CSN - July 2018

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

Smaller Chains Make Big Moves

Unceasing consolidation in the c-store industry paves the way for several new movers and shakers on this year’s Convenience Store News Top 100 ranking.

36 JUST HOW REAL IS THE DOLLAR STORE THREAT? JULY 2018 CSNEWS.COM

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SALES STRATEGIES

COMPREHENSIVE RESOURCES

CONSUMER INSIGHTS

MERCHANDISING SOLUTIONS

SALES & PROFITS

COLLABORATION

LEADERSHIP BRANDS

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VIEWPOINT

A Vibrant, Ever-Changing Top 100 C-store retailers are finding opportunity among the industry’s giants IT’S EASY TO VIEW the unceasing consolidation

occurring in the convenience store industry as a sign that eventually only the biggest chains will dominate the industry. According to this year’s Convenience Store News Top 100, our annual ranking of the largest U.S. c-store chains by store count, the big got even bigger in the past 12 months.

The CSNews Top 100 is the most respected, accurate, most-referenced and longest-running listing of the industry’s largest chains. This year, 7-Eleven Inc. held onto its perch atop the list by adding 1,000 stores in 17 states from Sunoco LP. No. 2 Alimentation Couche-Tard Inc. added almost 2,000 stores after acquiring CST Brands Inc. and Holiday Cos. But not so fast. As in every industry, when consolidation occurs and the big companies get bigger, opportunities open up for other retailers. Seven chains on this year’s Top 100 moved up 10 or more spots in their ranking over the previous year, and six of those chains operate less than 125 stores each.

list, existing companies moving up, and others falling off. Indeed, four of the industry’s top 25 chains were themselves acquired in the past year.

It’s always sad to see venerable c-store brands like Corner Store, Nice N Easy, E-Z Mart, Flash Foods and so many others disappear from the landscape. However, for all the consolidation that went on in the past year, the number of stores operated by the Top 100 (63,418) was only slightly higher than the previous year.

As a percentage of total stores, this year’s Top 100 represents 41.1 percent of the c-store industry, about the same as last year.

Even the top 10 hasn’t really lengthened its shadow over the industry. The 40,841 stores operated by the top 10 chains account for 26.4 percent of total industry stores, a negligible increase from last year’s 26 percent.

As smaller chains continue to prove, it’s not being small, but thinking small, that is the biggest obstacle to growth in the convenience store industry.

This is an industry where entrepreneurship still thrives, and comparatively smaller chains like Enmarket and Pester Marketing can leap 54 and 49 steps, respectively, up the Top 100 ranking in a single year (see our cover story on page 36).

Now Available Exclusively on CSNews.com Find the convenience store industry’s most comprehensive listing of the Top 250 chains — ranks, store names, all commodity sales volume, number of franchised/licensed stores, and number of company-operated stores.

As I pointed out last year, this is a robust industry with new companies cracking the

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

EDITORIAL EXCELLENCE AWARDS (2013-2018)

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

EDITORIAL ADVISORY BOARD

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

2013 American Society of Business Press Editors, Midwest Regional Azbee Awards Bronze, Best Editorial/Commentary, July 2012

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

2015 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2014

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

Jon Bratta Core-Mark International Inc.

Danielle Mattiussi Maverik Inc.

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

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

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

Jack Lewis GPM Midwest

Finalist, Best Profile, August 2012

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

Brett Atherton Bolla Management

2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2013 Business to Business, Retail, Single Article, February 2013 2013 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2012

Jim Hachtel Eby-Brown Co. Ray Johnson Speedee Mart Kirk Leff McLane Co. Inc.

Kyle McKeen Alon Brands Inc. Richard Mione GPM Southeast Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Roy Strasburger Convenience Management Services Inc.

The W∂ nderful Company is the #1 fastest-growing CPG company

A Healthy Growth Spurt • Our health-focused brands outpaced tobacco, alcohol, soft drinks and candy to become the #1 fastest-growing Consumer Packaged Goods (CPG) company.

• At 13%, we are the only multibillion-dollar company with double-digit sales growth.

• Our rise accounts for an impressive 5% of all growth in CPG.

Source: IRI ILD POS database, 2011-2017, MULO+C, IRI Consulting and BCG analysis. © 2018 The Wonderful Company.. All Rights Reserved. WONDERFUL, POM, POM POMS, HALOS, FIJI, SWEET SCARLETTS, JUSTIN, the accompanying logos and all other trademarks are owned by The Wonderful onderful Company or its affiliates. WM1805605-17

CONTENTS JUL 18

VO LU ME 54 N UMB ER 07

64

36 FEATURES

DEPARTMENTS

COVER STORY

VIEWPOINT

36 Smaller Chains Make Big Moves Unceasing consolidation in the c-store industry paves the way for several new movers and shakers on this year’s Convenience Store News Top 100 ranking.

4 A Vibrant, Ever-Changing Top 100 C-store retailers are finding opportunity among the industry’s giants.

10 CSNews Online OUT & ABOUT

54 Making Cents of the Dollar Store Threat How much will the infiltration of the penny-profit channel cost convenience stores?

24 Laying Out a Path to Future Success The health of the foodservice industry depends on developing true leaders and embracing the evolution of technology, according to the 2018 IDDBA Show.

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

54 26 New Products SMALL OPERATOR

30 Employee Training Must-Dos Everything you want to accomplish in retail revolves around proper training.

STORE SPOTLIGHT

64 Transforming Errands Into Engaging Experiences Dash In debuts an all-new, large-format store that emphasizes personal connection.

NEW HORIZONS

67 The Power of the She-E-O No matter their titles, women perform like CEOs and they should be recognized for it.

GETTING TO THE CORE

82 Coming to the Rescue of the Time-Starved What do consumers think of today’s expanding array of convenienceoriented services?

