodservice. 24 CONVENIENCE STORE NEWS May 23, 2011
WWW.CSNEWS.COM
To cater to its Hispanic customers, Stripes stores carry a wide variety of authentic Hispanic products. Hispanic candies and snacks are merchandised in front of the foodservice counter, which is a common practice at taquerias.
26 CONVENIENCE STORE NEWS May 23, 2011
ever, recognizing that c-stores go through a metamorphosis every 10 to 20 years. It was also critically important that the name not be offensive in any way in the Spanish language, given that most of the company’s stores are in heavily Hispanic-dominated markets. Stripes passed both tests. Susser said the team loved the patriotic look and feel of the name, and knew they could have fun marketing with it. “You can earn your stripes every day. You can follow the stripes down the highway to a fast, fun, friendly convenience store. You have stars and stripes forever. There are a lot of good plays off it,” he noted. The company has been rolling out the Stripes brand, market by
WWW.CSNEWS.COM
market, for the last five years. In March, stores in the last remaining market — San Angelo, Texas — were converted. Even though the brand is relatively new, it is already a household name in the company’s core markets. In a recent study commissioned by the retailer, respondents ranked Stripes as their favorite c-store in those core markets, and it was the most recognized c-store brand. Stripes also emerged as the most visited c-store in its markets, as 97 percent of respondents who said they visited a c-store in last 12 months shopped at a Stripes store, the study found. Market penetration has been a key to gaining brand awareness and loyalty so quickly, according
The company started doing store-specific merchandising in 2001 with beer, and has since expanded the practice to the non-alcoholic section of the cold vault.
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2
3
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May 23, 2011 CONVENIENCE STORE NEWS 27
FOODSERVICE SALES
$millions
to Vice President of Marketing Rod Martin, who joined the company two years ago. “We’ve got such a good presence in our markets that it’s really hard to miss our stores,” he said. In fact, Stripes is not afraid to grow on top of itself in high-growth areas. In every case, the company has found that while there’s a slight decline in the first year that the new store opens, the existing stores generally are back to meeting or exceeding the thresholds they were at previously within 24-36 months, said Richard Sebastian, senior vice president of retail operations. Aside from its physical presence, Stripes maintains a consistent marketing presence as well, using a mix of radio, outdoor advertising, highway signs and sponsorships to drive traffic to its stores. In regards to brand messaging, Martin said the communication has evolved over the last five years to where Stripes now aims to connect with customers at a “values level.” “What we’ve tried to do is understand our target audience and what their motivation is, not only as it relates to convenience store shopping but where they are in their lives,” he said, noting Stripes’ core heavy users are young, working-
,AREDO 4ACO #OMPANY "RAND $IFFERENTIATES 3USSER AND $RIVES 3ALES
$160 $140 $120
$166
$100
$148 $88
$80 $60
$71
$58 $40 2005
2006
2007
class Hispanic males. “One thing we want to hear from our customers is ‘you get me.’” MERCHANDISING SAVVY
While all 525-plus stores now sport the Stripes brand, by no means are they all alike. Store footprints vary widely: as of this January, 145 locations were less than 2,500 square feet; 166 were between 2,500 and 3,500 square feet; 89 were 3,501 to 4,500 square feet; and 126 were more than 4,500 square feet. Stripes’ new big-box stores, which typically cost around $3 million to build, are twice the size and have three times the cash
MERCHANDISE SALES COMPARISON PER STORE $1,800 $1,600 $1,400
$1,540 $1,350
3TRIPES PRODUCES MUCH HIGHER NON TOBACCO SALES
$354
$1,200 $1,082
$967
$422
$290
$780
$660
$677
Couche-Tard
Pantry
Casey’s
$570
$1,000 $800 $1,186 $600 $400 $200 0 Susser Tobacco Sales
Other Merch/Foodservice Sales
28 CONVENIENCE STORE NEWS May 23, 2011
$158
2008
2009
2010
flow of its legacy stores. The typical new format differs from the legacy stores in that: Q Total land spans 50,000 square feet vs. 20,000 square feet; Q The store building averages 4,800 square feet vs. 2,400 square feet; Q Parking spaces number 25-40 vs. six to eight; Q Fueling positions number 10-20 vs. four to six; and Q All new stores feature the proprietary Laredo Taco Company foodservice concept. Given their size, the big-box stores are able to offer greater variety across all categories, and deliver an elevated experience aesthetically, as they feature higher ceilings, bigger windows, better lighting and larger restrooms, said Steven DeSutter, president and CEO of Stripes LLC, who came to the company in 2008 having past experience with British Petroleum and quick-service restaurants such as Burger King Corp. “The larger scale creates an allaround better customer experience,” DeSutter added. Separate from these big-boxes, Stripes also has a supersized store model that spans 6,000 to 10,000 square feet and offers dedicated truck diesel islands. The chain operates more than 60 of these WWW.CSNEWS.COM
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tries. In focus groups, customers notice that and say, “You tempt us with what we like,” DeSutter noted. “Sometimes there’s not scan data available to say you should add this unique Hispanic specialty snack or candy, but we’re willing to put it in the stores and try it.” MADE FROM SCRATCH
Value plays a significant role in Stripes’ proprietary foodservice concept, Laredo Taco Company. Annually, the chain sells roughly 34 million tacos — about 95,000 a day.
large-footprint locations, and continues to seek properties where it can build others. With so many floor plans, Stripes is in no way a cookie-cutter operation. And neither is its merchandising approach. The chain continues expanding its use of store-specific merchandising, which it started in 2001 with store-specific beer planograms. The non-alcoholic section of the cold vault is the latest area where the retailer is doing individual store planograms that are updated twice a year. Stripes’ stores in lowerincome areas may have an entire cooler door of malt liquor, whereas truck stop stores that don’t sell much beer may only have two doors of it and instead carry a far larger selection of new-age drinks. Kevin Mahany, vice president of retail merchandising, foresees a day when Stripes will do store-specific merchandising for every category. “We’re moving little by little in that direction,” he said. “It’s not next year or the year after, but I see it just continuing to expand.” Still, all merchandising decisions 30 CONVENIENCE STORE NEWS May 23, 2011
today are driven by scan data. Merchandising team members review data daily, and Mahany said the goal is to continually shorten the timeframe of the data they’re using to judge the performance of products. Now, 13 weeks is the maximum. “The longer you use the data, the flatter the lines get,” he said. “We want to jump on trends quickly.” With its store base concentrated heavily along the Rio Grande River — where the population in many areas is up to 95 percent Hispanic — another major merchandising and marketing focus for Stripes is to become “the brand of choice for the Hispanic consumer.” To achieve this, the chain’s stores carry a large selection of authentic Hispanic products, such as Bimbo breads and pastries, Coca-Cola from Mexico and candy items from Ricolino and Lorena Pelon Pelorico. In addition, fresh, packaged tortillas are delivered daily to the stores. The authentic brands Stripes offers are the same ones Hispanic consumers find in their home coun-
Authentic Hispanic foods are also the cornerstone of Stripes’ original foodservice concept, Laredo Taco Company (LTC), which is offered in just over 300 of the chain’s stores. The retailer this March completed the conversion of all Country Cookin’ restaurants that were part of its November 2007 Town & Country Food Stores acquisition to Laredo Taco. Annually, LTC sells roughly 34 million tacos — or about 95,000 tacos a day. Mom-and-pop taquerias are the biggest competitor to Laredo Taco in Stripes’ core markets, so the c-store concept focuses on serving up food “the way grandmother used to make it.” Every item is made from scratch; nothing is pre-cooked. Ingredients come to the stores as raw materials and each day employees crack the eggs, dice the peppers, roll out the tortillas, etc. What’s more, they do it all in the front of the house where customers can see it. “We want the theater,” said Ben Hoffmeyer, senior category manager of foodservice. “The steam coming off the grill, the sizzle of the meat cooking, it all reinforces how fresh and authentic our food really is.” Since launching LTC 10 years ago, the retailer has tried several times to make the program easier for its store employees to execute, but every attempt to simplify has failed. As Susser noted, “It’s just a very complex concept. The beauty WWW.CSNEWS.COM
Since mom-and-pop taquerias are the biggest competitor to Laredo Taco Company in Stripes’ core markets, the concept focuses on serving up food “the way grandmother used to make it.”
of what we do is it’s really delicious, and if you want yours a little different, you can get exactly what you want.” While all LTC locations serve certain core menu items, other selections vary per store. Breakfast options may include chorizo and egg, potato and egg, potato and chorizo, carne asada, sausage and egg, or bacon and egg. For the lunch daypart, customers may find beef and/or chicken fajitas, barbacoa, enchiladas or tamales. Side items, such as rice, corn, mashed potatoes and plantains, are available as well. The company gives its stores leeway to cater to regional preferences. For instance, some areas prefer their tortillas smaller and thicker, while others like them larger and thin-
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ner. Customers will go to a specific Stripes store exclusively because they like the LTC cook there. Along with 99-cent tacos, Laredo Taco offers $3.99 “plate meals” consisting of a protein, two sides and a tortilla. The most popular plate meal is the half chicken. Hoffmeyer said these meals present an extraordinary value, as the same thing would cost at least $5.99 at a taqueria. “We spend a lot of time worrying: is our food delicious, are we getting it served up as quickly as possible for customers, and are we delivering it at really great price points?” Susser said. “A lot of other companies in our region are now trying to do a taco program. But we spend our time worrying about how to improve our busi-
WWW.CSNEWS.COM
ness, not following what our competitors do.” LTC is not only a foodservice program for Stripes, it’s also a loyalty program. The retailer’s recent study showed an overwhelming connection between Laredo Taco usage and average frequency of visits. Among heavy c-store users, those who said they were also a Laredo Taco customer visited an average of 1.5 times more each week vs. non-LTC customers, according to Martin. Laredo Taco emerged as the biggest driver of Stripes being the favored c-store, too. “If we can get our fresh, authentic food into their hands, then we become something special to them,” Martin said. The research also found that
more than 70 percent of all Laredo Taco transactions include additional purchases. The most common add-on is a fountain or packaged beverage, followed by a snack or candy purchase. Stripes merchandises authentic Hispanic snacks and candies in front of the foodservice counter, which is something often seen at mom-and-pop taquerias. To further leverage LTC across the store, company executives decided within the last year to move foodservice under merchandising, instead of keeping it a separate entity. They set up a Food Leadership Team, consisting of DeSutter, Mahany, Sebastian, Martin and Hoffmeyer, as well as David Wishard, vice president of business development, and Conrado Saldivar, senior director of
May 23, 2011 CONVENIENCE STORE NEWS 33
$ billions
REVENUE
$5 4.2 3.9
$4 $3
‘89
$2 $1 $0
= AGR C 0 — ’1
3.3
% 25.8
2.7 1.9
2.3
1.5 0.8 1.0 1.1
0.6 0.2 0.3 0.3 0.3 0.4 .03 .04 .04 .04 .07 .09
‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10
34 CONVENIENCE STORE NEWS May 23, 2011
and growing the lunch daypart. Hoffmeyer said LTC is more heavily skewed toward breakfast now. Snack and dessert items are also a work in progress. LTC recently started offering two varieties of churros, priced two for 99 cents, along with fried apple pie and Hispanic pastries. Dinner will be the final piece, according to DeSutter. “What’s worked for us is building a big breakfast business, which creates a lot of interest in coming back and trying our lunch. A big lunch business in place will be the natural extension to dinner offerings,” he said. STILL HUNGRY
Looking ahead to the next five years, Susser said the six growth $ millions
foodservice operations. The group meets every two weeks to review performance and talk about new projects, marketing opportunities and sales initiatives. Every decision made about Laredo Taco Company — whether minor or major — comes out of these meetings. “Now, we’re able to be on the same page for the entire store, and have an [all-encompassing] view of how we go to market,” Mahany explained. “We’re always thinking about how we can cross-promote other categories with our food. Everyone wants to tie into food now.” Add-on purchases are not so much driven by bundling, but rather by cross-merchandising and product placement, said Wendell Funk, director of category management. When you bundle, he said it can change the value messaging. “We’re offering a 99-cent taco, and it’s a big taco with four ounces of food. That’s the traffic driver,” Funk said. “For our consumer, especially in this tight economy, 99 cents means 99 cents.” By focusing on quality, value and awareness, Stripes has nearly tripled its foodservice sales since 2005, and the retailer sees plenty of opportunities to keep increasing sales. Currently, the focus is on improving speed of service, particularly during the breakfast daypart,
goals he laid out during the IPO process are still very much the company’s roadmap for the future. The plus of being a publicly traded company now is the strength it gives Susser Holdings financially in terms of access to capital and the ability to withstand competitive pressures and unforeseen issues, whether it’s a crisis in the Middle East or a hurricane. Back in 2006, Susser Holdings was like a puppy dog in that it was spirited, frisky and eager to try different things, Susser recalled. In the years since, the CEO said the company has evolved into a more disciplined, focused organization that’s more repetitive in what it does. “But hopefully, we are still as hungry for growth as ever,” he quickly added. Given its access to capital, penchant for growth and the depth of its management team, Susser said he doesn’t ever see the company deleveraging and not being a growth company. “We’re just trying to become excellent. It’s a journey and we know we have a lot of work to do,” he said. “Progress has been made, but gosh we have a lot of opportunities and we’re just out there trying to tackle a few every day — trying to get just a Q little bit better.”
EBITDAR
$180 163
$150
145 129
$120 $90
‘89
GR 0 CA 1 ’ —
.3% = 23 84 64
68
$60 $30 $0 ‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 WWW.CSNEWS.COM
Technologically Driven
E
ach year, Stripes chooses a staff person of the year and recognizes them at the company’s annual meeting. This year, the staff person of the year was not just one employee, but the 35 employees who make up the retailer’s information technology (IT) department. “We’re ramping up technology in our business more than ever before,” said Steven DeSutter, president of CEO of Stripes LLC, Susser Holdings’ retail division. “It is a fundamental means of how we continue to deliver efficiency and on the growth promises from our IPO.” As part of its exclusive interview with Susser Holdings, Convenience Store News sat down with DeSutter; George Mrvos, the company’s vice president of IT; and Casey Gay, IT development director; to learn how the c-store chain is utilizing technology to drive the business forward. Mrvos, who was previously vice president of information systems for Racetrac Petroleum, said the IT team’s role is to be an enabler. “An enabler of sales. An enabler of speeding up processes. Anything we can do to free up store manager administrative time, reduce costs and generate revenue,” he explained. Below are some of the technology initiatives that are making such results possible:
STRIPESNET Getting information out to every employee in the company, and even more importantly making sure it’s seen, was a challenge before the rollout of Stripesnet. Now, every employee has an individual e-mail account, and through a time clock application, store-level workers are alerted to their e-mails whenever they clock in/out. Store employees also can send private e-mails directly to their area and division managers, or the human resources department. “When you can do a better job of touching your people, it leads to greater job satisfaction. If you look at the basic human needs in any job, one of them is feeling connected to the organization. So, we work really hard on the connection and value of communication,” DeSutter said. “When I communicate, I want to touch everyone in the company.”
MANAGER WEB ACCESS Store managers’ time is one of the most precious commodities Stripes has, according to Mrvos. For this reason, much of his team’s work is aimed at getting the managers out of their back offices and onto the sales floor, so they can serve customers and manage their crews. 36 CONVENIENCE STORE NEWS May 23, 2011
Richard Sebastian, senior VP of retail operations (left), and George Mrvos, VP of IT, show off a store’s point-of-sale system. All 525plus Stripes stores have a common POS system.
