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* NACS 2010 SOI data: Tobacco is the largest c-store category in terms of in-store sales dollars.
VIEWPOINT By Don Longo, Editor-in-Chief
A Garden State of Mind Jersey-based Quick Chek’s CEO Dean Durling and Altria’s Bob Sears are newest Hall of Famers
N
ew Jersey may be losing its sole NBA basketball franchise, the New Jersey Nets, to Brooklyn next fall, but not much else is going wrong in the Garden State lately. Governor Chris Christie has been hailed for making long-needed difficult decisions to rein in the state’s spending and has been mentioned as a potential vice presidential running mate to presumptive Republican presidential candidate Mitt Romney. Meanwhile, “Jersey Boys” continues to play to full houses on Broadway; Jersey’s favorite son Bruce Springsteen has a new hit record; and the Jersey-based NFL New York Giants recently took home the Super Bowl trophy. And, now, New Jersey’s homegrown convenience store chain, Whitehouse Station-based Quick Chek Food Stores, will have something new to brag about: its Chairman, President and CEO Dean Durling will be inducted into the Convenience Store News Industry Hall of Fame at a gala reception and dinner this fall. It really is a great pleasure for us to honor Durling, who in his more than 30-year career with Quick Chek, has driven the privately-held company to become one of the industry leaders in innovative merchandising, foodservice and technology. WWW.CSNEWS.COM
When CSNews did its “A Day in the Life of Quick Chek” report last summer, we noted the impact of Durling’s vision on the chain — reflected in everyone’s dedication to the company mission of being “A Great Place to Work, A Great Place to Shop, and A Great Place to Invest.” The 128-store retailer ranks No. 58 on the CSNews Top 100 list of convenience store chains and is the dominant c-store chain in the New York metropolitan area. Under Durling, Quick Chek has become known for its fresh, assembled-toorder sandwiches, loyal hot coffee customers, no-fee ATMs, touchscreen menus, pioneering self-service checkouts and community service. Durling has served Quick Chek in several capacities, working his way from director of real estate and construction to assistant director of human resources, then vice president of marketing, executive vice president, vice chairman and CEO, and finally chairman and CEO. Durling has served as a board member of NACS for more than 14 years and has held the position of chairman of the board and executive committee member. He also served as a member of the New Jersey Economic Growth Council. Sharing the Hall of Fame stage with Durling will be Bob Sears, director, trade and state relations, sales training and compliance for
Altria Group Distribution Co., who was selected for induction into the supplier wing of the Hall of Fame by the same 50-member Blue Ribbon panel of industry peers and past inductees that selected Durling as this year’s retailer inductee. Sears joined Philip Morris USA in 1996 as the director of trade marketing for national accounts. In 1998, he became the section sales director for the Michigan market, and then in 2005, he became the director of external affairs based out of Richmond, Va. Two years later, he was appointed as director of trade relations for Altria Group Distribution Co. (AGDC). In 2012, Sears’ role expanded to include the Sales and Compliance Training departments. Sears serves on the NACS Supplier Board as vice chairman, on the American Wholesale Marketers Association (AWMA) board, the National Association of Tobacco Outlets (NATO) board, and the Altria Political Action Committee board of directors. I’m sure the entire industry will want to congratulate Dean and Bob, and I’m looking forward to a star-studded Hall of Fame event in ■ New Jersey this November. For comments, please contact Don Longo, Editorin-Chief, at (201) 855-7606 or dlongo@stagnito media.com. May 21, 2012 CONVENIENCE STORE NEWS 3
May 21, 2012
CONTENTS
18 | COVER STORY BP’s Big Investment The oil giant strengthens its commitment to customers, marketers and America with a new multi-million-dollar marketing campaign.
TOP100 CONVENIENCE STORES
24 | 7-Eleven Widens Lead The CSNews Top 100 account for 40 percent of the industry’s total stores, as “pure” c-store chains gain and Big Oil shrinks.
CATEGORY FOCUS FOODSERVICE
32 | Gold Medal Service Sheetz’ MTO Olympics highlights the speed and skill of the chain’s food and beverage prep.
DEPARTMENTS VIEWPOINT
3 | A Garden State of Mind Jersey-based Quick Chek’s CEO Dean Durling and Altria’s Bob Sears are CSNews’ newest Hall of Famers. TRENDWATCH
50 | A Look at Carbonated Soft Drinks
INDUSTRY ROUNDUP 10 | It’s Business As Usual at Sunoco Despite Acquisition 12 | Eye on Growth
IN-STORE MERCHANDISING
12 | Retailer Tidbits
36 | Hardly a Shot in the Dark Energy shots continue to be a sure bet for the convenience channel.
14 | People on the Move
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 © 2012 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 21, 2012
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Log onto www.csnews.com for daily news
TOP 5 DAILY NEWS HEADLINES The most viewed articles online.
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RESEARCH Expanded versions of CSNews’ proprietary research are available online.
Holding Steady
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1) The Pantry Loses Its 4th Executive in Less than a Year
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CFO Mark Bierley’s resignation, effective May 25, makes him the fourth high-level executive to leave the company in less than 12 months.
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2) New Cultural Mix Reshaping Retail Food Market
The burgeoning U.S. Hispanic population and single-person households remain steadfast forces in the retail food arena, while active baby boomers and newly empowered millennials are a mushrooming presence in the market. 3) Business as Usual for Retail in Sunoco-ETP Merger
Energy Transfer Partners’ CEO Kelcy Warren admits that branching out to retail was not part of the company’s game plan, but its $5.3-billion deal to acquire Sunoco Inc. gives it approximately 4,900 retail locations and that’s OK. 4) ExxonMobil, Shopkick Debut IndustryFirst Loyalty Program
More than 375 Exxon and Mobil convenience stores and gas stations are offering shopkick rewards in the Miami, New York City and Washington, D.C., areas. 5) Phillips 66 Spinoff to Bring Increased Retail Ops Spending
s of rshock t ling afte 2 forecas still fee ’ 201 res e sto ers are CSNews venienc Consum ion, but ess for con at Rec spots The Gre eral bright sev shows
24 CONVENIENCE STORE NEWS January 2012
WWW.CSNEWS.COM
NEW for sale! CSNews’ 2012 Realities of the Aisle Consumer Study CSNews’ 2012 Industry Forecast Study CSNews’ 2011 Technology Study CSNews’ 2011 Foodservice Study CSNews’ 2011 Industry Report Study CSNews’ 2011 Realities of the Aisle Study CSNews’ 2011 New Products Scorecard To purchase any of these research reports, go to www.csnews.com/catalog.html
The company will invest more money than before into its retail marketing segment now that it is an independent company, according to CEO Greg Garland.
CSNEWS EXCLUSIVE A Peek Inside Kum & Go’s New Central Arkansas Stores This family-owned, privately-held convenience store chain, based in West Des Moines, Iowa, announced in July that it intends to open 20 to 25 new stores in central Arkansas. During a recent trip to North Little Rock, CSNews Online editors stopped in at one of Kum & Go’s newest stores in the region. The new build at 5126 JFK Boulevard opened in December, but as our editors remarked upon entering, it looked so clean and pristine that it could have been opening day. For more exclusive stories, visit the Special Features section of www.csnews.com. 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.
6 CONVENIENCE STORE NEWS May 21, 2012
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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. 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 2012 Silver Eddie Award Folio: magazine Business to Business, Retail, Full Issue, October 2010 2012 Silver Eddie Award Folio: magazine Business to Business, Retail, Best Single Story, October 2010 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
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EDITORIAL ADVISORY BOARD Ed Burcher Suncor Energy
Steve Loehr Kwik Trip Inc.
Steve Motz Valero Energy Corp.
Rick Crawford Green Valley Grocery
Harry McHugh Wawa Inc.
Matt Paduano Nice N Easy Grocery Shoppes
Ian Johnstone Cenex Zip Trip
Kyle McKeen Alon Brands Inc.
Mike Triantafellou Handee Marts Inc.
Andrea Jackson Jacksons Food Stores Inc.
Richard Mione VPS Convenience Store Group
Roy Strasburger Strasburger Enterprises
(Retired)
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INDUSTRY ROUNDUP “We have nearly 80 percent of our 9,100 sites installed with the capability to offer the instant rollback at the pump, which is really outstanding.”
Young Americans are decreasing the amount they drive and increasing their use of transportation alternatives. The average young person (ages 16 to 34) drove 23 percent fewer miles in 2009 than the average young person in 2001.
