Convenience Store News - April 2019 by ensembleiq

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W H AT ’ S N E X T I N C O N V E N I E N C E A N D F U E L R E TA I L I N G

A New

NATIONAL

POWERHOUSE More than doubling its convenience store network in four years, Speedway moves west.

WHAT EXACTLY DOES “CONVENIENCE” MEAN TO TODAY’S SHOPPERS? APRIL 2019 CSNEWS.COM

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your business LEGISLATION / REGULATIONS

SALES STRATEGIES

COMPREHENSIVE RESOURCES

CONSUMER INSIGHTS

MERCHANDISING SOLUTIONS

SALES & PROFITS

COLLABORATION

At AGDC one of our goals is to help drive our customers’ LEADERSHIP BRANDS

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Servicing: Philip Morris USA U.S. Smokeless Tobacco Company John Middleton Nu Mark Nat Sherman

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VIEWPOINT

What Does Convenience Mean Today? Our 10th annual consumer study examines shoppers’ definition of convenience LAST OCTOBER,

I wrote in this column about how I felt the convenience store industry was on the verge of a fundamental transformation. I felt that convenience stores were undergoing tremendous changes in the way they attract and serve their customers.

That transformation starts with defining what “convenience” means to consumers today. Everyone wants to be the convenient, easy place to shop. From dollar stores to small-format stores from Amazon, Walmart and numerous supermarket chains, “convenience” is the prime attribute these retailers are chasing. Which brings me to our exclusive 2019 Realities of the Aisle consumer study, which analyzes the demographics and purchasing behavior of convenience store shoppers across a wide swath of product categories in-store, as well as fuel purchasing.

based on an experience that ultimately saves them time and effort. It’s “quick” and it’s “easy,” and the store has all the items they are most likely to need to purchase immediately. Convenience stores that prioritize simplifying the shopping and purchase steps are more likely to see a payback of increased traffic and basket size. Now in its 10th year, the Realities of the Aisle study can help you understand who’s shopping your stores, what they’re buying and why, and how they want to be approached and communicated with today. In addition to covering all the major product categories, the study looks at consumers’ reactions to loyalty programs, mobile apps, competitive retail channels, quality of foodservice, ATM, car wash, other ancillary services and much more. (Future installments focused on different themes will be published throughout the year.)

Last year, we spotlighted “opportunity” segments for c-stores — women, millennials, Hispanics and healthconscious consumers. This year, we crafted our survey to explore and highlight how all convenience store shoppers define the concept of “convenience.”

This year’s results are based on an online survey conducted in partnership with Convenience Store News’ sister company, EIQ Research Solutions. The questionnaire was fielded to a representative U.S.based sample of nearly 1,500 participants. In order to qualify, participants had to shop at a convenience store at least once a month.

For sure, the word “convenience” for c-store shoppers evokes multiple store and experience-related attributes. But is it just about being a “quick visit” or an “easy in-and-out of the store?” Or maybe it means close geographical proximity or on their predetermined route?

By undertaking a thoughtful and comprehensive understanding of customer needs as they relate to the convenience experience, convenience stores can address their future in a confident and effective manner.

One of the key findings of this year’s study (see page 52) is that the definition of convenience for most shoppers is

For comments, please contact Don Longo, Editorial Director, at (201) 855-7606 or dlongo@ensembleiq.com.

EDITORIAL EXCELLENCE AWARDS (2013-2018)

2018 Jesse H. Neal National Business Journalism Award Finalist, Best Editorial Use of Data, June 2017

2013 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2012

2013 Jesse H. Neal National Business Journalism Award Finalist, Best Profile, August 2012

EDITORIAL ADVISORY BOARD

2018 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Website Business to Business, Retail, Full Issue, October 2017 Business to Business, Editorial Use of Data, June 2017 2017 Eddie Awards, Folio: magazine Winner, Business to Business, Retail, Single/Series of Articles, May 2017 Honorable Mention, Business to Business, Retail, Single/Series of Articles, June 2016 2016 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2015 Business to Business, Retail, Single/Series of Articles, August 2015 2015 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2014

Brett Atherton Bolla Management

Vito Maurici McLane Co. Inc.

Jon Bratta Core-Mark International Inc.

Jack Lewis GPM Midwest

Rick Crawford Green Valley Grocery Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired)

2016 American Society of Business Press Editors, National Azbee Awards Gold, Best How-To Article, March 2015 Bronze, Best Original Research, June 2015

2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2013 Business to Business, Retail, Single Article, February 2013

Jim Hachtel Eby-Brown Co.

2016 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best How-To Article, March 2015 Silver, Best Original Research, June 2015

2013 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2012

Ray Johnson Speedee Mart

Danielle Mattiussi Maverik Inc. Richard Mione GPM Southeast Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Roy Strasburger Strasburger Retail

2015 American Society of Business Press Editors, National Azbee Awards Silver, Best Profile (long form), February 2014 2015 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best Special Supplement, November 2014 Silver, Best Profile (long form), February 2014 2013 American Society of Business Press Editors, Midwest Regional Azbee Awards Bronze, Best Editorial/Commentary, July 2012

2016 Trade Association Business Publications Intl. Tabbie Awards Silver, Front Cover Illustration, June 2015

AP R

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Convenience Store News

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CONTENTS APR 19

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38 FEATURES

DEPARTMENTS

COVER STORY

VIEWPOINT

SMALL OPERATOR

38 A New National Powerhouse More than doubling its convenience store network in four years, Speedway moves west.

3 What Does Convenience Mean Today? Our 10th annual consumer study examines shoppers’ definition of convenience.

34 Big Ideas Around Loyalty for Small Operators C-store retailers of all sizes can create successful customer loyalty programs.

10 CSNews Online

STORE SPOTLIGHT

FEATURE

52 Defining Convenience Just as shoppers’ behaviors are changing, so are their definitions of convenience.

OUT & ABOUT FEATURE

71 Conquering Customer Engagement Personalized offers and digital communications are key to keeping shoppers engaged.

24 The 7-Eleven Experience Digital initiatives and private brands were centerpieces of the retailer’s annual conference.

TWIC TALK OUT & ABOUT

26 TPE 2019 Ignites Las Vegas Attendees of the year’s first tobacco show learn how to rise above the category’s challenges.

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75 Telling One Cohesive Story Nouria Energy Corp.’s new retail brand represents a strategic repositioning for the company.

79 Elisa Goria, Circle K The 2017 TWIC Woman of the Year says passion, drive and determination can take you anywhere. GETTING TO THE CORE

OUT & ABOUT

28 Sharing Solutions Convenience Distribution Marketplace 2019 facilitates building connections.

94 The Shopping Preferences of Men vs. Women Store operators need to work harder to meet the needs of female shoppers.

30 New Products

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CONTENTS APR 19

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8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631 (773) 992-4450 Fax: (773) 992-4455 www.csnews.com Direct Mailing Address for Convenience Store News: 11-43 Raymond Plaza West, 16th floor, Newark, NJ 07102 BRAND MANAGEMENT Vice President/Group Brand Director Paula Lashinsky (917) 446-4117 plashinsky@ensembleiq.com EDITORIAL Editorial Director (201) 855-7606 Editor-in-Chief (201) 855-7608

Melissa Kress mkress@ensembleiq.com Angela Hanson ahanson@ensembleiq.com

Associate Editor (201) 855-7619

Danielle Romano dromano@ensembleiq.com

Associate Managing Editor (201) 855-7604

CATEGORY MANAGEMENT

14 TravelCenters of America Turns Focus to Expanding Its Network 16 Swipe Fee Lawsuit Moves Closer to Final Settlement

18 Retailer Tidbits 20 Supllier Tidbits

Renée M. Covino reneek@aol.com

Contributing Editor (201) 280-2614

Tammy Mastroberte tmastroberte@gmail.com

ADVERTISING SALES & BUSINESS

58 What’s Hot on C-store Menus? Kum & Go’s Huevos Rancheros Pizza lands a perfect score for uniqueness.

Associate Brand Director & Northeast Sales Manager (508) 385-2524

60 The Building Blocks of Convenience Foodservice Whether launching a new concept or adding to an existing menu, the development process is integral to the final result.

18 Eye on Growth

Contributing Editor (303) 741-3377

FOODSERVICE

16 Fast Facts

Rachel McGaffigan rmcgaffigan@ensembleiq.com

Associate Brand Director & Western Sales Manager (330) 840-9557

Ron Lowy rlowy@ensembleiq.com

Associate Publisher & Midwest Sales Manager Kelly Fischer (773) 992-4464 kfischer@ensembleiq.com Account Executive & Classified Advertising Terry Kanganis (201) 855-7615 tkanganis@ensembleiq.com Mary Beth Medley Classified Production Manager (856) 809-0050 marybeth@marybethmedley.com EVENTS Executive Vice President, Events & Conferences Ed Several (860) 830-8321 eseveral@ensembleiq.com AUDIENCE ENGAGEMENT

HOW TO

TOBACCO

64 Fighting to Keep Share New year, old story as convenience stores continue the battle to retain their tobacco sales.

46 Master Category Management for Today & Tomorrow The disciplines of category management and shopper marketing are converging. Visual Merchandising

Assortment Optimization

Category Definition Category Role Developement

Supply Chain

Director of Audience Engagement Gail Reboletti (224) 632-8214 greboletti@ensembleiq.com Audience Engagement Manager (215) 301-0593

Shelly Patton spatton@ensembleiq.com MeritDirect Elizabeth Jackson

List Rental (847) 492-1350 ext.318

Subscriber Services/Single-Copy Purchases (978) 671-0449 EnsembleIQ@e-circ.net

SNACKS

PROJECT MANAGEMENT/PRODUCTION/ART

68 Innovation Abounds C-store operators must cater to changing preferences, while still satisfying traditionalists’ needs.

Vice President, Production (877) 687-7321

Consumer Insights

Store Managers

Creative Director (973) 607-1320 Advertising/Production Manager (773) 992-4418 Art Director (224) 632-8245

Derek Estey destey@ensembleiq.com Colette Magliaro cmagliaro@ensembleiq.com Ed Ward eward@ensembleiq.com Michael Escobedo mescobedo@ensembleiq.com

Decision Trees

Space Management

E-Commerce

Financial Metrics

Research

Human Resources

Promotion

Joint Business Planning

Pricing Logistics Operations National Account Teams

CORPORATE OFFICERS

Marketing Merchandising

A23823_4b_CTC6044-T21-Resizes-Print-CSNews-8x10.75.indd 01.08.19 Epson HP

Distribution

Collaborative Category Management

Sales

Linda Lisanti llisanti@ensembleiq.com

Senior News Editor (201) 855-7618

INDUSTRY ROUNDUP

Shopper Marketing

Don Longo dlongo@ensembleiq.com

Executive Chairman Alan Glass Chief Executive Officer David Shanker Chief Financial Officer Dan McCarthy Chief Operating Officer Joel Hughes Chief Innovation Officer Tanner Van Dusen Chief Human Resources Officer Ann Jadown Executive Vice President, Events & Conferences Ed Several CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631. Copyright © 2019 by EnsembleIQ. 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, $10, except foreign, where postage will be added. Printed in U.S.A. Periodicals postage paid at Chicago, IL, and at additional mailing offices. POSTMASTER: Send address changes to Convenience Store News, PO Box 3200 Northbrook IL 60065-3200

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CSNEWS ONLINE

ONLINE EXCLUSIVE

TOP 5 DAILY NEWS HEADLINES

Stripes Stores to Release Three-Cup Collection Commemorating Music Legend Selena

The convenience store operator will release three limited-edition collectible cups featuring Selena, known as the “Queen of Cumbia.” The 2019 Selena commemorative collectible cups will be sold at participating stores in Texas and Louisiana while supplies last.

7-Eleven Opening Six Test Stores to Try Out New Concepts

The retailer welcomed customers to a new Dallas-area store on March 4 that features a Laredo Taco Co. restaurant; a café serving coffee drinks, made-to-order smoothies and shakes, among other beverage offerings; and a bar with wine and craft beer on tap.

Synergies of Marathon Petroleum & Andeavor Merger on Target

With just one quarter under its belt, the combined powerhouse of Marathon Petroleum Corp. and Andeavor has already reached approximately $160 million of realized synergies. Moving forward, Marathon Petroleum continues to expect total annual gross run-rate synergies of up to $600 million by year-end 2019 and up to $1.4 billion by the end of 2021.

FDA Takes “Forceful New Actions” Around Youth Tobacco Use

The Food and Drug Administration (FDA) is zeroing in on retailers as the agency works toward ending underage tobacco use. The FDA identified 15 national retail chains, either corporate-owned or franchised, whose violation rates exceed 15 percent of their total inspected stores since the start of the agency’s retailer compliance check inspection program in 2010.

Circle K Partners With San Antonio Rodeo on Mobile App Game

During the bull riding, bareback riding and saddle bronc riding portions of the event, rodeo attendees will be able to guess the rider’s score before the judges issue it. After entering their score guess, they will have the opportunity to win prizes from Circle K Texas.

RETAILER SPOTLIGHT: Pilot Flying J Makes Hospitality a Major Focus Professional truck drivers are a promiscuous bunch when it comes to brand loyalty. They go where the best deal is. Pilot Flying J is working on several fronts to ensure that the chain’s travel centers are where they choose to go time after time. While the climate in the travel center industry these days is good, according to Pilot Flying J’s Chief Merchant Brian Ferguson, there are some challenges facing all operators, such as declining customer counts, mile-per-gallon improvements in trucks and cars, a tight labor market and the rapid expansion of distribution in the United States, which is bringing everything closer together and, in turn, means truckers don’t have to travel as far to deliver their goods. “To compete in this environment, we want to have a tremendous store experience. We want to have a tremendous digital experience. We want to have a tremendous food offering, and a tremendous retail offering,” Ferguson told Convenience Store News.

RaceTrac President: Time Is Right for Franchising Program RaceTrac Petroleum Inc.’s reshaped executive team is hitting the ground running, and launching a new franchising program is at the top of its to-do list. On Feb. 19, the Atlanta-based convenience store retailer unveiled the new program, RT Franchising Inc., and announced that its first move would be to find experienced, qualified candidates for franchise opportunities in Central Florida. “We recognize that RaceTrac’s 85-year history, convenient locations and proven experience in marketing, operations and merchandising put us in a unique position to recruit and support qualified entrepreneurs,” newly appointed RaceTrac President Natalie Morhous told Convenience Store News. “RaceTrac has a strong brand reputation and looks forward to leveraging that brand to provide business-savvy entrepreneurs with the tools necessary to run a RaceTrac store and effectively serve the Central Florida community.” For more exclusive stories, visit the Special Features section of www.csnews.com.

MOST VIEWED NEW PRODUCT

Pura Still Spiked Water Pura Still, a new line of spiked still water, contains a splash of coconut water, a hint of natural fruit flavor and zero carbonation. Six-packs of 11.2-ounce bottles are available in three varieties: blackberry, mango and mandarin orange. The 4.5 percent ABV malt beverages have just 90 calories per serving. FIFCO USA launched Pura Still to meet the growing demand for better-for-you options in the readyto-drink alcoholic beverage space, the company said. FIFCO USA Rochester, N.Y. (585) 263-9318 fifcousa.com

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INDUSTRY ROUNDUP

TravelCenters of America Turns Focus to Expanding Its Network Company signs first TA Express franchising agreement with the operator of Coffee Cup Fuel Stops By Melissa Kress TRAVELCENTERS OF AMERICA LLC (TA)

moved into 2019 with a key goal on its agenda: grow its core travel center network. The shift came on the heels of the 2018 sale of its Minit Mart portfolio, TA’s standalone convenience store business. In its latest move, Westlake, Ohio-based TravelCenters signed an agreement with Heinz Inc., operator of Coffee Cup Fuel Stops, to convert four of its locations to TA Express sites. This deal marks the company’s first TA Express franchising agreement.

“Our pipeline of franchising inquiries is robust,” Richards reported. “We’re in serious and late-stage discussions and negotiations with a number of operators regarding possible franchising of an additional five travel centers, and have dozens of other sites in various stages of our franchising process. “We think independent travel center operators appreciate the brand strength associated with a TA or Petro location, as well as the trucking fleet fueling agreements they can leverage for increased sales volume,” he added. TA is also exploring opportunities for opening standalone truck repair facilities and managing truck repair facilities for franchisees or other independent operators.

“Four of these [Coffee Cup] locations are already in operation in North and South Dakota and are expected to be rebranded TA Express within 12 months, with the first site expected to be converted by the end of April,” Barry Richards, TA president and chief operating officer, said during the company’s fourth-quarter and full-year 2018 earnings call on Feb. 26.

CEO Andrew Rebholz said TA aims “to increase shareholder value through consistently improving our financial results and condition, continuing to present a superior customer service model to our traditional and non-traditional customers, and expanding our customer base, with our focus remaining on our core travel center business.”

There are also plans for two new-build locations over the next several years as part of the Heinz Inc. agreement, Richards added, which will bring the total to six.