Stripes set a technology goal in 2010 to reduce the administrative time spent by its store managers by 15 percent, and this year, it’s striving to achieve another 15-percent reduction. To help attain this, the company launched Manager Web Access roughly two years ago. This program delivers the information most important to managers without them having to search for it. The system is used by store managers, all the way up to the CEOs. All 525-plus Stripes stores have a common point-of sale system: either the VeriFone Sapphire Ruby or the VeriFone Sapphire Topaz. These POS systems capture every keystroke at every store, which can produce a sea of numbers. Manager Web Access pulls the information of most interest to managers — for instance, voids, no sales, paper outs and paper jams — from the Sapphire database and allows managers to access this information in one place. Previously such information was available, but on separate systems with different log-ins, Gay noted. Now with Manager Web Access, users can get very granular (continued on page 38) WWW.CSNEWS.COM
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very quickly, and because the program is available on the Internet, managers can even access it from home. Manager Web Access also makes it possible for store, area and division managers to monitor who’s working at each store in real time. “If I’m an area manager, I can see all of my stores, how many people are clocked in at each store, who they are, and how many hours they’ve been working that day and week,” Gay explained. “This is useful for managers trying to find substitutes. If someone calls in sick and there’s not enough labor at one store, I can look in this system and see that another store has a spare person who can be sent to that store.” Online job applications are tied into Manager Web Access as well. Thousands of online applications are received each week, and managers use the system to easily sort them by city or job position. “If I’m looking to hire someone in San Angelo, I can go into the system and sort by that city, and it brings up all of the applications we’ve received in that area,” Gay said. Managers then use the system to view the actual applications and follow up with the applicants. “This makes it a lot easier to find the skills we need,” said Gay.
FACT FINDER The newest piece of Manager Web Access is Fact Finder. Introduced about a year ago, it’s geared to the chain’s area and division managers. Reports are delivered daily, showing key alerts such as voids, no sales, errors, paper outages, paper jams, etc., on a store-by-store basis. “For instance, I’m not interested that Julie had one void on her shift, but I am interested that Matthew had eight voids, so we provide daily reports like these,” Gay explained. “We’re interested in seeing when and where there’s more [incidents] happening than there should be.”
CASHIER ANALYSIS Taking the Fact Finder concept to the next level, Stripes is rolling out a similar system for store managers that shows these key alerts for each cashier. Cashier Analysis captures the same data as Fact Finder, but brings the view down to an individual shift level. Now available at 10 stores, Cashier Analysis will be rolled out chainwide by this summer. Store managers receive a daily review each morning, showing them yesterday’s shifts worked by every employee. Each manager’s report includes the same kind of alerts, such as too many no sales, too many voids, etc. The manager can then click further to see each transaction under the alert, and with one more click, they can view the video of each of those transactions. (continued on page 40) 38 CONVENIENCE STORE NEWS May 23, 2011
WWW.CSNEWS.COM
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“In the past, you would have managers randomly watching video to catch something. Now, you just look at the transactions that appear odd and the video that interests you,” Mrvos said. Before, a manager might have known he or she had a problem, but couldn’t tell which employee was the cause. With Cashier Analysis, that’s no longer the case. “People don’t want to work around people who steal, so by reducing theft, you also decrease your turnover, reduce your training costs and improve morale. The wins keep going,” DeSutter said. “This is a step change for us, and I’m excited to see what it delivers.”
Marketing Means
R
od Martin uses two words to describe Stripes’ marketing: iconic and memorable. “We try to drive home different key points about the brand at different times of the year,” the vice president of marketing said. “When it’s summer, we’re primarily talking about having the widest variety of the coldest drinks in town. That’s supported by price points that reinforce value. At other times of the year, we talk about our authentic fresh food offerings or other values that support the core idea that Stripes ‘was made just for you.’” The company delivers these key points through a mix of radio, outdoor advertising and sponsorships. And being that its stores are located in heavily Hispanic areas, Stripes makes it a point to have a separate campaign that targets its Spanish-speaking customers.
OTHER PROJECTS Additional projects the IT team is currently working on include enhanced labor scheduling. Over the last year and a half, Stripes has devised metrics it uses to manage store labor very carefully. Now, the chain wants to provide store managers with a technological toolkit that will be based on customer counts and show where the store is overscheduled, underscheduled or just right. “It’s giving managers the tools to know who needs to be in the stores and when,” Mrvos said. Meanwhile, for division and area managers, Stripes is trying a new way to push out information to them in the field. The company is testing the use of Apple iPads to get information to the managers wherever they are and in a way that’s easy to access. “We’ve done a good job so far of getting our area and division managers more information than they’ve ever had before,” said DeSutter. “Now we’re asking, ‘How do we make that info more mobile, more accessible? And how do we make it more fun and engaging to use?’” — L.L. 40 CONVENIENCE STORE NEWS May 23, 2011
Eye-catching billboards are just one way Stripes markets itself. The retailer also tries to connect with existing and potential customers through the use of radio and event sponsorships.
“Hispanic consumers get marketed to by folks all the time that just do a straight translation of the same marketing campaign they did in English,” Martin explained. “We work very hard from a media and creative standpoint to have an English-language campaign and a Spanish-language campaign that both resonate with our customers.” Each campaign is supported by its own tagline. However, both tap into a central value shared by all Stripes customers, and that’s the idea of giving it all you’ve got. The English-language tagline for Stripes is “It’s Go Time,” and the Spanish-language tagline is “Con Ganas,” which Martin said is a culturally rich term that means to give it your best. “Our target audience is unique given our geographic area. This is just an absolute hardworking, multitasking part of the world. We have a lot of first-generation Americans here, so there’s a strong belief in the American dream among our target audience,” Martin said. “We respect who our customers are and where they’re coming from, and we try to reflect that in our marketing.” Sponsoring various types of events that are culturally important to the communities its stores serve is another important part of Stripes’ marketing plan. There are two different buckets for sponsorships — one for paid event sponsorships, the other for community investment. WWW.CSNEWS.COM
Paid sponsored events run the gamut from music, to the arts, to rodeo. In Laredo, Texas, Stripes sponsors the annual Jalapeno Festival, while in Lawton, Okla., a military town, it sponsors parades. In West Texas, stock shows and rodeos are popular. Paid sponsorships are evaluated on how well they align with Stripes’ audience, values and, of course, media value. “It’s about understanding each market we’re in and what’s important to that community,” said Martin. In addition to these more traditional marketing avenues, Stripes also recently entered the world of social media. The brand launched a Facebook presence last year, but only in January did the retailer start putting up POP (point-ofpurchase) signage to drive people to its page. Unlike other companies that only measure their Facebook success by how many people “like” them, Stripes’ objective is to post items that will be passed on from one person to another and so on. The company only makes one or two posts a day, and they’re always aimed at fun.
In its marketing, Stripes often talks about its authentic fresh food offerings and reminds customers that its stores have “the widest variety of the coldest drinks in town.”
“Instead of just hitting our core fans who already like us, we want to post something that those fans will pass on to their friends, so now we’re hitting two, three, four times as many people as the original post. Hopefully, some of those folks will jump on the bandwagon as well,” Martin said. — L.L.
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May 23, 2011 CONVENIENCE STORE NEWS 41
ILLUSTRATION BY RICHARD CHUNG, RISK GRAFFIX
Fractured Assets C-store industry remains fragmented even as several top chains add stores By Don Longo
7
-Eleven once again holds the top position on Convenience Store News’ Top 100 Convenience Stores list. The Dallas-based division of the Japanese c-store giant, Seven & I, operated 6,727 stores, as of April 2011, almost 2,000 more than its runner-up, Shell.
However, despite adding more than 200 net new stores over the past year (not including the recently announced pending acquisition of 188 Wilson Farms stores in western New York), 7-Eleven’s total store count represents less than 12 percent of the total 57,721 stores operated by the Top 100. More evidence of the continued fragmented nature of the c-store industry: The Top 100 retailers cumulatively experienced a decline of 63 stores from last year’s report, while the total c-store industry store count grew by 1,800 stores (or 1.3 percent) in the past year, according to Nielsen TDLinx, which supplies much of the store count data for CSNews’ Top 100 list. In a retail industry marked by intense consolidation in other channels — from category killer superstores to department stores, drug stores and even grocery chains — the convenience store sector remains set apart by its high number of individual operators and lack of dominant chains. The Top 100 chains accounted for 39.4 percent of the total number of c-stores in the industry today, down from 40 percent a year ago. The other major trend that this year’s Top 100 list illustrates is the continued shift from company operated to franchisee/licensee-operated stores. Among the Top 100 retailers, the number of company-operated stores declined by 2,215 units to 25,308. Meanwhile, WWW.CSNEWS.COM
Top 20 Company-Operated Chains # OF COMPANYOPERATED STORES % OF TOTAL
COMPANY
1 Alimentation Couche-Tard
2,916
2 The Pantry Inc.
1,667
100.00
83.80%
3 Casey’s General Stores Inc
1,616
100.00
4 Marathon Oil Co.
1,524
54.30
5 Hess Corp.
1,244
96.70
6 Valero Energy Corp.
995
58.10
7 Kroger Co.
799
100.00
8 Cumberland Farms Inc.
598
66.20
584
100.00
10 QuikTrip Corp.
9 Wawa Inc.
577
100.00
11 Susser Holdngs Corp./
535
100.00
12 Pilot Corp.
492
98.40
13 Exxon Mobil Corp.
480
12.40
14 Kum & Go LC
440
100.00
15 Military
429
100.00
16 Chevron Corp.
407
10.20
17 Delek US Holdings Inc.
405
100.00
18 VPS Convenience Store Group
396
100.00
19 Sheetz Inc
388
100.00
20 Kwik Trip Inc.
374
100.00
SSP Partners
Source: Nielsen TDLinx; Convenience Store News Market Research, 2011
May 23, 2011 CONVENIENCE STORE NEWS 43
RANK 2011
RANK 2010
1 2
1 3
3
COMPANY, CITY/STATE
TOTAL STORE COUNT
COMPANYOPERATED STORES
FRANCHISE/ LICENSEE
ANNUAL ACV* ($000)
PRIMARY STORE NAMES
7-Eleven, White Hen
6,727
0
6,727
$14,174,056
2
7-Eleven Inc., Dallas Shell Oil Products US/Motiva Enterprises LLC, Houston BP North America, La Palma, Calif.
4,831 4,718
33 0
4,798 4,718
10,411,440 15,868,320
4
5
Chevron Corp., San Ramon, Calif.
3,987
407
3,580
9,710,844
5
4
Exxon Mobil Corp., Irving, Texas
3,882
480
3,402
8,583,432
6
6
Alimentation Couche-Tard, Laval, Quebec, Canada1
3,480
2,916
564
12,897,040
7
7
Marathon Oil Co., Enon, Ohio2
2,809
1,524
1,285
9,699,560
8
9
Sunoco Inc., Philadelphia
1,896
350
1,546
6,237,400
9 10
8 10
CITGO, Houston 1,776 Valero Energy Corp., San Antonio 1,712
0 995
1,776 717
3,778,320 6,809,140
11
11
The Pantry Inc., Cary, N.C.
1,667
1,667
0
6,521,580
12
12
1,616
1,616
0
5,315,440
13
16
Casey’s General Stores Inc., Ankeny, Iowa Hess Corp., Woodbridge, N.J.
1,287
1,244
43
4,793,360
14 15
13 14
1,255 904
0 598
1,255 306
2,973,620 3,276,156
16
15
ConocoPhillips Inc., Houston Cumberland Farms Inc., Framingham, Mass. Kroger Co., Cincinnati
799
799
0
3,690,960
17 18 19 20
18 17 19 21
599 584 577 535
312 584 577 535
287 0 0 0
4,100,200 4,631,640 5,072,340 1,106,820
21
20
500
492
8
2,042,300
22
23
23
Racetrac Petroleum, Atlanta Wawa Inc., Wawa, Pa. QuikTrip Corp., Tulsa, Okla. Susser Holdings Corp./SSP Partners, Corpus Christi, Texas Pilot Corp., Knoxville, Tenn.
440
440
0
1,614,080
24
Kum & Go LC, West Des Moines, Iowa Military, Arlington, Va.
429
429
0
2,566,980
24 25
25 30
Holiday Cos. Inc., Minneapolis CHS Inc./Cenex, St. Paul, Minn.
427 425
323 66
104 359
1,920,360 914,160
26
22
Delek US Holdings Inc., Brentwood, Tenn.
405
405
0
1,413,100
44 CONVENIENCE STORE NEWS May 23, 2011
Shell Amoco, Ampm, Arco, BP, Connect, BP Shop Chevron, Chevron Extra Mile, Texaco Exxon On The Run, Exxon Tiger Mart, Mobil Mart, Mobil On The Run Circle K, Dairy Mart, Discount Beverage Outlet Marathon, Rich Oil, Speedway A Plus, Coastal, Optima, Sunoco CITGO Beacon, Corner Store, Diamond Shamrock, Total, Ultramar, Valero Campus Store, Kangaroo, Kangaroo Express, Kangaroo Food Store, Li’l Champ Food Store, Pantry, Petro Express, Presto C Store, Quick Stop Casey’s General Store Hess Express, Wilco Food Mart 76, Conoco, Phillips 66 Cumberland Farms, Gulf City Market, Kroger Express, Kwik Shop, Loaf N Jug, Mini Mart, Quality Foods, Quik Stop, Tom Thumb, Turkey Hill Minit Market Racetrac, Raceway Wawa QuikTrip Stripes, Town & Country Food Store Flying J, Pilot Food Mart, Pilot Travel Center Kum & Go Coast Guard Mini Mart, Marine Corps Shoppette, NEXCOM Mini Mart Holiday Stationstore Ampride/Cenex, Zip Trip Store Discount Food Mart, East Coast, Fast Food & Fuel, Favorite Market, MAPCO Express, MAPCO Mart WWW.CSNEWS.COM
RANK 2011
RANK 2010
27
26
COMPANY, CITY/STATE
TOTAL STORE COUNT
VPS Convenience, Wilmington, N.C.
396
COMPANYOPERATED STORES
396
FRANCHISE/ LICENSEE
ANNUAL ACV* ($000)
PRIMARY STORE NAMES
0
1,004,640
Li’l Cricket, S E Food Mart, Scotchman Store, Village Pantry, Young’s Food Store Sheetz
28
28
Sheetz Inc., Altoona, Pa.
388
388
0
4,873,700
29
29
Kwik Trip Inc., La Crosse, Wis.
374
374
0
833,560
Kwik Star, Kwik Trip
30t
31
Getty Petroleum Corp., East Meadow, N.Y.
330
103
227
748,540
Getty, Kwik Farms, Lukoil
30t
32
Stewart’s Shops Corp., Ballston Spa, N.Y.
330
330
0
1,011,920
32
33t
Allsup’s Convenience Stores Inc., Clovis, N.M.
309
309
0
404,560
Allsup’s
33
35
E-Z Mart Stores Inc., Texarkana, Texas
300
300
0
653,900
E-Z Mart
34
36
United Refining Co. of Pennsylvania, 281 Warren, Pa.
281
0
935,480
Country Fair, Kwik Fill & Smokers Outlet, Red Apple
35
37
Love’s Country Stores Inc., Oklahoma City, Okla.