Corey Correnti, BP (page 18)
Source: U.S. Public Interest Research Group Education Fund/Frontier Group
It’s Business As Usual at Sunoco Despite Acquisition New owner, Energy Transfer Partners, expects deal to close in the third or fourth quarter By Melissa Kress & Brian Berk
K
elcy Warren, CEO of Energy Transfer Partners (ETP), admits that branching out into retail was not part of the company’s game plan, but its $5.3-billion deal to acquire Philadelphiabased Sunoco Inc. has given ETP approximately 4,900 retail locations and that’s OK. “We would not have targeted a retail business as a strategic move for the company; however, it is part of the overall package,” Warren said following the acquisition announcement on April 30. “We believe it is extremely well run. We think the cash flows are very sustainable and it is a very good business. We are happy to have it, and committed to the business. We will continue to grow it and manage it with the people who have been doing that so well for quite a while.” For ETP, the key driver behind the deal was diversification. CFO Martin Salinas said the Dallasbased firm felt it needed to diversify its business, so it was not “overly subjected” to natural gas basis risk. Also, its customers were demanding more natural gas liq10 CONVENIENCE STORE NEWS May 21, 2012
uids (NGL) capabilities. “This deal is certainly transformational for us. The acquisition of Sunoco provides an attractive platform to our NGL service capabilities, while expanding into the crude and oil refined products of the
business,” Salinas explained, adding that both companies will benefit from growth opportunities realized through greater scale, increased geographic reach and a broader, more diversified business platform. Both ETP and Sunoco anticipate minimal disruption as the two companies move toward integration. Sunoco’s retail and logis-
tics business will continue to be based in the Philadelphia region, consistent with its current operating presence. The integration and approval process is expected to take four to six months, meaning the deal will close somewhere in the third or fourth quarter of this year, according to ETP, which as of press time, was putting together an integration team and integration plan. The goal is that by closing, “we are one functioning organization,” Salinas said. Sunoco CEO Brian MacDonald said he and his team are excited to join forces with ETP. “This was the appropriate next step for Sunoco,” said MacDonald. “This transaction will significantly expand and diversify our business and deliver unique synergies and benefits. We also believe our shareholders are receiving an attractive premium for their shares.” Sunoco recently reported that its retail marketing division lost $6 million in its 2012 fiscal first quarter, compared to a profit of $12 million for the same time period in 2011. ■ WWW.CSNEWS.COM
INDUSTRY ROUNDUP eye on growth ■ Alimentation Couche-Tard Inc. is entering Europe by acquiring Statoil Fuel & Retail ASA for $2.67 billion. According to Couche-Tard, there are many reasons why it sought to purchase Statoil, including gaining a convenience store foothold in Scandinavia, eastern Europe, and central European countries such as Russia and Poland. ■ Casey’s General Stores Inc. will break ground on its first Tennessee store next month. The Dyersburg location will mark the 13th state in Casey’s area of operation.
TravelCenters of America LLC (TA) purchased six travel centers during its 2012 fiscal first quarter and is in discussions to potentially buy an additional half-dozen, according to CEO Thomas O’Brien. TA spent $26 million to purchase the six properties. ■
■ Tesoro Corp. completed its purchase of 49 Albertson’s Fuel Express retail stations from Supervalu Inc. The convenience stores with gas are located in Washington, Oregon, California, Nevada, Idaho, Utah and Wyoming. Tesoro spent $37 million in its fiscal first quarter to close the transaction.
On May 1, Phillips 66 officially spun off from its former parent company, ConocoPhillips Inc. The new Houston-based business now trades as an independent company under the symbol PSX on the New York Stock Exchange and is responsible for all of ConocoPhillips’ former downstream assets, including the thousands of branded marketer sites. Phillips 66 executives told Convenience Store News that retailers sporting the Phillips 66, 76 and Conoco fuel banners can expect to see an even heavier focus on loyalty programs and related services now that the long-awaited spinoff has been completed.
retailer tidbits ■ After revealing a second-quarter net loss of almost $10 million, Cary, N.C.based The Pantry Inc. is pulling back on its Fresh Initiative — a chainwide remerchandising effort to grow its foodservice business that began two years ago under previous CEO Terry Marks. Now, new
CEO Dennis Hatchell is saying the c-store retailer’s Kangaroo Express stores need to take a “more holistic” approach to improve results. Approximately 340 of The Pantry’s 1,611 company-operated stores have been remodeled to the Fresh Initiative. Hatchell, a veteran of the grocery industry, did say the retailer will 12 CONVENIENCE STORE NEWS May 21, 2012
expand its foodservice business through more branded quick-service restaurant (QSR) concepts. The Pantry currently operates 230 QSR locations, such as franchised Subway locations. ■ Alon Brands, the 7-Eleven convenience store operator that is rapidly rebranding its 302 FINA motor fuel locations to the ALON brand, announced it has scrapped a planned initial public offering (IPO). The Dallas-based company, which had sought up to $100 million from the IPO filing, didn’t give a reason for its change of heart. ■ Who’s No. 1? Well, its ExxonMobil Corp., as the oil giant reclaimed the top spot on this year’s Fortune 500 list of the world’s largest companies based on revenue. ExxonMobil’s $452 billion in sales topped Walmart Stores, last year’s No. 1, by about $5 billion. Two other convenience store industry companies
made the top 5. Chevron Corp. finished at No. 3 with $246 billion in revenues and ConocoPhillips, which earlier this month spun off its Phillips 66 downstream division, placed fifth with $237 billion in revenues. Also on the list: Tesoro LP placed at No. 101; Western Refining Inc. earned the 285th slot; TravelCenters of America LLC came in at 329; Core-Mark Holding Co. Inc. placed at No. 393; and Susser Holdings Corp. earned the 486th slot. ■ Japan’s second-largest convenience store chain is coming to America. Lawson, second only to 7-Eleven parent Seven & i Holdings, will open two stores in Honolulu this summer, with plans to expand further within the state and eventually to the U.S. mainland. The new stores, located in a pair of Sheraton and Westin resorts, will be managed by a local Lawson subsidiary. A company spokesperson said the goal is to open as many as 50 outlets in Hawaii. WWW.CSNEWS.COM
INDUSTRY ROUNDUP people on the move ■ The Pantry Inc. has lost its fourth executive in less than a year as CFO Mark Bierley plans to leave the company effective May 25. The turnover began in June 2011 when Brad Williams, former senior vice president of operations, tendered his resignation. Former CEO Terry Marks followed two months later, and then in March, David Henniger, former marketing vice president, announced he was leaving as well. As of press time, the company was looking for a new CFO. Berry L. Epley, vice president and corporate controller, is assuming Bierley’s responsibilities until a successor is named. ■ The Spinx Co. President Steve Spinks is now the c-store retailer’s CEO. He takes over the chief executive title from
his father and company founder Stewart Spinks, who is now chairman. As CEO, Steve Spinks is focused on the day-today operational decisions at Spinx, while Stewart Spinks concentrates on strategic and long-term planning. ■ Three months after announcing her decision to resign from Sunoco Inc., former CEO Lynn Elsenhans officially stepped down from its board of directors on May 3. Her resignation as CEO became effective on March 1, but Elsenhans stayed on as chairman of the board until the company’s annual stockholders meeting. ■ Three new members were elected to the New York Convenience Store
Hall of Fame: Paul Rankin of United Refining Co., and Raziur Rahman and David Geary of the Altria Group. The New York Association of Convenience Stores (NYACS) planned to induct its newest Hall of Famers at its annual Chairman’s Banquet on May 17. ■ The Wisconsin Petroleum Marketers & Convenience Store Association (WPMCA) appointed Riiser Energy President and CEO Jim Kemerling as chairman of the board. WPMCA represents more than 2,000 independent petroleum marketers, convenience store owners, truck stop and travel plaza operators, automotive oil change outlets and other automotive service providers throughout the state.
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COVER STORY
BP’s Big Investment In a new, multi-million-dollar marketing campaign, the oil giant highlights its latest innovations, strengthening its commitment to customers, marketers and America By Tammy Mastroberte
F
or BP, 2012 is the year for change, improvement and investment. Specifically, a $500-million investment in its U.S. retail brand to reclaim the title of No. 1 fuel marketer “East of the Rockies” with its more than 9,000 BP-branded retail locations. The relaunch of BP gasoline with Invigorate, a new and improved loyalty program, and its exclusive sponsorship of the 2012 Olympic Games are all part of its dedication to improving customer experience, offering more to its branded marketers and standing out as a leader in the industry and the United States. Although the marketing campaign is launching this year, plans have been underway since 2010 for both the Olympics and BP’s new Pump Rewards loyalty technology, according to Corey Correnti, vice president of marketing, sales and supply at BP. “This all goes way back to February 2010 and is part of a broader corporate commitment to the United States,” he told Convenience Store News exclusively, noting that BP has the largest concentration of retail sites in America, with 9,500 sites East of the Rockies and approximately 1,200 ampm and ARCO locations West of the Rockies, including in Washington, Oregon, Nevada and Arizona. (The new
F
18 CONVENIENCE STORE NEWS May 21, 2012
marketing campaign does not involve the ampm and ARCO sites). The company also has had the largest oil and gas inventory in the U.S. for the past four years. It was 2010 when the company first announced its Olympics sponsorship, as well as the rollout of its proprietary rollback technology at the pump, known as Pump Rewards. Now in 2012, the company is delivering on these commitments and more, dedicating this year to marketing BP as a distinctive brand. COMMITMENT TO RETAIL
“In 2012 and beyond, BP’s commitment to its branded marketers will be second to none in our industry,” Doug Sparkman, president of BP’s East of the Rockies Fuels Value Chain, said at the company’s 2012 BP Amoco Marketers Association Convention in February. As part of this commitment and its reimaging efforts to improve customer experience, the company is offering a variety of reimbursement programs for site improvement to its branded marketers, including an LED (lightemitting diode) lighting program. “It improves the site experience and reduces energy costs for marketers,” Correnti said. “We are offering a 50-percent reimbursement on the upgrade costs.”