CONTENTS JUL 18

VO LU M E 54 N UMB ER 07 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

Don Longo dlongo@ensembleiq.com

Editor-in-Chief (201) 855-7608

Linda Lisanti llisanti@ensembleiq.com

Senior News Editor (201) 855-7618

Melissa Kress mkress@ensembleiq.com

Associate Editor (201) 855-7619

Angela Hanson ahanson@ensembleiq.com

Associate Managing Editor (201) 855-7604 Assistant Editor (201) 855-7614

14 INDUSTRY ROUNDUP

16 Is Thorntons the Next Big M&A Deal?

16 Fast Facts 18 Eye on Growth 18 Seen on Social Media 20 Retailer Tidbits

Chelsea Regan cregan@ensembleiq.com

Contributing Editor (303) 741-3377

Renée M. Covino reneek@aol.com

Contributing Editor (201) 280-2614

Tammy Mastroberte tmastroberte@gmail.com

ADVERTISING SALES & BUSINESS

CATEGORY MANAGEMENT

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

Rachel McGaffigan rmcgaffigan@ensembleiq.com

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

FOODSERVICE

14 Casey’s Moves Its Value Creation Plan Forward

Danielle Romano dromano@ensembleiq.com

58 What’s Hot on C-store Menus?

Stewart’s Shops’ “cheesecake in a cone” is cold and refreshing for the summer.

Ron Lowy rlowy@ensembleiq.com

Associate Publisher & Midwest Sales Manager Kelly Fischer (773) 992-4464 kfischer@ensembleiq.com Account Executive, Southeast (803) 315-0694

Cindy DeBerry cdeberry@ensembleiq.com

Account Executive & Classified Advertising Terry Kanganis (201) 855-7615 tkanganis@ensembleiq.com Classified Production Manager Mary Beth Medley (856) 809-0050 marybeth@marybethmedley.com

TOBACCO

60 Putting Cigars in the Fast Lane Five tips for getting the most out of this high-speed growth segment of tobacco.

22 Supplier Tidbits

EVENTS Vice President, Events (647) 557-5094 ext.1001

Michael Cronin mcronin@ensembleiq.com

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

Shelly Patton spatton@ensembleiq.com

List Rental (847) 492-1350 ext.318

MeritDirect Elizabeth Jackson

Subscriber Services/Single-Copy Purchases (978) 671-0449 EnsembleIQ@e-circ.net PROJECT MANAGEMENT/PRODUCTION/ART Vice President, Production (973) 358-4875

60

Creative Director (973) 607-1320

Kathryn Homenick khomenick@ensembleiq.com Colette Magliaro cmagliaro@ensembleiq.com

Custom Project Manager (224) 632-8244

Kathy Colwell kcolwell@ensembleiq.com

Custom Project Manager (973) 607-1368

Judi Lam jlam@ensembleiq.com

Advertising/Production Manager (773) 992-4418 Art Director (224) 632-8245

Ed Ward eward@ensembleiq.com Michael Escobedo mescobedo@ensembleiq.com

CORPORATE OFFICERS Executive Chairman Alan Glass Chief Executive Officer David Shanker Chief Operating Officer & Chief Financial Officer Rich Rivera Chief Brand Officer Korry Stagnito President, Enterprise Solutions Terese Herbig Chief Digital Officer Joel Hughes Chief Human Resources Officer Jennifer Turner Senior Vice President, Innovation Tanner Van Dusen 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 © 2018 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, P.O. Box 1842, Lowell, MA 01853.

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

America’s #1 Value Brand

Contact your RAI Trade Marketing Services representative or go to EngageTradePartners.com to learn more.

CSNEWS ONLINE

ONLINE EXCLUSIVE

TOP 5 DAILY NEWS HEADLINES

1

Derek Gaskins Leaves Rutter’s to Join Yesway

Yesway is adding a new member to its executive team: Derek Gaskins, formerly of Rutter’s. Gaskins will assume the position of senior vice president of merchandising and procurement at Yesway’s Beverly, Mass., office, overseeing the chain’s entire marketing team.

2

Pilot Flying J to Add 5,000 New Team Members This Summer

Pilot Flying J is going on a hiring spree, with plans to expand its employee roster by more than 5,000 team members this summer.

During this year’s hiring push, Pilot Flying J is looking to fill positions that range from entry level to management roles across its retail, restaurant and deli operations throughout North America.

3

Buc-ee’s Wins Trademark Infringement Fight Against Competing Texas Travel Stop

A federal jury sided with Buc-ee’s in its trademark infringement challenge against a competitor, Choke Canyon. The panel found that Choke Canyon’s alligator logo violated state and federal trademark law, infringing on Buc-ee’s established beaver logo.

4

QuikTrip Scooping Up Acres for Its San Antonio Entrance

QuikTrip Corp. is preparing to enter the San Antonio marketplace by making land purchases totaling more than $10 million. The company plans to open around 60 stores in San Antonio and 40 in Austin, with a smaller number along Interstate 35 between the two Texas cities.

5

Wawa Reinvents Hoagiefest for Summer 2018 Campaign

After a 10-year run of its 1960s-themed campaign, Wawa is going more modern for its summer 2018 Hoagiefest with new graphics, special effects and contemporary music. The convenience store retailer is also introducing special pricing during Hoagiefest for all three of its hoagie sizes, in all varieties.

EXPERT VIEWPOINT: Five Steps to Crack Down on Shoplifting Some retailers have been unwilling to take action against shoplifters due to a certain level of acceptance that shoplifting is just a part of the cost of doing business, but more and more retailers are fighting back. By employing a combination of good retailing practices, improved staffing policies, technology improvements and partnerships with law enforcement, these retailers are reducing the opportunity to shoplift. Store operators can improve store layout and displays; upgrade security measures; hire more better-trained staff; use advanced technology; and form partnerships with law enforcement, according to Nick Coult of Numerica Corp.

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

VIDEO: Discovering the Flavor of New Orleans at the 2018 Convenience Store News Foodservice Summit The 2018 Convenience Store News Foodservice Summit, presented in partnership with Tyson Convenience, focused on the role of food in a community. As in previous years, the event featured a wide variety of foodservice learning experiences, including a visit to the Southern Food & Beverage museum; a guided tour by Propeller, a nonprofit business accelerator program for small businesses; roundtable discussions; an exclusive, interactive conversation with former Whole Foods Market co-CEO Walter Robb; and much more.

For more exclusive stories, visit the Special Features section of www.csnews.com.