268
268
0
737,620
Love’s Country Store, Love’s Travel Stop
36
38
Tesoro Petroleum Corp., San Antonio, Texas
224
202
22
739,960
Mirastar, Tesoro Gas Express, USA Fuel Center, USA Gas, USA Mini Mart, USA Petroleum, USA Station
37
39
Travel Centers of America, Westlake, Ohio
220
201
19
1,408,420
Stewart’s Shops
Petro Stopping Center, Travel Centers of America
38
41
Maverik Inc., Salt Lake City
217
217
0
408,096
Maverik Country Store
39t
40
Fas Mart/GPM Investments LLC, Richmond, Va.
212
212
0
527,800
Fas Mart, Shore Stop Store
39t
33t
Jacksons Food Stores Inc., Meridian, Idaho
212
212
0
373,360
Jackson’s Food Store
41t
46
United Dairy Farmers, Cincinnati
188
188
0
308,880
United Dairy Farmers
41t
48
Tetco Inc., San Antonio
188
188
0
568,360
Big’s, Tetco, Walkers
43t
44t
Wilson Farms, Buffalo, N.Y.3
188
188
0
432,640
Sugar Creek, Wilson Farms Store
43t
42
Clark, Dayton, Ohio
188
0
188
453,440
Clark
45
44t
Tedeschi Food Shops Inc., Rockland, Mass.
187
106
81
241,280
Store 24, Tedeschi Food Shop
46
42t
Convenient Food Mart Inc., Mentor, Ohio
178
18
160
284,440
Convenient Food Mart
47
47
The Jones Co., Waycross, Ga.
173
173
0
547,560
Flash Foods
48
49
Thorntons Inc., Louisville, Ky.
163
163
0
591,240
Thorntons Timewise Food Store
49
51
Landmark Industries Inc., Houston
162
162
0
372,320
50
50
Meijer, Grand Rapids, Mich.
160
160
0
1,438,580
51
52
Warren Equities Inc., Providence, R.I. 147
147
0
532,740
52
55t
Krauszer’s Food Store, Edison, N.J.
139
0
139
263,120
Krauszer’s Food Store
53
53
Kwik Stop, Plantation, Fla.
133
0
133
238,940
Kwik Stop
54
54
Giant Industries Inc., Tempe, Ariz.
132
132
0
476,580
Giant Service, Mustang, Sundial Deli Mart
55
57
Two Farms Inc., Baltimore
129
129
0
247,000
Royal Farms
56
59
Quick Chek Food Stores, Whitehouse Station, N.J.
125
125
0
224,380
Quick Chek Food Store
57
57t
Fikes Wholesale, Temple, Texas
123
123
0
151,268
CEFCO Food Store
58t
60
Giant Eagle Inc., Pittsburgh, PA
113
113
0
1,414,920
58t
n/a
Murphy Oil, El Dorado, Ark.
113
113
0
191,360
WWW.CSNEWS.COM
Meijer Gas Station Xtra Mart
GetGo Murphy Express, Murphy USA
May 23, 2011 CONVENIENCE STORE NEWS 45
RANK 2011
RANK 2010
60
61
61t 61t 63 64 65t 65t
67 63t 65t 62 63t 65t
67t 67t 69
68 55t 70
70 71
69 72
72 73t
71 77t
73t 75 76t
75t 74 90t
76t 78t
73 80t
78t
77t
80t 80t 82t 82t 84t 84t 86t 86t 88t 88t
80t 75 90t 79 82t 85t 82t 88 85t 87
90t
94t
90t 92t
89 94t
92t 92t 95 96t 96t
84 90 94t 100 98t
96t
98t
COMPANY/CITY/STATE
TOTAL STORE COUNT
7-Eleven Stores of Oklahoma, 109 Oklahoma City, Okla.4 Sam’s Mart, Matthews, N.C. 108 Martin & Bayley Inc., Carmi, Ill. 108 Plaid Pantries Inc., Beaverton, Ore. 105 C.L. Thomas Inc., Victoria, Texas 104 Terrible Herbst Inc., Las Vegas 99 Sam’s Food Store, Rocky Hill, Conn. 99
COMPANYOPERATED STORES
FRANCHISE/ LICENSEE
ANNUAL ACV* ($000)
PRIMARY STORE NAMES
109
0
226,460
7-Eleven
108 108 105 104 99 99
0 0 0 0 0 0
275,860 517,400 154,180 518,440 290,160 165,620
98 98 92
98 98 92
0 0 0
469,820 395,980 406,640
Sam’s Mart, Xpress Mart Huck’s Plaid Pantry Speedy Stop Terrible Herbst Chucky’s Food Store, Sam’s Food Store Go Mart Food Store Duke & Duchess Mart Roadrunner Market
91 87
91 87
0 0
197,860 548,600
True North GasAmerica
86 83
31 83
55 0
135,200 194,740
Farm Store Admiral Petroleum
83 82 81
83 82 81
0 0 0
247,520 125,060 169,780
Town Pump Food Store Big Apple Little General
81 80
65 80
16 0
179,140 308,620
Sunmart E-Z Mart
80
35
45
109,720
79 79 78 78 76 76 75 75 74 74
79 57 78 78 76 76 75 75 0 74
0 22 0 0 0 0 0 0 74 0
327,600 140,140 210,080 184,340 139,620 239,200 267,540 105,040 104,000 136,760
Nice N Easy Grocery Shoppe Stop In Handi Plus, Handi Stop Family Fare Gate Food Post Break Time Moto Mart Road Ranger Taylor Petroleum Fast Stop Handee Hugo’s
72
72
0
179,920
Hy Vee Gas Station
72 70
72 70
0 0
56,940 138,840
Certified Sprint Mart Spinx Store Flash Market ABC Store Five Star Food Mart Freedom Valu Center, Super America Erickson Food Fast Store, Short Stop Market Miska Liquors Convenience Toot N Totum Store
Go Mart Inc., Gassaway, W.Va. Englefield Oil Co., Heath, Ohio Mountain Empire Oil, Johnson City, Tenn. True North Energy, Toledo, Ohio Gas America Services Inc., Greenfield, Ind. Farm Stores Grocery Inc., Miami Admiral Petroleum Co., Coopersville, Mich. Town Pump Inc., Butte, Mont. C.N.Brown Co., South Paris, Maine Little General Stores Inc., Beckley, W.Va. Sunmart Inc., Spring, Texas Blarney Castle Oil Co., Bear Lake, Mich. Nice N Easy Shoppes, Canastota, N.Y. Stop In Food Stores Inc., Roanoke, Va. Gulshan Enterprises, Houston M.M. Fowler Inc., Durham, N.C. Gate Petroleum Co., Jacksonville, Fla. MFA Petroleum, Columbia, Mo. FKG Oil Company, Belleville, Ill. Ranger Enterprises Inc., Rockford, Ill. Taylor Petroleum, Amarillo, Texas Fast Stop, Bloomington, Ill. Handee Hugo’s/Sampson Bladen Oil Company Inc., Clinton, N.C. Hy Vee Food Stores Inc., West Des Moines, Iowa Certified Oil Co., Columbus, Ohio Victory Marketing LLC, Ridgeland, Miss. Spinx Oil Co Inc., Greenville, S.C. Flash Market, West Memphis, Ark. MNS Ltd., Honolulu Newcomb Oil Co., Bardstown, Ky. Erickson Oil Products Inc., Hudson, Wis. Food Fast Corporation, Tyler, Texas
70 70 69 67 67
70 70 69 67 67
0 0 0 0 0
275,600 156,520 54,340 200,200 224,640
67
67
0
138,320
99t
n/a
Miska Liquors Convenience, Chicago
63
0
63
154,180
99t
n/a
Toot N Totum Food Store, Amarillo, Texas
63
63
0
171,860
See footnotes on Page 50 46 CONVENIENCE STORE NEWS May 23, 2011
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the number of franchisees or licensees of Top 100 companies rose by 2,152 units to 32,413. The company with the most company operated convenience stores in the U.S. is Laval, Canada-based Alimentation Couche-Tard, with 2,916 stores, mostly under the Circle K banner in the U.S. Couche-Tard is followed by The Pantry, with 1,667 stores, Casey’s with 1,616, Marathon (Speedway) with 1,524, Hess with 1,244 and Valero with 995. The convenience stores operated by supermarket giant Kroger (799), Cumberland Farms (598), Wawa (584), and Tulsa, Okla.-based QuikTrip (577) round out the Top 10 companies in corporate-run stores. With all its stores run by franchisees or licensees, 7-Eleven is No. 1 among franchised/licensed operators. Among its licensees are large operators like Dallas-based Southwest Convenience Stores, with over 300 stores in Texas and New Mexico, and Handee Marts, with more than 60 stores mostly in western Pennsylvania and northeast Ohio. The rest of the Top Franchisee/Licensee list is dominated by oil companies, most of whom have been divesting their directly operated retail stores for the past decade. With 204 net new units in the past year, 7-Eleven was also the fastest-growing c-store chain in store count. The next fastest grower was Shell with 195 net new units
Top 20 Franchisee/Licensee Chains # OF FRANCHISEE/ LISENSEE STORES
% OF TOTAL
1 7-Eleven Inc.
6,727
100.00%
2 Shell Oil Products US/
4,798
99.30
3 BP North America
4,718
100.00
4 Chevron Corp.
3,580
89.80
5 Exxon Mobil Corp.
3,402
87.60
6 CITGO
1,776
100.00
7 Sunoco Inc.
1,546
81.50
8 Marathon Oil Co.
1,285
45.70
9 ConocoPhillips Inc.
1,255
100.00
COMPANY
Motiva Enterprises LLC
10 Valero Energy Corp.
717
41.90
11 Alimentation Couche-Tard
564
16.20
12 CHS Inc./Cenex
359
84.50
13 Cumberland Farms Inc.
306
33.80
14 Racetrac Petroleum
287
47.90
15 Getty Petroleum Corp.
227
68.80
16 Clark
188
100.00
17 Convenient Food Mart Inc.
160
89.90
18 Krauszers Food Store
139
100.00
19 Kwik Stop
133
100.00
20 Holiday Cos Inc.
104
24.40
Source: Nielsen TDLinx
48 CONVENIENCE STORE NEWS May 23, 2011
Fastest Growing Chains COMPANY
# OF UNITS ADDED IN PAST YEAR
% OF TOTAL
1 7-Eleven Inc.
204
3.10%
2 Shell Oil Products US/
195
4.20 6.20
Motiva Enterprises LLC 3 Casey’s General Stores Inc
95
4 Sunoco Inc.
85
4.70
5 CHS Inc./Cenex
64
17.70
6 Cumberland Farms Inc.
52
6.10
7 Marathon Oil Company
50
1.80
8 Valero Energy Corp.
41
2.50
9 Racetrac Petroleum
40
7.20
38
16.50
10 Love’s Country Stores Inc Source: Nielsen TDLinx
followed by Casey’s (95), Sunoco (85), CHS/Cenex (64), Cumberland (52), Marathon (50) and Valero with 41 net new stores. Just because the industry as a whole is not becoming more consolidated doesn’t mean there weren’t several high profile acquisitions among the Top 100 in the past year. Last October, Marathon Oil reached agreement to sell its company-owned SuperAmerica locations, as well as franchise rights for another 67 stores to Northern Tier Energy LLC. The sale prompted the March 2011 name change of Speedway SuperAmerica LLC to Speedway, which is expected to eventually split from Marathon. Casey’s General Stores, itself the target of an unsuccessful takeover attempt by Couche-Tard, was extremely active on the acquisition front in the past year. Last July, the company announced plans to open 60 to 90 stores in the coming year. Acquisitions began in October with the announcement of Casey’s intent to acquire 19 convenience stores from Harper Oil Co in Springfield, Ill. Then in November, Casey’s said it would buy up to 44 c-stores from Kabredlos Co. of Lincoln, Neb. The stores are located in Nebraska, Kansas and Oklahoma. The acquisitions continued in 2011, as Casey’s signed an agreement to purchase 11 convenience stores from NuWay Cooperative in Trimont, Minn. in February, and in March it purchased five c-store locations in Springfield, Mo. from QuikTrip Corp. Finally, in April, Casey’s announced plans to open 20 more locations in the coming six months. AMONG OTHER TOP 100 CHAINS:
Wawa last July announced plans to open between 75 and 100 stores in Florida by 2013. WWW.CSNEWS.COM
Not discouraged by its unsuccessful takeover of Casey’s, Couche-Tard acquired 12 Crystal Flash Stores last September for its Circle K division. The Pantry closed on its acquisition of 47 Presto Convenience Stores in Kansas and Missouri in December. Also in December, 7-Eleven agreed to acquire from ExxonMobil the retail interests of 183 locations in Florida, all to be re-branded to 7-Eleven. In January, the retailer said it plans to open as many as 20 new locations in New York City by the end of 2012. In April, 7-Eleven then announced plans for an internal reorganization. The eight existing regions were replaced with 14 geographic zones. E-Z Mart (No. 23 on the Top 100 list) acquired all eight stores owned by BBF Oil last December. In January, VPS purchased 22 former Appco convenience stores that had been closed for the last six months. The stores are located in northeastern Tennessee and southwestern Virginia and will be converted to the Scotchman Store brand. In February, Loves announced its plan to open 20 new travel stop locations this year. Little General, which climbed from 90th place last year to a tie for 76 this year, acquired five former Bandy’s Sunny Spot Sunoco locations in West Virginia Q late last year. Source: Nielsen TDLinx; Convenience Store News Market Research, 2011 *All Commodity Volume (ACV) figures are annualized ranges of the estimated retail sales volume of all items sold in a store that pass through the retailer’s cash registers. Lottery sales are not included; gas sales are included where applicable. The Nielsen TDLinx ACV is an estimate — a directional measure to be used as an indicator of company size. 1 Alimentation Couche-Tard Inc., based in Laval, Quebec, operates convenience stores in both Canada and the U.S. For this ranking, only U.S. stores are included. 2 Speedway LLC is a wholly owned subsidiary of Marathon Oil Corp. 3 WFI Acquisition Inc. executed an agreement for the sale of its 188 Wilson Farms locations in New York to 7-Eleven Inc., in April, 2011. 4 7-Eleven of Oklahoma is not affiliated with 7-Eleven Inc. Editor’s Note: Licensees are included in the total store count of the parent’s banner name. For example, companies like Southwest Convenience Stores and Garb-Ko (both 7-Eleven Inc.) fall under those respective chain counts. Nielsen TDLinx utilizes the convenience store trade channel definition endorsed by the National Association of Convenience Stores and Convenience Store News. The Convenience Store Trade Channel includes small format stores, between 800 and 3,000 square feet and 500 and 1,500 SKUs, that operate at least 13 hours a day and carry a limited selection of grocery items, including at least two of the following: toilet paper, soap, disposable diapers, pet foods, breakfast cereal, tuna fish, toothpaste, ketchup, and canned goods. This channel includes stores that may or may not sell gasoline and offer fast-food services. Nielsen TDLinx is the worldwide leader in location information management. With Nielsen TDLinx Codes, consumer packaged goods manufacturers (CPG) are enabled to aggregate to a customer view, integrate disparate data and activity, communicate seamlessly on a code-to-code basis, and evaluate in any frame of reference with a systematic and repeatable process. Nielsen TDLinx provides universal coverage of over 725,000 locations, 11,000 accounts and up to five layers of account hierarchy. For more information, go to www.nielsen.com. 50 CONVENIENCE STORE NEWS May 23, 2011
Top 100 Convenience Stores Index 60 7 Eleven Stores of Oklahoma 1 7-Eleven Inc. 73t Admiral Petroleum Co. 6 Alimentation Couche-Tard 32 Allsups Conv Stores Inc. 78t Blarney Castle Oil Co. 3 BP North America 64 C L Thomas Inc. 75 C N Brown Co. 12 Casey’s General Stores Inc. 90t Certified Oil Co. 4 Chevron Corp. 25 CHS Inc./Cenex 9 CITGO 43t Clark 14 ConocoPhillips Inc. 46 Convenient Food Mart Inc. 15 Cumberland Farms Inc. 26 Delek US Holdings Inc. 33 E Z Mart Stores Inc. 67t Englefield Oil Co. 96t Erickson Oil Products Inc. 5 Exxon Mobil Corp. 72 Farm Stores Grocery Inc. 88t Fast Stop 57 Fikes Wholesale 84t FKG Oil Co. 92t Flash Market 96t Food Fast Corp. 71 GasAmerica Services Inc. 82t Gate Petroleum Co. 30t Getty Petroleum Corp. 58t Giant Eagle Inc. 54 Giant Industries Inc. 67t Go Mart Inc. 39t GPM Investments LLC 80t Gulshan Enterprises 88t Handee Hugo’s/Sampson Bladen Oil Company Inc. 13 Hess Corp. 24 Holiday Cos Inc. 90t Hy Vee Food Stores Inc. 39t Jacksons Food Stores Inc. 47 Jones Co. 52 Krauszers Food Store 16 Kroger Co. 22 Kum & Go LC 53 Kwik Stop 29 Kwik Trip Inc. 49 Landmark Industries Inc. 76t Little General Stores Inc. 35 Love’s Country Stores Inc. 82t M M Fowler Inc. 7 Marathon Oil Co. 61t Martin & Bayley Inc. 38 Maverik Inc.