“Though there is nothing yet far enough along to claim a win, we have a handful of potential targets under discussion for evaluation,” Richards said. “As noted earlier, one of our goals for 2019 is to add 20 sites to our travel center network and I intend to see that it is done.”

The company’s goal is to add 20 travel centers to its network this year, and the chief executive expects franchising opportunities to drive this. Acquisitions remain on the table as well.

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INDUSTRY ROUNDUP

Swipe Fee Lawsuit Moves Closer to Final Settlement U.S. District Court will hold a hearing for final approval on Nov. 7 THE U.S. DISTRICT COURT for the Eastern District of New York in Brooklyn gave preliminary approval to a multibilliondollar settlement in a suit alleging Visa, Mastercard and other banks violated antitrust laws and caused merchants to pay excessive fees for accepting Visa and Mastercard credit and debit cards.

After granting preliminary approval on Feb. 22, the U.S. District Court set the date for a hearing on final approval of the proposed settlement as Nov. 7. Visa and Mastercard, along with other defendants, have said they did violate the laws. The court has not decided which party is right as both parties agreed to a settlement. Under the settlement, Visa, Mastercard and the other bank defendants have agreed to provide approximately $6.24 billion in class settlement funds. After attorneys fees and costs, the settlement will be used to pay valid claims of merchants that accepted Visa or Mastercard credit or debit cards at any time between Jan. 1, 2004 and Jan. 25, 2019. The value of each claim will be based on the actual or estimated interchange fees attributable to the merchant’s Mastercard and Visa payment card transactions from Jan. 1, 2004 to Jan. 25, 2019.

The proposed settlement was reached in September; however, some in the retail community say the settlement still does not go far enough. As Convenience Store News previously reported, groups including NACS, the Association for Convenience & Fuel Retailing, the Retail Industry Leaders Association, the Retail Litigation Center and the National Retail Federation maintain that the settlement agreement does not address efforts to change network rules.

FAST FACTS

More than four in 10 consumers (44 percent) say it is important “that my beverages do something for me,” like provide energy, nutrients or other benefits.

Consumers fall into four snacking personas: Daredevil Foodie, the Traditionalist, Sweet Tooth and Last-Minute Friend. — Frito-Lay, U.S. Snack Index

For the year ending December 2018, the number of foodservice delivery orders by Gen Zers reached 552 million, just 1 million less than millennials’ delivery orders.

— The Hartman Group — The NPD Group, Delivering Digital Convenience

Four trends will disrupt the food industry in 2019: local, innovation driven by authenticity, new players and gut healthfocused offerings. — Packaged Facts, U.S. Food Market Outlook 2019

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INDUSTRY ROUNDUP

Eye on Growth

7-Eleven Inc. signed a master franchise agreement with a subsidiary of Future Retail Ltd to develop and operate 7-Eleven stores in India. The expansion marks the company’s first entry into the country.

Casey’s General Stores Inc. acquired the Fantasy’s Convenience chain and its Ride the Wave car washes. Casey’s plans to significantly remodel the nine acquired stores.

Applegreen plc grew its U.S. presence to more than 120 convenience stores by the end of 2018. Its U.S. operation now includes sites in New York, Connecticut, Rhode Island, Massachusetts, New Hampshire, Vermont, South Carolina and Florida.

Rutter’s cut the ribbon on the company’s first store in Maryland on Feb. 22. The 7,900-square-foot store features 14 fueling positions with several fuel options, Located in Walkersville, the store is the 73rd in including flex fuel, Rutter’s portfolio. unleaded 15 and ethanol-free fuel.

Parker’s acquired two South Carolina CornerMart stores. The locations in Lady’s Island and Port Royal will undergo significant upgrades.

Enmarket opened its largest c-store yet: a 6,366-square-foot location on Pooler Parkway in Georgia. It features the chain’s first-ever drive-thru window serving fresh food and beverages from The Eatery, Enmarket’s proprietary restaurant.

Retailer Tidbits

Yesway and Jones Soda Co. joined forces to debut Yesway Green Apple Jones Soda. The custom-label variety is available at all Yesway convenience stores.

The new retail fuel image is currently

being tested at several prototype Gulf Oil locations in New England. unveiled a new logo and a new retail fuel image with a refreshed take on its iconic logo. Gulf plans to kick off the launch by rebranding approximately 700 locations in the Northeast over the next two years.

Shell Oil Products US teamed with Excentus Corp. to launch Fuel Rewards Pro, a loyalty program that offers personal rewards to fleet drivers.

Casey’s General Stores Inc. will provide IRI access to point-of-sale data from its more than 2,100 convenience stores. The pact will support IRI’s account-level insights for the convenience channel. EG America LLC tapped Fintech as its exclusive provider of payments for alcoholic beverages. The agreement also includes direct-store-delivery packaged products delivered by the retailer’s alcohol distributors. Gate Petroleum Co. purchased Dover Fueling Solutions’ ClearView solution wetstock monitoring services for its companybranded fuel sites. The deal came after a pilot program at five Gate locations.

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INDUSTRY ROUNDUP

Supplier Tidbits

Altria Group Inc. completed its $1.8-billion investment in Cronos Group Inc. The deal gives Altria a foothold in the global cannabis market with an approximately 45-percent economic and voting interest in Cronos Group.

Dover completed its acquisition of Belanger Inc. Belanger now becomes part of OPW, a business unit within Dover’s Fluids segment.

Performance Food Group Co. (PFG) inked a definitive agreement Combined, Vistar to acquire and Eby-Brown will Eby-Brown service more than Co. LLC. The 75,000 locations. acquisition will allow PFG’s Vistar segment to strategically expand in the convenience channel. Core-Mark Holding Co. tapped Skupos Inc. as its Core Partner for scan data technology. As one of the company’s 13 Core Partners, Skupos is now the exclusive preferred provider for scan data technology.

PepsiCo Inc. acquired Health Warrior Inc., maker of plant-based products such as nutrition bars. The transaction expands PepsiCo’s nutrition portfolio.

π OVER 875 GLOVES IN STOCK

Dos Equis is debuting Mexican Pale Ale, a traditional pale ale with a Mexican twist. Available in 12-packs of bottles and cans and six-packs of bottles, the national launch will be supported with displays and merchandising materials.

ORDER BY 6 PM FOR SAME DAY SHIPPING

COMPLETE CATALOG

1-800-295-5510

Big League Chew teamed with National Pro Fastpitch (NPF) to pair the bubble gum brand with the professional softball league for the 2019 season. In-game and collaborative promos will run in team markets throughout the season, as well as for the NPF college draft.

uline.com

20 Convenience Store News C S N E W S . c o m

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4/4/19 2:24 PM

Unraveling the Complexity of Today’s Commerce Through Collaboration Today’s “always-on” shoppers are changing how you do business. Join industry leaders as we uncover solutions and unite the community to meet the challenges of today’s commerce. The Path to Purchase Summit is an invitation-only event for retailer and consumer goods professionals. To request your invitation, please contact us at p2psummit@ensembleiq.com.

May 15-17, 2019 • Fort Lauderdale, FL

An official event of:

Produced by:

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4/8/19 10:09 AM

LegaL Notice LegaL Notice

To merchants To merchants who who havehave accepted accepted Visa Visa and Mastercard and Mastercard at any at any time time fromfrom January January 1, 2004 1, 2004 to January to January 25, 2019: 25, 2019: Notice Notice of a of a classclass action action settlement settlement of approximately of approximately $5.54-6.24 $5.54-6.24 Billion. Billion.

R y n i l a n Si deseaSileer desea esteleer aviso este enaviso español, en español, llámenosllámenos o visite nuestro o visite nuestro sitio web, sitio www.PaymentCardSettlement.com. web, www.PaymentCardSettlement.com. ( claims forclaims a portion for of a portion the class ofsettlement the class settlement fund will be fund based willon: be based on: Notice of Notice a class of action a class settlement action settlement authorizedauthorized by the U.S. byDistrict the U.S. District b Court, Eastern Court,District EasternofDistrict New York. of New York. J • The amount • Theinamount the class in settlement the class settlement fund afterfund the deductions after the deductions M This notice This is notice authorized is authorized by the Court by the to inform Court toyou inform aboutyou an about an described described below, below, agreementagreement to settle a to class settle action a class lawsuit action that lawsuit may affect that may you.affect The you.•The The deduction O • The deduction to accounttofor account certainfor merchants certain merchants who exclude who exclude • lawsuit claims lawsuit that claims Visa and that Mastercard, Visa and Mastercard, separately,separately, and together and together themselvesthemselves i from the class, from the class, with certain withbanks, certain violated banks,antitrust violated laws antitrust and laws caused andmerchants caused merchants w • Deductions • Deductions for the cost for of the settlement cost of settlement administration administration and and to pay excessive to pay excessive fees for accepting fees for accepting Visa and Mastercard Visa and Mastercard credit andcredit and N notice, applicable notice, applicable taxes on the taxes settlement on the settlement fund and any fundother and any other debit cards, debit including cards, including by: by: S related taxrelated expenses, tax expenses, money awarded money to awarded the Rule to the 23(b)(3) Rule 23(b)(3) • Agreeing • Agreeing to set, apply, to set, andapply, enforce andrules enforce aboutrules merchant about merchant fees fees Class Plaintiffs For m Class Plaintiffs for their service for theironservice behalf on of behalf the Class, of the andClass, and (called default (called interchange default interchange fees); fees); attorneys’attorneys’ fees and expenses, fees and expenses, all as approved all as by approved the Court, by the andCourt, and www. • Limiting • Limiting what merchants what merchants could docould to encourage do to encourage their •their The total • dollar The total value dollar of all value validofclaims all valid filed. claims filed. customerscustomers to use other to forms use other of payment; forms of payment; and and Attorneys’Attorneys’ fees and expenses fees and and expenses service and awards service forawards the Rule for23(b) the Rule 23(b) • Continuing • Continuing that conduct thatafter conduct Visa after and Visa Mastercard and Mastercard changed changed (3) Class (3) Plaintiffs: Class Plaintiffs: For work For donework through donefinal through approval final of approval the of the their corporate their corporate structures.structures. settlementsettlement by the district by the court, district Rule court, 23(b)(3) Rule Class 23(b)(3) Counsel Classwill Counsel will Memb The defendants The defendants say they have say they donehave nothing donewrong. nothing They wrong. say They that sayask thatthe Court ask the for Court attorneys’ for attorneys’ fees in an fees amount in anthat amount is a reasonable that is a reasonable thems their business their practices business practices are legal are and legal the result and the of competition, result of competition, proportionproportion of the class of settlement the class settlement fund, not fund, to exceed not to 10% exceed of the 10% of the settlem and have benefitted and have benefitted merchantsmerchants and consumers. and consumers. The CourtThe hasCourt not hasclass not settlement class settlement fund, to compensate fund, to compensate all of the all lawyers of theand lawyers their and their partie decided who decided is right who because is rightthe because partiesthe agreed parties to aagreed settlement. to a settlement. The Thefirms law law that firms have worked that haveonworked the class on case. the class For additional case. For additional work work memb Court has Court given has preliminary given preliminary approval to approval this settlement. to this settlement. to administer to administer the settlement, the settlement, distribute distribute the funds,the andfunds, litigate and any litigate any The appeals, Rule appeals, 23(b)(3) RuleClass 23(b)(3) Counsel Classmay Counsel seek may reimbursement seek reimbursement at at memb the stettlement he settlement their normal theirhourly normal rates. hourly Rulerates. 23(b)(3) Rule Class 23(b)(3) Counsel Class will Counsel also will also Visa, request (i)request an award (i) an of their awardlitigation of their expenses litigation (not expenses including (not including the the follow Under theUnder settlement, the settlement, Visa, Mastercard, Visa, Mastercard, and the bank and defendants the bank defendants administrative administrative costs of settlement costs of settlement or notice),ornot notice), to exceed not to$40 exceed $40 have agreed havetoagreed provideto approximately provide approximately $6.24 billion $6.24inbillion class in class C million and million (ii) upand to $250,000 (ii) up to $250,000 per each of pertheeach eight of Rule the eight 23(b)(3) Rule 23(b)(3) • settlementsettlement funds. Those funds. funds Those are subject funds are to subject a deduction to a deduction to accountto account i Class Plaintiffs Class in Plaintiffs service in awards service forawards their efforts for their on efforts behalf on of the behalf of the for certainfor merchants certain merchants that exclude thatthemselves exclude themselves from the Rule from23(b) the Rule 23(b) t Rule 23(b)(3) Rule Settlement 23(b)(3) Settlement Class. Class. (3) Settlement (3) Settlement Class, butClass, in no event but in will no event the deduction will the deduction be greaterbe greater c than $700than million. $700The million. net class The settlement net class settlement fund will fund be used willtobe used to d h oW to h oW A sk to for A sk p for Ayment p Ayment pay valid pay claims valid of claims merchants of merchants that accepted that Visa accepted or Mastercard Visa or Mastercard a credit or credit debit cards or debit at any cardstime at any between time January between 1,January 2004 and 1, 2004To and receiveTopayment, receive payment, merchantsmerchants must fill out musta claim fill outform. a claim If the form. If the c January 25, January 2019. 25, 2019. Court finally Courtapproves finally approves the settlement, the settlement, and you do andnot youexclude do not exclude t yourself from yourself the Rule from23(b)(3) the RuleSettlement 23(b)(3) Settlement Class, youClass, will receive you will receive This settlement This settlement creates the creates following the following Rule 23(b)(3) Rule Settlement 23(b)(3) Settlement s a claim form a claim in the form mailinor thebymail email. or by Or email. you may Or ask you for may one askat:for one at: Class: All Class: persons, Allbusinesses, persons, businesses, and other entities and other that entities have accepted that have accepted • C www.PaymentCardSettlement.com, or call: 1-800-625-6440. or call: 1-800-625-6440. any Visa-Branded any Visa-Branded Cards and/or Cards Mastercard-Branded and/or Mastercard-Branded Cards in the Cards inwww.PaymentCardSettlement.com, the s United States United at any States timeatfrom any time January from1,January 2004 to1, January 2004 to25, January 2019, 25, 2019, o legAllr egAl Ights rIghts And oAnd ptIons optIons except that except the Rule that 23(b)(3) the Rule Settlement 23(b)(3) Settlement Class shallClass not shall include not include p (a) the Dismissed (a) the Dismissed Plaintiffs, Plaintiffs, (b) the United (b) the States United government, States government, (c) (c) Merchants Merchants who are included who areinincluded this lawsuit in this have lawsuit the legal haverights the legal and rights and f the namedtheDefendants named Defendants in this Action in thisorAction their directors, or their directors, officers, officers, options explained options explained below. Youbelow. may: You may: t or members or members of their families, of their families, or (d) financial or (d) institutions financial institutions that that a • File •a claim Filetoa ask claim fortopayment. ask for payment. Once you Once receive youa claim receive a claim have issued have Visa-Branded issued Visa-Branded Cards or Mastercard-Branded Cards or Mastercard-Branded Cards or Cards or form, you form, can submit you can it via submit mail itorvia email, mailor ormay email, fileorit may online fileatit online at The se acquired Visa-Branded acquired Visa-Branded Card transactions Card transactions or Mastercard-Branded or Mastercard-Branded www.PaymentCardSettlement.com. www.PaymentCardSettlement.com. be con Card transactions Card transactions at any time at from any time January from1,January 2004 to1,January 2004 to25, January 25, factua • Exclude • yourself Exclude from yourself the Rule from 23(b)(3) the Rule Settlement 23(b)(3) Settlement Class. Class. 2019. The2019. Dismissed The Dismissed Plaintiffs are Plaintiffs plaintiffs are that plaintiffs previously that previously settled settled If you yourself, exclude yourself, you can you individually can individually sue the sue the The re and dismissed and dismissed their own their lawsuit ownagainst lawsuita Defendant, against a Defendant, and entities and entities If you exclude Defendants on your own on your at your own own at your expense, ownifexpense, you want if to. you want to. • related to related those plaintiffs. to those plaintiffs. If you areIfuncertain you are uncertain about whether aboutyou whether you Defendants C If youyourself, exclude you yourself, will not youget will anynot money get any from money this from this may be a may Dismissed be a Dismissed Plaintiff, you Plaintiff, should you callshould 1-800-625-6440 call 1-800-625-6440 or or If you exclude a settlement.settlement. If you are If a merchant you are a and merchant wish to and exclude wish toyourself, exclude yourself, visit www.PaymentCardSettlement.com visit www.PaymentCardSettlement.com for more information. for more information. • C you must you makemust a written make request, a writtenplace request, it inplace an envelope, it in an envelope, and and t mail it with mailpostage it withprepaid postageand prepaid postmarked and postmarked no later than no later than WhAtW mhAt erChAnts merChAnts WIll get WIll get t July 23, July 2019,23, or 2019, send itorbysend overnight it by overnight delivery shown deliveryas shown as from from the sthe ettlement settlement • A sent by July sent 23, by July 2019,23, to 2019, Class to Administrator, Class Administrator, Payment Payment a Card Interchange Card Interchange Fee Settlement, Fee Settlement, P.O. Box P.O. 2530, Box Portland, 2530, Portland, Every merchant Every in merchant the Rulein23(b)(3) the RuleSettlement 23(b)(3) Settlement Class that Class does not that does not OR 97208-2530. Your written Yourrequest writtenmust request be signed must be bysigned a by a The re exclude itself exclude fromitself the class from by thethe class deadline by the described deadline described below andbelow and OR 97208-2530. person authorized to do so and to do provide so andallprovide of the all following of the following overla files a valid files claim a valid willclaim get money will get from money the class from settlement the class settlement fund. fund. person authorized information: (1) the words (1) the “Inwords re Payment “In re Card Payment Interchange Card Interchange the cla The valueThe of each valueclaim of each willclaim be based will on be the based actual on the or estimated actual or estimated information: Fee and Merchant Discount Antitrust DiscountLitigation,” Antitrust Litigation,” (2) your full (2) your full on be interchange interchange fees attributable fees attributable to the merchant’s to the merchant’s MastercardMastercard Fee and Merchant name,telephone address, telephone number, and number, taxpayer and identification taxpayer identification for Ca and Visa and payment Visa payment card transactions card transactions from January from 1,January 2004 to 1, 2004 to name, address, January 25, January 2019. 25, Pro2019. rata payments Pro rata payments to merchants to merchants who file valid who file valid number, (3) number, the merchant (3) the merchant that wishes that to wishes be excluded to be from excluded the from the Super