WWW.CSNEWS.COM
Other improvements, including power washing, repairs to the island through BP’s epoxy sealing program, pavement repairs and painting, are all eligible for reimbursement in 2012. The company is even offering 50-percent reimbursement for new fuel dispensers. “When we talk about imaging, we aim to make the sites brighter, faster and cleaner in order to improve the overall site experience,” Correnti explained. Additionally, BP joined other major oil companies in lowering its credit and debit card interchange fees in November, reducing the average rate of processing cards by approximately 0.14 percent — giving the company the lowest fees in the industry, he noted. The company also rolled out a FraudGuard program in July 2011,
WWW.CSNEWS.COM
which includes a payment card fraud prevention technology to increase security for eligible locations. Currently more than 80 percent of BP stations have the technology installed. “The FraudGuard program was created to help sites reduce payment-card related theft at BP locations,” Correnti said, explaining there are two different technologies as part of the program — the AVS, or Address Verification System, and the VADB, or Virtual Auto-Dial Backup. AVS is a zip code security feature that prompts customers to enter their billing zip code when using a credit card at the pump, and for sites that install the technology, BP will take on the responsibility for any chargebacks incurred. “This feature has helped reduce the chargebacks at participating sites,” Correnti said. “Year over year, we
have seen a 46-percent reduction in chargebacks.” The other piece of the technology is the VADB, which uses a backup telephone line to process credit transactions. This insures transactions will be processed in the event the satellite communication fails, and stops the branded marketer from having to pile up transactions without verification. AN INVIGORATING CAMPAIGN
In January of this year, BP relaunched its gasoline with Invigorate, along with a yearlong marketing campaign that includes the brand’s first fuelsrelated television commercial since 2009. The commercial features a split screen that follows the journey of two vehicles using different fuels. The one using BP gasoline with Invigorate is shown to drive a longer distance compared to the other brand. “We got back on TV this year, showing that with continuous use, consumers can get more mileage out of our gasoline compared with low detergent alternatives,” Correnti said. “We think this message is really resonating with consumers, and we went with live footage for the commercial instead of animation.”
May 21, 2012 CONVENIENCE STORE NEWS 19
COVER STORY
In addition to television, the marketing campaign includes a robust national radio schedule, digital support, local public radio stations and new point-of-purchase (POP) materials both in-store and at the pump. The overall message is BP gasoline with Invigorate helps clean and protect critical engine parts from harmful deposits, allowing customers to go longer between fill-ups — something that hits home even more when gasoline prices begin to climb — and is a new message from prior campaigns first launched in 2008, according to Correnti. “We’ve had positive feedback from our testing of the media, and would expect to see increase in volume over the next month or so,” he told CSNews in March. A REWARDING ROLLBACK
BP first announced its plans for a proprietary rollback technology at the pump in February 2010, and while it was reportedly on hold due to technical issues, Correnti said the project was never put on hold, but rather delayed, which pushed
BP currently has nearly two million Visa cardholders.
20 CONVENIENCE STORE NEWS May 21, 2012
Despite the negative press stemming from its 2010 Gulf of Mexico oil spill, BP is using 2012 to regain momentum, giving back to its customers and branded marketers in the U.S.
back the initial timeframe of full deployment. “Since the middle of last year, we have been fully focused on the deployment of the technology,” he said. “We have nearly 80 percent of our 9,100 [BP] sites installed with the capability to offer the instant rollback at the pump, which is really outstanding.” The company’s nearly two million Visa cardholders were notified of the new loyalty program tied in with the rollback payment technology in January via direct mail, e-mail and card statement inserts, and then mailed new cards in February — all to gear up for the March 3 launch. Cardholders were also given a one-time, 10-centsper-gallon discount as a starter reward, and in the first two weeks of the launch, 98 percent of participating locations had at least one Pump Rewards transaction, Correnti reported. The new loyalty program allows BP Visa or BP credit card holders to earn cents-per-gallon
discounts available for instant rollback at the pump. For BP Visa cardholders, the company offered an extra incentive of a 25-centsper-gallon rebate for every $100 spent in the first 60 days of the launch. Qualified purchases can be made at BP locations, as well as other locations accepting Visa. After the first 60 days, the incentives dropped to 15 cents for every $100 spent. Those with just a BP credit card (non-Visa) only earn discounts on purchases at BP locations, and gain five cents per gallon for every $100 spent, vs. 15 cents for the Visa cardholders. “For the BP Visa, if you spend money elsewhere, you are still earning rebates that you can spend at BP sites. Concert tickets, dinner, hotel stays — it all generates cents-pergallon rebates to be redeemed at the pump,” Correnti said, pointing out that as soon as a transaction takes place, rebates are posted to the account and can be redeemed instantly at the pump. “Rebates are available by 8 a.m. the day after the transaction posts.” Additionally to benefit branded marketers, BP is supporting the WWW.CSNEWS.COM
COVER STORY
launch with new POP materials and extra incentives throughout 2012. For every BP Visa and BP card activated at their location, a marketer can earn $25 for every new Visa card approved and activated by the consumer, and $10 for each BP proprietary card. “We will have applications at the site, and in our experience, more than 70 percent of our applications are derived there,” Correnti said. “It’s been a really good launch, and we expect great things with the instant gratification of seeing that rollback at the pump.” The new Pump Rewards loyalty program allows BP Visa and BP credit card holders to earn While BP is partnering with cents-per-gallon discounts available for instant rollback at the pump. Chase on the Visa card, the rollback program is proprietary, with keypad, they can enter how much count cards available with a stored no affiliates or other marketers of it they would like to apply to the value helps people experience the involved. “This is something really current purchase, and the pump technology for themselves and see how easy it is to use,” he said. “It unique, and I don’t think anyone instantly rolls back. “It’s the visual aspect of it, gets people very interested, and we else offers the scale we have across and consumers respond have had a lot of success with it.” our network,” he added. The company is also investing in strongly, even at the For those branded marketers penny level,” said digital campaigns, which include who have not yet signed on Correnti. “They can banner ads that tie back to the to participate in the rollback rollback the pump microsite, www.pumprewards.com, technology, the company is up to nine or 10 which Correnti said has been fairly offering a free “do it yourcents per gallon, and if successful, and will continue to self” rollback toolkit they have earned $3 per be a big source for the promotion that many are takgallon, they can use this year. ing advantage of, “We have As the year progresses, BP will that, too. Rewards which is creatcontinue to roll out new initiaremain active for ing additional nearly 80 percent of our tives tied to the Pump Rewards a year.” deployments, 9,100 sites installed with In addition program technology, including according to the POP offering one-time-use rebate codes to Correnti. the capability to offer the materials on- to branded marketers, who can The kit coninstant rollback at the site, the com- distribute them to customers at tains all the pany has also promotional events. tools needed pump, which is really “The great thing about the capadeployed street to install the outstanding.” teams in select bility of this technology is we can software. — Corey Correnti, BP markets to pro- leverage it going forward to reward “Once the mote the new loy- consumers in other ways,” said technology is alty program. The street Correnti. “We can distribute plastic installed, it is really teams offer immediate dis- cards with unique codes to allow about understanding how it works and promoting it to con- counts to customers filling up at customers to redeem rewards, the pump, such as a 10-cents-per- which allows for more focused and sumers,” he explained. Customers can simply swipe gallon discount. This demonstrates localized marketing.” The company can also offer these their card at the pump and see the technology and encourages cards to additional companies in how much of a reward they have more sign-ups, Correnti said. “Having promotional and dis- the area, so they can reward their at the time of purchase. Using the 22 CONVENIENCE STORE NEWS May 21, 2012
WWW.CSNEWS.COM
COVER STORY
consumers or employees with discounts on BP gasoline. These companies can actually offer employees a branded card with their own company logo to be redeemed at a BP location. “Having the technology, and it being our own proprietary program, we can leverage it with other partners by using cards or numeric codes because the technology is very adaptable,” Correnti noted. BP TEAM USA
BP became an official partner of the U.S. Olympic Committee, and the U.S. Olympic and Paralympic teams in February 2010. The company sponsored the 2010 U.S. Olympic and Paralympic Teams, as well as the 2011 U.S. Pan American Team, and continues its sponsorship this year. BP is also the official oil and gas partner for the London 2012 Olympic and Paralympic Games, and will be providing fuels and engine oils for more than 5,000 vehicles. As part of the sponsorship, it will also provide bottled gas (LPG) for catering facilities through the Olympic and Paralympic venues. “Our U.S. Olympic athletes require sponsorship, and it’s a great co-branding opportunity,” Correnti said. “It’s not just the summer games, but also the future winter games, so we are committed as the official energy sponsor for the U.S. Olympic Committee and Team USA through 2016.” Through BP Team USA, the company is sponsoring nine athlete ambassadors in their efforts to make it to the Olympics, and WWW.CSNEWS.COM
BP relaunched its gasoline with Invigorate this January, along with a yearlong marketing campaign that includes the brand’s first fuel-related TV commercial since 2009.