MOST VIEWED NEW PRODUCT

Nestlé Crunch Dark Nestlé Crunch Dark and Buncha Crunch Dark provide a twist on the classic candy, bringing together crisped rice and rich dark chocolate. Featuring 100 percent real dark chocolate, Nestlé Crunch Dark is now available in a single bar (1.5 ounces), with a suggested retail price of $1.09. Buncha Crunch Dark is available in a resealable stand-up bag (8 ounces) for a suggested price of $3.79, as well as a snackable concession box (3.2 ounces) for a suggested price of $1.06.

Nestlé USA Rosslyn, Va. (800) 225-2270 www.nestleusa.com

THE C-STORE ALCOHOL SHOPPER Convenience is beer’s single largest platform, and growing – but the landscape is evolving. No two stores are the same, but Anheuser-Busch and its retail partners can grow by understanding key similarities between account types.

WHO

WHERE

WHEN

THE CURRENT C-STORE ALCOHOL SHOPPER

4 KEY C-STORE SEGMENTS*

TIME

Male

Young

47% 85% Male

Under 35

Unmarried

56% 45%

52%

51%

47%

% Married C-Store Grocery

Urban

Residential area.

Fuel and coffee stop for commuters and neighborhood walk-ins.

Higher-density area serving diverse group of mostly walk-ins. Hybrid work/residential focus.

Low price/ deal sensitivity.

Value shoppers seek EDLP.

Diverse Index to LDA Population 86 146 144 75

22% 17% 6%

Ethnicity

Mass & Club Other

Caucasian Afram

Hispanic Other

49% of trips to convenience are spontaneous.

Neighborhood

hola!

Hispanic

Seek deals.

50%+

Of all trips occur in a 6-hour evening period (6pm - midnight).

Highway

In predominantly Hispanic neighborhoods, or elsewhere but serving predominantly Hispanic clientele.

Day of Week

61%

Fuel-driven stop, typically serving non-local traffic passing through.

Lower need for immediate consumption. *Several more account types exist

Frequency

of trips occur between Fri-Sun

Alcohol Trips per Week

All stores Highway Urban Neighborhood Hispanic

WHY

WHAT

HOW

For What

Pack Size Purchased

Route

2.9 3.0 5.0 2.0 4.0

71% of trips begin at work or home. #1 Relax

#2 Social

Transportation

#3 Party

64% Singles

For Whom

72%

buy for self.

12% 2-6 Packs

Beer Temperature Purchased

Lower: Urban.

Higher: Hispanic.

98% of shoppers buy beer cold.

Why C-Store Channel chosen for beer selection.

78% of trips end at home.

Store chosen for proximity to home/work.

Cold

Warm

STORE LAYOUT

87% drive.

24% 12+ Packs

Time to Consumption 68% consume within 3 hours of purchase.

41%

1 hour

27%

1-3 hour

12%

4-8 hour

13% 4%

The next day

Later that day

Lower: Urban.

Higher: Highway.

Planning ~90% of all category, brand and pack choices are made pre-store.

Speed: Time in Aisle :05

:22

:15

Hispanic

Urban

Highway

COOLER ENGAGEMENT

:10 Neighborhood

TERMINAL DOOR

FLOOR PLAN

Doors at end of well-traveled aisles to cooler get very high engagement.

Shoppers are goal-oriented and navigate directly to cooler. Visibility of cooler upon entry, and directness of route between door, cooler and counter, affect level of browsing engagement.

SINGLES DOOR Doors containing singles get very high engagement.

Circular Plan

STRIKE ZONE Shoppers' visual attention is usually concentrated from eyes to knee-level.

Forced Plan Cooler

Warm Display

EDLP Value shoppers seek everyday low prices, starting on the bottom shelves.

Line of Sight Door Counter More Browsing Harder Navigation

TOP/BOTTOM AREAS Low visual attention at most account types.

Less Browsing Easier Navigation

MERCHANDISING

Communication Placement Good: On way to cooler

66%

RECALL NO ALCOHOL MERCHANDISING.

The rushed, highly planned nature of trips as well as the overwhelming amount of merchandising means breakthrough is very difficult.

ANHEUSER-BUSCH

INSIGHTS

Better: Cooler-adjacent Best: On cooler shelf or door

1-Second proposition

2 for $4

Large font Colorful contrast 10-Second proposition

Bad: Other category

Buy 1, get 50% off 2nd*

Worse: Transition zone

*with purchase of x qualifying brands and y pack sizes

Worst: Outside store

2017 ABI C-Store Explore Research:

Communication Principles

syndicated data,

eye tracking,

in-store observation,

Smaller font Plain colors

surveys,

Exit Interviews.

SM

THIS IS

OUR WATCH WE I.D. TOBACCO PURCHASES

HELP KEEP TOBACCO OUT OF THE HANDS OF MINORS. I.D. ANYONE UNDER 27.

It’s up to us to protect our community from underage tobacco use. To help prevent sales to minors, FDA has created the “This Is Our Watch” program. Look for your materials in the mail. Learn more about federal tobacco regulations and order free materials at www.FDA.gov/ThisIsOurWatch.

INDUSTRY ROUNDUP

Casey’s Moves Its Value Creation Plan Forward Fleet card and price optimization initiatives set to roll out in the retailer’s upcoming fiscal year By Melissa Kress moved forward on several components of its new value creation plan in its fiscal year 2018 fourth quarter.

CASEY’S GENERAL STORES INC.

In early March, Casey’s unveiled the plan, which is comprised of several key programs and drivers, including enhanced store performance through a new fleet card program, price optimization and digital engagement program. The plan also includes a continuing focus on controlling operating expenses and capital reallocation.

“We are confident these key initiatives will drive accelerated sales and profitable growth and, most importantly, increase shareholder return,” Casey’s President and CEO Terry Handley stated during the company’s fourth-quarter earnings call on June 12.

The chief executive provided a more detailed update on the store performance initiatives: • Fleet Card Program: Since unveiling the value creation plan, the retailer completed a request for proposals (RFP) and selected FleetCor as its partner. Casey’s will begin implementing a new fleet card program in the second quarter of fiscal year 2019.

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

• Price Optimization: Casey’s completed a RFP and identified the optimization platforms for fuel and in-store.