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Nuts for Candy, Nuts for subject Candy, to subject and upon to final and upon approval finalof approval the settlement of the settlement Rule 23(b)(3) RuleSettlement 23(b)(3) Settlement Class, andClass, what position and whatorposition authority or authority of the Rule of the 23(b)(3) Rule Settlement 23(b)(3) Settlement Class, theClass, plaintiff the inplaintiff Nuts for in Nuts for you have you to exclude have to the exclude merchant, the merchant, and (4) the and business (4) the business Candy will Candy request willthat request the California that the California state courtstate dismiss court the dismiss the names, brand names, names, brand“doing names,business “doing as” business names, as”taxpayer names, taxpayer Nuts for Candy Nuts for action. Candy Plaintiff’s action. Plaintiff’s counsel incounsel Nuts forinCandy Nuts for may Candy may identification identification number(s),number(s), and addresses and addresses of any stores of any or sales stores or sales seek an in Nuts awardforin Candy Nuts for of Candy attorneys’ of attorneys’ fees not tofees exceed not to exceed locations whose locations sales whose the merchant sales the desires merchant to be desires excluded. to be You excluded.seek You an award $6,226,640.00 $6,226,640.00 and expenses and not expenses to exceed not to $493,697.56. exceed $493,697.56. Any fees Any fees also are requested also are requested to providetofor provide each such for each business suchor business brand or brand or expenses or awarded expenses inawarded Nuts forinCandy Nuts for will Candy be separately will be separately funded funded name, if reasonably name, if reasonably available: available: the legal name the legal of any name parent of any parent om. and will not andreduce will not thereduce settlement the settlement funds available funds to available members to members of of (if applicable), (if applicable), dates Visadates or Mastercard Visa or Mastercard card acceptance card acceptance d on: thetoRule 23(b)(3) the RuleSettlement 23(b)(3) Settlement Class. Class. began (if began after January (if after 1,January 2004) 1,and2004) endedand(if ended prior (if to prior January 25, January 2019),25, names 2019), of all names banks ofthat all banks acquired thatthe acquired Visa orthe Visa ctions Theor release Thedoes release not does bar the not injunctive bar the injunctive relief claims relieforclaims the or the Mastercard Mastercard card transactions, card transactions, and acquiring and acquiring merchant merchant ID(s). ID(s). declaratory declaratory relief claims relief thatclaims are a predicate that are a for predicate the injunctive for the injunctive relief relief claims asserted claimsinasserted the pending in theproposed pending Rule proposed 23(b)(2) Ruleclass 23(b)(2) action class action Object • to Object the to settlement. the settlement. The deadline The deadline to objectto object xclude • captioned Barry’s Cut Barry’s Rate Stores, Cut Rate Inc., Stores, et. al.Inc., v. Visa, et. al.Inc., v. Visa, et al.,Inc., et al., is July is23,July 2019. 23, To2019. learnTohow learnto how object,to visit object, captioned visit MDL No.MDL 1720,No. Docket 1720,No. Docket 05-md-01720-MKB-JO No. 05-md-01720-MKB-JO (“Barry’s”). (“Barry’s”). www.PaymentCardSettlement.com www.PaymentCardSettlement.com or call 1-800-625-6440. or call 1-800-625-6440. n and InjunctiveInjunctive relief claims relief areclaims claimsare to claims prohibitto orprohibit requireorcertain require certain Note: If Note: you exclude If you yourself exclude from yourself the from Rule the 23(b)(3) Rule 23(b)(3) other conduct. They conduct. do not They include do notclaims include forclaims payment for of payment money,ofsuch money, such SettlementSettlement Class you Class cannotyou object cannot to the object settlement. to the settlement. (b)(3) as damages, as damages, restitution,restitution, or disgorgement. or disgorgement. As to all such As toclaims all such forclaims for For more For information more information about these about rights these and rights options, and visit: options, visit: s, and declaratory declaratory or injunctive or injunctive relief in Barry’s, relief inmerchants Barry’s, merchants will retainwill all retain all www.PaymentCardSettlement.com. rt, and www.PaymentCardSettlement.com. rights pursuant rights to pursuant Rule 23toofRule the Federal 23 of theRules Federal of Civil RulesProcedure of Civil Procedure have they as a named have asrepresentative a named representative plaintiff orplaintiff absent class or absent class If theIfCthe ourtCA ourt pproves Approves the the which theywhich member inmember Barry’s,inexcept Barry’s, thatexcept merchants that merchants remainingremaining in the Rule in the Rule 23(b) fInAlfsInAl ettlement settlement 23(b)(3) Settlement 23(b)(3) Settlement Class willClass release willtheir release righttheir to initiate right to a new initiate a new of the and separate andaction separate for action the period for the up period to five up (5) to years five following (5) years following the the el will Members Members of the Ruleof23(b)(3) the RuleSettlement 23(b)(3) Settlement Class whoClass do notwho exclude do not exclude court’sof approval the settlement of the settlement and the exhaustion and the exhaustion of appeals.of appeals. onable themselvesthemselves by the deadline by the will deadline be bound will be bybound the terms by the of this terms ofcourt’s this approval of the settlement,settlement, The release Thealso release does also not bar doescertain not bar claims certain asserted claimsinasserted the class in the class including including the release theofrelease claims ofagainst claimsthe against released the released d their parties provided action captioned B&R Supermarket, B&R Supermarket, Inc., et al.Inc., v. Visa, et al. Inc., v. Visa, et al.,Inc., et al., parties in provided the settlement in the settlement agreement,agreement, whether orwhether not theor notaction the captioned work members file No. 17-CV-02738 No. 17-CV-02738 (E.D.N.Y.), (E.D.N.Y.), or claims or based claims on certain based on standard certain standard members a claimfile fora payment. claim for payment. te any The settlement commercial commercial disputes arising disputes in arising the ordinary in thecourse ordinary of business. course of business. The settlement will resolve will and resolve release and claims release byclaims class by class ent at members members For more For information more information on the release, on thesee release, the full seemailed the fullNotice mailed Notice for monetary for monetary compensation compensation or injunctive or injunctive relief against relief against l also Visa, Mastercard, Rule 23(b)(3) to Rule Settlement 23(b)(3) Settlement Class Members Class Members and the settlement and the settlement Visa, Mastercard, or other or defendants. other defendants. The release The bars release the barstothe ng the following following agreementagreement at: www.PaymentCardSettlement.com. at: www.PaymentCardSettlement.com. claims: claims: d $40 • Claims • based Claims on conduct based on and conduct rules that and were rules alleged that were or alleged raised or raised (b)(3) the Ctourt he Ch ourt eArIng heArIng AboutAbout in the litigation, in the litigation, or that could or that havecould beenhave alleged beenoralleged raised in or raised in of the the litigation the relating litigationtorelating its subject to itsmatter. subject This matter. includes Thisany includes any thIs s thIs ettlement settlement claims based claims on based interchange on interchange fees, network fees, fees, network merchant fees, merchant On November On November 7, 2019, there 7, 2019, will there be a will Court behearing a Courttohearing decide to decide discount fees, discount no-surcharge fees, no-surcharge rules, no-discounting rules, no-discounting rules, honorrules, honorwhether towhether approvetothe approve proposed the settlement. proposed settlement. The hearing Thealso hearing will also will all-cards rules, all-cards andrules, certain andother certain conduct other and conduct rules.and These rules. These address the address Rule 23(b)(3) the Rule Class 23(b)(3) Counsel’s Class Counsel’s requests for requests attorneys’ for attorneys’ If the claims areclaims released areifreleased they already if theyhave already accrued haveoraccrued accrue or in accrue in fees and expenses, fees and expenses, and awardsand forawards the Rule for23(b)(3) the RuleClass 23(b)(3) Plaintiffs Class Plaintiffs xclude the future the up to future five years up to five following years following the court’sthe approval court’sof approval the of the for their for representation their representation of merchants of merchants in MDL in1720, MDLwhich 1720, which eceive settlementsettlement and the resolution and the resolution of all appeals. of all appeals. culminated culminated in the settlement in the settlement agreement. agreement. The hearing The will hearing take will take one at: • Claims • based Claims on based rules in on the rulesfuture in the thatfuture are substantially that are substantially place at: place at: similar tosimilar – i.e., todo– not i.e.,change do notsubstantively change substantively the naturethe nature United States United District StatesCourt District for the Court for the of – theofabove-mentioned – the above-mentioned rules as rules they existed as they asexisted of as of Eastern District EasternofDistrict New York of New York preliminary preliminary approval of approval the settlement. of the settlement. These claims These based claims on based on 225 Cadman 225Plaza Cadman Plaza ts and future substantially future substantially similar rules similar are released rules areifreleased they accrue if they up accrue up Brooklyn,Brooklyn, NY 11201NY 11201 to five years to five following years following the court’sthe approval court’s of approval the settlement of the settlement You do notYou have dotonot gohave to the to Court go to the hearing Courtorhearing hire an or attorney. hire anBut attorney. But and the resolution and the resolution of all appeals. of all appeals. claim you can ifyou youcan want if you to, atwant yourto, own at your cost. own The Court cost. The has Court appointed has appointed line at The settlement’s The settlement’s resolutionresolution and releaseand of these release claims of these is intended claims istointended to the law firms the law of Robins firms ofKaplan RobinsLLP, Kaplan Berger LLP,Montague Berger Montague PC, and PC, and be consistent be consistent with and no with broader and nothan broader federal than lawfederal on thelaw identical on the identical Robbins Geller Robbins Rudman Geller & Rudman Dowd & LLP Dowd as Rule LLP 23(b)(3) as Rule Class 23(b)(3) Class factual doctrine. predicate doctrine. Class. factual predicate Counsel toCounsel represent to the represent Rule 23(b)(3) the RuleSettlement 23(b)(3) Settlement Class. Class. e the The release The does release not extinguish does not extinguish the following the following claims: claims: ant to. • QuestIons QuestIons ? ? Claims • based Claims on based conduct onorconduct rules that or rules couldthat not could have been not have been m this alleged oralleged raised in orthe raised litigation. in the litigation. For more For information more information about this about case this (In case re Payment (In re Payment Card Card urself, • Claims • based Claims on future based rules on future that rules are not that substantially are not substantially similar similar Interchange Interchange Fee and Merchant Fee and Merchant Discount Antitrust Discount Litigation, Antitrust Litigation, MDL MDL e, and to rules that to rules were that or could were have or could beenhave alleged beenoralleged raised or in raised in you1720), 1720), may: you may: r than the litigation. the litigation. Call toll-free: Call1-800-625-6440 toll-free: 1-800-625-6440 wn as Any •claims Any thatclaims accruethat more accrue thanmore five years than five afteryears the court’s after the court’s Visit: www.PaymentCardSettlement.com Visit: www.PaymentCardSettlement.com yment • approval of approval the settlement of the settlement and the resolution and the resolution of any appeals. of any appeals. Write to the Write Class to Administrator: the Class Administrator: rtland, Card Payment Interchange Card Interchange Fee Settlement Fee Settlement d by a The release The also release will have also the willeffect have the of extinguishing effect of extinguishing all similarall or similar Payment or P.O. Box 2530 owing overlapping overlapping claims in any claims other in actions, any otherincluding actions, including but not limited but not to limited P.O. to Box 2530 Portland, OR Portland, 97208-2530 OR 97208-2530 hange the claimsthe asserted claimsinasserted a California in a California state courtstate classcourt action class brought action brought Email: Email: info@PaymentCardSettlement.com California of California citizen merchants citizen merchants and captioned and captioned Nuts Nuts info@PaymentCardSettlement.com ur full on behalfonof behalf v. Visa, CandyInc., v. Visa, et al., Inc., No.et17-01482 al., No. 17-01482 (San Mateo (San County Mateo County cation for Candyfor Please check Please www.PaymentCardSettlement.com check www.PaymentCardSettlement.com for any updates for any updates SuperiorPursuant Court). to Pursuant an agreement to an agreement between the between partiesthe in parties in torelating om the Superior Court). relating the settlement to the settlement or the settlement or the settlement approval process. approval process.

1-800-625-6440 1-800-625-6440 • info@PaymentCardSettlement.com • info@PaymentCardSettlement.com 22-23-CSN_ADS.indd 23

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OUT & ABOUT

The 7-Eleven Experience Digital initiatives and private brands were centerpieces of the retailer’s annual conference By Renée M. Covino MUCH LIKE THE RETAILER ITSELF,

the 2019 7-Eleven Experience was a multifaceted affair. The convenience store giant’s annual conference, held Feb. 6-7 in Las Vegas, consisted of a trade show, expo, Product Assortment Learning Center (PALC) and model store. The trade show featured more than 146 vendor partners — double the number of booths from last year — and 888 pre-book opportunities for 7-Eleven Inc. franchisees. Hundreds of new products also were available for sampling. According to Irving, Texas-based 7-Eleven, this year’s conference drew a record attendance of This year’s event drew a record attendance of more than 8,500. more than 4,500 7-Eleven franchisees and their guests, and a total attendance of 8,500-plus. The overall • Have the latest version of the 7-Eleven app; theme of the conference was: Customer• Register for the 7Rewards loyalty program; Obsessed, Digitally-Enabled. • Open the app and tap “Start Scanning”; • Shop and scan items with a barcode (clear shopping bags are offered); • Pay for purchases using Apple Pay, Google Pay or a traditional debit or credit card; • Scan the QR code on the final confirmation screen at the Scan & Pay station.

“We’ve grown our private brand assortment from just 87 items in 2008 to more than 1,500 items today.” — Joe DePinto, 7-Eleven Inc.

The target is to have 850 stores operating with Scan & Pay by the end of 2019. The first wave of Scan & Pay stores will all be in the same region of the country, still undisclosed. Unlike the 14 pilot stores, “it’s not necessarily in the Texas area,” Singh hinted.

Scan & Pay, the retailer’s mobile self-checkout that lets customers skip the line and pay for their purchases using the 7-Eleven app (which also houses the chain’s popular 7Rewards loyalty program), was one of the centerpieces of the 2019 7-Eleven Experience. Unveiled late last year in 14 test stores in Dallas, Scan & Pay was available for franchisee interaction in the model store.

Private brands was the other centerpiece of the 2019 7-Eleven Experience. 7-Eleven customers expect higher quality and value, and the retailer is delivering that with its private brands, according to 7-Eleven CEO Joe DePinto.

“Nobody else has done this — integrated self-checkout with a loyalty program,” said Chief Information Officer/Chief Digital Officer Gurmeet Singh. “Customers can now take control of their shopping experience and earn loyalty points at the same time.”

“We’ve grown our private brand assortment from just 87 items in 2008 to more than 1,500 items today through an intense focus on continuous improvement and quality,” he said.

The basic steps of Scan & Pay are:

The company expects its private brands business to reach more than $1 billion in sales this year as it continues to evolve and unveil new private brand categories and SKUs.