has launched a full social-media marketing campaign to highlight its efforts. BP Team USA has a Facebook page dedicated to the athletes, with more than 111,000 fans; a Twitter page with more than 20,000 followers; and a YouTube channel that had almost reached one million video views as of press time. There is also a microsite dedicated to the athletes at www.bpusathletes.com. The company’s branded marketers are participating in the promotion as well, as BP has created a catalog of merchandise materials, including BP U.S. Olympic team cobranded uniforms, shirts and hats, along with items for promotional giveaways. Another way marketers are getting involved is through the BP Fueling Communities grant program. In 2011, the program helped donate more than $3 million to 400-plus community organizations nominated by BP’s branded marketers. This year, the company
will leverage its Olympics sponsorship to offer marketers the ability to support local Paralympic Sports Clubs — community-based programs developed to support youths and adults with physical disabilities, as well as Paralympic hopefuls. BP will also be launching a nationwide media campaign featuring two Olympic-themed promotions to drive consumers to its microsites, including a trip to the Olympic games in London, and a variety of merchandise prizes. “We will give away more than $1 million of merchandise between May and August 2012,” Correnti said, adding that the company is also launching an “experiences tour,” which is a roadshow of events across the country to allow people to experience the Olympics firsthand. “We are really excited about this,” he said. “It’s a powerful relationship we will use throughout this summer, when it will be really relevant.” Despite the hardships over the past couple of years, due to negative press and lawsuits stemming from its 2010 oil spill in the Gulf of Mexico, BP is using 2012 to gain new momentum, giving back to its customers, branded marketers and the United States. And so far, the ■ company is succeeding. May 21, 2012 CONVENIENCE STORE NEWS 23
1 00 TOP CONVENIENCE STORES
7-Eleven Widens Lead The CSNews Top 100 account for 40 percent of the industry’s total stores, as “pure” c-store chains gain and Big Oil shrinks By Don Longo
7
-Eleven Inc. continues to pull away from the pack as the U.S. convenience industry’s largest chain by number of stores. In the past year, the Dallas-based division of Japanese c-store giant Seven & i Holdings Co. widened its store count lead over Big Oil companies Shell Oil Products US, BP plc and Chevron Corp., and even Canada-based c-store giant Alimentation Couche-Tard Inc., which operates the Circle K brand in the United States. While the industry remains highly fragmented, the Convenience Store News Top 100 convenience store chains added approximately 2,600 net new stores in the past year, a 4.6-percent increase to 60,355 stores. All together, the Top 100 account for 40.7 percent of the convenience industry’s 148,126 stores, according to Nielsen TDLinx, which supplies much of the store count data for the CSNews Top 100 list. In general, “pure” convenience store companies such as 7-Eleven, Couche-Tard (Circle K), Casey’s General Stores Inc., Cumberland Farms, RaceTrac Petroleum, Wawa Inc., QuikTrip Corp. and Susser Holdings Corp. (Stripes) got bigger, while Big Oil companies like BP and ExxonMobil Corp. lost ground in this year’s c-store count. As of March 2012, 7-Eleven operated a total of 7,341 c-stores, an increase of 9.1 percent over its count of 6,727 stores a year ago. The rest of the top 10 include: 2. Shell/Motiva Enterprises: 4,934 stores, up from 4,831 a year ago. 3. BP: 4,691 stores, down from 4,718 a year ago. 4. Chevron: 4,057 stores, up from 3,987 a year ago. 5. Couche-Tard: 3,585 stores, up from 3,480 a year ago. 6. ExxonMobil: 3,445 stores, down from 3,882 a year ago. 7. Marathon Petroleum Corp./Speedway LLC: 2,670
24 CONVENIENCE STORE NEWS May 21, 2012
stores, down from 2,809 a year ago. 8. Sunoco Inc.: 1,987 stores, up from 1,896 a year ago. 9. Valero Energy Corp.: 1,786 stores, up from 1,712 a year ago. 10. CITGO Petroleum Corp.: 1,722 stores, down from 1,776 a year ago. Another continuing trend among the CSNews Top 100 is the continued shift from company-operated to franchisee/licensee-operated stores. Among the Top 100 retailers, the number of company-operated stores rose by 648 units, while the number of franchisees or licensees rose by 2,219 units.
TOP 20 COMPANY-OPERATED CHAINS Company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Company-Operated Stores
Alimentation Couche-Tard Inc. 3,049 Casey’s General Stores Inc. 1,692 The Pantry Inc. 1,614 Marathon Petroleum Corp./Speedway LLC 1,372 Hess Corp. 1,084 Valero Energy Corp. 1,000 Kroger Co. 811 Cumberland Gulf Group 603 Wawa Inc. 599 QuikTrip Corp. 597 Susser Holdings Corp./SSP Partners 545 Pilot Corp. 508 Military 500 Kum & Go LC 428 VPS Convenience Store Group 420 Sheetz Inc. 416 Chevron Corp. 415 Kwik Trip Inc. 385 Delek US Holdings Inc. 384 Sunoco Inc. 372
% of Total 85.0% 99.9 99.9 51.4 95.8 56.0 100.0 65.0 100.0 99.8 100.0 98.4 100.0 100.0 100.0 100.0 10.2 100.0 99.7 18.7
Source: Nielsen TDLinx; Convenience Store News Market Research, March 2012 WWW.CSNEWS.COM
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TOP100 CONVENIENCE STORES
2012 Rank
2011 Rank
Company, City, State
Total Store Count
Company-Operated Stores
Franchise/ Licensee
Annual ACV* ($000)
Primary Store Names
1
1
7-Eleven Inc., Dallas
7,341
184
7,157
$15,515,916
7-Eleven, Sugar Creek, White Hen Pantry, Wilson Farm Stores
2
2
Shell Oil Products US/ Motiva Enterprises LLC, Houston
4,934
38
4,896
10,708,620
Shell
3
3
BP North America, La Palma, Calif.
4,691
3
4,688
15,626,780
Amoco, ampm, Arco, Arco Thrifty, BP, BP Connect, BP Shop
4
4
Chevron Corp., San Ramon, Calif.
4,057
415
3,642
9,968,140
Chevron, Chevron ExtraMile, Texaco
5
6
Alimentation Couche-Tard Inc., Laval, Quebec, Canada1
3,585
3,049
536
13,276,380
Circle K, Dairy Mart, Discount Beverage Outlet
6
5
ExxonMobil Corp., Irving, Texas
3,446
13
3,433
7,361,952
Exxon, Exxon On The Run, Exxon Tiger Mart, Mobil, Mobil Mart, Mobil On The Run, Mobil Snack Shop
7
7
Marathon Petroleum Corp./ Speedway LLC, Enon, Ohio
2,670
1,372
1,298
9,086,057
Marathon, Rich Oil, Speedway
8
8
Sunoco Inc., Philadelphia
1,987
372
1,615
6,572,800
APlus, Coastal, Optima, Sunoco
9
10
Valero Energy Corp., San Antonio
1,786
1,000
786
6,975,800
Beacon, Corner Store, Diamond Shamrock, Total, Ultramar, Valero
10
9
CITGO Petroleum Corp., Houston
1,722
0
1,722
3,631,160
CITGO
11
12
Casey’s General Stores Inc., Ankeny, Iowa
1,693
1,692
1
5,556,460
Casey’s General Store
12
11
The Pantry Inc., Cary, N.C.
1,615
1,614
1
6,513,260
Campus Store, Cowboys Food Mart, Etna, Golden Gallon, Kangaroo, Kangaroo Express, Kangaroo Food Store, Li’l Champ Food Store, On The Way Food Store, Pantry, Petro Express, Presto C Store, Quick Stop, Sprint Food Store
13
14
ConocoPhillips Inc., Houston2
1,283
2
1,281
3,069,560
14
30t
Getty Realty Corp., Jericho, N.Y.
1,142
1
1,141
653,120
15
13
Hess Corp., Woodbridge, N.J.
1,131
1,084
47
4,865,900
16
15
Cumberland Gulf Group, Framingham, Mass.