The retailer will begin testing in the second quarter, with a planned rollout of fuel optimization and select key items inside the stores in the third quarter. It will then expand the price optimization program in the first quarter of 2020 to all remaining categories.

• Digital Engagement: Casey’s completed the onboarding of Chris Jones, new chief marketing officer, who will lead the digital engagement implementation process. The retailer also completed the startup and design phase of its digital transformation, including vendor review and technology selection. The digital engagement program will include a new ecommerce platform, marketing automation tools and a customer loyalty program.

In addition to these enhanced store performance initiatives, the convenience store chain is focused on implementing ongoing cost-reduction measures and managing operating expenses. This includes reducing its number of 24-hour convenience stores and pizza delivery locations. The decision, Handley said, came after “an extensive, hour-by-hour profitability analysis in an effort to determine the optimal hours of operation and delivery offering.”

The reduction had an adverse impact on same-store sales in the fourth quarter, but Casey’s “achieved a significant and measurable reduction in store-level operating expenses,” according to Handley.

Ankeny, Iowa-based Casey’s finished the fourth quarter with 2,073 stores in 15 states.

Rediscover flav

Bourbon & Bacon. Another first from the pioneers in meat snack innovation.

We didn’t get to be the #1 snack bite brand in the U.S. by staying in the smokehouse. We get out, talk to our customers and consumers, then head back to Wisconsin to refine our products and packaging. Quality and craftsmanship are a part of everything we do!

This spring, we introduced new breakthrough packaging for our 2 oz. Bites, Big Smokey, Smoke Stacks and Twisted Link Sausage Sticks. We are also especially proud to announce two additions to the Old Wisconsin® C-store lineup, Bourbon & Bacon Big Smokey Sausage Sticks and Bourbon & Bacon Smoke Stack Sausage and Cheese Sticks.

To learn more about Old Wisconsin or to place an order, please contact your local sales representative at 1-800-621-0868.

oldwisconsin.com ©2018 Carl Buddig & Company The “f” logo is a registered trademark/service mark of Facebook, Inc. The Twitter logo is a registered trademark/service mark of Twitter, Inc. The YouTube logo is a trademark/service mark of Google LLC. The Instagram logo is a registered service mark of Instagram, LLC. The Pinterest logo is a registered trademark/service mark of Pinterest, Inc. All other trademarks belong to Carl Buddig & Company.

INDUSTRY ROUNDUP

FAST FACTS The top three reasons people stop at convenience stores during summer drives are to use the bathroom (96 percent), get gas (95 percent), and buy food or drinks (91 percent).

— NACS Summer Drive Study

Overall beverage sales were up 3.5 percent over the 2018 Memorial Day weekend, affected partly by gas prices that neared $3 per gallon.

— Wells Fargo Securities LLC’s Beverage Buzz Survey

14

%

Fourteen percent of consumers regularly use plant-based alternatives such as almond milk, tofu and veggie burgers; 84 percent of them don’t consider themselves vegan or vegetarian.

— The NPD Group

Is Thorntons the Next Big M&A Deal?

The chain declines to comment on reports it retained an investment banker to explore a sale IN THIS ALREADY BUSY MERGER-ANDACQUISITION YEAR, Thorntons Inc. may

de Petróleos de Chile COPEC S.A.

be next to find new ownership. However, the convenience store retailer declined to comment on recent speculation that it is exploring a sale.

Ankeny, Iowa-based Casey’s General Stores Inc. “could even be a buyer given the challenge it has in gaining the scale necessary to avoid being a takeover candidate,” according to OPIS.

“While we don’t comment on rumor or speculation, we see great growth ahead for Thorntons this year and in future years, and we are very happy with our business,” the company told Convenience Store News.

In mid-June, Oil Price Information Service (OPIS) reported that Thorntons is considering hanging a for-sale sign on the chain. Specifically, OPIS reported the Louisville, Ky.-based company retained investment banker Lazard to explore selling its retail operations.

“M&A experts polled by OPIS believe there will be strong interest from consolidators, as well as from companies that might view the Thorntons properties as a means of expanding in some key geography,” stated Tom Kloza, global head of energy analysis at OPIS.

Thorntons operates 192 stores in Kentucky, Illinois, Indiana, Ohio, Tennessee and Florida.

“Marathon [Petroleum Corp.] might be the most logical suitor, but would likely run into Federal Trade Commission issues, where its Speedway or Marathon brands overlap with the private brand,” Kloza said. “Marathon also has its hands full in what will be a multiquarter digestion of Andeavor refining, marketing and logistics assets.”

OPIS named several well-known c-store industry players as potential bidders, including Irving, Texas-based 7-Eleven Inc. and Brentwood, Tenn.-based MAPCO, which is owned by the U.S. subsidiary of Compañía

Founded in 1971 by James H. Thornton, the Thorntons chain is known for its “Real Kitchen. Real Food.” fresh food program and offering E15 at the pump under its Unleaded15 trademarked brand name.

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

INDUSTRY ROUNDUP

Eye on Growth

A newly formed investment group, Riiser Fuels LLC, acquired Wisconsin’s Riiser Energy, picking up 34 convenience stores.

In addition to the R-Store locations, Riiser Fuels acquired transportation and fuel operations in the deal.

Grocer Tom Thumb opened its first convenience store, Tom Thumb Express, on June 20. The 2,500-square-foot Dallas location is open daily from 7 a.m. to 10 p.m., while its self-service fuel pumps are available 24 hours.

A subsidiary of GPM Investments LLC took ownership of 1-Stop Food Stores from DMJ Corp. The move added 11 Michigan c-stores to GPM’s Midwest footprint.

Wawa Inc. cut the ribbon on its 800th store on May 24. The milestone location is at 1702 Rocky Run Parkway in Wilmington, Del.

Yesway continues to grow its banner in Texas, acquiring 13 Chisum Travel Center and Fast Stop convenience stores. The Yesway reached its move represents 100-store milestone in late May with the purchase of the second of three 11 Pick-A-Dilly convenience major Yesway stores in Missouri. portfolio acquisitions scheduled for this quarter.