More private brands are on the way this year. One of the most anticipated ones, due out in May, will be its own brand of cigarettes sold under the label of Teton. CSN

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4/4/19 2:28 PM

OUT & ABOUT

TPE 2019 Ignites Las Vegas Attendees of the year’s first tobacco show learn how to rise above the category’s challenges By Melissa Kress THE THEME OF TOBACCO PLUS EXPO

(TPE) 2019 was “Ignite,”

and that it did. The annual conference and expo is traditionally the first tobacco show of the year. TPE 2019, held Feb. 11-13 at the Las Vegas Convention Center, marked the event’s 15th year and organizers celebrated in style — with an expanded show floor boasting 30 percent more square footage than 2018, an array of products touching all existing and emerging segments of tobacco, and a new TPE mobile app featuring information related to the show. Michael Herklots, vice president of retail and brand at Nat Sherman Inc., keynoted the event and his presentation entitled “How to Merchandise, Market and Promote in a New FDA Landscape” could not have come at a better time. As the tobacco category faces pressures from several fronts, including Michael Herklots regulation and competing retail channels, Herklots acknowledged that tobacco retailing is not getting any easier. He offered six strategic tips for navigating the changing landscape: 1. Define your brand experience; 2. Be consistent; 3. Merchandising matters; 4. Embrace partnerships; 5. Trust your gut and your data; and 6. Anticipate change.

With the theme of “Ignite,” TPE 2019 celebrated the event’s 15th year.

Among other things, the Farm Bill legislation permanently removed hemp from the Controlled Substances Act, deeming it an agricultural commodity. As a result, federally regulated institutions, including banks and credit card companies, may now freely conduct business with the hemp industry. The key difference between marijuana and industrial hemp is the amount of tetrahydrocannabinol (THC), the main psychoactive compound in marijuana. CBD products made from hemp oil can only have up to 0.3 percent THC. “Now, it is federally legal to grow, process and retail hempbased products unless states have specific laws prohibiting it,” noted fellow panelist Bryan Moyer, CEO of North Carolina-based agricultural hemp company Criticality. As for how big the opportunity is, estimates put the hemp market at more than $20 billion by 2023. However, there are some challenges to overcome, notably on the consumer side.

Change — whether regulatory or consumer related — is inevitable, Herklots advised. To survive change, he said a retailer needs to be “significantly different and valuable to its customers.”

Cypher pointed out that there’s “a wealth of misinformation and great information” about the CBD products industry. “Consumers need to cut through the noise,” he said. “What’s real and what’s not?”

CBD Joins the Conversation

To achieve consumer adoption, companies need to educate the consumer, make the consumer comfortable in the space and create trustworthy brands.

In addition to highlighting the well-known players of the backbar, Tobacco Plus Expo has made a name for itself as a place for emerging tobacco segments to make a splash. This year, a big draw on both the show floor and in education sessions was cannabidiol (CBD) products. Speaking at a panel discussion entitled “A to Z on CBD,” Christian Cypher, senior vice president of global specialty products and managing director of specialty crops for Pyxus International, explained that passage of the Farm Bill in late 2018 ushered in a new era of opportunity for CBD products. Pyxus International is a North Carolinabased global agricultural company.

On the supply side, hemp is a new product for roughly 90 percent of farmers, so “tried-and-true” agricultural best practices still need to be developed. As Moyer pointed out, transparency will play a critical role in the industry. “You can liken the CBD industry to where vapor was five or six years ago,” Cypher added. “There needs to be a maturation process.” CSN

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OUT & ABOUT

Sharing Solutions Convenience Distribution Marketplace 2019 facilitates building connections By Angela Hanson

Convenience Distribution Association members and partners gathered in San Antonio for the 2019 Convenience Distribution Marketplace. COLLABORATION WAS A KEY THEME of

the Convenience Distribution Association’s (CDA) 2019 Convenience Distribution Marketplace, which took place Feb. 11-13 in San Antonio. The event’s theme, “Sharing Solutions,” brought CDA members and partners together to discuss and share best practices for the future of their own businesses and the convenience store industry as a whole.

Kimberly Bolin

“Several activities were built in to maximize those opportunities in both fun and relaxed environments, educational and thought-provoking settings, and more business-centric with the trade show,” explained CDA President and CEO Kimberly Bolin. “We really shook up the schedule this year. Chairman Kevin Barney and the Events Planning Committee had the vision that this event should really maximize the time that attendees could share solutions through networking, education and while conducting business.”

The event’s “Taste of Texas” dinner featured more lighthearted happenings, such as friendly cornhole competitions, armadillo racing, authentic cuisine and plenty of opportunities to mix and mingle. That was balanced by formal education sessions designed to give attendees the information most useful to them. “Change is not coming; change is here,” Matt Thornhill, founder and managing partner at SIR’s Institute for Tomorrow, said during his

opening keynote speech. Acknowledging the inherent difficulties in predicting the future, Thornhill explained how c-store industry players can prepare for what’s ahead by looking at the trends that are already occurring. Other Marketplace speakers included Eddie Yoon, founder of Eddie Would Grow; Tina Berenbaum, principle at Centauric; Mitch Zeller, director of the Food and Drug Administration’s Center for Tobacco Products; and economist Alan Beaulieu. Marketplace highlighted some of the Convenience Distribution Association’s latest initiatives, such as its scholarship program. The organization has expanded the program to add two additional scholarships, up to a total of four, for employees or immediate family members of employees of CDA member distribution companies. “We believe that it’s important to encourage and support individuals that are pursuing their education in the CDA community,” Bolin said. “It ties into our goal of telling our story about the many rewarding and diverse careers in this segment of the supply chain. It is important to tell the story so that we can educate, recruit and retain talent.” The CDA also inducted two industry veterans into its Hall of Fame during the event. Hall of Fame memberships are presented to the convenience store industry’s most valued participants. Their careers include continual accomplishments on the industry’s behalf and they have demonstrated unquestioned dedication to CDA’s highest values. Bob Caldarella, who recently retired from ITG Brands, began his nearly 50-year career as a sales representative for Lorillard and retired as vice president of sales development with ITG Brands. Jode Bunce started his career by joining Eby-Brown Co.’s sales training program one day after graduating from Northern Illinois University and currently serves as executive vice president of cigarettes and stamping at Eby-Brown. CSN

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Heineken USA relaunched Newcastle Brown Ale brewed by Lagunitas Brewing Co. The new brew celebrates the “Altogether Uncommon” by bringing together a unique blend of pale and roasted malts with American hops. Newcastle Brown Ale is being produced at Lagunitas’ breweries in Petaluma, Calif., and Chicago. It is brewed with American Centennial and Chinook hops and fermented using Lagunitas’ English House Ale yeast. The new Newcastle Brown Ale features a smooth, crisp, slightly roasty flavor with a hoppy twist that is neither too sweet nor too bitter. It is available in six-, 12- and 24-packs of 12-ounce bottles, as well as a 7.75-gallon slim steel keg. The brand continues to be marketed by Heineken USA and distributed through its network. Heineken USA White Plains, N.Y. lagunitas.com

Swisher Sweets Sticky Sweets, a proven customer favorite, is now available as an Encore Edition. These cigarillos provide a delicious blend of caramel fused with juicy peach for an unbeatable, satisfying taste and equally enticing aroma, according to the maker. Available in a resealable two-count pouch with the “Sealed Fresh” guarantee, Swisher Sweets Sticky Sweets cigarillos are ready for shipment to stores nationwide. The product is offered in “2 for 99¢”, “Save on 2” and “2 for $1.49” price options. It is also available in a “2 for $1.29” option in select markets. Swisher International Inc. Darien, Conn. (800) 874-9720 swisher.com

4. Hunt Brothers Pizza Steak & Cheddar Pizza Hunt Brothers Pizza introduces its newest limited-time offer: Steak & Cheddar Pizza. It is made on Hunt Brothers’ original crust, topped with a creamy cheese sauce, a blend of 100 percent mozzarella and natural yellow cheddar cheeses, and then layered with thinly sliced marinated steak. Topped with the company’s signature Just Rite Spice, the Steak & Cheddar Pizza is sure to excite taste buds with every bite, according to the company. Starting in late April, customers can order this specialty pizza at participating Hunt Brothers Pizza locations, while supplies last. It is available as a large 12-inch whole pizza or a Hunk A Pizza. Hunt Brothers Pizza Nashville, Tenn. huntbrotherspizza.com

5. International Delight Peeps Marshmallow Creamer International Delight hatched a new flavor of creamer: Peeps Marshmallow Creamer. Whether coffee lovers prefer Peeps chicks or bunnies, they can now add the flavor of Peeps marshmallow candy to their cup for the first time — making the line of 20-plus International Delight creamers sweeter than ever, according to the brand. WhiteWave Foods Co. Broomfield, Colo. (800) 441-3321 internationaldelight.com

30 Convenience Store News C S N E W S . c o m

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6. Orange Vanilla Coke & Coke Zero Sugar The Coca-Cola Co. added Orange Vanilla Coke and Orange Vanilla Coke Zero Sugar to its portfolio, marking the first Coca-Cola trademark flavor innovation in more than a decade. Available nationwide beginning Feb. 25, Orange Vanilla Coke and Orange Vanilla Coke Zero Sugar come in 12-ounce cans and 20-ounce bottles. Additionally, the new flavors are available exclusively at Wendy’s restaurants in Coca-Cola Freestyle fountain dispensers through the end of the NCAA March Madness basketball tournament before rolling out nationally to all Freestyle units. The new varieties are being supported with a full marketing campaign, including TV, social, digital, outdoor, mobile, radio and experiential spots. The Coca-Cola Co. Atlanta coca-colacompany.com

7. Ne-Mo’s New Cake Bread Flavors Ne-Mo’s added four new cake bread flavors for 2019. Chocolate Chip Cake Bread features moist, sweet bread with a hint of vanilla and semisweet chocolate chips. Iced Golden Pound Cake Bread pairs rich, golden, buttery-flavored bread with vanilla icing. Double Chocolate Cake Bread is a rich and decadent bread bursting with chocolate chips. Strawberry Cream Cheese Bread is a moist, flavorful strawberry bread made with cream cheese and strawberry pieces, topped with a sweet crumble streusel. Horizon Food Group San Diego (800) 325-2692 nemosbakery.com

8. Friends Fun Wine The Friends Fun Wine collection features six unique and bold drinks, such as Coconut Chardonnay, Strawberry Moscato and Sangria. The wines have a 5.5-percent ABV and 71 to 94 calories per 4.2-ounce serving. All varieties are currently available in 750-milliliter glass bottles for a suggested retail price of $5.99. In 2019, the brand will expand its offerings to include 250-milliliter and 330-milliliter aluminum bottles, which will feature a packaging design developed by internationally recognized artist Miguel Paredes. The Fun Wine Co. Miami funwine.com

9. Harvest Snaps New Flavors New from Harvest Snaps, Southern Style BBQ Black Bean Snack Crisps and White Cheddar Green Pea Snack Crisps join the Original Lightly Salted Green Pea Snack Crisps in updated 10-ounce packaging. Made with farmdirect vegetables as the first ingredient, each variety features the same baked — never fried — crunch and irresistible taste consumers love, the brand noted. With 30 percent to 60 percent less fat than regular potato chips and only 130 calories per 22 crisps, the veggiefirst snacks are made with high-quality ingredients and completely free of artificial flavors, colors, cholesterol and common allergens such as soy, nuts, wheat and eggs. Calbee North America Fairfield, Calif. harvestsnaps.com

10. Legal Lean Grape Flavored Cone Leaf Wraps Legal Lean Grape Flavored Cone Leaf Wraps feature an all-natural cornhusk filter. The all-natural fillable leaf cone is slow-burning to extend pleasure. Each tube contains three pre-rolled cones. The leaf wraps are available in a 24-count tube display with 12 displays per case. Legal Lean Co. Orlando, Fla. (408) 883-5326 legalleanstore@gmail.com legalleanstore.com

32 Convenience Store News C S N E W S . c o m

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SMALL OPERATOR

Big Ideas Around Loyalty for Small Operators C-store retailers of all sizes can create successful customer loyalty programs By Renée M. Covino A CUSTOMER IS THE MOST IMPORTANT ASSET to any retailer. However, the goal is to attain that customer’s loyalty, not just that customer’s transaction.

Four in 10 consumers are more loyal to brands today than they were five years ago, according to a recent Oracle study. Sizeable marketing budgets have enabled big retail chains to run fast and furious with customer loyalty programs, but does that mean small operators and independents don’t have a chance to keep up in the race? Not at all, according to several experts who shared with Convenience Store News their best loyalty program ideas geared for smaller operators in the c-store realm. Here are their suggested tactics and best practices:

Quick & Easy Does It A recent Gartner study found that 20 percent of customers drive 80 percent of sales in the world of SMBs (small to midsized businesses). This makes a good business case for small retailers to invest in customer loyalty for increased sales. Phan Meduri, director of product management for Riversand, a data science research firm and data management solution provider, suggests that small operators follow the key tenets of the top-ranked 2018 loyalty programs (as named by Bond Insights). They include Speedway’s Speedy

Rewards, Amazon Prime and the Kroger Fuel Program. What these program have in common, Meduri explained, is that they focus on ease of use and quick rewards, namely: • An easy registration process — they give a pre-generated loyalty number vs. a user-initiated registration process; • Transaction accumulation toward a reward — for example, a digitized punch card/free coffee for every 10 coffees purchased; and • The ability for customers to unlock rewards in quicker intervals. “Providing reward redemption at shorter transaction limits helps in quicker acceptance of the program,” Meduri said. “Smaller retailers must also communicate frequently on deals and promotions exclusive to members.”

Narrow It Down Small retailers should choose just one of the key loyalty tenets — recency, frequency or monetary — to design their loyalty program upon, according to Jenn McMillen, CEO of Incendio, a consulting firm that builds (and fixes) loyalty programs, including the architecture behind GameStop’s PowerUp Rewards program. “Everyone wants everything, but a good program should be focused around one of the tenets to start,” McMillen told CSNews. “Do you want one more visit? One more incremental purchase? More visits in a shorter timeframe? Each of those things is a great goal, but best practices dictate that you choose one to start.” She believes a key piece of running a successful loyalty program is the software that powers it. Several new companies have entered the market in the past few years that “take away the enormous price tag and support staff of running a loyalty program,” according to McMillen. “That’s how small companies, such as the local gas station or car wash, are coming to market with impressive loyalty programs,” she said. The latest loyalty techniques include using analytics to make

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SMALL OPERATOR

smarter decisions around segmentation, retention and offer strategy. “Sending the same coupon to the entire mailable customer database is foolish and margineroding,” she cautioned. The best customer loyalty tactics for a small retailer are the same as for a big retailer, McMillen said. “Personalize the content you send me, make it relevant to me, demonstrate that you know me by serving up content that relates to things I’ve already done or purchased, and show me the love through exclusive discounts, coupons or experiences,” she detailed. Her most important tip, though, is to digest the data you’re gathering and use it to make smart decisions. “Not everyone on your customer list should be treated equally; a common mistake,” she said. “Treat your best customers better and they’ll reward you with more frequency, more spending, more visits. After all, it’s easier to get one more purchase out of a current customer than one purchase out of a new customer.”

Keep It Real Roi Kliper, CEO of City Hive, an e-commerce and data platform for the wine and spirits industry, believes the most important aspect of a small retailer’s loyalty plan is to be fair and honest. Kliper has a PhD in computational neuroscience. “Your customers will see a fake loyalty plan from a mile away. If you are trying to pretend to give something, don’t,” he said. “Customers are smart. But that doesn’t mean a loyalty plan has to boil down to discounts or eroding margins.” Good businesses know to reward their loyal clients with a personal touch, a better service level, and early or exclusive access to unique offers or events, said Kliper. “The most successful ones manage to use their loyalty plan to build a community where members feel connected,” he added. Some other loyalty tips from Kliper include: • Clubs are better to offer than subscriptions. • Cash is better than points. • Bother to know your customers. • Do not sell them a quantity discount, but rather a unique relationship. “Punch cards are so 1980s — even the digital ones,” he remarked. • Figure out what makes you unique and make that available for your customers at better conditions. • Measure the effect on your business. • Iterate — repeat these steps over and over again.

The way Kliper sees it, omnichannel is also a forwardthinking approach in successful loyalty plans and something small operators must keep up with as well. “People need to be able to connect with you and enjoy the benefits of their membership across different channels. To make something only available in-store or for app customers is unacceptable to the modern consumer,” he said.