50 Meijer 84t MFA Petroleum 23 Military 99t Miska Liquors Convenience 95 MNS Ltd. 69 Mountain Empire Oil 58t Murphy Oil 96t Newcomb Oil Co. 78t Nice N Easy Grocery Shoppes 21 Pilot Corp. 63 Plaid Pantries Inc. 56 Quick Chek Food Stores 19 QuikTrip Corp. 17 Racetrac Petroleum 86t Ranger Enterprises Inc. 65t Sam’s Food Store 61t Sam’s Mart 28 Sheetz Inc. 2 Shell Oil Products US/ Motiva Enterprises LLC 92t Spinx Oil Co Inc. 30t Stewart’s Shops Corp. 80t Stop In Food Stores Inc. 76t Sunmart Inc. 8 Sunoco Inc. 20 Susser Holdngs Corp./ SSP Partners 86t Taylor Petroleum 45 Tedeschi Food Shops Inc. 65t Terrible Herbst Inc. 36 Tesoro Petroleum Corp. 41t Tetco Inc. 11 The Pantry Inc. 48 Thorntons Inc. 99t Toot N Totum Food Store 73t Town Pump Inc. 37 Travel Centers Of America 70 True North Energy 55 Two Farms Inc. 41t United Dairy Farmers 34 United Refining Co. of Pennsylvania 10 Valero Energy Corp. 92t Victory Marketing LLC 27 VPS Convenience Store Group 51 Warren Equities Inc. 18 Wawa Inc. 43t Wilson Farms Source: Convenience Store News Market Research, 2011
WWW.CSNEWS.COM
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CSNEWS 2011
HR & LABOR STUDY
Employment Down, Turnover and Pay Slightly Up The average number of workers per store falls even as economy rebounds By Don Longo
W
hen NACS retail members went to Capitol Hill in March in order to lobby lawmakers to resist big banks’ efforts in delaying and repealing the Durbin swipe fee reform amendment, one of their talking points was how the humongous credit- and debit-card transaction fees — which hit a record $9 billion last year for convenience stores — were contributing to the nation’s stubbornly high unemployment rate.
52 CONVENIENCE STORE NEWS May 23, 2011
▼
Fig. 1 Number of Employees Per Store/Length of Stay Avg Length of Stay (in years)
Number of Employees TOTAL
SINGLE
CHAIN
TOTAL
SINGLE
CHAIN
Store associates
8.3
7.8
8.6
2.4
2.8
1.6
Asst. managers
0.7
0.3
0.9
3.5
3.9
3.2
Store managers
1.1
0.8
1.3
5.6
7.0
4.9
Field managers
n/a
n/a
2.1
n/a
n/a
6.1
Source: Convenience Store News Market Research, 2011
Fig. 2 Problems with Quality and Integrity of Work Force
▼
“The money I pay to the credit card companies in transaction fees could be used to hire an additional worker or at least prevent the layoff of at least one employee per store,” one retailer told a Congressman. “The impact on local economies is staggering.” Now, research proves the truth of that statement. According to the just released Convenience Store News 2011 HR & Labor Study, the average number of store associates per store decreased by one, from 9.2 to 8.3 last year. That figure buttresses the argument of several retailers who have said that the rising expense of credit and debit card transaction fees essentially resulted in their employing fewer workers per store. Turnover rates are slightly higher this year compared to a year ago, but well below the morethan-100 percent store level turnover c-store retailers faced in 2000. Convenience retailers also reported
TOTAL
SINGLE
CHAIN
Employee shrink/theft
4.37
3.72
4.88
Attitude/customer service skills
4.24
3.53
4.78
Reliability
3.98
3.38
4.43
Basic skills/competence
3.89
3.47
4.20
Vendor shrink/theft
3.32
2.84
3.69
Drug/alcohol use on the job
2.43
1.64
3.05
Rated on a scale of 1-10, where 10=most serious problem Source: Convenience Store News Market Research, 2011
WWW.CSNEWS.COM
CSNEWS 2011
HR & LABOR STUDY
Fig. 4 What Factors Impact Turnover Rates?
▼
▼
Fig. 3 Turnover Rates 2011
2010
2011
2010
3.17
3.38
Store associates
45.1%
41.9%
Wages
Assistant managers
18.4
19.6
Dismissal for cause
3.39
3.87
Competition for employees from other businesses
3.95
4.49
Store managers
10.3
12.6
Benefits
4.08
4.36
Field managers
7.4
5.3
Lack of career enhancement
4.58
4.44
Insufficient training during orientation
4.75
4.89
Unpopular shifts (eg. overnight hours)
4.85
4.62
Workplace safety
7.05
6.69
stiffer competition for good workers from other businesses, and noted they’ve increased salaries and benefits for their store level workers, according to the study. Highlights of the study include: Q Shrink and theft continue to be the No. 1 concern cited by retailers about the quality and integrity of their employees. However, “attitude and customer service skills” moved up last year from fourth to second among retailers’ concerns about their workforce. Meanwhile, “basic skills” dropped from second to fourth among retailers’ list of most serious workforce problems. Q Store level employee turnover rates were slightly higher in 2011 than in 2010, but nowhere near as high as in 2000 when the nation’s unemployment rate was much lower. Q Meanwhile, turnover rates among store managers, assistant manager and field managers continued to decline in 2011. Q As the economy improves, it appears competition from other businesses is again becoming a bigger factor influencing turnover. Competition from other businesses moved up from fifth to third among reasons for causing turnover among employees. Wages and dismissal for cause continue to be the top two reasons for turnover, according to convenience store retailers. WWW.CSNEWS.COM
Ranked from 1-8, where 1=most impact Source: Convenience Store News Market Research, 2011
Fig. 5 Actions Taken to Reduce Turnover Rate at Stores
▼
Source: Convenience Store News Market Research, 2011
CAR 2011
2010
Improving store atmosphere/corporate culture
46.6%
50.7%
Enhancing training
37.9
38.0
Raising salaries
34.0
44.0
Flex time/attractive scheduling
31.1
51.3
Creating opportunities for career advancement
22.3
24.0
Providing/adding benefits
20.4
24.0
Increasing store security
12.6
26.0
9.7
7.3
Other actions Multiple responses accepted Source: Convenience Store News Market Research, 2011
Q Offering flex time and attractive scheduling is not being used as much this year to reduce turnover. Last year, flexible scheduling was the No. 1 tactic used by c-stores to reduce turnover among store employees, but it dropped to fourth this year. Improving the in-store atmosphere and the company’s corporate culture moved up from second to first among turnover reduction tactics, followed by enhanced training and higher salaries. Creating career opportunities and providing or adding benefits are the other two
tactics most often used to reduce store turnover. Q In terms of benefits, or “goodies,” as they are called by Sheetz CEO Stan Sheetz, health insurance and cash bonuses are the two most pervasive forms of incentives offered by c-store retailers. For store level employees, a 401k plan and health insurance are the most popular benefits. More than half of store managers get a cash bonus for meeting goals, while a third of store employees also receive cash bonuses. Almost one in five store managers also get May 23, 2011 CONVENIENCE STORE NEWS 53
CSNEWS 2011
HR & LABOR STUDY
▼
Fig. 6 Incentives Offered
▼
Fig. 7 Employee Insurance Changes in Past Year
CAR STORE ASSOCIATES
STORE MANAGER
401K plan
40.9%
48.1%
Made changes (net)
41.8%
Insurance (net)
37.5
55.7
We increased employee contribution
23.9
Medical
37.5
55.7
We cut back on coverage
11.9
Dental
21.6
40.5
We eliminated coverage
3.0
Vision
17.0
27.8
We increased coverage
1.5
Cash bonus for meeting goals
33.0
55.7
Other changes
9.0
Sweepstakes/bonus gift program
14.8
12.7
Tuition reimbursement
14.8
19.0
Employee of the month type recognition
13.6
7.6
Profit sharing
12.5
15.2
2.3
2.5
21.6
22.8
Stock in company Other incentives Multiple responses accepted Source: Convenience Store News Market Research, 2011
54 CONVENIENCE STORE NEWS May 23, 2011
store employees at $10 per hour or higher, an increase from 4.1 percent in 2010. Q Meanwhile, the amount of time between hiring and receiving
58.2
their first merit increase remained about six months for store employees. The amount of that increase declined by 10 cents to 36 cents per hour. Q Approximately 60 percent of convenience store retailers conduct formalized performance reviews. Among chains, that figure is higher at 73 percent. Q In the 12 months since the previous survey, convenience retail-
Fig. 8 Screening Tools Used in Hiring
▼
tuition reimbursement of some kind. A little less than 15 percent of c-stores offer tuition reimbursement to store employees. About 80 percent of companies in the c-store industry make matching contributions to employees’ 401k plans. Q Despite the difficult national economy, only 3 percent of c-store retailers said they’ve eliminated health care insurance coverage for their employees. However, about 12 percent cut back on coverage and another 24 percent required employees to increase their contribution toward insurance premiums. Almost six out of 10 companies, though, said they made no changes in the health care insurance plans in the past year. Q Starting salaries in the convenience store industry for storelevel associates rose 2.9 percent in the past year, to a mean average of $8.01 per hour (up 23 cents per hour). About 6 percent of retailers, however, now start their
Made no changes
Source: Convenience Store News Market Research, 2011
2011
2010
Application
98.9%
95.4%
Interview
96.6
95.4
Reference check
76.1
77.8
Background checks (Net)
50.0
40.5
Dept. of Motor Vehicles
13.6
20.9
6.8
9.8
45.5
34.0
Basic skills (ie. reading, math)
44.3
44.4
Drug testing
33.0
25.5
Credit check
17.0
15.7
9.1
9.2
4.5
11.1
INS Criminal
Alcohol testing Education check Multiple responses accepted Source: Convenience Store News Market Research, 2011
For comments, please contact Barbara Grondin Francella, Senior Editor, at barbfrancella@aol.com. WWW.CSNEWS.COM
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CSNEWS 2011
HR & LABOR STUDY
Prepare for Employee Turnover, Disengagement ‘Business will not simply return to their pre-recession turnover levels.’ Bob Kelleher, The Employee Engagement Group
C
onvenience store retailers need to prepare for higher turnover and employee disengagement as the economy improves and the unemployment rate declines. “We’re entering the era of the disengaged as many employees seek alternatives elsewhere,” said Bob Kelleher, CEO of The Employee Engagement Group. “Companies of all sizes will start hiring again soon, employees will again believe that it is okay to be someone’s low man on the totem pole, and the musical chair aspect of job movement will take root.” Recent research from Glassdoor.com’s employment confidence survey supports Kelleher’s views. According to the survey, 73 percent of employees say they will leave their job in the future and more than one in three expect to do so within the next three years. Additionally, MetLife’s 9th annual study of employee benefits trends found that employees hope to land a new job in the next 12 months as employee loyalty wanes. “Very strong” employee loyalty, according to the study, plunged to 47 percent from 59 percent just three years ago. Kelleher also projected that businesses will not simply return to their pre-recession turnover levels. For instance, if a company’s traditional voluntary turnover dropped from 15 percent to 5 percent, the 10 percent of the workforce that didn’t leave during the past year is now in queue, and will be in addition to the traditional 15 percent voluntary turnover. In the convenience store industry, where turnover levels are currently running higher than 45 percent, what would happen if turnover increased five-fold? How would it impact employee engagement, customer satisfaction and the bottom line? In his book, “Louder Than Words — 10 Practical Employee Engagement Steps … that Drive Results!” (www.BobKelleher.com) Kelleher lays out 10 engagement practices that will help companies focus on their retention strategies today to be prepared for tomorrow. 1. Link your engagement efforts to high performance: Employee engagement is not about employee satisfaction. The last thing you should want is a team of satisfied but underperforming employees. Kelleher defines engagement as “the unlocking of employee potential to drive high performance.” 56 CONVENIENCE STORE NEWS May 23, 2011
2. Engagement starts at the top: Leaders must demonstrate support for an engaged culture by personally living their company’s values. In today’s recessionary times, leaders have large shadows — and employees are watching everything you do! 3. Engage First Line Leaders: The key driver of engagement is the relationship with one’s direct manager. Studies show that if one’s line manager is disengaged, his/her employees are four times more likely to be disengaged themselves. 4. Focus on communication, the cornerstone of engagement: Successful leaders recognize the power of a robust communication plan, one built on clarity, consistency, and transparency. 5. Individualize your engagement: Today’s leaders must tailor their communication approaches, rewards and recognition programs, and training and development investments to the unique motivational drivers of each employee. 6. Create a motivational culture: Kelleher believes leaders must create motivational cultures where employees can flourish. Leaders are more apt to get the discretionary effort of their employees when they think you care about them as people! 7. Create feedback mechanisms: Companies need to ask employees what they think, and employee engagement surveys are a great tool to check an organization’s pulse. As we slowly recover from this deep recession, some enlightened companies are beginning to ask their employees “what do you think?” as they conduct employee engagement surveys. 8. Reinforce and reward the right behaviors: Employees are incredibly motivated by achievement, not money. Kelleher believes that money can disengage if employees perceive unfairness. 9. Track and communicate progress: Leaders need to reinforce “line of sight” by telling their employees where they’re going, how they’re performing, and where they fit in. 10. Hire and promote the right behaviors and traits for your culture: Kelleher often tells clients, “You don’t have an engagement issue, you have a hiring issue — you’re hiring the wrong behaviors and traits to succeed in your culture.” WWW.CSNEWS.COM
CSNEWS 2011
2010
4.1%
$7.25 to $7.49
28.6
33.1
$7.50 to $7.99
23.8
21.4
$8.00 to $8.50
23.8
24.8
$8.50 to $9.99
16.7
12.4
$10.00 or more
6.0
4.1
$8.01
$7.78
Mean
Source: Convenience Store News Market Research, 2011
▼
Fig. 10 When Store Associates Are Given Their First Increase 2011
2010
After 3 months
41.0%
44.4%
After 6 months
19.3
22.5
After 9 months
3.6
4.2
After 12 months
21.7
16.2
Other mentions
14.5
12.7
Mean (no. of months)
6.2
5.7
Amt of first increase
$0.36
Fig. 13 Training
▼
1.2%
Intranet (9 percent). Q In the event that a new hire doesn’t work out, most convenience store retailers (75 percent) have a process in place to handle dismissals. Three-quarters also have an employee manual and more than 90 percent of retailers require new employees to read and sign a form stating they’ve read Q the manual.