Global Partners LP inked an agreement to purchase 10 company-operated gas stations and convenience stores from Keene, N.H.-based Cheshire Oil Co. LLC. All of the locations are branded T-Bird Mini Marts and market CITGO fuel.

Rutter’s opened its first store outside of Pennsylvania, and its 70th overall, in Inwood, W. Va. The move outside its home state is the first of many planned over the next few years.

QuikTrip Corp. purchased 18 lots totaling roughly 98 acres in San Antonio. The retailer will open roughly 60 c-stores in San Antonio and 40 in Austin, with a smaller number along Interstate 35 between the two Texas cities.

Keith’s Superstores bought 12 stores in southern Mississippi from Burns Oil Co. With the sale, Burns Oil will turn its resources toward growing its central Mississippi division, which is owned and operated by Burns & Burns Inc.

Seen on Social Media of eight employees. In 1999, she took the position of Fuel Manager and shows no signs of retiring. Thank you so much for your dedication and hard work!

Yesway Des Moines, Iowa Tomorrow is the first day of summer! Stay hydrated all season long with Yesway water.

The best part is 5 cents of every spring and purified water purchase, up to $25,000, goes to Operation Homefront, an organization that builds strong, stable and secure military families so they can thrive in the communities that they’ve worked so hard to protect.

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

Royal Farms Baltimore WOW, Ms. Jennie Enos is celebrating her 60th year work anniversary with Royal Farms today!

Jennie began her career with us on June 9th, 1959. She worked her way up to an Accounting Supervisor supervising a team

Rutter’s York, Pa. We have another Rutter’s Reward Night for the York Revolution! Get your two tickets when you make qualifying purchases of any Rutter’s beverage!

The Destination for Getting Ahead of Tomorrow’s Shoppers Oct. 2-4, 2018 Minneapolis, MN Minneapolis Convention Center

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FEATURED KEYNOTES

Whitney Hardy

John MacDonald

Katherine Wintsch

Brendan Witcher

SVP & CMO

VP & CMO

Founder & CEO

VP/Principal Analyst, Digital Business Strategy

Sponsored by:

INDUSTRY ROUNDUP

Retailer Tidbits

Global Partners LP’s Alltown Markets chain unveiled Alltown Advantage, its first points-based loyalty program. Two points are awarded for every gallon of fuel purchased and every dollar spent in-store.

Rutter’s joined the ranks of E15 retailers.

The fuel offering with 15-percent biofuel is available at seven Rutter’s locations in Maryland, Pennsylvania and West Virginia.

Chevron Corp. gave away a year’s worth of free gas every day during June to

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

celebrate the new Techron “unbeatable mileage” claim.

Customers played to win through an instant game on the Chevron and Texaco mobile apps.

Love’s Travel Stops debuted the new GasBuddy mobile payments service.

The program allows users to pay at Love’s pumps from their vehicles.

The mobile payment feature is an expansion of GasBuddy’s Pay with GasBuddy card program that rolled out in September.

Weigel’s launched the myWeigel’s Rewards Card customer loyalty program.

It’s partnering with Outsite Networks Inc. for the new marketing initiative.

ATMs at more than 800 Speedway convenience stores will feature the Fifth Third Bank brand in a partnership between the bank, Speedway LLC and Cardtronics. The new branding will appear at Speedway stores in Ohio, Indiana and Kentucky.

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INDUSTRY ROUNDUP

Supplier Tidbits

Altria Group Inc. unveiled a new company structure that forms two divisions: core tobacco and innovative tobacco products. Another key component of the new structure is the creation of a chief growth officer position.

Tyson Foods Inc.’s Tyson Innovation Lab launched its first brand, ¡Yappah!, on May 31. Protein Crisps, the first product, is made using rescued and upcycled vegetables, as well as grain-based ingredients.

PepsiCo Inc. will expand its betterfor-you snack portfolio through an agreement to acquire Bare Foods Co., which does business as Bare Snacks.

The Hershey Co. celebrated the launch of Reese’s Outrageous Bars by surprising the brand’s biggest fans. Initiatives included creating a Reese’s oasis in one fan’s backyard and delivering a Reese’s Egg wedding cake.

This transaction will further PepsiCo’s “Performance with Purpose” vision to offer consumers more positive nutrition options.

Heineken signed a marketing alliance with Live Nation. Under the multiyear pact, the Starplex Pavilion in Dallas will be renamed Dos Equis Pavilion.

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

Seattle Seahawks three-time All-Pro linebacker Bobby Wagner is the new face of the Oberto Beef Jerky brand.

He will star in a TV campaign and be featured in digital and social content programming, point-of-sale materials, and print and radio advertisements.

WE KNOW YOUR MISSION IS TO PROVIDE FRESH, SAFE PRODUCTS TO YOUR CUSTOMERS. SO IS OURS. As a convenience store operator, nothing is more important than ensuring fresh, safe products for your customers. That’s why we’ve invested over $1 billion in an end-to-end cold chain solution with a multi-step monitoring process that constantly validates product temperatures from the time they arrive at our distribution centers until they’re delivered to our retailers. It’s why we’re a member of IFDA and GS1— organizations dedicated to foodservice supply chain integrity and traceability.

And, it’s why all of our facilities undergo independent audits by Mérieux NutriSciences, a leading certification body and auditing provider for the global supply chain.

To learn more about our custom cold chain solution, visit mclaneco.com/coldchain

© 2018 McLane Company, Inc. All rights reserved.

OUT & ABOUT

Laying Out a Path to Future Success The health of the foodservice industry depends on developing true leaders and embracing the evolution of technology, according to the 2018 IDDBA Show By Angela Hanson THE FOODSERVICE INDUSTRY IS CHANGING,

and those who refuse to change with it will be left behind, Erik Waterkotte said at the opening session of the 2018 International Dairy Deli Bakery Association (IDDBA) Show. However, that doesn’t mean the industry as we know it is doomed. Ultimately, the core business stays the same: selling things that customers need, want and value.

Waterkotte, who serves as the 2017-2018 chairman of the board of IDDBA and is senior director of sales at Hayward, Calif.based Columbus Craft Meats, projected both caution and optimism as he kicked off the annual event, held June 10-12 in New Orleans.

like giving discounts to Amazon Prime members.