Get Personal Some retailers think a loyalty program is strictly an incentivized rewards program with discounts or perks, but Zack Goldstein, CEO and founder of customer engagement solution provider Thanx, believes the best loyalty programs build a deeper relationship between the brand and its customers. “Everything is about personalization these days and savvy customers expect their customer experiences to be highly relevant and tailored toward them,” he said. “One-sizefits-all marketing and campaigns fit no one.” Data is the fuel for personalization at-scale and “an absolute game-changer” in enabling offline merchants to finally compete against online behemoths, said Goldstein. He also recommends the following for small operators: • Start with enrollment and make it as easy as possible for customers to join the program. Alert shoppers to the program in-store at the point of service, at a kiosk, online or by asking customers to join via text or a mobile app. • Make the program effortless by eliminating the need for customers to scan a card or enter their phone number. “Modern engagement platforms make it effortless for your customers and your staff by making the credit card the trigger of data that enables customers to earn rewards with every purchase they make,” he said. • Retain current customers by marketing effectively through tailored campaigns at the right time and knowing how they prefer to engage across preferred communication channels, such as SMS, email, social media, etc. • Incentivize customers to return in order to drive a high customer lifetime value. Use a holistic platform to seamlessly interact with shoppers while assessing a wide range of data from the initial contact to point of purchase and beyond. • Ask for feedback. “It is one of the most cost-efficient ways to gain insights into your customer and their experience with your brand,” Goldstein advised. Proactively asking a customer about their experience also fosters a deeper connection. CSN

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COVER STORY

More than doubling its convenience store network in four years, Speedway moves west BY MELISSA KRESS 38 Convenience Store News C S N E W S . c o m

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COVER STORY

Oct. 1 appears to be a big day for Speedway LLC. On Oct. 1, 2014, the Enon, Ohio-based convenience store operator closed on its acquisition of Hess Corp.’s retail network, adding 1,250 locations to its portfolio. Prior to this deal, Speedway’s store count stood at roughly 1,500 stores. By adding Hess’ assets, the chain’s store count neared 2,800 and landed Speedway in the No. 1 spot on the 2015 Convenience Store News Top 20 Growth Chains ranking. Fast forward four years and on Oct. 1, 2018, Speedway experienced another growth spurt — this time, acquiring San Antonio-based Andeavor’s retail locations thanks to a strategic tie-up between Andeavor and Speedway parent company, Findlay, Ohio-based Marathon Petroleum Corp. (MPC). Speedway is a wholly owned subsidiary of MPC. The new national powerhouse has 3,923 c-stores from coast to coast — and once again earned the No. 1 spot on the 2019 CSNews Top 20 Growth Chains ranking. In fact, Marathon Petroleum’s addition of 1,492 locations between January 2018 and January 2019 accounted for more than 40 percent of the 3,635 stores overall added by the top 20.

3,923 STORES COAST TO COAST

ON THE 2019 CSNEWS TOP 20 GROWTH CHAINS RANKING

Convenience Store News 39

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COVER STORY

There are best practices from [Andeavor’s] entire operation. We’re learning every day from each other; two great companies that had different approaches on how they went to market. Speedway President Tony Kenney says there’s much more to converting acquired stores than just changing the signage.

“That’s pretty rapid growth, from 1,500 stores four years ago to just about 4,000 stores now,” said Speedway President Tony Kenney. The addition of Andeavor has expanded Speedway’s operation across key markets nationwide, combining the strong position MPC has historically enjoyed east of the Mississippi with the western U.S. presence Andeavor had built up over time. “Before acquiring the Hess locations, Speedway was a Midwestern company — Ohio, Indiana, Michigan, Illinois, Kentucky and West Virginia. Hess expanded our footprint up and down the East Coast, from the Northeast down to the Southeast. But still, with the combination of those two, we were all east of the Mississippi,” Kenney explained. The Andeavor acquisition changed that. Its stores are in the southwestern United States — West Texas, New Mexico, Arizona — and then up and down the West Coast. “California will be our largest state in terms of store count,” Kenney noted. “And there are some stores in Oregon, Washington and Alaska.”

TONY KENNEY PRESIDENT, SPEEDWAY

‘Super’ Once Again The Andeavor transaction also did something else for Speedway: it returned the SuperAmerica banner back to the retailer. Speedway had sold off SuperAmerica eight years earlier. A series of acquisitions brought SuperAmerica into the Andeavor fold in 2017. Speedway acquired 200 company-owned SuperAmerica locations in Minnesota’s Twin Cities market as part of the Andeavor deal. To date, 170 of those locations have been converted to Speedway, and the retailer expects to finish that market by the end of April. The re-identification involves much more than just changing the signage outside. “A lot of people think you show up one day and change the ID sign outside from SuperAmerica to Speedway. What’s really involved is you’ve got to get inside the store. We change all the point-of-sale, the back-office systems, we install our loyalty program, [and] there is extensive training of employees on new systems and procedures,” Kenney detailed. “All of that is technology driven, so we are basically installing a whole new connection to a network to be able to run the stores like the rest of the Speedway stores,” he continued. “What’s really happening inside the store is much more complex than just the appearance — the things that you see from the outside perspective, the painting and things like that.”

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COVER STORY

With integration of the SuperAmerica stores almost wrapped up, Speedway is planning its next market for re-identification. In addition to SuperAmerica, Andeavor’s retailmarketing system included stores marketed under such well-known fuel brands as ARCO, Shell, Exxon, Mobil, Tesoro, USA Gasoline and Giant.

I think we’ve gotten better as we are moving into the Andeavor re-identifications.” Speedway is also learning from Andeavor’s best practices. “There are best practices from their entire operation,” Kenney noted. “We’re learning every day from each other; two great companies that had different approaches on how they went to market.”

According to Kenney, Speedway is already doing the design work in the stores and getting permits to begin re-identification of all the Southwest locations: West Texas, primarily the El Paso market; New Mexico; and Arizona. Work was slated to begin on those 250 stores on April 1.

For example, Andeavor was a very strong fuel operator, so the company focused primarily on the fuel side of the business. It had a number of strong relationships with major brands to market fuel and did substantially higher-than-industry volumes at its locations, according to Kenney.

Lessons Learned

“There are several best practices that we are going to apply as we look forward to the work we have to do, especially as we get into California,” he said.

Speedway learned a lot of about the re-identification process from its Hess retail integration. “This is about training people in these new systems. You have a huge people aspect of converting stores from one brand to another. There are a lot of things you do learn as we do more of these,” Kenney said. “Certainly, what we did with Hess, we came away with a better understanding of what the expectations could be on a large-scale basis; what most effectively you can ask people to do to keep moving at an efficient pace. A lot went into that, and

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Another area of opportunity Kenney sees is SuperAmerica’s Super Mom commissary and bakery — a program he admits he’s always been a big fan of. As Speedway continues to grow its foodservice business, it looks to add efficiency by controlling more of its supply chain. On the other side of the equation, Speedway also has several best practices to apply to Andeavor — chief among them, Speedway’s strength in the in-store business. “We are able to bring a lot of our knowledge and learnings, and relationships that we have with CPG companies and vendor partners,” Kenney said. “We

Technology is one of the three pillars of Speedway’s growth strategy.

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COVER STORY

have a strong loyalty program. We want to leverage that. There will be some best practices brought from the Speedway side as we continue to integrate the Andeavor stores.”

Speedway’s Trident of Growth While Speedway experienced most of its expansion from two large acquisitions in the past four years, the company’s growth strategy is actually a combination of three steps: • Organic growth, • Mergers and acquisitions (M&A), and • Technology. In terms of organic growth, Kenney explained that Speedway’s approach typically involves building new stores, rebuilding older stores that have the potential to do more, and remodeling existing stores — investing in expanded foodservice and cooler space, for instance. “With a portfolio of almost 4,000 stores, we have many opportunities to high-grade our assets,” Kenney told CSNews. Regarding M&A, Speedway intends to continue being an active player, but with discipline. “As you know, the industry continues to consolidate and with that, there are many opportunities big and small. You want to be able to look at those and evaluate them, see how they fit overall into your strategy of growth,” said Kenney. “We certainly will be active in looking at those and if they make sense, potentially pursuing more down the road. However, we will take a very disciplined approach to acquisitions in the future.” As for the third leg of the c-store chain’s growth strategy, Kenney said technology goes along with organic growth. “Technology is so important, I think, especially in the future of our industry as the consumer continues to evolve, and generations evolve — the millennials, Gen Z and Gen X. They’re more accustomed to shopping in a different way than baby boomers access the convenience channel,” he explained. “They want to engage on mobile platforms, through websites and social media. They want to have interaction with your brand on a personal basis.” Recognizing this, Speedway has zeroed in on personalization as a major part of its technology platform, leveraging the

Speedway continues to grow its foodservice business.

data it mines from its Speedy Rewards loyalty program. “We have consumer-specific data from 14 years of transaction history and we can make relevant offers to our customers using that data,” he shared. “We are investing in screens at our pumps in conjunction with EMV compliance, as well as screens at each pointof-sale inside the store. When customers swipe their Speedy Rewards card, we immediately can interact with that consumer on a personal level based on their purchase history. It’s a way to upsell and grow the business using technology to engage the consumer the way they want to be marketed to.” The convenience channel is under a lot of pressure, Kenney acknowledges, not just in terms of fellow c-store competitors, but also Amazon, dollar stores, quick-service restaurants and more. “They are out there all competing hard for the same consumer and engaging them in different ways,” he said. “We have got to stay on top of that in order to protect our markets and ultimately grow same-store sales.” Being part of a public company, Speedway faces the extra pressure of continually reinvesting in the business and meeting expectations for shareholder returns. With all growth, there comes challenges, but Kenney is confident that Speedway is on the right track. “As long as we are delivering projects and growing, whether it is organic growth or acquisitions, and those investments are meeting or exceeding alternatives for capital for the corporation, I think our shareholders are going to be happy,” he said. “But I cannot emphasize enough, we must be prudent and disciplined on how and where we invest capital to make sure we are generating expected returns.” CSN

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Master Category Management for Today & Tomorrow The disciplines of category management and shopper marketing are converging A Convenience Store News Staff Report COMPETITION FOR THE “CONVENIENCE” SHOPPER is at an alltime high. Convenience store operators must ensure they are mastering category management to understand the needs of consumers and meet those needs consistently across every product category in the store.

be about what is driving change in the market and how the customer is impacting that change, echoed Todd McCourtie, senior director of industry strategy at JDA Software, a provider of end-to-end, integrated retail and supply chain planning and execution solutions.

“The practice of category management has changed and will continue to change, mainly driven by the increased awareness and education of consumers. They are surrounded by a wealth of information at their fingertips that is changing their perception of what they choose to consume and purchase,” said Kristen Thaler, category development manager for convenience distributor McLane Co. Inc. “The industry [needs] to move to a more collaborative approach to ensure that strategies are aligned to fulfill the needs of the ever-changing consumer.”

“It’s not that category management of the past wasn’t about the customer. Certainly, it was. But it was more around the product vs. what the customer wanted to purchase,” said McCourtie.

Category management of the past has been more of a calendar-based event vs. a perpetual, always-on responding to customer trends and need changes. C-store retailers have to rethink their approach to targeting customers. Moving forward, it really needs to

Visual Merchandising

Today, the disciplines of category management and shopper marketing are converging. Blaine Ross, president of the Category Management Association (CMA), defines category management as “a process to create a comprehensive plan that meets shopper needs in a superior manner to produce excellent business results for retailers and manufacturers.” “It is a holistic approach toward developing a plan based on facts and insights that deliver sound strategies and tactical success,” Ross continued. “Category management

Assortment Optimization

Category Definition Category Role Developement

Supply Chain

Consumer Insights

Store Managers

Decision Trees

Space Management

Distribution

Collaborative Category Management

Shopper Marketing

Sales

E-commerce

Financial Metrics

Research

Human Resources

Promotion

Joint Business Planning

Pricing Logistics Operations National Account Teams

Marketing Merchandising

Source: Category Management Association

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Call to Action l Stop negotiating business plans and developing category plans in the absence of the shopper. Shopper insights and shopper marketing need to be included in, not separate from, category management. Working in a “bubble” will limit your success. l Know your consumer and stay up-to-date on category trends to ensure that your item mix supports the evolving needs of your customer base. Continually look for gaps for items that may be missing from your set to capitalize on sales opportunities. l It’s not just about a planogram anymore. It’s about strategy, understanding the customer’s path to purchase, and ensuring you have the right products available on whatever path the customer chooses. l Those companies that can store data and access the information on a timely basis will be well positioned to meet and predict shopper demands. Use the data to hone your strategy. Retailers and suppliers that continue to deliver actionable insights will be successful in driving incremental growth and influencing their target shoppers. l Document and share your overall category management strategies across the entire organization. Keep this updated annually. Develop onboarding tools to teach new team members what you’re trying to accomplish. Also share your objectives with your trusted suppliers and ask them to bring in shopper-focused solutions that match your goals.

excellence requires a disciplined structure and process designed to identify key insights to fuel growth.” Reflecting the convergence of shopper marketing and category management, CMA recently formed a second organization called the Shopper Insights Management Association (SIMA). The goal is to help its members drive meaningful basket and brand growth and improved shopper experience across all touchpoints. “Today, category management and shopper insights professionals are dynamically linked due to the emergence of new industry concepts that require a broader view of the strategic decision-making framework,” Ross explained. “We believe that bringing these functions together for thought leadership, career development, certification and sharing of best practices will provide the industry with a compelling value proposition.” Ross noted that the retailers and suppliers that are winning in the convenience store industry are those organizations that are leveraging a variety of disparate data sources, and who can also deliver integrated shopper insights and influence the shopper.

Category Management = Data Management Advances around technology and data are reshaping the practice of category management, too. It’s become an absolute must for category managers to leverage data insights, so they are able to better predict what the customer is going to demand and meet those assortment needs. Data analysis today requires a robust dataset that includes, but is not limited to, scanned sales, transactional, market, consumer panel, loyalty and shopper insights data, according to Sue Nicholls, founder and president of the Category Management Knowledge Group. She pointed to two data game changers in particular: • Improved data granularity has advanced to the point where transactional data can be broken into pieces; for example, hourly data. Such daypart data gives retailers the ability to analyze sales volumes for any given hour of the week. This is critical data because different types of customers shop a c-store at different times of the day. • Leakage data can give c-store operators perspective on what competitive retailers they are “leaking to.” This perspective can help a retailer identify its chief competitors (both online and offline) and what items they are leaking. Having a lot of data isn’t enough, though. “You need to integrate the data as much as possible with tools and technology that allow easy and quick access to the data so that less time is spent pulling the data and more time is spent drawing insights,” Nicholls added. There have been tremendous advances in analytical tools and technologies to ensure that both c-store industry retailers and suppliers are positioned well to succeed, noted CMA’s Ross. In the area of space planning, automation has significantly reduced the drawing time for planograms. Other advances include

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simplification of standard reporting, same-store testing, analytics to answer what tactics work best, and implementation of virtual reality concepts, he said. To really understand the opportunity gaps that exist and ensure they have the right market coverage, retailers need a strategic assortment tool that will help them take consumer data — whether it be through data science or other means of market-level data — into that solution, advised McCourtie of JDA Software. They also need a data-based platform to connect their assortment planning with their space planning with their strategic planning with their macro space or floorplan — and automation to support all of those functions, he said. JDA has developed a platform that orchestrates all of those business processes — everything from data understanding, to strategic planning around the assortment, to understanding the shopper persona, to understanding where the path to purchase really is, to the automation capabilities to drive space and floorplans, according to McCourtie. “You are going to need data insights, you are going to need data science and you are going to need a level of automation within that execution in order to provide that,” he explained. “…You are seeing a lot more freestanding c-stores pop up without gas, with the emphasis on a quick express market. But in order to do that, you have to understand your customer and you have to have the technology to help you gather that data, analyze that data and execute on that data.” McLane’s Thaler agrees that many different data sources, studies and technologies have changed the practice of category management dramatically and will continue to do so. One that she points to is liveimage planogram development, which McLane utilizes in its Center for Category Innovation. “That program, combined with our proprietary sales reporting, helps to validate customer sales data, create a sales matrix to isolate how each customer indexes within the competitive market and analyze productivity and space allocation by subcategory, which enhances growth opportunities for our customers,” Thaler explained. She also believes that analyzing sales data to identify opportunity gaps at least once a year, preferably twice a year, to enhance product selections containing both core and new innovation items that perform well nationally and regionally is a very important strategy. “It maintains consistency to keep up with growth and trends within the industry,” she said.

What’s to Come When asked where she sees the practice of category management headed in the next 10 years, Thaler said category assessment and analytics will need to become more predictive in determining patterns in

shopping behavior. She also foresees an increased focus on niche consumer products, and says customer service and overall experience will need to be heightened to set convenience store retailers apart from their competitors. JDA’s McCourtie predicts an emphasis on artificial intelligence (AI) and machine learning. Predictability and probability forecasting is going to be key, he believes. “[The industry is] going to not just automating of the planogram, but automating of the process,” he said. “Going forward, with machine learning, artificial intelligence and the data that will be available, we will be able to drive cross-category assessment to be able to say: If I change my assortment here, will it affect my next two categories?” Ross of CMA foresees continued focus and innovation around such key areas as shopper insights, data science, automated processes, visualization, e-commerce expertise and centers of excellence in order to move faster and smarter. There also will be new methodologies for collecting different types of data, such as voice data, video in-store, receipts, imaging, geo-fencing, etc. What won’t change, though, is the key sales fundamentals of pricing, promotion, shelving, assortment and marketing; utilizing scorecards to measure goals; and keeping the focus on the shopper first and foremost, he maintains. “The shopper insights professional will need to be involved with strategies and tactics to deliver against the shopper in all touchpoints — brick and mortar, click and collect, click to ship, same-day delivery and more. These insights will need to be fully integrated with finance, marketing, sales, supply chain and IT,” Ross said. “The foundation is to understand the shopper and activate on what we know. This will always be at the core of what we do.” CSN

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FEATURE

DEFINING CONVENIENCE

Just as shoppers’ behaviors are changing, so are their definitions of convenience By Angela Hanson, Melissa Kress & Danielle Romano TRADITIONALLY, CONVENIENCE STORES have filled the definition of “convenience” by location mostly. The channel is known for its prime locations, around-the-clock service and small store size.