LENGTH
Store associates
41.3 hours
$584
Assistant Managers
117.2
$1,857
Store managers
210.1
$3,678
Source: Convenience Store News Market Research, 2011
Fig. 14 Training Methods Employed by Company
Fig. 11 Conduct Formalized Performance Reviews
On the job
$0.46
Source: Convenience Store News Market Research, 2011
No
58 CONVENIENCE STORE NEWS May 23, 2011
39.8% 60.2%
Yes
2011
2010
100.0%
98.6%
Reduced expenses
18.8
18.2
Computer-based/ internet
17.6
14.9
Computer-based/ DVDs
12.9
19.6
5.9
4.1
Other mentions
Multiple responses accepted Source: Convenience Store News Market Research, 2011
Fig. 12 How Pay Scale Compares with Comparable Businesses in Market
We pay more We pay less We pay the same
2011
2010
31.3%
25.5%
7.2
6.2
61.5
68.3
Source: Convenience Store News Market Research, 2011
Fig. 15 Is Upselling Training Provided to Employees?
▼
Source: Convenience Store News Market Research, 2011
▼
ers feel that their pay scales now compare better with comparable businesses in their market. Slightly more than 31 percent of c-store retailers said they pay more than competing businesses, an increase from about 25 percent who said that a year ago. Q In terms of training, c-store retailers appear to be spending less time but spending more money on instruction. This store associates will be trained an average of 41.3 hours each, at a cost of $584 per employee. A year ago, the training time average 43.8 hours at a cost of $519 per employee. About four
COST OF TRAINING
▼
2011
Less than $7.25
out of 10 c-store retailers include upselling and suggestive selling within their training programs for store associates. For store managers, the training time now averages 210 hours at a cost of $3,678 per manager, compared with about 220 hours and $3,145 per manager a year ago. Q There wasn’t much change in training methods from year to year. On-the-job training is still the most prevalent form of education, followed by classroom, although use of computer-based and DVD training videos declined somewhat from a year ago. Q About half of c-store retailers said they have formalized employee feedback programs in place. The most popular ways to garner feedback include district/headquarters meetings of all employees (14.9 percent), an employee hotline (11.9 percent) and electronic forums like a company ▼
▼
Fig. 9 Starting Hourly Wage for Store Associates
HR & LABOR STUDY
42.9% No
Yes
57.1%
Source: Convenience Store News Market Research, 2011
WWW.CSNEWS.COM
CONVENIENCE STORE NEWS 2011
INDUSTRY SALARY SURVEY
What Do C-store People Earn? Compensation inches up for most jobs in the convenience store industry
T
60 CONVENIENCE STORE NEWS May 23, 2011
CURRENT SALARY
BONUS/ COMMISSION
TOTAL COMPENSATION
$178,400
$28,300
$219,300*
130,300
19,100
158,200**
101,200
16,500
117,700
96,300
7,100
103,400
89,900
7,600
97,500
74,900
5,800
80,700
Dir./Mgr. Marketing
74,000
6,200
80,200
General Manager
65,800
6,100
71,900
Dir./Mgr. Merchandising
61,500
4,900
66,400
Dir./Mgr. Technology/Information
58,000
2,500
60,500
Category Manager
55,400
3,500
58,900
Dir./Mgr. Human Resources
55,300
5,800
61,100
Dir./Mgr. Foodservice
51,600
3,300
54,900
District Manager
50,600
3,100
53,700
Store Manager
33,800
3,500
37,300
* Total compensation for CEOs includes $12,600 in added compensation. **Total compensation for Presidents includes $8,800 in added compensation Source: Convenience Store News Market Research, 2011
Fig. 19 How Bonus/Commissions Are Structured
â–ź
Meanwhile, convenience store manager compensation was up only a half a percent over the previous year to a mean average of $37,300 in 2010. That figure is also 1.6 percent higher than the average total compensation for store managers in 2006. Most headquarters and support center executives and managers saw their compensation grow last year, with the increases ranging from 4 percent for chief financial officers and 3.5 percent for merchandising execs, to 0.6 percent increases seen by marketing and operations folks. Foodservice executives saw a 1.3 percent pay hike last year. Compensation for district managers, though, fell 0.4 percent from 2009, and was almost 3 percent below the 2006 level. CEOs also reported that they received approximately 19 percent of their annual pay through commissions, bonuses and other added compensation. For store managers, bonuses added up to about 9 percent of their total compensation. Q
â–ź
he total compensation for Fig. 18 chief executive officers of Total Compensation Package convenience store retail companies rose almost 2 percent Chief Executive Officer in the past year to a mean average President of $219,300, but was 1.6 perChief Financial Officer cent below a peak of $222,900 Chief Operating Officer achieved in 2006, according to Vice President the 2011 Convenience Store Dir./Mgr. Operations News Industry Salary Survey.
2011
2010
Based on improved sales
56.1%
51.6%
Improved productivity
23.8
19.4
Improved profits
44.4
35.5
Reduced expenses
33.4
25.8
In-stock compliance levels
13.6
12.9
Other mentions
12.8
6.4
Multiple responses accepted Source: Convenience Store News Market Research, 2011
WWW.CSNEWS.COM
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EXPERT’S VIEW: Real Estate Strategy By Robert E. Bainbridge
Will Real Estate Values Rebound from the Great Recession? 2011 may be transition year with real estate prices bottoming out followed by a return to property appreciation
H
ave we passed through the valley of the shadow? The last decade saw the most difficult economic period for real estate prices since the Great Depression of the 1930s. Convenience store real estate prices peaked in 2006 at just under $1.4 million, according to CoStar. This median price reflects c-stores with fuel service. C-store sale prices declined in 2009 and 2010. Although it is too early to tell, 2011 may be a transition year with a bottoming of real estate prices followed by a return to property appreciation. Some preliminary real estate market data suggests this may be the case. Moody’s National Commercial Properties Index shows general commercial real estate prices down 39 percent from their peak in late 2007. The median price of c-stores is down 44 percent over the same period, to $780,000 in 2010. Today, c-stores with fuel service are selling for about $350 per square foot of store building area. This price reflects the total value of the real estate, which includes the site, store building, fuel service and canopy. For example, a location with a store of 2,500 square feet and an 8-position fuel service would be expected to sell for $875,000 today, based on national average prices (2,500 multiplied by $350 = $875,000). This is the value of the real estate, which does not include the inventory, personal property or intangible business value. Real estate values for c-stores are
62 CONVENIENCE STORE NEWS May 23, 2011
USA CONVENIENCE STORES MEDIAN SALE PRICES 2006–2011 $1,700,000 $1,500,000 $1,300,000 $1,100,000 $900,000 $700,000 $500,000 2006
2007
2008
2009
2010
2011
Source: CoStar www.costar.com
ultimately determined by the earnings potential of the location. One widely used relationship between earnings and real estate value is the Gross Profit Multiplier, or GPM. The GPM is calculated when a c-tore sells on the open market. The sale price of the real estate is divided by the average gross profit. GPMs are usually in the range of 2.5 to 3.5. An average GPM in the U.S. is about 3.0. So, as a rule of thumb, a location with an average gross profit of $500,000 can be expected to have the associated real estate priced at about $1,500,000 ($500,000 multiplied by 3.0). Gross Profit Multipliers are one of the tools used by real estate appraisers to estimate the value convenience stores.
For c-stores, the real estate often makes up 90 percent of the value of the going-concern. Today, average real estate values are back at 2004 to 2005 levels. As more sale data is compiled for 2011, we will know in a few months whether real estate prices have reached the bottom. Real estate prices usually follow rather than lead in an economic recovery. Q Let us hope the worst is over. Robert E. Bainbridge is an author, instructor and expert witness in the appraisal and valuation of convenience stores and gas stations. He can be reached at reb@cstorevalue.com, or (541) 823-0029. More valuation info at www.castorevalue.com. Editor’s Note: The opinions expressed in this column are the author’s, and do not necessarily reflect the views of Convenience Store News.
WWW.CSNEWS.COM
EXPERT’S VIEW: Tobacco By Jason Healy
Clearing the Smoke Surrounding E-Cigs As the popularity of e-cigarettes grows, so does the questions on quality control and health effects
S
ince their introduction to the U.S. market approximately three years ago, e-cigarettes (also known as e-cigs) have ignited a firestorm of controversy. A collection of government agencies, health alliances and antismoking groups have been fighting to regulate and even ban them — with very little real evidence to support their positions. Regardless, consumer interest continues to grow, as do predominately online e-cig sales. So what’s behind all of this controversy, and why can’t these new smokeless tobacco products find a home in retailers’ tobacco departments? If you’re one of the few who haven’t heard of e-cigarettes, they mimic the taste and feel of smoking without the tobacco, smell and ash associated with traditional cigarettes. Most come in a variety of flavors and varying levels of nicotine — from high to no nicotine at all. When the user inhales, a battery in the device heats a flavored liquid to create a smoke-free vapor “puff” that resembles cigarette smoke, but evaporates within seconds and doesn’t have a lingering odor. But as e-cigs’ popularity and usage grow, so do questions about the quality control and health effects of these new products, which only serve to fuel the debate. Everything from the flavors, to the technology and even the ingredients have been criticized. The truth is that hundreds of companies are scrambling to get in on the market while it’s still hot,
64 CONVENIENCE STORE NEWS May 23, 2011
and as such are opting for lower production cost over product quality — sourcing all of their ingestible ingredients from China under dubious quality control standards. In fact, many of these brands were cited in a July 2009 FDA report as containing carcinogens and toxic chemicals. While most of the electronic components of any brand’s e-cigs are imported, it’s important to look for those whose liquid (or juice) is manufactured in the USA. Foreign producers of these ingestible ingredients are not likely to adhere to the same stringent quality control standards. RESEARCH FINDS E-CIGS SAFER
A new university health study released by the Journal of Public Health Policy is shedding a new light on e-cigs, and reigniting the controversy for some. The study was conducted and co-authored by Michael Siegel, a professor of community health sciences at Boston University School of Public Health (who has long studied tobacco epidemiology, and has evaluated tobacco-related policies at national, state and local levels) and Zachary Cahn, a graduate student in the political science department at the University of California at Berkeley. Research compared traditional tobacco cigarettes to electronic cigarettes and found e-cigarettes are not only
safer, but actually have the potential to become a smoking cessation device. Additionally, the study showed that none of the more than 10,000 chemicals present in tobacco — including over 40 known carcinogens — have been found in the cartridges or vapor of electronic cigarettes in anything more than trace quantities. In fact, the research documents only three main ingredients in e-cigarettes, comparatively — with water and nicotine among them. MAKING SHELF SPACE FOR E-CIGS
So for the time being, retailers are on their own to verify the quality of the products they stock until the e-cigarette industry has stricter federal regulations. While the path of e-cigs has not been completely mapped out just yet, the latest research combined with consumer demand all but ensures a growing market for these products. It’s safe to say consumers and retailers can expect to see much more from these new devices in the future, as they continue to redefine the smokeQ less tobacco category. Jason Healy is President of blu Cigs, a provider of electronic cigarettes in the U.S., offering an alternative to smoking. The company is based in Charlotte, N.C. For more information, visit www. blucigs.com. Editor’s Note: The opinions expressed in this article are the author’s, and do not necessarily reflect the views of Convenience Store News.
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Program Features New Research on Latina Shoppers Taking Latino Marketing and Merchandising into the New Decade August 10-12, 2011, Hilton La Jolla Torrey Pines, La Jolla, CA Latina Shoppers Drive The Hispanic Market! Understanding The Four Key Segments of Hispanic Women and Their Consumer Preferences In fall of 2010, Redbean Society and New American Dimensions joined forces to conduct a groundbreaking, just-released research study on Latina Women Shoppers. The new study is the first of its kind to evaluate the cultural and behavioral dynamics that influence shopping in the fastest growing consumer market segment in the U.S. today, the Hispanic market—expected to represent at least $1.3 trillion in buying power by 2013. Join Jackie Bird, CEO of Redbean Society and David Morse, President & CEO of New American Dimensions, LLC as they unveil the research of at least four shopper archetypes among Latina women: Las Exploradoras (Love to Shop), Las Pragmáticas (Practical Shoppers), Las Digitalistas (Online Shoppers), and Las Frescitas (Young Affluents). The Latina Shopper Study was sponsored by Pepsico, Sara Lee Corporation and VISA.