927
603
324
3,344,068
Cumberland Farms, Gulf
17
16
Kroger Co., Cincinnati
811
811
0
3,738,540
City Market , Dillons, Food 4 Less, Fred Meyer, Frys, King Soopers, Kroger Soopers, Kroger Express, Kroger Fuel Center, Kwik Shop, Loaf N Jug, Mini Mart, Quality Foods, Quik Stop, Smiths Express, Smiths Fuel Center, Tom Thumb, Turkey Hill Minit Mart
18
17
RaceTrac Petroleum, Atlanta
632
335
297
4,434,560
RaceTrac, RaceWay
19
18
Wawa Inc., Wawa, Pa.
599
599
0
4,764,240
Wawa Foodmarket
20
19
QuikTrip Corp., Tulsa, Okla.
598
597
1
5,780,840
QuikTrip
21
20
Susser Holdings Corp./ SSP Partners, Corpus Christi, Texas
545
545
0
1,121,900
Stripes, Town & Country Food Store
22
21
Pilot Corp., Knoxville, Tenn.
516
508
8
2,139,280
Flying J, Pilot Food Mart, Pilot Travel Center
23
23
Military, Arlington, Va.
500
500
0
3,016,780
Coast Guard Mini Mart, Marine Corps Shoppette, NEXCOM Mini Mart, Shoppette
24
24
Holiday Cos. Inc., Minneapolis
439
333
106
1,978,340
Holiday Stationstore
25
25
CHS Inc./Cenex, St. Paul, Minn.
431
66
365
923,520
26
22
Kum & Go LC, West Des Moines, Iowa
428
428
0
1,575,080
26 CONVENIENCE STORE NEWS May 21, 2012
76, Conoco, Phillips 66 Getty, Kwik Farms, Lukoil Hess, Hess Express, Wilco Food Mart, Wilco Travel Plaza
Ampride/Cenex, Zip Trip Store Kum & Go
WWW.CSNEWS.COM
TOP100 CONVENIENCE STORES
2012 Rank
2011 Rank
27
27
VPS Convenience Store Group, Wilmington, N.C.
420
420
0
$1,064960
Every Day Shop & Café, Li’l Cricket, Next Door Food Store, S E Food Mart, Scotchman Store, Village Pantry, Young’s Food Store
28
28
Sheetz Inc., Altoona, Pa.
416
416
0
5,197,400
Sheetz
29t
26
Delek US Holdings Inc., Brentwood, Tenn.
385
384
1
1,366,040
Discount Food Mart, East Coast, Fast Food & Fuel, Favorite Market, MAPCO Express, MAPCO Mart
Company, City, State
Total Store Count
Company-Operated Stores
Franchise/ Licensee
Annual ACV* ($000)
Primary Store Names
29t
29
Kwik Trip Inc., La Crosse, Wis.
385
385
0
859,300
31
30t
Stewart’s Shops Corp., Ballston Spa, N.Y.
329
329
0
1,008,800
Kwik Star, Kwik Trip
32
32
Allsup’s Convenience Stores Inc., Clovis, N.M.
315
315
0
413,400
Allsup’s
33
33
E-Z Mart Stores Inc., Texarkana, Texas
296
296
0
640,640
E-Z Mart
34
36
Tesoro Petroleum Corp., San Antonio
293
228
65
988,000
2 Go Mart, Big Johns, Mirastar, Tesoro, Tesoro Gas Express, USA Fuel Center, USA Gas, USA Mini Mart, USA Petroleum, USA Station
35
35
Love’s Travel Stops & Country Stores Inc., Oklahoma City, Okla.
291
291
0
805,220
Love’s Country Store, Love’s Travel Stop
36
34
United Refining Corp. of Pennsylvania, Warren, Pa.
282
282
0
940,940
Country Fair, Kwik Fill & Smokers Outlet, Red Apple
37
38
Maverik Inc., Salt Lake City
237
237
0
447,616
Maverik Country Store
38
n/a
Northern Tier Energy, Ridgefield, Conn.
233
166
67
792,904
SuperAmerica
39
49
Landmark Industries Inc., Houston
230
230
0
555,620
Timewise Food Store
40
37
TravelCenters of America, Westlake, Ohio
226
208
18
1,405,560
41
39t
Fas Mart/GPM Investments LLC, Richmond, Va.
213
212
1
528,320
Fas Mart, Shore Stop Store
42
39t
Jacksons Food Stores Inc., Meridian, Idaho
207
207
0
353,600
Jacksons Food Store
43
57
Fikes Wholesale, Temple, Texas
205
205
0
310,908
CEFCO Food Store, Food Fast Store, Short Stop Market
44
45
Tedeschi Food Shops Inc., Rockland, Mass.
191
119
72
244,920
Tedeschi Food Shop
45
41t
United Dairy Farmers, Cincinnati
188
188
0
308,620
United Dairy Farmers
46
41t
Tetco Inc., San Antonio
186
186
0
563,680
Big’s, Tetco, Walker’s Food & Fuel
47
43t
Clark, Dayton, Ohio
178
0
178
410,280
Clark
48
47
The Jones Co., Waycross, Ga.
172
172
0
544,960
Flash Foods
49
46
Convenient Food Mart Inc., Mentor, Ohio
171
18
153
277,940
Convenient Food Mart
50
48
Thorntons Inc., Louisville, Ky.
167
167
0
609,960
Thorntons
51
64
C.L. Thomas Inc., Victoria, Texas
165
165
0
772,980
52
50
Meijer, Grand Rapids, Mich.
161
161
0
1,452,880
53
54
Giant Industries Inc., Tempe, Ariz.
153
153
0
549,120
Giant Service, Mustang, Sundial Deli Mart
54
51
Warren Equities Inc., Providence, R.I.
152
152
0
552,240
Xtra Mart
55
n/a
Sinclair Oil Corp., Salt Lake City
147
0
147
291,148
Sinclair
56
55
Two Farms Inc., Baltimore
142
142
0
273,780
Royal Farms
57
52
Krauszer’s Food Store, Edison, N.J.
140
0
140
268,840
Krauszer’s Food Store
58
53
Kwik Stop, Plantation, Fla.
134
0
134
240,500
Kwik Stop
59t
58t
Murphy Oil Corp., El Dorado, Ark.
128
128
0
208,260
Murphy Express, Murphy USA
Stewart’s Shop
Petro Stopping Center, TravelCenters of America
Speedy Stop Meijer Gas Station
59t
56
Quick Chek Food Stores, Whitehouse Station, N.J.
128
128
0
229,060
Quick Chek Food Store
61
67t
Englefield Oil Co., Heath, Ohio
126
126
0
520,780
Duchess Shoppe
62
58t
Giant Eagle Inc., Pittsburgh, Pa.
119
119
0
1,918,540
63t
60
7-Eleven Stores of Oklahoma, Oklahoma City, Okla.3
110
110
0
229,060
28 CONVENIENCE STORE NEWS May 21, 2012
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TOP100 CONVENIENCE STORES
2012 Rank
2011 Rank
Company, City, State
Total Store Count
Company-Operated Stores
Franchise/ Licensee
Annual ACV* ($000)
Primary Store Names
63t
61t
Martin & Bayley Inc., Carmi, Ill.
110
110
0
$525,000
65
63
Plaid Pantries Inc., Beaverton, Ore.
107
107
0
157,560
Huck’s
66
n/a
Lehigh Gas Corp., Bethlehem, Pa.
106
30
76
226,148
Choice, Kwik Pik, Uni Mart
67
67t
Go Mart Inc., Gassaway, W. Va.
101
101
0
483,340
Go Mart Food Store
68
65t
Terrible Herbst Inc., Las Vegas
99
99
0
284,180
Terrible Herbst
69
65t
Sam’s Food Store, Rocky Hill, Conn.
96
95
1
159,380
Chucky’s Food Store, Sam’s Food Store
70
90t
Hy-Vee Food Stores Inc., West Des Moines, Iowa
95
95
0
231,400
Hy-Vee Gas Station
71
69
Mountain Empire Oil, Johnson City, Tenn.
92
92
0
409,760
Roadrunner Market
72t
70
True North Energy, Toledo, Ohio
88
88
0
191,360
True North
72t
71
GasAmerica Services Inc., Greenfield, Ind.4
88
88
0
556,920
GasAmerica
74t
73t
Admiral Petroleum Co., Coopersville, Mich.
87
87
0
210,600
Admiral Petroleum
74t
72
Farm Stores Grocery Inc., Miami, Fla.
87
33
54
147,160
Farm Store
74t
73t
Town Pump Inc., Butte, Mont.
87
87
0
257,400
Town Pump Food Store
77t
76t
Little General Stores Inc., Beckley, W. Va.
85
85
0
180,700
Little General
Plaid Pantry
77t
84t
MFA Oil Co., Columbia, Mo.
85
85
0
151,580
Break Time, MFA Oil, Petro Card 24
79
78t
Blarney Castle Oil Co., Bear Lake, Mich.
84
84
0
314,860
E-Z Mart
80t
78t
Nice N Easy Grocery Shoppes, Canastota, N.Y.