While location is still important among convenience store shoppers, the word “convenience” has evolved to now evoke multiple store- and experience-related attributes, according to the findings of the 2019 Convenience Store News Realities of the Aisle consumer study. For a majority of shoppers, it boils down to a convenient experience. When asked what defines convenience, 44 percent of shoppers polled cited quick/ quick visit and 13 percent said a store is convenient if it is close, close to home or close to work. Convenience also means “easy.” Specifically, 22 percent of those surveyed defined convenience as easy, 13 percent defined it as easy to get in and out, and 7 percent defined it as easy access. What a store has to offer is important, too,

according to shoppers. In tandem with the expectation of an easy experience, 5 percent of shoppers said a store that offers a convenient shopping experience is one that is easy to shop and has what they need. Overall, the definition of convenience for most shoppers is an experience that ultimately saves them time and effort. Convenience is quick, easy, close by and allows a shopper to get what they need, when they need it. Convenience stores that focus on simplifying the shopping and purchasing experience are more likely to see an uptick in foot traffic and an increase in basket size.

Shopping Behaviors For most U.S. consumers, stopping by a convenience store has become a habit, with nearly two-thirds of all shoppers (63 percent) visiting at least

% of Shoppers That Define Convenience as… Quick/quick visit Easy

44% 22%

Easy to get in and out

13%

Close/close to home/work

13%

Necessities/basics (bread, milk, eggs, etc.)

13%

Easy access

Easy to shop/find what I need

Has a gas station

Base: 1,499 U.S. shoppers aged 18+ who shop convenience stores at least once a month Source: Convenience Store News 2019 Realities of the Aisle Study; EIQ Research Solutions

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Ratings for Convenience Store Shopped Most Often

weekly. This is particularly true for the younger generations, as 66 percent of millennials and 65 percent of Generation X visit c-stores weekly, compared to 56 percent of baby boomers. In contrast to other retail channels that are dominated by only a few national players, such as mass merchandise, club, dollar and drug, the convenience channel is strikingly diverse. Shoppers listed 98 different c-store chains as the store they most often shop, and only 7-Eleven reached double digits (20 percent) for the percentage of shoppers that most often visit that chain. Other chains most frequently listed as the most-visited include QuikTrip (6 percent), Circle K (6 percent), Speedway (5 percent) and Wawa (4 percent).

Excellent/very good

Speed of shopping trip

Fair/poor

76%

Friendliness of employees Cleanliness of store

63% 27% 10%

63% 29% 8%

Helpfulness of employees

58% 27% 15%

56% 52%

Quality of prepared food

49% 30% 21%

40% 36% 23%

Price of products

Base: 1,499 U.S. shoppers aged 18+ who shop convenience stores at least once a month Source: Convenience Store News 2019 Realities of the Aisle Study; EIQ Research Solutions

Frequency of Convenience Store Visits: Gasoline vs. In-Store 60% 49% 49% Gasoline only

In-store only

Both

27% 26% 19% 13% 4%

11%

Daily

4% Weekly

Once/month

6% 6%

1% 1% 1%

Once/6 months

Yearly

10%

2% Never

Base: 1,499 U.S. shoppers aged 18+ who shop convenience stores at least once a month Source: Convenience Store News 2019 Realities of the Aisle Study; EIQ Research Solutions

Most Recent Convenience Trip Spend 2% 4% Less than $2

15%

$2-$4.99

18%

$5-$9.99 $10-$14.99

8% 19%

$15-$19.99 $20 or more Purchase gas only

33%

Base: 1,499 U.S. shoppers aged 18+ who shop convenience stores at least once a month Source: Convenience Store News 2019 Realities of the Aisle Study; EIQ Research Solutions

AP R

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31% 13% 30% 19%

40% 30% 30%

Fun to shop

When it comes to trip frequency, in-store-only visits on a daily basis occur slightly more often than trips made just for gasoline (13 percent vs. 4 percent,

25% 11%

Organization of store

Loyalty program

When rating the store they shop most often, respondents gave “excellent/very good” ratings to trip speed (76 percent), friendly staff (64 percent), store organization (63 percent) and cleanliness (63 percent). Conversely, categories with the highest “fair/poor” ratings included price (30 percent), quality of prepared food (21 percent) and loyalty program (19 percent), indicating room for improvement in these areas.

Breakfast and late afternoon to early evening remain the most common trip times, as 32 percent of shoppers say they typically visit from 6 a.m. to 8:59 a.m., 50 percent typically visit from 4 p.m. to 6:59 p.m., and 37 percent typically visit from 7 p.m. to 9:59 p.m.

21% 3%

64%

Variety of products offered

Still, despite the industry’s diversity, shoppers habitually visit the same location, with 72 percent of c-store shoppers reporting they typically visit the same store each time.

C-store visits are most likely to take place while running errands, with seven in 10 shoppers describing this as a typical trip occasion. Shoppers are also likely to pair a c-store trip with travel to or from school or work (53 percent) or while traveling for pleasure (48 percent). While it is a minority of shoppers, a non-insignificant 46 percent will typically make a trip for the specific purpose of visiting a c-store.

Good

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FEATURE

Time of Day Typically Shop Convenience Stores

respectively). However, gasoline-only trips spike on a weekly basis (60 percent).

4 p.m. - 6:59 p.m.

50%

What They’re Buying Of the nearly 1,500 c-store shoppers surveyed, 63 percent said they bought gasoline on their last visit. However, only 2 percent said they purchased fuel only on their most recent trip.

7 p.m. - 9:59 p.m.

37% 6 a.m. - 8:59 a.m.

2 p.m. - 3:59 p.m. 11 a.m. - 1:59 p.m. 29%

32%

9 a.m. - 10:59 a.m.

Also topping the purchase list are: salty snacks (48 percent purchased on last visit), candy/gum (47 percent), bottled water (44 percent), canned/bottled soda (43 percent), sweet snacks (40 percent), cold dispensed beverages (39 percent), hot dispensed beverages (39 percent), lottery tickets (38 percent) and snack packs (34 percent). Grab-and-go prepared food — which includes hot dogs, other roller grill items and packaged sandwiches and salads — comes close to breaking into the top 10, with 32 percent of respondents saying it was the reason for their recent c-store buy. Made-to-order prepared food, on the other hand, was cited by just 25 percent of respondents. While c-stores offer a number of ancillary services, they aren’t necessarily resonating with consumers; 49 percent of shoppers say they do not use any ancillary services on a regular basis. Only ATM (29 percent) and car wash (16 percent) see shopper usage above 10 percent.

What They’re Spending On average, shoppers estimate they spent $10.31 on their last c-store visit, not including the price of gasoline. Fifteen percent spent $20 or more. Interestingly, health-conscious consumers are more likely to spend $20 or more vs. non-health-conscious shoppers (17 percent vs. 13 percent, respectively), indicating an opportunity to increase basket size with better-for-you items. This year’s study revealed that generational differences affect c-store spending. Younger shoppers — defined as Generation Z (those aged 18-21), millennials (aged 22-37) and Generation X (aged 38-53) — spent more on their most recent shopping trip than baby boomers (aged 54-72). Younger shoppers demonstrate a higher reliance on c-stores for unplanned or impromptu meals, snacks and basic necessities.

27%

22% 10 p.m. or later

16%

Base: 1,499 U.S. shoppers aged 18+ who shop convenience stores at least once a month Source: Convenience Store News 2019 Realities of the Aisle Study; EIQ Research Solutions

% Influenced to Visit a Convenience Store Based on... Loyalty program Word of mouth Coupon Gas price app

33% 28% 26% 23%

None of the above

18%

Other

18%

Mobile app offer Social media promotion/message Radio or TV advertisement Email Print circular Billboard

14% 13% 11% 10% 8% 8%

Text message

Mobile ordering

Base: 1,499 U.S. shoppers aged 18+ who shop convenience stores at least once a month Source: Convenience Store News 2019 Realities of the Aisle Study; EIQ Research Solutions

% Influenced to Shop In-Store During Recent Trip by... Banners/window signs None of the above

27% 26%

Frequent buyer/loyalty programs

25%

Promotional signage

25%

Video displays on pump

17%

Mobile app promotions/deals

17%

Pumptoppers (print ads on pump) Car wash promotions

16% 12%

Gasoline nozzle display ads

10%

Coupons dispensed from pump

10%

Other Audio music feed with messages

8% 5%

Base: 1,499 U.S. shoppers aged 18+ who shop convenience stores at least once a month Source: Convenience Store News 2019 Realities of the Aisle Study; EIQ Research Solutions

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Channels Where Shoppers Purchase in Typical Month Grocery Mass Specialty/ Discount Club Dollar Drug Online Other Only Do Not Natural Supermarket C-store Purchase

Prepared food 50%

34%

12%

15%

14%

Hot dispensed beverages 13%

10%

16%

33%

27%

Cold/frozen dispensed beverages 22%

18%

10%

34%

21%

Beer/malt beverages 33%

26%

11%

35%

Candy/gum 46%

44%

12%

10%

27%

23%

11%

Packaged beverages 62%

58%

19%

21%

24%

17%

Packaged snacks 64%

58%

12%

22%

21%

28%

17%

Cigarettes 6%

12%

69%

Other tobacco products 5% 6% 2% 2% 1% 3% 4% 3% 4% 10% 71% Grocery items 71% Highest Monthly Purchase Incidence

65%

16%

28%

26%

21%

11%

Lowest Monthly Purchase Incidence Base: 1,499 U.S. shoppers aged 18+ who shop convenience stores at least once a month Source: Convenience Store News 2019 Realities of the Aisle Study; EIQ Research Solutions

Whereas 19 percent of total c-store shoppers spent $10 to $14.99 on their most recent trip, Gen Zers (25 percent), millennials (22 percent) and Gen Xers (20 percent) were more likely than baby boomers (13 percent) to spend this amount. More than a quarter of total respondents spent $5 to $9.99 on their last visit (33 percent); 8 percent spent $15 to $19.99; and less than a quarter spent $2 to $4.99 (18 percent). Baby boomers (7 percent) were more likely than Gen Z (1 percent), millennials (3 percent) and Gen X (3 percent) to have spent less than $2 during their most recent trip. While technology is a leading way c-store operators are enhancing their convenience experience, the research shows that mobile payment and retailer mobile apps combined were used by only 2 percent of overall shoppers to pay during their last visit. Traditional means of payment, including debit card (42 percent) and cash (33 percent), were shoppers’ preferred methods. Younger shoppers, though, do demonstrate higher usage of debit and mobile payment compared to the older generations. As a result, convenience stores will continue to feel the pressure to offer more digital and frictionless shopping, payment and promotional solutions. Gen Z (45 percent) and baby boomers (43 percent) were more likely to have paid with cash than millennials (29 percent) and Gen X (30 percent). There are also some notable differences in payment method by gender: • Male shoppers were more likely to have paid with a credit card than females; • Female shoppers were more likely to have paid with a debit card than males; and

• Male shoppers were more likely than females to have paid using mobile payment.

Enticing Additional Buys What draws shoppers to the stores they visit and how can you get them to buy more? For one-third of c-store shoppers, loyalty programs motivate them to visit a specific store, the findings show. Word of mouth (28 percent), coupons (26 percent) and gas price apps (23 percent) are also among the most influential factors. Certain technology-based tactics, including gas price apps, mobile app offers and social media, influence at least 10 percent of shoppers. However, digital tactics such as mobile apps, social media promotions/offers, text messages, mobile ordering and coupons resonate more strongly with younger shoppers than with baby boomers or members of Generation X. Factors that influenced consumers to shop for in-store merchandise on a recent trip to a convenience store included promotional signage (cited by 25 percent of shoppers), banners/window signs (27 percent) and loyalty programs (25 percent). Overall, younger consumers appear to be more responsive to influencers, as 31 percent of Gen Xers and 33 percent of baby boomers say they were influenced by “none of the above,” compared to 24 percent of Gen Z and 20 percent of millennials. Younger shoppers are also more responsive to video displays at the gas pump, with 24 percent of Gen Z, 21 percent of millennials and 16 percent of Gen X saying they were influenced by video displays at the pump on a recent visit, compared to 6 percent of baby boomers. CSN

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FOODSERVICE

What’s Hot on C-store Menus? Kum & Go’s Huevos Rancheros Pizza lands a perfect score for uniqueness This month showcased a variety of very unique — especially in the minds of shoppers — breakfast items designed to drive traffic and appeal to a wide range of consumers.

BREAKFAST ANYONE?

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These creative concepts also offered very regional flavor profiles that might be an opportunity for your part of the world, too. So, keep an eye on Unbranded PI (Purchase Intent) as an indicator of an item that can work in multiple settings.

The First 100 of the Year!

and Casey’s Sausage Gravy flavors appealed to surprising audiences. You’ll note the highest interest levels were from Asian consumers and families with kids, in addition to a more expected western regional consumer. This is a great reminder of the importance to match up your target consumer with those indicating a preference for these items as a way to determine if a concept is right for your brand.

Runner-Up While the two breakfast pizzas were seen as exceptionally unique and drove purchase intent, ampm’s Maple Sausage & Fried Egg on French Toast also showed both branded and unbranded appeal this month. The combination of sweet and savory clearly resonated with consumers. However, interestingly enough, this was not seen as a unique offering like the other items and potentially less likely to drive traffic as the others might. CSN

Kum & Go’s Huevos Rancheros Pizza landed a perfect score for Uniqueness, narrowly edging out another breakfast pie offering from Casey’s General Stores. The high Draw score also makes the Huevos Rancheros Pizza a destination item, with almost half of surveyed shoppers saying they would come in just to try it. Frequency and Branded PI were very high as well, giving this limited-time offer (LTO) top standing with shoppers. “Topped with taco sauce, green chiles, cheese and eggs” could have been very polarizing, but clearly won over those surveyed.

Targeted Appeal While breakfast pizza seems like a very male-focused food offering, both Kum & Go’s Huevos Rancheros

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FOODSERVICE

The Building Blocks of Convenience Foodservice Whether launching a new concept or adding to an existing menu, the development process is integral to the final result By Angela Hanson IN THE CONVENIENCE FOODSERVICE SPACE, some retailers are experienced veterans that have fine-tuned their programs and how they introduce new menu items. Others are starting from scratch with brand-new programs or new prepared food products to fit the top trends and meet changing consumer demand. To succeed with something new, operators must have strong knowledge of the market, a clear goal and a realistic path to reach it, according to industry experts.

“We started with the offer and what we wanted to stand for,” said Ed Burcher, vice president of foodservice at FriendShip Food Stores, which opened the doors to its first food-focused concept store in its hometown of Elyria, Ohio, in July 2018. The convenience store chain recognized that it needed to standardize many items and offers, as well as the general look and feel of the store, to provide a consistent experience that would draw customers back on a daily basis. This meant making some changes to meet the needs and desires of FriendShip’s existing customer base. “What did not change was our FriendShip Kitchen offer,” Burcher continued. “FriendShip has a history of food and foodservice, using other brands and programs. The goal with FriendShip Kitchen is to bring all of our offers under our name so that we have consistency with communications and expectations.”

To determine how to meet this goal, the retailer identified what the new prototype would need. This included extra square footage to accommodate the store’s new features and a redesigned kitchen plan to ensure the flow and processes necessary to serve restaurant-quality food. The project required dedication to space, equipment, process and execution, according to Burcher. While FriendShip created a new concept, c-store operators looking to achieve improvements in their existing foodservice program can follow the same process, even if a new-build store model isn’t in the cards, according to Chef Kyle Lore of Salt Lake City-based convenience store chain Maverik Inc. A smaller-scale change may even make it easier to fill a competitive need. “Market research in the areas near the stores is the primary driver,” Lore said. “What does your customer want that is not being made available?” At the same time, operators should be cautious about what their foodservice program is capable of providing, and not rush to get ahead of themselves just to fill a niche. “I am a big believer in process. While there are times that you can skip steps, an operator should understand what it will take to provide an item to a guest in every store the same way, each and every time,” added Burcher. “There is no magic formula, but operators should have a process that ensures that all areas are addressed: supply, ingredients, packaging, pricing, promotion, communication and execution.”