“The synergy of brick-and-mortar and ecommerce will fill customer needs in ways we haven’t dreamt,” Waterkotte predicted.

Echoing the need to look ahead, Albertsons President and Chief Operating Officer Jim Donald discussed his vision of the future during the show’s first general session and an afternoon presentation entitled “The Future of Fresh.”

“The way we used to merchandise is gone and it’s not coming back,” Donald said, discussing how the center of store is no longer the center of attention.

In the future, Donald expects that: the majority of customer interactions will be managed through technology; scanand-go technology will be in place; robots will perform tasks such as refilling shelves and unloading trucks; and the death of malls and big-box stores is overblown, but these spaces will be strongly oriented to fresh by 2023.

At the same time, even with the rise of technology, “leadership skills will be required even more,” he noted.

To be successful, Donald believes leaders must be at ease with handling commerce, investors, face-to-face interactions and people smarter than themselves. And, he said, they must surround themselves with “a team of rivals — not a team of people saying ‘yes, let’s do this.’”

During the show’s second general session, Mike Eardley, IDDBA president and CEO, stressed the importance of transparency as a key component of future success.

“Transparency in the food industry is a must today,” Eardley said during his presentation, which was titled “Growing the Future: What’s in Store.”

The IDDBA 18 show, hosted by the International Dairy Deli Bakery Association, drew 10,576 attendees and 891 exhibiting companies.

“We’re seeing things accelerate,” he said, reflecting on changes he says stem from advances in technology and are having major ramifications on retail foodservice.

He noted that “omnichannel is standard operating procedure,” citing Amazon’s exploration into cashierless stores with Amazon Go, and how Amazon is utilizing its purchase of Whole Foods through things

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

It is unequivocally true that shoppers care where their food comes from, he said. They want to know what the ingredients are and where they were sourced. Consumers want to know the story behind their food, and have proof of it.

“Transparency and storytelling go hand-in-hand,” Eardley said. “Transparency equals trust.”

He advised companies to adopt consumer-focused strategies that give consumers the “why” — why to shop at a certain store, why they want a certain product, etc.

“They help us learn how to increase our business and create loyal customers,” he said. CSN

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NEW PRODUCTS

1

2 3

1. 5-hour TEA Shot

2. Trident Vibes

Living Essentials LLC, the maker of 5-hour ENERGY shots, introduces the 5-hour TEA shot, now available in a peach tea flavor. Just like 5-hour ENERGY shots, the 5-hour TEA shot is a quick and simple energy booster, according to the company.

The 1.93-ounce bottles don’t require refrigeration.

Described as an exciting journey of taste and texture, Trident Vibes gum brings a burst of something new with every chew, according to the maker.

Trident Vibes is available in three flavors — Spearmint Rush, Ooh La Lemon and Tropical Beat — that have a light crystal coating for extra pops of flavor as you chew. The gum is available nationwide in a bottle pack (40 pieces) for a suggested retail price of $3.49 per bottle.

Living Essentials LLC Farmington Hills, Mich.

(248) 960-1700 5hourenergy.com

Mondelez International East Hanover, N.J. (855) 535-5648 tridentgum.com

4

3. Red Rock Deli Potato Chips

4. Eggland’s Best Snacks

Red Rock Deli, a popular Australian snack brand, is now available for the first time stateside, in select markets. Red Rock Deli potato chip varieties include Himalayan Pink Salt, Red Curry and Coconut, and Lime and Cracked Pepper. The chips are cooked in 100 percent sunflower oil, are Non-GMO Project verified, and contain no artificial colors or flavors.

Eggland’s Best introduces a new line: Eggland’s Best Snacks. Each pack contains a nutritious Eggland’s Best hard-cooked and peeled egg, along with two other snack items. Varieties include: Bacon and Cheddar Cheese, Salame and Provolone Cheese, Olives and Feta Cheese, and Chocolate Covered Almonds and Cheddar Cheese. All varieties have a suggested retail price of $3.29.

Red Rock Deli Purchase, N.Y. (844) 254-1234 redrockdeli.com

Eggland’s Best Malvern, Pa. (800) 922-3447 egglandsbest.com

5. Dunkin’ Donuts Cookies & Cream Bottled Iced Coffee Dunkin’ Donuts unveiled Cookies & Cream as the newest variety to join its line of bottled, ready-to-drink (RTD) iced coffee beverages. Available now, Cookies & Cream joins Dunkin’s four other RTD flavor favorites, including Original, Mocha, Espresso and French Vanilla. The Coca-Cola Co. and its bottling partners have been manufacturing and distributing prepackaged Dunkin’ Donuts branded bottled beverages since the beginning of 2017. The bottled Dunkin’ Donuts Iced Coffee beverages are made according to Dunkin’ Donuts’ specifications using high-quality Arabica coffee blends with real milk and sugar.

The Coca Cola Co. Atlanta (800) 520-2653 dunkinanytime.coca-cola.com

5 26 Convenience Store News C S N E W S . c o m

NEW PRODUCTS

9

8 6

7

6. Strongbow Original Dry Cider

7. Simply Good Snack Sticks

8. Hostess Bakery Petites

9. Tranquini Relaxation Drink

Strongbow Hard Ciders is bringing back, by popular demand, its renowned Original Dry flavor this summer. The dry cider, with a 5-percent ABV, is made with a mixture of bittersweet and culinary apples for a crisp, less sweet taste.

Like all Strongbow products, it contains no artificial flavors or colors. Original Dry became available nationally beginning in June in 16.9-ounce single-serve cans and four-packs of 16.9-ounce cans. The launch is being supported by a full visibility program with new and impactful point-of-sale elements. Additionally, a 360-degree marketing plan will build awareness through highly targeted digital, social and PR engagement focused specifically around Strongbow fans.

Western’s Smokehouse LLC introduces a line of meat snack sticks that target the growing consumer trend for healthier products in the marketplace. Simply Good Snack Sticks contain only lean cuts of beef and pork, and spices, according to the company. The meat snack sticks contain no nitrates, gluten, MSG or soy. The line includes Gourmet Original, Zesty Jalapeno, and Sweet Smokehouse Barbeque varieties. General availability of the Simply Good line of meat snack sticks is scheduled for July 1.