81
35
46
111,020
Nice N Easy Grocery Shoppe
80t
86t
Ranger Enterprises Inc., Rockford, Ill.
81
81
0
280,800
Road Ranger
82
n/a
Gas Mart USA Inc., Leawood, Kan.
80
80
0
137,020
Eddy’s Mart, Gas Mart, Jumpin Jimmy’s Gas Mart
83t
80t
Gulshan Enterprises, Houston
79
58
21
140,400
Handi Plus, Handi Stop
83t
82t
M. M. Fowler Inc., Durham, N.C.
79
79
0
214,240
Family Fare
83t
n/a
Tri Star Energy, Nashville
79
79
0
258,440
Daily’s Express, Daily’s Tri Star Energy, Scot Market
86t
75
C. N. Brown Co., South Paris, Maine
78
78
0
118,560
Big Apple
86t
80t
Stop In Food Stores Inc., Roanoke, Va.
78
78
0
324,480
Stop In
88t
84t
FKG Oil Co., Belleville, Ill.
75
75
0
261,560
Moto Mart
88t
82t
Gate Petroleum Co., Jacksonville, Fla.
75
75
0
178,100
Gate Food Post
88t
76t
Sunmart Inc., Spring, Texas
75
37
38
161,460
Sunmart
91
88t
Fast Stop, Bloomington, Ill.
74
0
74
104,260
Fast Stop
92t
88t
Handee Hugo’s/Sampson Bladen Oil Co. Inc., Clinton, N.C.
73
73
0
135,460
Handee Hugo’s
92t
92t
Victory Marketing LLC, Ridgeland, Miss.
73
72
1
142,480
94
90t
Certified Oil Co., Columbus, Ohio
72
72
0
56,940
Sprint Mart
95
96t
Newcomb Oil Co., Bardstown, Ky.
71
71
0
215,540
96
95
MNS Ltd., Honolulu
70
70
0
55,120
97t
n/a
Mid-Atlantic Convenience Stores, Greenwich, Conn.
69
69
0
171,080
97t
92t
Flash Market, West Memphis, Ark.
69
69
0
154,700
Flash Market
99
92t
Spinx Oil Co Inc., Greenville, S.C.
66
66
0
260,000
Spinx Store
100
100t Express Mart Franchising Corp., Syracuse, N.Y.
64
64
0
108,680
Express Mart
Certified Five Star Food Mart ABC Store Uppy’s
Source: Nielsen TDLinx; Convenience Store News Market Research, March 2012 *All Commodity Volume (ACV) figures are annualized ranges of the estimated retail sales volume of all items sold in a store that pass though 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 ConocoPhillips Inc.’s convenience stores operate under Phillips 66 as of May 2012. 3 7-Eleven of Oklahoma is not affiliated with 7-Eleven Inc. 4 Speedway LLC has agreed to acquire this chain; deal is expected to close by end of second quarter of this year. 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 the parent’s chain count. 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, with 500 to 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.
TOP 100 CONVENIENCE STORES INDEX
Laval, Canada-based Couche-Tard continues to be the company with the largest number of companyoperated c-stores in the United States, with 3,049 units. Ankeny, Iowa-based Casey’s leapt over The Pantry Inc. to rank second on the list of top companyoperated chains, with 1,691 stores. The Pantry held on to the No. 3 spot among top company-operated chains with 1,614 companyoperated stores, followed by Marathon (Speedway) at 1,372; Hess at 1,084; Valero at 1,000; Kroger Co. (various c-store brands) at 811; Cumberland Farms at 603; Wawa at 599; and QuikTrip rounding out the top 10 with 597 company-operated stores. As in previous years, there has been a lot of acquisition, divestiture and expansion activity among the CSNews Top 100 over the past year. Some of the major moves include: UÊ ÊÌ iÊ >ÌiÊv> ]ÊÇ iÛi Ê °Ê£®Ê>VµÕ Ài`ÊÓnÊÀiÌ> Ê locations from Pacific Convenience & Fuels LLC. The stores in California, Oregon, Washington and Colorado were converted to the 7-Eleven brand. This year, the company intends to continue opening stores in New York City, with as many as 14 expected to go live in 2012. Beginning in 2013, the retailer plans to open 20 Manhattan locations each year until 2017. UÊ ÕV i />À`Ê °Êx®Ê«ÕÀV >Ãi`Ê££ÊV ÃÌ ÀiÃÊvÀ Ê Neighbors Stores Inc. in Mount Airy, N.C., and con-
TOP 20 FRANCHISEE/LICENSEE CHAINS Company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
7-Eleven Inc. Shell Oil Products US/ Motiva Enterprises LLC BP North America Chevron Corp. ExxonMobil Corp. CITGO Petroleum Corp. Sunoco Inc. Marathon Petroleum Corp. ConocoPhillips Inc. Getty Petroleum Corp. Valero Energy Corp. Alimentation Couche-Tard CHS Inc./Cenex Cumberland Gulf Group RaceTrac Petroleum Clark Convenient Food Mart Inc. Sinclair Oil Corp. Krauszer’s Food Store Kwik Stop
Total Store Count
Franchise/ Licensee
% of Total
7,341
7,157
97.5%
4,934 4,691 4,057 3,446 1,722 1,987 2,670 1,283 1,142 1,786 3,585 431 927 632 178 171 147 140 134
4,896 4,688 3,642 3,433 1,722 1,615 1,298 1,281 1,141 786 536 365 324 297 178 153 147 140 134
99.2 99.9 89.8 99.6 100.0 81.3 48.6 99.8 99.9 44.0 15.0 84.7 35.0 47.0 100.0 89.5 100.0 100.0 100.0
Source: Nielsen TDLinx; Convenience Store News Market Research, March 2012 WWW.CSNEWS.COM
1 63t 74t 5 32 79 3 86t 51 11 94 4 25 10 47 13 49 16 29t 61 100 6 33 74t 41 91 43 88t 98t 82 72t 88t 14 62 53 67 83t 92t 15 24 70 42 57 17 26 58 29t 39 66 77t 35
7-Eleven Inc. 7-Eleven Stores of Oklahoma Admiral Petroleum Co. Alimentation Couche-Tard Inc. Allsup’s Convenience Stores Inc. Blarney Castle Oil Co. BP North America C. N. Brown Co. C.L. Thomas Inc. Casey’s General Stores Inc. Certified Oil Co. Chevron Corp. CHS Inc./Cenex CITGO Petroleum Corp. Clark ConocoPhillips Inc. Convenient Food Mart Inc. Cumberland Gulf Group Delek US Holdings Inc. Englefield Oil Co. Express Mart Franchising Corp. ExxonMobil Corp. E-Z Mart Stores Inc. Farm Stores Grocery Inc. Fas Mart/GPM Investments LLC Fast Stop Fikes Wholesale FKG Oil Co. Flash Market Gas Mart USA Inc. GasAmerica Services Inc. Gate Petroleum Co. Getty Realty Corp. Giant Eagle Inc. Giant Industries Inc. Go Mart Inc. Gulshan Enterprises Handee Hugo’s/Sampson Bladen Oil Co. Inc. Hess Corp. Holiday Cos. Inc. Hy-Vee Food Stores Inc. Jacksons Food Stores Inc. Krauszer’s Food Store Kroger Co. Kum & Go LC Kwik Stop Kwik Trip Inc. Landmark Industries Inc. Lehigh Gas Corp. Little General Stores Inc. Love’s Travel Stops & Country Stores Inc.
83t 7 63t 37 52 77t 97t 23 96 71 59t 95 80t 38 22 65 59t 20 18 80t 69 28 2 55 99 31 86t 88t 8 21 44 68 34 46 48 12 50 74t 40 83t 72t 56 45 36 92t 27 54 19 18
M. M. Fowler Inc. Marathon Petroleum Corp. Martin & Bayley Inc. Maverik Inc. Meijer MFA Oil Co. Mid-Atlantic Convenience Stores Military MNS Ltd. Mountain Empire Oil Murphy Oil Corp. Newcomb Oil Co. Nice N Easy Grocery Shoppes Northern Tier Energy Pilot Corp. Plaid Pantries Inc. Quick Chek Food Stores QuikTrip Corp. RaceTrac Petroleum Ranger Enterprises Inc. Sam’s Food Store Sheetz Inc. Shell Oil Products US/Motiva Enterprises LLC Sinclair Oil Co., Salt Lake City Spinx Oil Co Inc. Stewart’s Shops Corp. Stop In Food Stores Inc. Sunmart Inc. Sunoco Inc. Susser Holdings Corp./ SSP Partners Tedeschi Food Shops Inc. Terrible Herbst Inc. Tesoro Petroleum Corp. Tetco Inc. The Jones Co. The Pantry Inc. Thorntons Inc. Town Pump Inc. TravelCenters of America Tri Star Energy True North Energy Two Farms Inc. United Dairy Farmers United Refining Corp. of Pennsylvania Valero Energy Corp. Victory Marketing LLC VPS Convenience Store Group Warren Equities Inc. Wawa Inc.
verted them to the Circle K banner. Earlier, Circle K had purchased 26 c-stores in Ohio, Pennsylvania and West Virginia from Chico Enterprises. UÊ-«ii`Ü>ÞÊ ]Ê>ÊÃÕLà ` >ÀÞÊ vÊ >À>Ì Ê*iÌÀ iÕ Ê (No. 7) acquired 88 c-stores in Ohio and Indiana from GasAmerica Services Inc. Additionally, Marathon spun off 233 SuperAmerica units to Northern Tier Energy. UÊ >ÃiÞ½ÃÊ i iÀ> Ê -Ì ÀiÃÊ °Ê ££®Ê Ü Ê LiÊ LÀi> ing ground soon on its first store in Kentucky and is expected to open another store in Tennessee by the end of the year. The new locations will mark the 12th and 13th states in which the Iowa chain operates. ■ May 21, 2012 CONVENIENCE STORE NEWS 31
FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages
Competing teams worked with equipment brought in specially to replicate conditions of a regular Sheetz store.