On the Menu Once the kitchen space and general direction of a convenience foodservice concept are set, it’s time to develop the

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FOODSERVICE

Making Something Old New Again Sometimes, the hot new menu item is a long-standing favorite — with a twist Developing a standout menu item doesn’t have to mean starting from scratch. It’s possible to take a product that already exists, reposition how it’s offered and marketed, and create a success story, as Rutter’s Director of Foodservice Ryan Krebs recently found out. Krebs began looking into why the convenience store chain’s Chicken Pot Pie was experiencing poor sales. The locally made, 12-ounce item, which was stored in the cold case and positioned as something to grab and heat up at home, wasn’t moving despite Pennsylvania Dutch-style Chicken Pot Pie being very popular in Rutter’s operating area. “It wasn’t resonating with customers as something they’d pick up and heat later,” Krebs told Convenience Store News. The rates at which the packaged pies were being thrown out for reaching spoilage dates would have justified removing the product, but he decided to experiment first by making a simple change: heating it up in-store. “I used all my culinary background,” Krebs joked.

Maverik tests new menu items in phases. Factors evaluated include production difficulties, unexpected secondary impacts and real-time customer feedback.

menu — and this starts with imagination.

Rutter’s began offering the same Chicken Pot Pie as both a madeto-order menu item and a grab-and-go product from the hot hold. For packaging, the retailer put it in the soup cups it already used. The difference in format made an immediate difference.

“I [think about] what we have, how many things we can bring in to make something cool or interesting,” Lore said. “This is purely brainstorming on my part, from a chef standpoint.”

Virtually overnight, sales jumped from a couple of cases per week to thousands. Rutter’s distributor even added another line just to keep up with the product demand.

The next step is to evaluate all the ideas. Along with analyzing factors such as entry costs for new items, retailers need to decide on a testing process that fits their size and resources prior to implementation, or be prepared to eat extra costs in the case of customer rejection.

“It elevated the entire program,” Krebs said, noting that even the Chicken Pot Pie’s cold version saw increased sales afterward, growing by more than 100 percent compared to what they were before. Today, the product “just crush[es] it in fall and winter” and still sees high buy-in during the spring and summer months. What was nearly a failed menu item became a success story with dedicated promotional support and its own TV commercial. One interesting and unexpected aspect of the item’s spike in popularity is that despite the recipe being a particular regional style, the Rutter’s store that ranks No. 1 in Chicken Pot Pie sales is not located in Pennsylvania Dutch Country. The entire experience taught Krebs that format matters as much as the actual product, and that the right product can stretch beyond cultural barriers. Above all, he’s glad he didn’t opt to drop the item and be done with it. “What an epic fail that would have been,” he reflected.

At FriendShip, the company has used a rigorous testing process in the past, from idea to test market to full rollout. Burcher noted that smaller chains such as FriendShip, which operates 26 c-stores, are often more nimble than the largest players in this area because they are able to make significant changes in a shorter period of time. “We are evolving our stores and offer at a much faster rate than larger chains can and it accelerates our ability to achieve consistency in offer, brand and execution,” he said. At Maverik, which operates more than 300 stores, the testing process occurs in phases. A test item will typically appear at a small number of stores, often just five, and then be

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reviewed by the company’s quality assurance managers, who have a strong background in food safety and work directly with those employees involved in foodservice operations. Together, they evaluate factors such as production difficulties, unexpected secondary impacts on other processes, and real-time customer feedback. If the initial results are promising, Maverik makes adjustments and then moves on to a broader test at 10 to 30 stores. Hands-on testing can reveal fatal flaws in an item that looks fine on paper. Lore gave the example of Maverik’s experiment with raw pizza dough balls, which ultimately didn’t work because the kitchen space was not designed for it. “Just trying it out, it was apparent there was no way we could consistently do that in a c-store environment,” he said. Both Lore and Burcher agree that limited-time offers (LTOs) are a good way to test a menu item in the market and explore demand. LTOs can help operators determine whether an item has the potential to become permanent or should disappear after the promotional period. “To become permanent, it must impact the mix in a meaningful way,” Lore said. CSN

As a smaller chain, operating 26 stores, FriendShip Food Stores finds that it can be more nimble and quicker to act than larger chains.

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TOBACCO

Fighting to Keep Share New year, old story as convenience stores continue the battle to retain their tobacco sales By Melissa Kress NEARLY THREE-QUARTERS of all U.S. tobacco sales happen in a convenience store, the latest numbers from Management Science Associates Inc. (MSA) show. That sounds like good news for the convenience channel, but when you consider all the outside threats — notably, regulatory and competitive — you soon realize c-store retailers have a lot to lose.

During the National Association of Tobacco Outlets’ (NATO) Industry Outlook, held recently at Tobacco Plus Expo (TPE) 2019, Megan Shea, a local consultant with the association, explained that 18 states are currently “really active” in introducing tobacco proposals at the local, county and state levels. Among them: California, Minnesota and Massachusetts, as well as emerging states like Illinois and New York. “These ordinances start small, but get bigger and bigger in terms of impact on the tobacco industry,” Shea told attendees of the Las Vegas event, held Feb. 11.

Other notable stats of the 2019 legislative agenda include: • 14: As of early February, 14 states introduced some type of cigarette/OTP tax bill. • 2: The tax increase proposals in two states, North Dakota and Wyoming, that have been defeated. • 13: Roughly 13 states have e-cigarette and vapor tax bills on their 2019 agendas. • 4: Four states are eyeing cigar tax bills. • 20-plus: More than 20 states are considering raising the minimum legal age to buy tobacco products. Virginia Gov. Ralph Northam recently signed Tobacco 21 legislation into law, making the state in the heart of tobacco country the seventh to prohibit the sale of tobacco products to anyone under 21. A similar measure was sitting on the desk of Illinois Gov. J.B. Pritzker as of press time. His predecessor, Gov. Bruce Rauner, vetoed Tobacco 21 legislation in August 2018.

Bringing the Heat Although convenience stores sell the lion’s share of tobacco products in the U.S., other retail channels have a stake in the game — and some are bringing the heat. Tobacco outlets account for 8 percent of all U.S. tobacco sales, while drugstores and dollar stores each ring up 2 percent, according to NATO Industry Outlook presenter Don Burke, senior vice president of MSA. Those numbers are based on wholesale shipment to retail data through December 2018 across nearly 300,000 stores. While tobacco sales have stumbled a bit in the convenience, tobacco outlet and drug channels, the same does not hold true for dollar stores. The overall nicotine category dipped 1.4 percent in the convenience channel for the 52 weeks ending fourth-quarter 2018 vs. the 52 weeks ending fourth-quarter 2017. Tobacco outlets and drug also saw declines, but dollar grew 10.7 percent. More dollar stores are adding tobacco to their merchandise mix, driving the increase, Burke explained, citing that roughly 21 percent of dollar stores are carrying tobacco today. Dollar stores also have about three times the number of locations of tobacco outlets and although the dollar channel is still getting its feet wet in the tobacco category, Burke believes it will be a strong competitor once it finds the ideal product mix.

The Backbar Shift Cigarette declines may be driving the overall nicotine category slip in c-stores, but there’s good news in snus, vapor products and especially large cigars. MSA data cited by Burke shows that large cigars are up 9.2 percent in convenience and gas.

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TOBACCO

Bonnie Herzog of Wells Fargo Securities LLC Megan Shea of the National Association of Tobacco Outlets

In Retailers’ Corner The National Association of Tobacco Outlets (NATO) came roaring into 2019 prepared to fight against efforts to clamp down on tobacco sales, regardless of channel. The association launched two initiatives in late December to combat the flurry of tobacco regulation happening at the local level. Proposals range from flavored tobacco bans, to minimum package size and pricing requirements, to limits on tobacco retailer licenses. NATO’s first initiative is the National Response Network (NRN). Pointing to the fact that local government sometimes has a “fast-paced” agenda, Megan Shea, a local consultant with NATO, explained that NRN is a partnership of about 60 state and national associations and business groups that work to get the word out about local tobacco measures and hearings. In addition to an alert system, the groups in NRN educate their members about how to establish a relationship with local elected officials before any restrictive ordinance is proposed. This relationship-building can take the form of store visits or meetings with elected officials. NRN also addresses how to contact elected officials if an ordinance is proposed. In tandem with NRN, the second initiative is the National Local Advocacy Alliance website. This site, according to Shea, “is a tool to help retailers get engaged.” The website’s features include: • Local Ordinances page: A listing of proposed local tobacco ordinances by state, including copies of each proposed ordinance. • Take Action page: Pre-drafted email and social media messages to send to local lawmakers. • Resources page: Fact sheets on the different kinds of local tobacco ordinances. • Ordinance Library: An archive of previously adopted local ordinances by state.

“Convenience and gas is a big story for large cigars,” he said. Vapor is also a big story, with cartridges, disposables and kits ringing up increases in all traditional classes of trade. “Vapor has great growth potential, but keep in mind the other tobacco product segments that are also growing,” Burke added.

Fellow NATO Industry Outlook presenter Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities LLC, acknowledged that the decline in combustible cigarettes is causing some concern among investors. However, she said the notion that tobacco is falling off a cliff is overblown.

CMY

In 2018, cigarette volumes were indeed down by more than historical trends — typical declines have been between 3 percent and 4 percent over the past several years — but Herzog said the volume is pivoting to reduced-risk products. She predicts this trend will continue. Juul has experienced tremendous growth in the past year and a half. With that boost has come negative publicity surrounding the rise in youth vapor use, but she noted, “quite a few adults” are using the vapor product. An early believer in the potential of electronic cigarettes and vapor products to positively impact the tobacco category, Herzog reiterated her belief that over the next five to 10 years, e-cigarettes, vapor and reduced-risk products will continue to take share in the overall nicotine business. Specifically, she predicts the segment’s share to grow 15 percent to 20 percent by 2023. CSN

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Laun

January 2019

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SNACKS

Innovation Abounds C-store operators must cater to changing preferences, while still satisfying traditionalists’ needs By Danielle Romano is exploding. Shifting consumer demographics, increased fluidity around what is eaten and when, and shopper demand for high-quality items that also taste great are driving the introduction of scores of new products touting clean label, plant based, high protein, low sugar, functional ingredients and fresh takes on old classics.

INNOVATION IN THE SNACKS CATEGORIES

“The trends that play here are trust in traditional wisdom, movement from treatment to prevention, and more functional fuel,” noted Stefanie Nolby, manager of global consumer insights at General Mills. “This is really around expanded knowledge, the ability to pinpoint specific maladies, and the ensuing demand creates opportunity for curated and customized reactive solutions. Consumers manage their health via the food they eat.” With consumers snacking all day long, they are seeking products that fulfill both functional and emotional needs — particularly, products that feature unique textures, serve as a meal replacement, satisfy an indulgence, and blur the snack and candy “snackfection” line.

Two key emerging demographics shopping the snacks category in convenience stores are influencing change and shifting the purchase mix: millennials and women, according to Michael Caporusso, director of category management at Core-Mark Holding Co., a convenience channel distributor. Millennials and women are looking for snacks with authentic, global-oriented flavors that are conveniently available for their busy lifestyles, but they also want products that have clean ingredients and are locally sourced. Additionally, they are looking for products that emphasize specific health callouts, like high protein or gluten free.

Adopting a Consumer-First Mindset As snacking innovation continues, the average c-store basket — typically thought of as a traditional salty snack, a sweet treat and a packaged beverage — is going through a metamorphosis. Instead, today’s c-store basket is filled with a mix of proven sellers alongside products capitalizing on consumer demand for better-for-you and new options like resealable packaging and small boxed combos. “The average basket is gravitating toward healthier products,” said Scott Hill, vice president of sales, convenience channel, for meat snacks innovator Jack Link’s. “Today’s two biggest food trends are snacking and protein, and together they are a powerhouse combination. Consumers are also increasingly rejecting sugar, which is why candy is down. Convenience retailers will find success by positioning protein as an everyday snack and helping consumers trade a sweet treat for a meat treat.” Among “protein seeker” consumers, the attributes that rank high for them include portability (73 percent cite this as important) and satiety (41 percent), noted Hill. “Nearly all of the growth in refrigerated snacking is coming from protein combinations and snack packs. This emerging subcategory is seeing more than 20 percent year-over-year growth from these protein combinations of meat, cheese, nuts and other snack items,” he added. For c-store operators to be successful, it’s important to highlight innovation, while remaining selective in order to protect the integrity and productivity of their in-store sets. Molly Sjostrom, senior category development manager for General Mills Convenience, suggests operators work closely with their distributor and manufacturer partners for guidance. Discussions should focus on what products are expected to be the biggest/most incremental launches and how to merchandise these items with a consumerfirst mindset.

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PROTEIN GO-TEAM Meat snacks fuel sales from health-conscious consumers across all walks of life

1 PROTEIN IS HOT

CUSTOMER BASE IS EXPANDING

IMPORTANCE OF PROTEIN IN CHOOSING A SNACK

58%

Very Important

SNACKERS WHO CONSIDER PROTEIN IMPORTANT ARE LIKELY TO…

32% Important

Source: Jack Links, “Protein for Performance,” May 2018

JERKY IS A PROTEIN POWERHOUSE SNACKS PERCEIVED TO HAVE HIGH PROTEIN CONTENTS

●

Be younger

Protein shake smoothie

●

Have kids at home Heavily participate in sports

Protein bars

● ●

Be frequent snackers

Meat snacks

●

Be high protein consumers

Nuts

●

Work out regularly

Source: Jack Links, “Protein for Performance,” May 2018

Greek Yogurt

39%

Source: Jack Links, “Protein for Performance,” May 2018

FULL-PROFILE FLAVOR

TOP REASONS CONSUMERS BUY BEEF JERKY 3 Excellent protein 4 All natural/ no additives

2 Made with 100% beef

69% 62%

1 Great taste

82% 79%

Source: Jack Links, “Protein for Performance,” May 2018

6 THE JERKY CATEGORY HAS TAKEN OFF The North America meat snacks market is expected to record a CAGR of 7.2% between 2018 and 2023.

Jerky business climbed to more $1 billion in sales in 2017 and is expected to grow an annualized 4.2 percent through 2022.

Source: Mordor Intelligence

Source: Project NOSH

JERKY BEATS THE COMPETITION Jack Links Original Beef Jerky (serving 28 g) protein

calories

fat

carbs

sugar

11g

Leading Granola Bar Brand (serving 42g/2 bars) protein

calories

fat

carbs

sugar

190

29g

12g

Source: Statista.com, “Leading Vendors of Granola Bars in the United States in 2017”

Almonds (28g, about 23 nuts) protein

calories

fat

carbs

sugar

160

14g

Source: California Almond Board

TAKE ADVANTAGE NOW The right merchandising mix should include a variety of ﬂavors, sizes, displays and promotions based on customer preference data. Contact Jack Link’s to build your jerky business today! www.jacklinks.com

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NO-GO FOR YOGURT Greek yogurt is also high in protein but with 2.5 times the sugar (15g). Source: Leading brand single-serve berry-flavored Greek yogurt

4/5/19 1:11 PM

SNACKS

“Will this product fulfill a consumer need better than something on the shelf today?” Sjostrom posed, adding the following five pointers for c-store retailers to follow: 1. For innovations they have determined deserve shelf space, on-shelf messages, danglers and clings can call out the new item. 2. For innovations retailers believe will generate news, excitement and incremental purposes, but they are not convinced it’ll outperform what is currently on-shelf, shippers can be a great way to test out whether there’s strong interest. 3. Allocate space on endcaps to highlight what’s new across a variety of snacking segments as a way to test out innovative items to determine what warrants shelf space. 4. Operators can get creative in merchandising with baskets and hangers near highly shopped areas (i.e., “Fresh Food”) to showcase new items and drive impulse purchases. 5. While queue or checkout lane displays are critical

real estate and should be used to drive purchases of the strongest core brands, reserving space for a few innovative products can be effective in driving awareness and communicating you’re a destination for what’s new.

Don’t Ignore Your Core While c-stores should embrace snack innovation, they must continue to address the needs of “traditionalist” consumers: those simply not interested in seeking out new options. As Core-Mark’s Caporusso puts it: “Core is still king.” “Retailers must ensure they are carrying top items and in multiple pack sizes. Different shopper profiles are looking for the same top items in different types of packs,” Caporusso said. “Single-serve appeals to on-the-go, busy shoppers making impulse purchases; multi-serve appeals to shoppers looking for a portable snack at a value; while value consumers are seeking to trade up pack size, building bigger baskets at perceived better value.” CSN

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FEATURE

CONQUERING CUSTOMER ENGAGEMENT Personalized offers and digital communications are key to keeping shoppers engaged By Tammy Mastroberte THANKS TO TECHNOLOGY, connecting with customers is easier than ever before, whether it’s through loyalty programs, text messaging, social media, geofencing or in-app notifications. The flip side of this, though, is that consumers are getting inundated with messages from retailers and other brands vying for their attention, and it’s easy to get lost in the mix or lose a customer’s attention — especially if the messages are not relevant to them.