Hostess Brands LLC introduces premium adult snacking to the sweet baked goods category with the launch of Hostess Bakery Petites. Inspired by fresh, handcrafted bakery treats, Bakery Petites come in the following varieties: Cake Delights, Brownie Delights and Crispi Thins.

Hostess Bakery Petites are made with ingredients such as real chocolate, real vanilla and real raspberries. There are no artificial flavors or colors and no high fructose corn syrup in the snacks.

The products are baked in the USA.

Beverage brand Tranquini has partnered with Cascadia Managing Brands for a U.S. expansion of the relaxation drink line. Tranquini is a natural de-stress drink made from a unique herbal blend — green tea extract containing natural theanine, lemon balm, chamomile and lavender, according to the company. Tranquini is made with 100 percent organic cane sugar, no artificial colors, only natural flavors, and contains zero preservatives.

Western’s Smokehouse LLC Greentop, Mo. (660) 949-2445 info@westernssmokehouse.com

westerns-smokehouse.com

Hostess Cakes Kansas City, Mo. (800) 483-7253 hostesscakes.com

Heineken USA White Plains, N.Y. (855) 787-2437 heinekenusa.com

10. Hi-Chew Açaí & Tropical Mix Varieties Hi-Chew expands its line of Japanese fruit chews with Hi-Chew Açaí and Hi-Chew Tropical Mix. Hi-Chew Açaí delivers a burst of sweetness, including real chia seeds, in each chew.

The candy derives its rich purple color and real fruit flavor from the açaí berry. Each Hi-Chew Açaí stick contains 10 individually wrapped chews. Hi-Chew Tropical Mix includes an exotic mix of flavors, including Kiwi, Mango, and a brand-new Pineapple flavor.

Morinaga America Fort Lee, N.J. (201) 947-0408 info@hi-chew.com hi-chew.com

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

10

Tranquini Dallas info@tranquini.com tranquini.com

YOU NEED MORE THAN A SOFTWARE PROVIDER We know software and the industry, but only you know your business.

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C-

S

TO

Employee Training Must-Dos

UE

SMALL OPERATOR

RE RES

C

Everything you want to accomplish in retail revolves around proper training TRAINING IS THE MOST IMPORTANT ELEMENT

of the foundation on which to build a retail business. Everything you want to accomplish in retail revolves around training. I firmly believe that good salespeople are born, but great retailers are developed. It takes consistency and repetition to create a retail culture that enhances the customer experience.

By Roy Strasburger, President, Strasburger Retail

Of course, training takes place in all parts of a company or organization. Accounting people need to be trained. Marketing people need to be trained. Store personnel need to be trained. All of this training needs to be interrelated so that one section feeds off another. This is truly a case where the sum is greater than the parts.

What do you need to focus on when you create a training program?

Although I am going to use store operations as an example, I think the following ideas are applicable for any type of training that takes place within your organization.

Training is about communication. It’s not just about knowing what words to say and how to speak well. It is about how to tell a story that resonates with your audience.

A good trainer must have experience in the areas in which they are training. They have to know the battles that will be fought, the problems that will arise, and the various psychological components of the tasks to be done. Sending out a trainer who does not have experience in the subject matter is like sending a fireman to fight a house fire with a water pistol. It’s going to be ineffective and it will not be respected.

The first step is finding a person with the requisite experience who can tell a good story. That person will be able to command the attention and, more importantly, the respect of the trainees. Ultimately, the role of the trainer is to become a mentor. The trainer will be someone who gives advice, listens to problems, and is there to help spot flaws and inconsistencies in your organizational program.

Once you have someone who can tell a knowledgeable story, they need to convey the context as to why the employee is here.

What is the purpose of their job? How do they fit into the organization? What are the expectations? How can they improve? How do they report mistakes and errors? Clear business objectives and organizational structure will help the employee to find his or her place in the company and feel more at home.

All of this leads to what I think is the most important part of a training program — helping the trainee gain a sense of place and purpose. It is not about the mechanical or administrative skills that need to be done on a daily basis; it’s about how the trainee fits in as a member of the overall team. In my experience, the most successful team members are those who feel as if they belong to something that is larger than themselves and know how their position impacts the greater group.

Here, we start getting into more of the nuts and bolts of the training. We’ve found a good trainer and our trainee understands their place in the overall structure. Now, the job is to tell them how to do the task at-hand. To do that, you must have something to train them with. The same way that you would have a map (or these days, GPS) when you are going on a trip, you need to provide your trainee with a route through the training requirements.

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

your business LEGISLATION / REGULATIONS

SALES STRATEGIES

COMPREHENSIVE RESOURCES

CONSUMER INSIGHTS

MERCHANDISING SOLUTIONS

SALES & PROFITS

COLLABORATION

LEADERSHIP BRANDS

At AGDC one of our goals is to help drive our customers’ success. We represent the Altria Operating Companies’ vast portfolio of industry-leading brands. We aim to develop sales strategies that align with current consumer insights and your operational goals. Work with us and take advantage of our comprehensive resources to evolve and elevate your business.

©2018 Altria Group Distribution Company | For Trade Purposes Only

SMALL OPERATOR

Everyone can put together the basis of a training program. You don’t have to spend a lot of money, but you may need to spend some time. To build a training program, you need to think about each specific job, how that job is performed, and what you want the outcome of that performance to be. At its most basic, it can start off as the equivalent of a job description for the position.

When someone understands their job duties and their objectives, job satisfaction and retention rates go up. It is important that an employee knows what he or she can and cannot do and the limit of their authority to make decisions. The more definition that is given to the granting of the employee’s decision-making power, the more confident the employee is in handling customer complaints, providing enhanced customer service, and doing those things that the customer feels is above and beyond what was expected.

The simplest way to create training materials is to make a paper version of your training program and requirements. Put the job description together with a list of objectives and expectations, add a checklist

It is very important to have refresher courses conducted periodically after the initial training section is done. to show that the trainee demonstrated their knowledge of the tasks, and make sure that when you read it out loud, it makes sense.