Gold Medal Service Sheetz’ MTO Olympics highlights the speed and skill of the chain’s food and beverage prep By Angela Hanson
A
thletes all over the world are rushing to prepare for this summer’s Olympic Games in London. But in March, another kind of Olympics was held closer to home at the Hershey Lodge in Derry Township, Pa. Instead of showcasing athletic performance, Sheetz Inc.’s Made-toOrder (MTO) Olympics recognized speed, accuracy and presentation of its foodservice. Three-person teams that had made their way to the main event through preliminary competitions throughout Sheetz’s markets competed for the main prize, with the winners walking away with more than $1,000 in cash and prizes. Although the MTO Olympics doesn’t stretch back centuries like its namesake, Sheetz is not exactly new to these games. This year’s competition marked the 11th MTO Olympics in 12 years (they were suspended once for the convenience
32 CONVENIENCE STORE NEWS May 21, 2012
store chain’s 50th anniversary, so company managers could go on a cruise) and they’ve only grown more elaborate and ambitious over time. “The original concept was to host some event to try to get store operations folks excited about selling food,” Douglas Mills, director of food and beverage sales and development for Sheetz, told Convenience Store News. “To create camaraderie between districts and employees and regions.” The 2012 competition featured an “all in” Las Vegas casino theme, and an Elvis impersonator served as master of ceremonies, awarding prizes to the store managers who wore the best costumes in a dress-up contest. Past themes have incorporated NASCAR racing and St. Patrick’s Day. “Each year, it gets crazier and crazier, to be honest with you,” said Mills. Sheetz builds replica store kitchens at the competition site, shipping in equipment and live count-
down clocks to add to the tension and excitement. The first convention-style MTO Olympics was more casual and served as a method of getting employees to focus on selling food and speed of service. Back then, company managers could select any three employees to compete. As the MTO Olympics have become more elaborate, the selection process has grown more rigorous, with the individual stores making the first cuts. “They have a competition at their store to find the fastest, most-accurate three-man team that they can assemble,” Mills explained. “The best of the best are the ones that put themselves forward for this event.” Next, the teams head to a district-wide competition to determine who moves on to a regional trial that hosts teams from all 37 Sheetz districts. In the end, each of the retailer’s four regions sends one team to the MTO Olympics. WWW.CSNEWS.COM
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FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages While the Olympics themselves are a spring event, the qualifying competitions are spaced out over time, something that Mills said helps keep employees engaged and excited throughout the year. “Employees take honor in participating,” he noted. “It’s a badge of honor to be a participant in the Olympics.” At the main event, teams must be prepared to fulfill orders for any item they might prepare in a real Sheetz store. It may be a challenge to get everything done quickly and just right, but a skilled team shouldn’t have any worries, as the menu items for the competition are “items they should be very familiar with making each day in the store,” Mills said. Products made for this year’s Olympics included Sheetz’ traditional made-to-order 12-inch subs, hot dogs, a breakfast sandwich, a hot latte and more. Contest officials place orders through a touchscreen, just like a real customer would, in order to simulate the real consumer experience. The Olympics are “trying to get them to focus on creating the best consumer experience possible, simulating what they do in the store
Speed, accuracy and appearance are some of the factors on which teams are judged. 34 CONVENIENCE STORE NEWS May 21, 2012
Master-of-ceremonies “Elvis” awarded prizes to the winners of a costume contest.
each day,” explained Mills. Five years ago, competing teams expanded from two members to three with the introduction of a dedicated barista. In theory, the food and drink preparers will stick to their dedicated roles, but Sheetz’ training practices mean no one will be left in a pinch. “Because everyone’s crossed trained, they can jump in and help,” he said. It’s not enough to be the first team to complete a competition order. The MTO Olympics features a 14-member panel of judges who evaluate the teams on safety, appearance, portioning, speed and accuracy. Each team is assigned their own pair of judges, who come from company backgrounds that include marketing and sales, research and development, operational efficiency and quality assurance. “People who are intimate with foodservice programs at Sheetz,” Mills reiterated. The judges are more critical now that the degree of difficulty for contestants is higher, and a greater emphasis on accuracy and presentation has changed what used to be a “speed Olympics.” As the size of the MTO Olympics and the skill of the participants have increased, so has the event’s production value. “The production
factor is first-class,” said Mills. This year — the first that the press was invited to attend — pyrotechnics, confetti canons and lights accompanied a “smack-talk video” played on the main viewing screen as each competitor was introduced. This year’s winners — a Bedford, Pa.-based team composed of Kristy Crist, Melissa Henry and Kaylee Shomo from Region No. 3, District No. 26, Store No. 28 — took home $1,000 cash, an Apple iPad 2 and a Vita-Mix Creations commercial blender apiece. Each member of the second-place team received $750, an Amazon Kindle Fire and a Bunn MyPod Coffee Brewer with 100 Sumatra pods. Third-place winners earned $500, an Apple iPod and a gourmet coffee gift basket. The prizes are enough to motivate anyone, but the rewards for Sheetz are much greater. “Made-to-order food and beverage has become a much larger part of our business — a more important piece of our financial pie,” said Mills. Emphasis on foodservice grows every year, making it more and more important for Sheetz to keep its employees focused and engaged. “Each day, [food] becomes a more important ■ part of our business.” For comments, please contact Angela Hanson, Assistant Editor, at ahanson@stagnitomedia.com. WWW.CSNEWS.COM
IN-STORE MERCHANDISING Grocery + General Merchandise + HBC + Periodicals
Hardly a Shot in the Dark Energy shots continue to be a sure bet for the convenience channel By Renée M. Covino
G
ot energy shots? If you’re a convenience store, of course, you do. The health and beauty care (HBC) subcategory quickly became a merchandising no-brainer several years back — and signs still point to a surge, albeit on a smaller scale. Last year, energy shot sales and units increased 34 percent and 32 percent, respectively, over the prior year, according to Nielsen’s Scantrack Convenience service. Even though these figures are significantly lower than what analysts called the “meteoric” gains c-store retailers experienced with shots in years past, they are still impressive double-digit numbers in a market where overall in-store sales are growing by only about 3 percent annually. “Growth is still occurring, though it is not at the pace it once was,” confirmed Dana Sump, category manager at Casey’s General Stores Inc. “We had experienced some nice growth in the 50-percent range; now it’s still going, but at about 25to 30-percent growth.” At Minute Market, energy shots still make up the first four of its top five HBC items, according to Phyllis Simpler, operations manager. Across the channel, sales of energy shots for the past three years were stellar enough to make it the fastestgrowing subcategory in c-stores. C-stores lend the perfect selling environment for shots — a quick pick-me-up product that fits nicely in a convenient in-and-out retail format for travelers, truckers, students, late-night workers and all energy36 CONVENIENCE STORE NEWS May 21, 2012
seeking shoppers. In fact, energy shots generate their biggest share of total sales at c-stores, according to a recent report by Mintel. Convenience stores’ share of shots and energy drinks (the report didn’t just single out shots) grew from 79.1 percent of total sales in 2006 to 81.8 percent in 2011. Mintel also found that the convenience channel’s key consumer profile — adults aged 18 to 24 — matches with that of energy drink and shot users’ demographic group. A spokesperson for energy shot maker 5-Hour Energy, now a $1-billion brand, confirmed that c-stores are clearly the single biggest channel for selling its brand. But how has the climate changed recently? MORE DEALING
For one thing, c-stores such as Casey’s General Stores are regularly promoting energy shots now. “During the higher [economic] times, we never had to promote the category; it was just organic growth. People were trying it and liking it,” Sump said. Now, the chain has undertaken a more aggressive energy shot promotion schedule for 2012 — in six of the 12 months, there will be an energy shot promo, according to Sump, with many running at two for