Keynote Speaker
Vicente Fox
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CANDY & SNACKS Chocolate + Non-Chocolate + Gum + Salty Snacks
A Sweet and Savory Preview The 2011 NCA Sweets & Snacks Expo will be driven by innovation and a renewed sense of fun By Renée M. Covino
B
oasting the biggest show floor in its 15 years, the 2011 Sweets & Snacks EXPO, sponsored by the National Confectioners Association (NCA), is reportedly flourishing right along with the recession-resilient categories it represents — candy and snacks. “We have 536 exhibitors and 140,000 square feet of candy and snack products,” said Jenn Ellek, NCA’s director of trade communications and marketing, in late April. “The show is sold out. We had to start a waiting list.” Several factors are behind the continued strength of the largest confectionery, cookie and snack show in the Americas, according to Michael Rosenberg, EXPO chairman and president and CEO of The Promotion in Motion Cos. Inc. For one, “just four years ago, we welcomed snack companies to our show and we are proud to say that now 40 percent of our exhibitors feature snack products,” he said. One such exhibitor is the world’s largest manufacturer of pork rinds, Rudolph Foods, based in Lima, Ohio. Rudolph’s vice president of sales and marketing, Mark Singleton, calls the EXPO, “a wonderful transformation from a sole candy show to a true snack show. A lot of times, the same buyer is responsible for both salty snacks and candy, so the show is one convenient place for a wide range of retailers to make purchasing deci66 CONVENIENCE STORE NEWS May 23, 2011
sions. It’s one of my top two shows a year.” Singleton explained that seeing the buyers with greater frequency at shows like the EXPO is very advantageous. “We get their input. Some of our best ideas come from their insight,” he noted. The innovation this year from Rudolph includes Colossal Cracklins (the shoulder skin of pork rinds that has driven the category for the past four years, according to Singleton), its new kettle popcorn and a new chili-and-lime flavored puffed wheat snack, Chicharinas. “I remind our team that we give consumers a moment of satisfaction for 99 cents,” Singleton noted. “That’s very important to the c-store channel, where a lot of this is sold.” From the candy side, Larry Lupo, vice president of sales convenience and retail for Mars Chocolate North America, views the EXPO as “a tremendous opportunity to meet with customers one-on-one.” In addition to discussing new products and promotions that will help drive retail sales, “we’ll show them Mars SweetSource insights, which offer customer solutions for growing the entire confection category,” Lupo explained. “This
includes planograms, best category assortment and category management best practices to maximize confectionery sales.” Confections combining sweet and savory, such as M&Ms Pretzel Chocolate Candies and Snickers Peanut Butter Squared, are on-trend with customers, according to Mars. To learn about trends and more, the confectionery company recently launched www.Mars24seven.com exclusively for c-store operators. “It offers everything they need to create, enhance and maintain a thriving candy aisle,” Lupo said. A new component of the Web site this year is the 2011 Fantasy Racing Program, a NASCAR-themed game that c-store operators can play for the chance to win prizes, including a trip to Daytona. MODELED AFTER DISNEY
The NCA has kept up with innovation, too, just like its candy and snack exhibitors. “We’ve really been working on the experience of coming to the EXPO,” said Ellek. “For so many years, we filtered out the fun to concentrate on getting business done, but this year we’re really bringing it back.” She explained a lot about the show was modeled WWW.CSNEWS.COM
CANDY & SNACKS Chocolate + Non-Chocolate + Gum + Salty Snacks after Disney, including “the awesome arrival and fond farewell. Attendees are really going to feel the fun of our industry this year.” Highlights of the 2011 EXPO include: Q Innovation Alley — “This is 10 companies in the 200 aisle that are either new to the industry or are start-ups or are new to the trade show,” Ellek explained. Buyers can expect to find innovations they wouldn’t find anywhere else, and “cool, niche ideas that some big corporations haven’t come up with,” she added. Prime Choice Foods, based in Henderson, Nev., is one such company. With a focus on all-natural, organic and Hispanic snacks, Prime Choice is highlighting its new line, Savory Balance, at the EXPO. “It’s a completely different way of snacking,” Mauro Gomez, vice president of sales and marketing, told Convenience Store News. Every serving of Savory Balance tortilla chips, about 10 chips, gives snackers a “full serving of fruits and vegetables and is an excellent source of vitamins A, C and antioxidants,” he said. “People want to enjoy snacks with better nutrition without giving up flavor.” Q Six Top-Notch Experts/Speakers — These include Steve Matthesen, executive vice president with The Nielsen Co. on the state of the confectionery and snack industry, Joy Bauer, a nutritionist for the Today Show, speaking on, “Life is Hard, Food Should be Fun,” and Nick Bilton, New York Times journalist and best-selling author to explain future technology trends. 68 CONVENIENCE STORE NEWS May 23, 2011
Q EXPO Mobil App — Sponsored by The Hershey Co., this tool is available for most smart phones and the Web. It is said to be custom-designed to enhance the 2011 EXPO experience making the event more efficient, interactive and fun. Q Buyers’ Choice Best New Concept Award Program — Buyers use handheld technology to vote for their favorite new products and merchandising solutions at the start of the show on Tuesday and awards for the most popular picks are announced on-site on Wednesday. Five winners will be picked from the New Products Showcase, and three winners will be awarded from the Magic of Merchandising Display Gallery. While the show attracts over 14,000 industry professionals, last year marked a banner year in qualified retail buyer attendance — more than 6,000, according to Ellek. “And we’re shooting for the same this year — all of our major trade channels are in sync or ahead of last year,” she said. The convenience store channel is a familiar one to the annual event. “Grocery and c-store attendees represent our top-two trade channels at the show,” Ellek explained. “The convenience channel is a major one of concentration in the category. The growth continues to be very steady despite what’s going on in the economy. There’s such potential there. It’s one of our great growth channels in candy and snacks.” C-store category managers such as Danna Huskey of E-Z Mart confirm this growth trend. “Our sales
are very strong right now; I hope to continue seeing our numbers above 2010’s,” she told CSNews. At the EXPO, Huskey is looking for new innovation in novelty candy for quick in-and-outs, she said. “I want to see which direction the manufacturers are going with items that target 8 to 18 year olds.” Jim Hachtel, senior category manager at BP/ARCO ampm, also confirmed his company is wellpositioned to have a great year in confection. However he is also going to the EXPO with an agenda for how it can be better. “We need gum to hold up its end and help support the performance in the chocolate category,” he told CSNews. “I am looking forward to the innovation coming out later this year from both Wrigley and Cadbury to address these needs.” Hachtel is also coming to the show to “meet with the majors to discuss the cost increases and the go-forward strategy for the category.” Cost increases dominate his concerns for the category currently. “I am worried that this could kill the momentum we’ve seen in the category over the past couple years, and that consumers will pull back from candy as a way to treat themselves to small indulgences,” he said. Overall though, Hachtel loves the show. “Finding those hidden nuggets, attending some of the learning sessions and networking with the industry are all invaluable Q to us here at ampm,” he said. For comments, please contact Renée Covino, at reneel@aol.com. WWW.CSNEWS.COM
SHAKE IT UP! ENERGIZE YOUR SALES THIS SUMMER ™
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Tic TacÂŽ Summer Flavors* are top mint sellers in Convenience Stores across the U.S. $50,000
Drives incremental sales over leading everyday mints!
$40,000
$30,000
$20,000
$10,000 $0
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Altoids Peppermint
Mentos Mixed Fruit
IceBreakers Cool Mint
Tic TacÂŽ Freshmint
IRI Total US Convenience – Latest 12 weeks ending July 25, 2010
Contact your local Ferrero representative at 1-800-FERRERO
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CANDY & SNACKS Chocolate + Non-Chocolate + Gum + Salty Snacks
Consumer View of Candy Consumers can’t resist lure of candy and snacks at c-stores
A
ccording to CSNews’ 2011 Realities of the Aisle consumer research study, buying snacks, candy and gum are among the top five reasons consumers say they shop at a convenience store. More importantly, in terms of actual products purchased, about a third said they bought gum or candy a c-store in the month
prior to the survey and 23 percent said they purchased packaged salty snacks, attesting to the strong impulse nature of these categories. In terms of purchase frequency, about 43 percent of consumers surveyed said they buy candy/gum at least three times per month or more. The mean average purchase frequency was a little more than three times
Top 15 Products Bought at C-store in the Past Month Gasoline Candy/gum Canned/bottled soda Lottery tickets Prepared fast food Hot dispensed beverages Fountain soda/drink Packaged salty snacks Bottled water Cigarettes
2011
2010
69.0% 33.7 33.1 26.0 25.3 23.9 23.1 23.1 19.8 19.6
72.6% 32.4 32.2 25.0 25.0 22.9 19.6 23.7 15.7 20.6
per month and the mean amount spent in that month on candy/gum was a relatively high $8.52. When it comes to competitive sources to satisfy their sweet cravings, consumers most often went to supermarkets (64 percent), followed by mass merchandisers (49 percent), drug stores (32 percent) Q and dollar stores (24 percent).
Amount Spent in Past Month on Candy/Gum at a C-store 2011
Less than $10 Less than $5 $5 - $9.99 $10 - $19.99 $20 - $29.99 $30 or more Mean Median
15.8% 51.3% 24.6 14.4 5.9 3.7 $8.52 $2.50
Source: CSNews’ 2011 Realities of the Aisle consumer study Source: CSNews’ 2011 Realities of the Aisle consumer study
Where Else Candy/Gum is Purchased Supermarket Mass merchandiser Drug store Dollar store Wholesale club Specialty candy store Other
Purchase Frequency of Candy/ Gum at C-store in Past Month
2011
2010
63.6% 48.9 31.9 24.3 13.0 3.4 2.8
64.1% 56.4 34.2 n/a 10.8 3.4 4.8
Multiple responses accepted.
1 time 2 times 3 times 4 times 5-9 times 10 times or more Mean Median
Source: CSNews’ 2011 Realities of the Aisle consumer study
Source: CSNews’ 2011 Realities of the Aisle consumer study
70 CONVENIENCE STORE NEWS May 23, 2011
2011
2010
24.3% 32.8 13.8 11.3 12.1 5.7 3.3 2.0
23.9% 26.5 15.4 13.7 14.2 6.3 3.8 2.0
WWW.CSNEWS.COM
CANDY & SNACKS Chocolate + Non-Chocolate + Gum + Salty Snacks WHAT’S NEW IN CANDY & SNACKS Wheat Thins Crunch Stix Kraft added new flavors of Wheat Thins Crunch Stix: Chipotle Pepper and Cinnamon Kick. The allnatural flavored Crunch Stix contain 11 grams of whole grain per serving and have zero high fructose corn syrup. They come in a unique 8-ounce, wide-mouth box for convenient snacking access. Other flavors are Honey Wheat and Fire Roasted Tomato. Each box has a suggested retail price of $3.49. Kraft Foods Northfield, Ill. (847) 646-2000 www.kraftfoodscompany.com
Palmer Valentine 2012 Candy Palmer Candy Co. has a variety of chocolate treats available for retailers to order for Valentine’s Day 2012. Zoo Crew Pops are 2.25-ounce chocolate double-crisp pops that come 18 per case and sell for $1.00 each; Sports Hearts are 2-ounce peanut butterfilled chocolate hearts that come 20 per case and sell for $1.00 each; and Sports Lovers Hearts are smaller chocolate peanut-butter filled hearts that come in a variety of bag sizes. Palmer Candy Sioux City, Iowa (800) 831-0828 www.palmercandy.com
Orville Redenbacher’s Pop Up Bowl Consumers looking for a salty snack can save time and dishes with Orville Redenbacher’s new Pop Up Bowl, which starts out as a regular bag of microwave popcorn and pops up into a wide-mouth, ready-to-use bowl, according to the company. The Bowl has two transparent walls that let people see when the kernels have all 72 CONVENIENCE STORE NEWS May 23, 2011
popped and are ready to eat. It sells for suggested retail prices of $2.99 for a three-pack and $4.49 for a six pack, and comes in Butter, Movie Theater Butter and SmartPop! varieties, with Kettle Korn and Ultimate Butter coming in June. ConAgra Foods Inc. Omaha, Neb. www.conagrafoods.com
Cream Swirl Lollipops Original Gourmet’s brand new Cream Swirl flavors are made with real cream for a tasty treat. Each lollipop has a smooth texture with no air bubbles and reportedly lasts a whole hour. Flavors include Strawberry Shortcake, Cherry Cheesecake, Orange Creamsicle, Butterscotch Sundae, Lemon Meringue Pie, Apple Pie Ala Mode, Mocha Latte, Root Beer Float, Peaches and Cream, Blueberries and Cream and Cinnamon Bun. The patented magnetic display pole offers an attractive vertical display. Each lollipop is only 110 calories. Original Gourmet Food Co. Inc. Salem, N.H. (603) 894-1200 www.ogfcstore.com
OLOVES The healthy olive snack OLOVES is now available in the U.S. for the first time. Each 1.1-ounce snack pouch holds 12-14 marinated olives that are pitted and liquid free. At only 50 calories per pack, OLOVES are also low in sodium and saturated fat, as well as Kosher, vegan and free of preservatives. Flavors include Tasty Mediterranean and Light Hearted Vinaigrette, with Lemony Lover and Hot Chilli Mama arriving in August. Retailers can purchase OLOVES in cases of 12 pouches, pallets of 1,200 or preloaded, reusable hang-strip cases of six. Each pouch has a suggested retail price of $1.50. Brand Stand Limited info@oloves.com www.OLOVES.com WWW.CSNEWS.COM
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4 0 70003 00 7339 Case: 0 94 8 5 0 0 0 9 33 Box: 0 7
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Source: IRI National C-store Latest 24 Weeks ending 3/20/2011 Dollars per $MM ACV
Hispanic Retail 360 Magazine Launched in April 2011, Hispanic Retail 360 is the only magazine to reach retailers and marketers targeting the Hispanic consumer. It will be the authority for news, market information, data and analysis on the Hispanic consumer market, with an emphasis on serving the retailer community across all channels. Hispanic Retail 360 is a stand-alone magazine polybagged with Convenience Store News, Progressive Grocer and The Gourmet Retailer magazines. It reaches more than 20,000 C-suite executives and owners in convenience, grocery and specialty food and kitchenware retailing.
2011 Publication Dates Issue Date July September December
Be sure to check out other exciting elements from our integrated media platform: www.HispanicRetail 360.com; our bi-monthly Hispanic Retail 360 News & Trends E-Newsletter; and our face-to-face 2011 Hispanic Retail 360 Summit, taking place August 10-12 at the Hilton La Jolla Torrey Pines in La Jolla, CA.
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FOODSERVICE
Prepared Food + Hot, Cold, Frozen Dispensed Beverages
The Slice Is Right By adding pizza to its foodservice menu, a convenience store can reach communities that don’t have traditional pizzerias By Melissa Kress
W
e have all heard of “as American as apple pie,” but what about “as American as pizza?” It may not be that much of a stretch. Once sold mainly in pizzerias, pizza — either by the pie or by the slice — is popping up at a variety of venues: sporting arenas, bowling alleys, big-box stores and, most notably, convenience stores. But as pizza has grown in popularity among consumers, the industry has struggled to find a way to do it well. Last month Flash Market Inc. opened a Pizza Inn at its Flash Market store in Saraland, Ala. The site marked the fourth collaboration between the Dallas-based Pizza Inn and Flash Market, based in West Memphis, Ark. “We have tried to do pizza before through local vendors but this is different,” explained Keith Brown, director of foodservice for Flash Market. “In the c-store environment you need quality to be successful. We decided to go with Pizza Inn and we like their program.” In total, Flash Market has more than 70 convenience stores and approximately 30 different food concepts, including Subway, Quiznos and Dairy Queen, in those locations. Flash Market and Pizza Inn first teamed up about a year ago and plans are on the drawing board to open a Pizza Inn in a fifth Flash Market by the summer, Brown added. Flash Market has delivery-carry out options at a
Bottom Line Z Flash Market, Village Pantry and Rutter’s are just a few examples of the growing trend to bring pizza to the convenience store consumer. Z Within two months of rollout, Rutter’s pizza program is now in 38 of its stores. Z Pizza programs can be incorporated into most existing foodservice operations with minimal investment. WWW.CSNEWS.COM
Hunt Brothers Pizza is seeing business bloom in suburban and inner city convenience stores.
few locations and a pizza express at one. It is looking to offer a buffet at some of its stores down the road. The pizza operations in the Flash Market stores make their own dough and make the pizzas fresh. They also offer large-sized pies, once seen only in traditional pizzerias. “Convenience stores have always been identified with small individual pizzas,” Brown said. “We do those too, but also offer a large pizza.” But why pizza? “The concept of ‘build it and they will come’ still works. It is going to be a good program May 23, 2011 CONVENIENCE STORE NEWS 75
FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages for us and we are very excited,” he explained, adding that customer response has been very favorable. In addition to pizza as an in-store foodservice option, Flash Market is hoping its partnership with Pizza Inn will open other avenues for the company’s stores. “Pizza Inn is very marketable. With it we can do a lot and we are hoping this opens the doors for us with catering,” Brown said. “We can bring what we learn from that to other foodservice options.” Village Pantry, part of Wilmington, N.C.-based VPS Convenience and one of the top 20 company-operated chains in the c-store industry, has also added pizza to its foodservice menu. “We’ve had pizza in a lot of our locations for years now,” explained Chad Prast, foodservice director at Village Pantry. “We have changed the branding and variety as new improved opportunities have come along.” To date, the 40 Village Pantry locations have the company’s private label pizza program and 12 locations feature Hunt Brothers Pizza. When bringing pizza into the mix, Village Pantry decided not to eliminate another foodservice item, he added. “Pizza was an add-on to our other food programs to give the customer more variety,” Prast said. “We didn’t have to remove or delete any items to add it.” He said that adding the private label pizza to its locations required only a minor investment because the stores use the equipment from the existing foodservice program. “In the 12 stores where we added Hunt Brothers Pizza we had a capital investment and overall we are happy with the return,” Prast said. Most of the Village Pantry stores with pizza sell it by the slice, he added, and the stores with a Hunt Brothers Pizza sell it by the slice and by the pie. In addition, Village 76 CONVENIENCE STORE NEWS May 23, 2011
Since pizza can be incorporated into a c-store’s operation there is more flexibility with staffing.