“If I never drink coffee, why would you send me an offer for a free coffee,” said Jeff Hoover, data insights strategist for convenience store brands at Paytronix, a loyalty program provider based in Newton, Mass. However, if I bought an energy drink two months ago but have not purchased it again, sending a message about that might drive me back into the store.”

While email has been a popular way for retailers and marketers to engage customers, this area is so saturated that most people don’t open emails anymore, noted Hoover. In fact, a 20- to 25-percent open rate is on the high end, meaning 75 percent of customers are not opening and seeing the messages. As a result, many retailers are moving to mobile and in-app messaging; customers today are more open to this form of communication than in the past. At Double Quick, a 48-store convenience chain based in Indianola, Miss., the company discovered its customers wanted to communicate through an app. Last fall, Double Quick launched a campaign where customers could text a number and receive an offer. The chain sent follow-up messages to the people who opted in, asking if they would like to receive offers and if so, the ways they preferred to receive them. App was a top response. “We asked if they would like to receive offers through an app and the overwhelming number of people who said yes drove us to create one,” Vicki Goss, director of marketing, told Convenience Store News. “We were surprised by the number of responses because we are in an economically depressed area, but people are using apps for other things, too.” Surveying customers is one of the most effective ways to uncover what they really want, rather than what the company thinks the customers want, according to Goss. “Everybody has a cellphone no matter where they live — in a rural area or a city — and when looking to see how an organization can best serve them, they are looking to technology,” she added. In the past, Double Quick used social media and in-store events to connect, but recently the retailer turned to its point-of-sale provider Pinnacle Corp. and selected its Pinnacle Loyalty Rewards and Affiniti Cloud Consumer mobile app solution. This is integrated with Pinnacle’s Darius for Retail, allowing Double Quick to collect data to create personalized marketing strategies and promotions. “Customers opt-in through our Wi-Fi connection and we can send targeted emails or texts customized to the customer,” Goss explained. “They get a unique shopper ID, so we can identify them and what they are purchasing. The Darius piece is housed within the app, so customers can opt-in to the app and get offers, or they can opt-in for email and texting.”

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When customers download the app, they are asked if they would like to be part of the Quick Path loyalty program, and customers who opt-in to the Wi-Fi connection get an email asking if they would like to download the app.

Providing Value No matter which method a c-store retailer chooses, the most important thing to engage customers and keep them interacting with your brand is to offer value. Whether the goal is to get them to opt-in to a loyalty program, receive text messages or receive in-app notifications, offering customers something in return for their opt-in will help drive adoption. The same goes for keeping them engaged — there must be value provided in exchange, according to Hoover.

grand prizes each month for new opt-ins to the program. Providing value should also be the goal when engaging customers via social media. While promoting specials and offers for a brand is part of all social media marketing, posts of this type should be limited, cautioned Brad Plowman, spokesperson at FUEL Marketing, an advertising agency based in Salt Lake City. “Customer engagement can be tricky,” Plowman said. “We apply the 80/20 rule on social media engagement with customers, with 80 percent of the content being informative, entertaining, funny or personality driven, while 20 percent should be promotional. If the consumer has chosen to follow or like a company’s social media page, the best engagement comes from providing content that makes them want to return.” One advantage c-stores have when it comes to customers’ needs is the sale of gas, and the emotional connection customers have to gas pricing. Sending offers for 5 cents off gas is a way to emotionally tie into their needs, according to Hoover. “With our loyalty offerings, we are doing more geofencing so when a customer gets within a certain radius of the store, say one mile, we can send a message saying, ‘There is 3 cents off gas in your account, so you can get a gallon a gas for X right now,’” he explained.

Make It Personal If c-store retailers want to keep customers engaged with their content and communications, then focusing on offers relevant to them and their buying habits is crucial. Customers want to receive meaningful offers and value from interacting with a brand. Thanks to today’s loyalty programs and other engagement platforms, data is helping retailers to deliver just that. “In order for our new program to work, we want to focus on unique offers based on what we know they are buying,” Goss said of Double Quick’s loyalty program and app. “We also don’t want to offer what other c-stores are offering.” “The value has to be there and you can usually see a correlation between participation and the value provided,” he said. “Customers want immediate value and ongoing value, and when it comes to loyalty programs, the first step is getting people to join. Offering a registration reward or a reward for downloading the app creates stickiness right away.” When Double Quick sent its survey asking how customers would like to receive offers, the chain gave a buy-one, get-one offer immediately at the end of the survey. Goss shared that they are planning to launch

Engagement and the level of personalization continues to evolve as well, allowing retailers to drill down to the individual customer level. What started as sending everyone the same offer then evolved into segmenting customers into five or six buckets and today, data can be segmented down to each individual customer, noted Hoover. “We can now look down to the personal level and find the right offer for the right individual,” he said. “If a customer comes into the store more frequently than they purchase gas, then sending them an offer to spend $25 in-store and get 10 cents off gas might not be as meaningful.” In addition to purchase behavior history, a customer’s visit frequency is another way to set parameters. C-store

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FEATURE

retailers can create “visit challenges,” Hoover suggested. For example, if a customer visits a store less than four times each month, the challenge would be to send them offers and get them up to five or more visits the next month. If someone comes in three times a month, the goal would be to get them to four times — and this would be done by sending them relevant offers, he explained. C-store operators, however, must be aware of the frequency at which they reach out to customers, and it should depend on the level of interaction that customer already has with the brand. For example, create one segment for customers who visit two or three times a month and another segment for those who visit two or three times a week. “Customers visiting daily would be more open to messaging once or week or even more, whereas those who visit once a month might get overwhelmed and

opt-out,” Hoover warned. “It’s important to talk to your frequent customers more often and the less frequent customers less often, but make the communication relevant.” Messaging someone in real time while at the pump outside the store is another way to engage in a relevant way. This can be done through geofencing, or through a loyalty system when they swipe a card. Once the system recognizes they are there, a relevant message can be sent. “If we recognize they are there and that they have not come into the store in the past 30 days, we can send them an offer to get them to come in,” Hoover pointed out. He encourages c-store operators to get involved with digital technology when it comes to engaging and communicating with customers, rather than waiting for customer participation rates to increase. There is a learning curve and now is the time to jump in, he said. “You have to push the envelope into these new areas. You can’t just send out emails,” he explained. “The open rates are tanking, and people don’t respond to brands the way they used to with email. The opportunities now are with the digital technology.” CSN

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STORE SPOTLIGHT

Telling One Cohesive Story

Photos by Stephanie Dollof, Wicked Awesome 3D

Nouria Energy Corp.’s new retail brand represents a strategic repositioning for the company By Danielle Romano IN TODAY’S EVOLVING CONVENIENCE STORE

landscape, operators know that adaptation and cohesion play important roles in longevity and growth. Nouria Energy Corp.’s new retail brand — nouria — is proof of this ideology, as it represents a strategic repositioning for the company.

At a Glance nouria

Location: 449 Sabattus St., Lewiston, Maine Size: 6,000 square feet (2 acres of land) Unique features: Fresh-food offers designed to provide customers with a one-stop shopping experience, nouria café, baked goods made in-store daily, a drive-thru

“We knew that our brand stands for more than fuel, but that our focus had been fragmented across many different brands, with each location named either after the town it operated in or with a generic name,” said Joe Hamza, chief operating officer for retail and marketing. “We wanted to create a brand cohesion that would help customers know what to expect when entering one of our nouria locations.” As consumers’ wants, needs and shopping habits continue to change, nouria is a critical step in the Worchester, Mass.based company’s evolution to a vibrant and relevant retail brand, according to Hamza. However, given the geographic disparity of its current locations, Nouria Energy maintains a keen appreciation for the uniqueness of each of its markets and understands that consumer shopping needs are not homogenous. Nouria Energy owns 137 convenience stores in five New England states, 116 of which are company-operated and 21 of

which are operated by commission and leased dealers. The company also owns and operates 47 car washes under the Golden Nozzle brand. “By effectively implementing this strategy, we believe that the nouria brand can be viewed as uniquely differentiated and more consumer-relevant,” Hamza explained.

Inspired Offers After nearly three years of planning, nouria made its debut in Lewiston, Maine, on Sept. 11, 2018. A grand-opening celebration took place in November. This location was selected for the inaugural nouria store because of its prime positioning — it’s situated at a major intersection in Lewiston and nestled between Lewistown High School and Bates College. Occupying nearly 2 acres of developed space, including 6,000 square feet of store space, Nouria Energy designed the building starting from the outside, and then worked its way inside. Unique architecture, differentiated in-store offerings and eye-catching, inspiring artwork reflect the retailer’s quest to appeal to younger adults and female consumers. “The in-store design, color scheme, lifestyle and community-inspired graphics,

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STORE SPOTLIGHT

“We wanted to create a brand cohesion that would help customers know what to expect when entering one of our nouria locations.” — Joe Hamza, Nouria Energy Corp.

[and] brighter, more spacious layout are all designed to help deliver the ultimate customer experience through an inviting environment,” Hamza told Convenience Store News. Additionally, nouria’s fresh-food offering is designed to provide customers with a one-stop shopping experience by providing grab-and-go items, snacks, beverages and the essentials for creating healthy, fresh, takehome meals. Recognizing that “shopping experience” is a huge point of interest for consumers today — and as a means of inviting customers to relax and enjoy their meals — the inaugural nouria store introduces café nouria. This concept encompasses full-service hot coffee, espresso drinks and iced coffee; a wide variety of pastries; parfaits and fruit cups; other beverages; and breakfast sandwiches. All items are available in-store or via the store’s drive-thru. Other unique offerings available at the Lewistown nouria store are: • High-quality, all-natural meats and poultry; • A wide assortment of fresh vegetables; • Artisan bread, rolls and desserts that are freshly baked in-store every day; • Amato’s, the most sought-after Italian food brand in New England, whose menu consists of sandwiches, pizza and salads; • Indoor seating for 26, set against the front windows; • Outdoor seating for 12; • Free Wi-Fi; and • 16 fueling positions offering Irving fuel, which Hamza said is Maine’s favorite fuel brand. Nouria Energy opened its second nouria store in Westborough, Mass., on Dec. 28, 2018. The company plans to upgrade and rebrand all of its company-operated stores to this new concept over the next five to seven years, Hamza shared with CSNews. CSN

Nouria Energy plans to rebrand and upgrade all of its company-operated stores to this new concept over the next five to seven years.

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SPONSORSHIPS ARE NOW AVAILABLE!

TOP

W MEN IN CONVENIENCE PRESENTED BY CONVENIENCE STORE NEWS

The 2019 Convenience Store News’ Top Women in Convenience awards program recognizes the integral role women play in convenience retailing. Women will be honored from the retailer, wholesaler and supplier communities in four different categories:

AWARD CATEGORIES* Women of the Year

Senior Level Leaders

Rising Stars

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SPONSORSHIPS AVAILABLE! CONTACT: PAULA LASHINSKY Vice President and Brand Director 917-446-4117 • plashinsky@ensembleIQ.com

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TWIC TALK

Elisa Goria, Circle K The 2017 TWIC Woman of the Year says passion, drive and determination can take you anywhere By Linda Lisanti NOW IN ITS SIXTH YEAR,

the Convenience Store News Top Women in Convenience (TWIC) awards program has recognized more than 200 of the best and brightest women making a positive impact on not only the companies they work for, but also the entire convenience retail channel.

TWIC is the only program that recognizes exceptional female leaders, rising stars and mentors among retailer, supplier and distributor firms in the convenience store industry, from the C-suite to the store level to the independent entrepreneur. In TWIC Talk, our bimonthly Q&A series, we interview a past TWIC winner about what it’s like to be a female leader in the convenience store industry today — the opportunities, the challenges — and get their words of wisdom for up-and-comers seeking to blaze their own trail. This month’s TWIC Talk subject is Elisa Goria, global lead for dispensed beverages at Circle K/Alimentation CoucheTard Inc. In 2017, Goria was one of the five women celebrated by TWIC as Women of the Year. How would you describe the current state of affairs for gender equality in the convenience store industry? How does this compare to 10 years ago? Much like other industries, the conversations around gender equality are more prevalent now. While we are seeing more female colleagues within the convenience store industry in leadership, we still have opportunities. It’s exciting to see the number of women grow across our channel and more being celebrated for their successes and advancement. Years ago, it would not be unusual to attend a conference or meeting and be one of the few females present. It’s great that we are on a positive path and are consciously working toward a better balance.

What is the most positive change you have personally witnessed? The most exciting change is the dialog on the subject. I am very proud to be a part of Alimentation Couche-Tard (ACT). At ACT, we have a diversity policy, a female chair on the board, and many women in executive roles. Working together with an inspiring group of women within the company, it’s an honor to be a part of our newly created ACT Women’s Council. It’s also wonderful to see the recognition within the industry through TWIC. Along your career path, did you personally experience gender bias or inequality? If so, how did you overcome? I have been incredibly fortunate in my career with Circle K, which started in the stores, as I have always been challenged with new roles and responsibilities. Over the years, I had many powerful mentors, both male and female. I have seen firsthand great women at all levels driving forward the organization. The best thing we can do for each other is ensure we are each doing our part to encourage and empower women within our organizations.

What barriers to advancement do you see still existing in the c-store industry? The external barriers presented in the industry are slowly being removed and to meet that opportunity, women need to continue to overcome internal barriers of self-doubt or the “I’m not ready syndrome.” If you are passionate and dedicated, you can create your own opportunities to grow. We all must continue to learn, use our voice and be confident in our own abilities. What is your advice for other industry women looking to rise to higher ranks? Continue to challenge yourself; step out of your comfort zone. Probably the most important element of advancement is sharing your ambitions with those who can help you. It’s great to find mentors and sponsors within the company. A mentor can provide support, encouragement and help you grow. A sponsor can ensure your name is in the mix when conversations occur around new opportunities. Passion, drive and determination can take you anywhere you want to go. CSN

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Hemp Products

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ADINDEX Altria Group Distribution.....................................2 Blu E-Cigs..................................................................27 Bob’s Red Mill..........................................................45 Campbell Soup Company...................................8–9 Continental...............................................................12–13 Convenience Distribution Association...........29 Cookies United........................................................15 Del Monte Fresh Produce Inc............................37 E-Alternative Solutions........................................33, 65 Epiq Systems...........................................................22–23 Forte Products........................................................63 GlaxoSmithKline Consumer Health Care.......7, 41, 57 Hunt Brothers Pizza..............................................61 Imageworks Display & Mktg. Group................47 Inline Plastics...........................................................49 Jack Link’s Beef Jerky..........................................69 John Middleton Company..................................35 Krispy Krunchy Chicken......................................59 Liggett Vector Brands..........................................31 Living Essentials.....................................................11 McLane Company..................................................96 North America Nutrition - Quaker Oats........95 Premier Manufacturing........................................43 Swedish Match North America LLC................25, 51, 67 Swisher International............................................17, 55 The Wonderful Company....................................19 Tyson Foods.............................................................5

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Uline............................................................................20 Universal Merchants Outsert ............................Outsert VP Racing Fuels & Lubricants...........................Front Cover AP R

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GETTING TO THE CORE

The Shopping Preferences of Men vs. Women Store operators need to work harder to meet the needs of female shoppers Itâ&#x20AC;&#x2122;s been said that men are from Mars and women are from Venus. Thereâ&#x20AC;&#x2122;s certainly no denying that men and women think and act differently, but how exactly does that translate when it comes to shopping and, more specifically, shopping at convenience stores? EIQ Research Solutions, sister company of Convenience Store News, surveyed 1,000-plus c-store shoppers to determine the strengths and weaknesses of varying store types among different demographics. Respondents were asked to evaluate experiences at up to two different retail store types, including convenience, drug, dollar and supercenter.

What is most important to shoppers and how does it differ for females vs. males? Shopping Experience Importance by Gender Percentage rating 9 or 10 on scale of 1-10

Key Takeaway All shoppers, regardless of gender, prioritize the factors in a similar order starting with price, product quality and store cleanliness, but store operators will need to work harder to meet the needs of females, who place a higher degree of importance on all factors compared to males, with the exception of trip speed.

How do males and females perceive channels as alternatives for convenience? If convenience was not an option, where would they go?

% that would go to convenience if _______ was not an option?*

Key Takeaway Both males and females will choose a supermarket first if a c-store is not available, but females overall exhibit a willingness to consider alternate channels at a higher rate than males, which is likely a result of their overall tendency to shop different channels more frequently. C-stores are not currently seen as a substitute by both males and females for most channels, with supermarkets or mass merchandisers more often fulfilling that need.

As a leader, you have the opportunity to boldly define whatâ&#x20AC;&#x2122;s next in retail. Our research experts uncover the insights necessary to answer big questions, empowering you to start the conversation. Contact us to discuss how we can work together to build and tell your story. For more information, email us at untoldstories@ensembleiq.com.

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Survey respondents sourced via ProdegeMR, reinventing the market research process by taking a respondent first approach. Visit prodegemr.com/ensembleiq for more info.

The survey was conducted among 1,000-plus convenience store shoppers in January 2019

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