$6, some at two for $5 and even buy one/get one deals. He clarified that these promotions will be for newer energy shot items, coming from companies looking to drive “trials” and not from Living Essentials’ 5-Hour Energy, which he said doesn’t fund any promotions. Sump doesn’t see his chain growing the space for the category, which is currently at 12 SKUs of shots and 12 peg-hanging items. “I think we can maintain what we have if we start promoting the category going forward,” he explained. “Everyone is getting into the category. Grocery stores, drugstores, dollar, big-box all have shots at their checkouts and they typically are willing to work on a lot less margin than convenience, so we have to watch what we do from a pricing standpoint.” Simpler noted that once in a while, “5-Hour comes along with a deal for retailers whereby if you buy so many boxes, you can get a box for free, and that helps the gross margin,” which she said is about 40 percent in the category. Additionally, Simpler told Convenience Store News that money-making deals in the energy shots category can be found in places like McLane’s virtual tradeshow. WIDER APPEAL
While energy shots are still in the early stage of their product lifecycle, they have more recently WWW.CSNEWS.COM
managed to create appeal among a wider base of consumers than energy drinks. In mid-2011, the Wall Street Journal reported that a somewhatsurprising segment of consumers were gravitating toward energy shots: baby boomers aged 60 and up. 5-Hour Energy reportedly began focusing on seniors more than a year ago when it attended the AARP’s annual convention and handed out free samples at the show. In August, Mintel research revealed that adults aged 55-plus show higher consumption of 5-Hour Energy compared to adults aged 18 to 24. In fact, the brand’s biggest consumers are adults aged 65-plus. Because this population group has higher-than-average growth projections, Mintel believes the energy shots category has a higher potential to grow its consumer base in the next five years vs. energy drinks, which notoriously appeal to a younger crowd. Meanwhile, there are those shot manufacturers going toward the other end of the spectrum to grow the category, too. For instance, new player Pure Growth and its recently launched Street King shot target a “younger, hipper demographic who are not currently using energy shots through a more emotive message and a charitable give-back,” according to Keesha Johnson, spokesperson for the company. She said Street King — founded by rapper 50 Cent — has “revved up the market” with its 100-percent natural caffeine and flavors. The energy shots category is seeing innovation in packaging as well. There is certainly nothing wrong with the 2-ounce “shot” bottle — it has become something of an industry icon in packaging already. But the success of the category certainly lends itself to new delivery systems catching on, WWW.CSNEWS.COM
A Quick Hit of Energy s Convenience stores are the favorite retail channel for energy shot users. s The top three reasons why energy shot users drink them is to get an energy boost, increase mental alertness and stay awake. s Across all channels, the energy shot segment grew 30 percent from 2010 to 2011, more than twice the growth of energy drinks. s Energy shots appeal to consumers on the platform of delivering an energy boost without the sugar and crash associated with energy drinks. s Energy shots are still in the early stages of their product lifestyle, but they appeal to a wider base of consumers; they are predicted to have a higher potential to grow their consumer base in the next five years vs. energy drinks. s One caveat regarding growth in the energy shots market is the possible intervention of the Food and Drug Administration (FDA), as new research linking energy shots (and drinks) with high caffeine-consumption risk continues to appear. Source: Mintel’s “Energy Drinks and Energy Shots - US - August 2011”
especially as the segment matures. “I continue to believe in my mind that there’s something out there other than the 2-ounce delivery system, even though none have ever caught fire here,” said Casey’s Sump. Currently, Casey’s carries the Ed Hardy Energy Stix, which Sump describes as similar to the “pixie sticks” candy concept of old. A transdermal strip is another delivery idea, on the market now from PUREBRANDS and its Sheets Energy Strips. It is targeted to athletes and co-founded/backed by Miami Heat basketball superstar LeBron James. The idea behind it is that a strip provides a faster delivery system for energy, giving sports-minded consumers quick energy without the fullness from a bar or bloating from a drink. Soon after it came on the market last year, Sheets formed exclusive distribution relationships with Convenience Valet and Energy 1 Distribution. Through Convenience Valet, c-stores such as 7-Eleven, QuikTrip, Sheetz and Circle K now sell Sheets Energy Strips. Michelle Sausen, vice president of marketing for Convenience Valet, said the distribution company saw the dissolvable strip as a unique
angle to help grow the category overall. “We believe in the concept of the individually wrapped energy strip without being a ‘me-too’ item,” she maintained. The functional “shot” appeal of energy shots is a powerful, expanding one, and forward-thinking convenience store retailers are also keeping their eyes on the (other supplement) bottles. NOHO, touted as “The Hangover Defense,” is now available at Mobil On the Run stores throughout southern California, and LiveWire Energy Chews are being sold in Casey’s locations throughout the Midwest. Convenience Valet is also putting stock in sleep-aid shots. “With all the additional caffeine that is present in the market, consumers will need to decompress,” Sausen explained. “Sleep-aid shots and products with functional benefits have become much more widely accepted from retailers and consumers.” That’s why Convenience Valet will be launching the Mint Dream Sheets Sleep Strip. Serena Williams, who Sausen said has gone public about her sleep deprivation, will be lead spokesperson for the new product. ■ For comments, please contact Renée M. Covino, Contributing Editor, at reneek@aol.com. May 21, 2012 CONVENIENCE STORE NEWS 37
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Associate Editor Convenience Store News
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SaveaLot..................................www.save-a-lot.com ..........................................7 Swedish Match NS, Inc./ White Owl ...............................customerservice@smna.com ............................38
Western Regional Sales Manager 847-469-8519 kmckay@stagnitomedia.com
Roz Gilman Ad Manager 224-632-8243 rgilman@stagnitomedia.com
T
Talon/Lane Ltd. .......................800.241.2038......................................................11 U
United Tobacco Vapor Group wholesale@UTVGecig.com ................................21
WWW.CSNEWS.COM
May 21, 2012
CONVENIENCE STORE NEWS 49
TRENDWATCH Consumer and Product Trends from Mintel www.mintel.com (312) 932-0400
A Look at CSDs NUMBER OF NEW CARBONATED SOFT DRINKS LAUNCHED IN THE U.S. Carbonated Soft Drinks
2009
2010
2011
2012*
219
280
244
54
Source: Mintel Global New Products Database (GNPD) *2012 refers to the period between Jan. 1 and April 23, 2012.
FACTORS INFLUENCING SODA PURCHASE DECISIONS Any influential
My “regular” brand In-store price promotions (instant coupons, buy one/get one free, etc.) Name brand Choice of flavors Soda less than $1 (only when buying single-serve bottle/can) Other coupons/discounts (not received in-store or on a smartphone) Promoted with my favorite snack in-store (buy one/get one half etc.) Sweetened with regular sugar In-store display and/or end-aisle display (impulse buying) Pre-priced can/bottle, where price is printed on the packaging (only when buying single-serve bottle/can) No high-fructose corn syrup All-natural Promotions/coupons I have received on my smartphone Attractive packaging Calorie-controlled packaging (i.e. 100-calorie soda can/bottle) TV advertising Displayed next to my favorite snack items such as chips, pretzel Social media marketing (such as discounts, coupons offered through Facebook/Twitter) Organic
Very influential
77%
41%
36%
75 69 68
38 34 32
37 36 36
64
31
33
59
26
33
43 41
15 16
28 25
38
11
26
37 35 35
13 15 14
24 20 21
34 33
15 11
19 22
32 30
12 10
20 20
28
9
19
27 16
11 6
16 10
Source: Mintel, November 2011 Base: 1,262 Internet users aged 18+ who bought regular soda in the last three months.
50 CONVENIENCE STORE NEWS May 21, 2012
Somewhat influential
What influences which carbonated soft drinks (CSDs) consumers buy? Customers most often stick with their “regular” brand, according to a Mintel survey of 1,262 Internet consumers 18 or older who bought soda during the past three months. Forty-one percent of respondents said their regular brand was “very influential” regarding their purchase decision, and an additional 36 percent said they were “somewhat influenced” by their regular brand. However, convenience store retailers that use in-store promotions, such as coupons and two-fers, to encourage consumers to purchase a particular CSD need not fret. According to the research, 75 percent of respondents said they were either very influenced or somewhat influenced by instore promotions. The next three factors influencing customer CSD purchasing decisions were buying a name brand, choice of flavors and the ability to buy a single-serve bottle or can of soda for less than $1, respectively. The least important factor when purchasing a CSD is the product being organic, the survey revealed. Only 16 percent of respondents were influenced in any way by that factor. Social media marketing campaigns and the placement of a soda next to a favorite snack item also had little influence on consumer CSD buying habits. On a related note, 2012 CSD launches are on pace to be the lowest in several years. As of April 23, only 54 new CSDs were launched in the United States. If that pace holds up, only about 165 new CSD products will debut this year. That result would significantly trail the past three years. In 2011, 244 new CSDs were launched; 2010 concluded with 280 new CSDs on the market; and 2009 ended with 219 product introductions. — Mintel WWW.CSNEWS.COM
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