Pantry is testing a take-and-bake program for whole pizzas sold out of the deli case at 10 sites. A take-and-bake program is already in place at Rutter’s locations, according to Jerry Weiner, vice president of foodservice. The convenience store chain also offers made-to-order pizza through its order kiosks, he said. “This is a pretty new product that we rolled out about two months ago,” Weiner explained. “Pizza is a staple in terms of food to offer.” And while he sees value in adding pizza to Rutter’s menu, Weiner did not want to go head-to-head with pizzerias. “I didn’t want to compete with the abundance of pizza places that do a great carryout and delivery business,” he said. “Instead of the typical 14-inch pizza, we offer a nine-inch pizza,
which is ideal for individuals or, if for a family, two children.” Since launching the program, pizza is now available at all Rutter’s locations that feature electronic order kiosks, which total 38 stores. “The early signs are pretty good. I was looking at the take-and-bake program to get us into the thought process of the consumer and it’s working pretty well,” he said. “We are ahead of where we thought it would be at this time.” While Weiner explained that Rutter’s did not necessarily eliminate a foodservice item to make room for pizza, he does conduct a SKU management process twice a year to see what is working and what may have fallen off. And similar to some Village Pantry stores, Rutter’s found adding a pizza program to be a miniWWW.CSNEWS.COM
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mal investment because it utilizes the existing foodservice equipment. “The pizza cooks in our high-speed convection ovens,” he explained. “Previously we had pizza operations in five stores but took it out because of space requirements and the extra equipment needed. It was also labor intensive. But now we can incorporate it into the existing foodservice model.” Flash Market, Village Pantry and Rutter’s are just a few examples of the growing trend to bring pizza to the convenience store consumer. But there are many, many more. According to Keith Solsvig, vice president of marketing for Hunt Brothers Pizza, the Nashvillebased company is in more than 6,000 convenience stores and is fast approaching the 6,500 mark. “We are growing by leaps and bounds,” he said. “One of our best years was 2010 in terms of new stores and we are on a great track this year as well.” Don Hunt founded the company 20 years ago to reach consumers who lived in rural areas with limited access to pizzerias. He set up his first shop in a small corner store and it has grown from there by finding places where there were few or no pizza options. “There is a huge opportunity especially when you look at the change in the convenience store environment. It is moving away from big oil and more toward single-unit operators,” Solsvig explained. “A lot of our pizza business is with single-unit operators who may not have the expertise or the financial means to pay huge franchisee fees.” Hunts Brothers Pizza program ranges between $15,000 and $20,000, and the store operator gets the equipment, branding and merchandising. Once in place, the pizza operations become part of the convenience store and are run by the store staff, he said. “They can have more flexibility in terms of staffing,” Solsvig added. “Employees can work the pizza operations during the lunch rush then stock shelves when things slow down and move back to pizza during the dinner hours.” And while Hunt Brothers Pizza may have its roots in small town USA, it has experienced growth in suburban and inner city neighborhoods. The city locations tend more toward a walk-up business, he said, adding that the suburban locations see more of a grab-and-go market. “We started in rural markets, and we are still doing great there, but we are growing in suburban and city areas as well,” Solsvig added. But any way you slice it, pizza seems to be here to stay, and what better place to find it than in a conveQ nience store? For comments, please contact Melissa Kress, Associate Editor, at mkress@ stagnitomedia.com. 78 CONVENIENCE STORE NEWS May 23, 2011
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Retailers Leverage Unusual Locales At stadiums, airports, campuses — opportunities abound off the corner By Barbara Grondin Francella
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hile most of the c-store industry scrambles for indemand high-traffic corners, some are leveraging nontraditional locations for growth, brand positioning and other competitive advantages. Sports stadiums, airports, dorm complexes, office buildings, malls — all have housed convenience
stores, most often featuring a spin on traditional convenience offer. “It’s an interesting part of the industry; it’s often mom-and-pops opening up a single store in a unique location or a location that is ancillary to another business, such as a restaurant operator in a business park opening a convenience location,” said Mike
Lawshe, president and CEO of Fort Worth, Texas-based Paragon Solutions, who has designed a number of nontraditional locations. “The traditional convenience store model doesn’t often work in many of these environments. It takes a new look at different demographics in a different setting. Nontraditional sites can be
The QuikTrip store in the Sprint Center rings up an average 1,000 transactions per event. 80 CONVENIENCE STORE NEWS May 23, 2011
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great opportunities, but sometimes big c-store chains and others in the industry get tunnel vision.” Certainly Tulsa, Okla.-based QuikTrip Inc. doesn’t have tunnel vision — more like concourse vision. The c-store operator acquired naming rights to the Grand Prairie AirHogs minor league baseball stadium in the Dallas market in 2008 and became a founding sponsor of the Sprint Center in Kansas City, Mo., in late 2007, operating stores in both venues. The naming rights and concession at the AirHog’s home, now called QuikTrip Park, were meant to cement the chain’s brand in a very competitive market it had operated in for about a decade, according to Jim Denny, vice president, marketing for the 575store chain. “This allowed us to reach a middle class demographic, but was much less expensive than partnering with Major League Baseball.” With 80 stores in the market, QuikTrip management thought the partnership would be a good branding opportunity — and one that would reinforce the chain’s positioning, which includes highquality private label packaged products and foodservice items. The concession gives the chain an opportunity to promote its QT Kitchens sandwiches, pastries and roller grill times — except for hot dogs, which are sold by another concessioner. The chain also sells coffee, hot chocolate and other hot beverages; frozen drinks; Wally kid’s drinks; and proprietary Rooster Booster and other packaged energy drinks. Soft drinks are sold elsewhere in the park. “That’s one issue with any of these deals — if you are going to run a concession, you have to sell something no one else is selling,” he noted. WWW.CSNEWS.COM
Customers of the Sprint Center QuikTrip serve themselves from 20 frozen drink machines.
“Nontraditional sites can be great opportunities, but sometimes big c-store chains and others in the industry get tunnel vision.” — Mike Lawshe, Paragon Solutions Results so far have been lackluster. “It’s not doing as much for as we would have liked, in terms of positioning our brand. It’s been okay. But attendance figures are not as robust as we had hoped. When the Texas Rangers caught fire and started competing against us for fans with deals on their ticket prices, it hurt our business there,” said Denny. A much more successful venue for QuikTrip has been the Sprint Center in Kansas City, a market the chain has operated in for more than 40 years. “Branding wasn’t as big a strategy,” Denny
said. “We went into this more to promote and give exposure to QT Kitchens [food items].” The venue books a huge variety of attractions — some 90 events a year — from Sesame Street productions to Ozzie Osbourne concerts. The Sprint Center averages a million visitors per year. “We’re reaching customers who wouldn’t normally stop in the stores, so it’s almost like paid-for sampling because they are buying our products,” the retailer said. The store is in the venue’s premier location, at the main entrance that leads to escalators to go to the secMay 23, 2011 CONVENIENCE STORE NEWS 81
ond level. “Everyone lands in front of our store,” Denny said. With the arena averaging 11,000 people per event, the QuikTrip store runs an average of 1,000 transactions per event. QuikTrip’s longtime presence in the market has helped drive sales. The c-store retailer has the greatest market share of any c-store operator in the city. The arena store sells products at the same retails found in other QuikTrip stores. “We didn’t think
to keep the line moving.) With customers coming in waves before the events and during intermissions, QuikTrip has set up the store as a self-serve location, keeping wait times to a minimum. The store is equipped with 20 frozen drink machines positioned on the outside perimeter of the 900-square-foot store. Three registers are kept open, while one or two other employees — all regular QuikTrip store associates, assistant
leveraged its relationship with the other founding sponsors, including Price Chopper supermarkets, United Missouri Bank, which partners with the chain on in-store ATMs, and the local MillerCoors distributor, which has worked with QuikTrip on a number of promotional events inside and outside the Sprint Center. With a primary goal of brand positioning, food trial and promotion, QuikTrip hoped to break even
The Camden Food Co. positions itself as a healthy alternative for packaged snacks, beverages and fast food in an airport terminal setting.
it was fair to customers to come in for a drink and have it priced three times the amount they pay in our stores,” Denny said, adding the decision was a key negotiating point with AEG Worldwide, which runs the venue. The result: while QuikTrip sells 22-ounce frozen drinks for $1 including tax, another concessionaire is selling fountain drinks for nearly $5 each. (The retailer includes tax in the prices and rounds retails up or down to the nearest quarter, 82 CONVENIENCE STORE NEWS May 23, 2011
managers or managers — keep shelves stocked and the store clean and well-maintained. The chain pays Levy Restaurants, the arena’s concessionaire, a percentage of the store’s sales as it operates through its point-of-sale and cash handling system. “It’s a good deal for us,” Denny said. “We don’t have to worry about making deposits.” For its support as a founding partner, QuikTrip is promoted through signage. The retailer has
at the site. It has done that. Exit survey results revealed QuikTrip has the highest brand recognition at the venue — higher, even, than Sprint. In other sports venue news, at American Airlines Center, home of the Dallas Mavericks, 7-Eleven is selling Slurpees in 32-ounce souvenir cups. According to one review on yelp.com, the price is $7. (The chain had no comment.) BIG STORE ON CAMPUS
In
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136-store Royal Farms, based in Baltimore, will open a store this August on the street level of a luxury student housing complex on the campus of the University of Maryland. The complex, called The Varsity, will house the first Royal Farms store to open in the area. The 24-hour location will offer takeout breakfast sandwiches, subs, wraps and fresh brewed coffee, plus Royal Farms’ signature takeout chicken, according to The Varsity’s Web site. “We thought this was a great opportunity to have a presence on a college campus,” said Ed Stronski, a spokesperson for Royal Farms. The complex will offer 20,000 square feet of retail space on the ground level, covered parking for retail customers and residents, and a fitness center, business center and game room for students. Meanwhile, a Wawa college store in Princeton, N.J. has practically become an institution and made news earlier this year when writer/actress Ellie Kemper, who plays DunderMifflin’s receptionist on “The Office,” blogged about “The Wa,” which operates adjacent to Princeton University campus. Kemper wrote an article entitled “Ode to Wawa” for the Princeton Paw, pledging her undying love for Wawa. “How do I put into words one of the most enduring relationships I have in this world? I’m not sure I know. How do I come to terms with the fact that whenever I come back to Princeton, it is the Wa that I am happiest to see?” she wrote. “I do appreciate Blair Arch, and smile politely at my former professors, and give my friends half-hearted hugs, but it is the Wa that holds my undying adoration. “The Wa was my Cheers. It made me feel like someone was taking care of me; even though I was no 84 CONVENIENCE STORE NEWS May 23, 2011
“For convenience/service centers on airport property, it’s not necessarily the travelers you are attracting, it’s the people who work there.” — Jim Fisher, IMST Corp.
Operating inside an airport means making a huge capital investment in locations often built into older buildings.
longer at home, somebody still cared enough to make sure I had a hot dog before going to bed.” SKY-HIGH SALES
Another nontraditional venue with built-in traffic counts is an airport, where c-stores are either catering to employees of the airport, car rental services and other nearby companies outside the terminal or to employees and passengers inside the terminal. “For convenience/service centers on airport property, it’s not neces-
sarily the travelers you are attracting, it’s the people who work there — hotel shuttle bus drivers, taxis, limos, business and leisure rental car customers, as well as vendors, suppliers and daily visitors to the complex. There could be 22,000 people working in the complex every day,” noted Jim Fisher, CEO of IMST Corp., a Houston-based retail sales analysis firm that serves nontraditional retail organizations. “They are cities within themselves.” Airport Plazas LLC, the Jericho, WWW.CSNEWS.COM
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N.Y.-based developer and operator of c-store and gasoline plazas at airports, recently secured financing for a site at the Cincinnati/ Northern Kentucky International Airport. The $8.5 million project will feature a 9,800-square-foot main building on 1.5 acres just off I-275. The site will include a c-store, light auto repair, car wash and restaurant; it is expected to open by the end of the year. An existing Airport Plaza store at Newark Liberty that opened last year features a gasoline and compressed natural gas station, 7-Eleven, auto repair, towing and a two-bay car wash. In the works are plazas at John F. Kennedy International Airport in New York, Southwest Florida International Airport (Fort Myers) and Tulsa Airport. In addition, Airport Plazas recently won requests for proposals for airports in St. Louis and several other cities around the country, according to Airport Plazas LLC President and CEO George Abi Zeid. Dealing with airports has its own challenges and rewards, Abi Zeid said. “It’s a long and tedious process, but at the end of the day you know you will get the approval for a mutually beneficial project. In addition to bringing income to the airport, these stores are a great convenience to the employees and customers. It’s a beautiful captive market for us.” Airport Plazas LLC funded the Newark Project with its own capital and resources. The company has a funding commitment for the pending and future airport plazas. In each case, 20 percent of a project’s capital will be provided by Airport Plazas, with the balance provided by investors. The company will own and operate all plaza services except the food court and quick-serve restau86 CONVENIENCE STORE NEWS May 23, 2011
An Airport Plaza store at Newark Liberty features a gasoline and compressed natural gas station, 7-Eleven, auto repair, towing and a two-bay car wash.
rants, Abi Zeid said. The 7-Eleven at Newark airport is subleased, but future c-stores will be operated by Airport Plazas. Despite the challenges of operating on airport grounds, most of Airport Plazas’ sites are “amazing locations” at the main entrance of the airport, Abi Zeid said. The 7-Eleven c-store at Newark Liberty is reporting double the chain’s national average in food sales. Operating inside an airport brings another slew of challenges. Camden Food Co., which focuses on healthy food choices in a quickserve setting, is a recent English import, now found inside airports in Indianapolis, Raleigh-Durham and Vancouver. Expansion plans will put Camden Food Co. sites in airport terminals in Houston, Milwaukee, Sacramento, Toronto and New York (JFK). The chain’s offer includes sandwiches, salads, fruit, packaged snacks and beverages that are fat-free, gluten-free, organic and/ or kosher. “For us, operating in an airport does present a set of challenges,” said Darleen Nascimento,
a spokesperson for SSP America, the Landsdowne, Va.-based division of SSP, which develops food concepts in travel locations worldwide. “We’re highly impacted by what happens with the TSA and the airlines themselves. We have a captive audience, which is the good news — that reduces the amount of competition compared to street-side stores. On the downside, the customers are limited to the number of people inside the terminal and that fluctuates up or down and is impacted by so many things — weather, the number of flights, how flights are scheduled, flight delays, cancellations, even things like the volcanic ash across the ocean.” Knowing how much food to prepare at what time can be difficult. Customers don’t follow normal daypart eating patterns and Camden Food Co. policy is to stay open no matter what happens with flights. The chain also faces airportrelated expenses, such as the fee it pays to get its product from its delivery spot at the airport to the actual site inside the terminal. WWW.CSNEWS.COM
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Summary: This has been a really tough year for fuel causing VLJQL¿FDQW PDUJLQ HURVLRQ IRU IXHO UHWDLOHUV $QG LW LV RQO\ H[SHFWHG WR get worse. Even prior to today’s rising and volatile fuel prices, many retailers have viewed fuel as a thin margin business primarily UHVSRQVLEOH IRU GULYLQJ WUDI¿F WRZDUGV LQVLGH VWRUH VDOHV 7KHUH DUH retailers however, that have gone a different path and taken back FRQWURO RI WKHLU IXHO PDNLQJ LW DQ LPSRUWDQW SUR¿W FHQWHU LQ WKHLU business – even in today’s economic climate. In this interactive webinar sponsored by FuelQuest, a regional grocery chain and a convenience store chain discuss how they have utilized IXHO PDQDJHPHQW DXWRPDWLRQ WR FUHDWH KHDOWK\ SUR¿WV DQG JDLQ D competitive advantage in their markets. Sponsored by:
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Ricker Oil, Susser Holdings, Kum & Go and A.C. & T. Co. go above and beyond for their local communities as this year’s Spirit Awards winners By Don Longo & Tammy Mastroberte
G
d: Unplugge s Pot Wawa re Glass No Mo nial Centen CITGO’s on ati Celebr
iving 10 percent of company profits to support local organizations; watching a CEO dress in a clown costume to visit local stores; or seeing employees from a small company rally to raise money in support of a local breast cancer support group following the diagnosis of the owner’s wife, are just a few examples of the extraordinary efforts convenience store companies make when it comes to giving back to the communities they serve. “At Kum & Go, community service is a personal value held by all members of our team,â€? said Kyle J. Krause, president and CEO of Kum & Go, and one of the winners of this year’s Spirit Awards for Community Outreach, sponsored by Convenience Store News. “It is because of our commitment to our customers and their families that Kum & Go annually returns a minimum of 10 percent of proďŹ ts back to the communities which we serve. We also strive to help organizations in need within the neighborhoods that our associates live and work.â€? Launched last year, The Spirit Awards for Community Outreach program celebrates con-
dings, ser Hol Oil, Sus T. Co. Ricker A.C. & ir Go and for the Kum & beyond this ve and as go abo munities ners. local com Awards win rit Spi year’s
venience retailers involved in community service programs aimed at bettering the lives of people in the their markets of operation. This year, the winner of the Grand Spirit Award for Community Outreach is Ricker Oil, a family owned and operated company based in Anderson, Ind., with 50 convenience stores in 14 communities throughout Indiana. Along with Ricker, these c-store retailers also were named 2010 Spirit Award Winners in their chain-size categories: Q For companies with one to 99 stores: A.C. & T. Co. Q For companies with 100-499 stores: Kum & Go LC Q For companies with 500-plus stores: Stripes A PERSONAL TOUCH Ricker Oil prides itself on having a business plan that embodies principles and values translating into community involvement and support of local organizations. The judges noted the expanse of Ricker’s community involvement rivals that of much bigger Left: Ricker Oil and Stripes both won a Spirit Award this year. Above: Jay Ricker of Ricker Oil dressed in a clown costume during the company’s Salvation Army Red Kettle Campaign.
30 CONVENIEN CONVENIENCE E STORE NE NEWS WS NOVEMBER NOVEM ER 1, 2010
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“You need to consider the time it takes to do that, also,” she needed. Because its locations are post-security points, hiring can be challenging too. “Think about how much you look forward to going to the airport, parking, getting a tram to the terminal, going through security — not everyone wants to deal with that every day,” Nascimento said. Employees also face detailed security screenings for ID badges that allow them to go through security checks more quickly. “That process can cause hiring delays and plays into the recruiting process as well,” she noted. Still, she said, the process pays off. “Pre-security locations usually aren’t as profitable as postsecurity locations, because travelers want to get through security before they relax and know they have time to think about food.” The Camden Food Co. concept especially appeals to traveling women and families, who want something more nutritious than standard packaged snacks and fast food, she said. The chain is starting to incorporate more local fare, partnering with farmers and artisans within 100 miles of each airport. “Healthier fare isn’t commonplace in the airport, so we want to be a benchmark with what is happening street-side in terms of greener locations,” Nascimento said. Cups are made of corn syrup to be biodegradable, for example. Still, operating inside an airport means making a huge capital
investment in locations that are often built into older buildings, taking a certain amount of risk. “Some people don’t understand the upfront investment, the process of getting governmental agency approval and all of the extra fees,” Nascimento said. CREATING A DESTINATION
Other operators of nontraditional locations don’t have built-in foot traffic — they create it. The Nambe Falls Travel Center, built on Nambe Pueblo tribal land, is 15 minutes north of Santa Fe,
ing houses a c-store, Arby’s and Java City coffee bar that features a stacked-stone fireplace, free wireless Internet and flat screen television. The store also has a postal station; beer, wine and liquor section; discounted tobacco shop; and two drive-through windows. Open since 2008, the travel center saw first-year sales of just under $10 million, with 40 to 50 percent of that attributed to motor fuels. “Our goal was to make the store memorable and give it multiple profit centers so that travelers and the short-haul truckers who are going down the road would drive six-tenths of a mile around the loop when there are other c-stores closer to the exit,” said Matt Doyle of Development Services Group of Albuquerque. “We spent a lot of time making sure we had warm colors and SSP America great concepts.” A few advantages of developing tribal stores: Tribal land can be used as equity to gain financing, and because the tribe does not pay excise taxes, it is easier to price competitively with chain c-stores nearby. Still, it can be a challenge to move a tribe’s governing body to make timely decisions, Doyle said. “Our goal is to make them move quickly and understand the opportunity cost. They don’t always understand the revenues they could be making on the land while it sits empty for a year.” Q
“For us, operating in an airport does present a set of challenges … the customers are limited to the number of people inside the terminal and that fluctuates up or down and is impacted by so many things.”
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— Darleen Nascimento, New Mexico, off U.S. 84. The site, which sells Alta-branded E10 and E85 gasoline and B5 and B20 Blue Sun biodiesel, was the first retail business of the Nambe Pueblo Development Corp. “Native American c-stores are often built on remote locations and have to become destinations in their own right, being built in conjunction with other activities, such as a hotel, a casino or further retail development,” noted Fisher, whose firm has advised on more than 130 projects with Native American tribes. The 6,100-square-foot build-
For comments, please contact Barbara Grondin Francella, Senior Editor, at barbfrancella@aol.com. May 23, 2011 CONVENIENCE STORE NEWS 89
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REPSONSIBILITIES: Responsibilities may include, but will not be limited to: • Develop and implement both a multi-account and multi-industry strategic sales plan • Establish and maintain relationships with key customer contacts for both physical and digital sales opportunities • Search out opportunities at all classes of trade (Grocery, Convenience Store, Drug, Big-Box, Home Repair, Dollar Stores etc) • Attend appropriate trade-shows and conventions to meet with key decision makers • Travel to present presentations to key retailers/wholesalers • Gather competitive data on price point, series and compilations • Report sales activities and strategies with music labels for owned repertoire, solicit repertoire owner information to insure best practice tactics • Report on all field Sales activity to all departments within the organization, where/when applicable • Regularly monitor field activity and work with Marketing to update field on relevant market drivers for titles and react accordingly • Conduct regular retail store visits to monitor program compliance, view market conditions and review competitive environment • Forecast all upcoming releases on both an account and industry specific level • Provide input regarding packaging, repertoire, price point and solicitation materials to maximize sales for each class of trade • Develop proper display vehicles for each class of trade • Provide agenda items and be available to attend sales meetings in-order to provide both updates and input on sales activity. Hold ongoing follow-up discussions based on action items discussed and assigned • Based on sales and upcoming publicity/advertising/events, monitor stock levels in anticipation of accounts demand and make requests to production • Monitor anticipated purchases at specific accounts throughout the entire sales cycle and be prepared to discuss both shortfalls or overages, to insure quota achievement • Monitor accounts product sell-off to consumers and encourage reorder patterns, where appropriate • Maintain advertising budgets • Strategize priority accounts by release and hold pre-solicitation discussions with account buyers to create solid sales plans • Assist in developing concise marketing materials designed to focus on elements most important to each class of trade • Monitor return activity for titles and develop strategies to minimize returns
QUALIFICATIONS:
• Five (5) years of key account experience in the entertainment, retail or consumer packaged goods industry • Working knowledge of Excel, PowerPoint and Word • Ability to formulate and analyze data
• Ability to establish a solid business plan and maximize opportunities • Interpersonal selling skills a must • Team Player • Travel required
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Ad Index
A
Aflac...............................................www.aflac.com..............................................................9 Anheuser- Busch ...........................www.beerprofitguide.com ......................................CV4 Altria Group Distribution Company www.insightsc3m.com ........................................CV2 C
Cadbury Adams USA.....................www.usa.cadbury.com................................................67 Chiquita Brands ............................www.chiquitaToGo.com ..............................................63 CHS ................................................www.chsinc.com ........................................................37 CITGO Petroleum...........................www.citgo.com ..........................................................49 Coca Cola ......................................www.cokeinsights.com ..............................................15 D
DelMonte Fresh Produce Inc........www.freshdelmonte.com ..........................................19 DVDNow ........................................www.dvdnow.net........................................................33 DMD Pharmaceuticals ..................800.795.2477................................................................41 F
Ferrero USA Inc.............................www.ferrerousa.com ..................................................69 FRS Health.....................................www.frs.com ..............................................................42 Fuelquest Webinar........................87......................................................................................
Harry Stagnito President and CEO 224-632-8217 hstagnito@stagnitomedia.com
Kollin Stagnito Chief Operating Officer 224-632-8226 kollinstagnito@stagnitomedia.com
Ned Bardic Senior Vice President/Partner 224-632-8244 nbardic@stagnitomedia.com
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Hershey .........................................www.hersheys.com ....................................................11 Hispanic Retail 360 .......................www.HispanicRetail360.com ............................65 & 74
Michael Hatherill
Ice-O-Matic ....................................www.iceomatic.com ..................................................32
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I J
Jack Links Beef Jerky....................www.jacklinks.com ....................................................29 JTI...................................................www.jti-usa.com ........................................................39 Just Born .......................................www.justborn.com......................................................71 K
Kraft Foods....................................www.KraftInsights.com......................................13 & 67 Kretek Intl. ....................................www.kretek.com ......................................................CV3
Eric Savitch National Sales Manager 856-489-3336 esavitch@stagnitomedia.com
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LaundryLux....................................www.laundrylux.com ..................................................51 Liggett Vector Brands ...................www.liggettvectorbrands.com ..................................57 M
Marfood.........................................www.pemmicam.com ................................................35 McLane Co. Inc..............................www.mclaneco.com ..............................................26-27 MillerCoors....................................www.millercoors.com ..................................................5 N
National Tobacco ..........................800.331.5962................................................................83 Nemco Food Equipment...............www.nemcofoodequip.com........................................78 NVE Pharmaceuticals....................www.6hrpower.com ..........................................21 & 31 P
Perfetti Van Melle .........................www.airheads.com ....................................................73 Produce Marketing Association ...www.pma.com ............................................................77 R R.J Reynolds Tobacco Co./Amer. Snuff.www.mygrizzly.com ....................................................17 R.J. Reynolds Tobacco Co./Camel........www.engagerjrt.com.com ............................................7 R.J. Reynolds Tobacco Co./Pall Mall ....www.engagerjrt.com ..................................................25 R.J. Reynolds Tobacco Co./Santa Fe ....866.710.4039................................................................47
Tony Vecchie Midwest Regional Sales Manager 847-970-3596 tvecchie@stagnitomedia.com
Terry Kanganis Account Executive & Classified Advertising 201-855-7615 tkanganis@stagnitomedia.com
Mark Tisdale Southeast Regional Sales Manager 770-490-8091 mtisdale@stagnitomedia.com
Revolymer .....................................www.rev7gum.com ....................................................38 Ryko...............................................www.ryko.com ............................................................59 S Swedish Match NS, Inc./White Owl ....customerservice@smna.com ......................................55
Swisher International ...................www.swisher.com ......................................................61
WWW.CSNEWS.COM
Roz Gilman Ad Manager 224-632-8243 rgilman@stagnitomedia.com CONVENIENCE STORE NEWS 105
MAY 23, 2011
CONSUMER TRENDS By Barbara Grondin Francella, Senior Editor
Consumers’ Diversity Offers Untapped Potential But retailers’ employees and marketing strategies don’t always reflect the new customer
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iverse communities are the fastest-growing segments of the country’s consumer purchasing power, but retailers’ and product makers’ marketing and workforce strategies aren’t effectively tapping into those consumer preferences. As purchasing power of women, Hispanics, African Americans and the lesbian, gay, bisexual and transgender community grows — and changes in the workforce accelerate — retailers and manufacturers must find new ways to connect with their consumers, according to “The Changing Consumer and The Workforce Imperative,” a new report by The Network of Executive Women, which works to advance women in the consumer products and retail industry. The convenience store industry, with its 90,000 independent operators concentrating on hyper-local business, and its diverse store manager community, may have a leg up on creating that consumer connection. But retailers and product makers must not only have a diverse employee base, but capitalize on that diversity in their idea generation and decision making, according to the report. “Retailers and manufacturers cannot serve the changing consumer without better understanding them. To build market share and
106 CONVENIENCE STORE NEWS MAY 23, 2011
loyalty in diverse markets, retailers must offer products, pricing, marketing and in-store experiences that appeal to these customers and meet their needs,” said NEW President and CEO Joan Toth. “On a strategic level, the multiple perspectives of a fully diverse team lead to the fresh and original ideas necessary to propel a business forward.” With the best consumer insights coming from those who share a consumer’s cultural experience, recruiting, retaining and advancing a diverse workforce are integral to creating a brand-consumer connection, she noted. “Consumers feel most comfortable doing business with companies whose employees mirror their communities and this leads to brand-loyal behavior.” How crucial is understanding the preferences of women, Hispanics, African Americans and the LGBT communities? Consider this: Women control $4.3 trillion of the $5.9 trillion in U.S. consumer spending, making them the largest single economic force in the world, according to the U.S. Women’s Chamber of Commerce. Their buying clout is being pushed by increased rates of higher education, greater levels of entry into and advancement within the workforce and more small business ownership. While purchasing dollars among
whites increased 139 percent between 1990-2008, growth was 187 percent among African Americans and 349 percent among Hispanics, a group that is expanding in size more rapidly than other demographic groups, according to the Selig Center for Economic Growth. At San Jose, Calif.-based Robinson Oil Corp., dba Rotten Robbie, marketing and merchandise manager Kris Kingsbury has been searching for information and advice that would help her better reach the Asian Americans living near a new store that opened adjacent to Cupertino in late March. Between 1990 and 2008, research shows, purchasing dollars grew 337 percent among Asians. “I’ve been asking vendors for any data they have that would help me key in on flavors and other factors that would make a difference to the Asian community,” Kingsbury said, noting she’s having difficulty getting answers about Chinese-specific consumer preferences. “When we go into a community, it’s important to know what it’s all about. After years of talking about diversity in retail companies, we aren’t there yet. I’d love to have the store employees reflect the face and language of those Q in the community.” For comments, please contact Barbara Grondin Francella, Senior Editor, barbfrancella@aol.com. WWW.CSNEWS.COM