Hey presto, you will have a basic training program for that position.

Of course, you can spend the money to develop or buy online training programs with more sophisticated parts and pieces. However, when you buy an off-the-shelf training program, it lacks the special features and uniqueness that define your company and what makes it special. Remember what I said at the beginning of this article — the most important thing about training is conveying your company philosophy and ideas to your employees.

An element that we have found very successful in our business is having the completion of the training program linked to a person’s progress within the company. For example, once a team member has completed the Customer Service Representative training section (our equivalent to the person who runs the cash register and interacts the most with our customers), they are then eligible to move on to the training program that provides them with the next level of skills. That could be training in foodservice or some other special program you have in your business.

Completing that training may make them eligible to be trained as an assistant manager. And once the assistant manager training is completed, they can move up to the store manager training. This provides a path that the employee can see, and they know what they need to do to advance their career.

Training keeps the employee involved and it helps them see what their career path is. It is human nature for someone to want to know what they are working toward, and this gives them a set of objectives. An engaged employee is a motivated employee, and a bonus to any business.

Once the training has been completed, we feel it is very important to have refresher courses conducted periodically after the initial training section is done. For example, when somebody completes a training program, we may go back in 30 days and do a refresher course to remind the employee of what they have done, and reinforce what they have learned. This also allows the employee to give you feedback based upon what they have experienced in trying to implement the information gained during the training program to what actually happens in the job.

Which leads us to the next element of a

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

SMALL OPERATOR

successful training program: the feedback loop. It makes no sense to train somebody in a program that doesn’t work. Therefore, you need to solicit feedback and suggestions from your employees and from your customers. Your customers are the best evaluators of how successful your training programs are.

Take all of the feedback and comments seriously and see what can be done to modify or change the training program to reflect the reality of the situation. Are you training people to do something that doesn’t actually work in real life? Or that no one actually does? Or that doesn’t meet your customers’ demands?

The last key element is consistency. All of these components need to be implemented the same way every time the training program takes place. In our business, it’s important that everyone is trained the same way every time so that if we move a team member from one store to another, even if it is across the country, they can slide effortlessly into the routine because it feels

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

familiar due to the fact that our training is the same and everybody is doing the same thing the same way.

Consistency is how great stores are created. Even if you have one store, every employee knows what to do because they’ve all been part of the same training program.

Story. Context. Map. Advancement. Refresh. Feedback.

Consistency. Remember SCMARFC! Actually, that is a really silly acronym. Don’t use that. But what is important is that your employees know what they need to do and how they can be successful working in your store.

If you remember that, you will be on the right path. CSN Roy Strasburger is president of Strasburger Retail (previously Convenience Management Services Inc.), a privately held retail consulting, operations and management provider serving the small-format retail industry nationwide. Strasburger Retail operates retail locations for companies that don’t have the desire, expertise or infrastructure to operate them. Learn more at strasburgerretail.com.

Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.

COVER STORY

Smaller Chains Unceasing consolidation in the c-store industry paves the way for several new movers and shakers on this year’s Convenience Store News Top 100 ranking A Convenience Store News Staff Report

IN THE CONVENIENCE CHANNEL,

known for its smaller, neighborhood-focused stores, the big chains keep getting bigger.

In the past year, Irving, Texas-based 7-Eleven Inc. added roughly 1,000 stores across 17 states when it acquired most of the retail assets of Dallas-based Sunoco LP. Meanwhile, Laval, Quebec-based Alimentation Couche-Tard Inc. kept up its reputation as an aggressive acquirer by adding CST Brands Inc. (roughly 1,300 stores) and Holiday Cos. (500-plus stores) to its ever-growing portfolio.

With those mega-deals in the books, it’s no surprise 7-Eleven and Couche-Tard sit in the No. 1 and No. 2 spots on this year’s Convenience Store News Top 100 ranking — the same positions they have occupied since 2016.

The past year also saw already-large chains like San Antonio-based Andeavor (formerly known as Tesoro Petroleum Corp.) jump 26 spots in ranking to No. 10 after acquiring Western Refining Inc.; and Richmond, Va.-based GPM Investments LLC gain two spots to now rank No. 12 upon acquiring E-Z Mart Stores Inc. Four of last year’s top 25 chains — including CST, Western Refining and Holiday — disappeared from this year’s ranking on account of acquisitions. However, this paved the way for several new names to join this year’s Top 100 ranking, and for several smaller chains to make big moves on the list. Seven chains on this

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

Make Big Moves

J UL

20 1 8

Convenience Store News

37

COVER STORY

year’s Top 100 jumped 10 or more spots in ranking year over year, with six of those seven being smaller chains operating less than 125 stores each.

year. In a leap just as impressive, Denver-based Pester Marketing gained 49 spots, going from No. 110 (tie) in 2017 to No. 61 (also a tie) this year.

Two smaller chains, in particular, made huge moves year over year: Enmarket Inc. and Pester Marketing Co. Savannah, Ga.-based Enmarket moved up 54 positions, rising from No. 108 in 2017 to No. 54 (a tie) this

Enmarket nearly doubled its footprint to 122 stores by picking up 34 sites from Bamberg, S.C.-based Brabham Oil Co. and 35 sites from Glennville, Ga.-based Clyde’s Market.

Growth Spurts

As Enmarket President Brett Giesick told Convenience

TOP 100 2018 2017 Rank Rank

Company, City, State

1

1

2

2

3

3

4

4

5

5

6

7

7

6

8

10

9

8

10

36

11

11

12

14

13

ConocoPhillips/Phillips 66 Houston 13 Cumberland Farms Inc. Westborough, Mass. n/a Valero Energy Corp.

San Antonio n/a EG Group (U.S. HQ) Cincinnati

14 15 16

16

18

17

Total U.S. CompanyFranchise/Licensee Primary Store Count Operated Stores Stores Store Names

7-Eleven Inc. Irving, Texas Alimentation Couche-Tard Inc. Laval, Quebec, Canada

$34,857,472

9,348

2,565

6,783

7-Eleven, Stripes

$27,276,080

7,230

6,224

1,006

Shell Oil/Motiva Enterprises LLC Houston Marathon Petroleum Corp.

Findlay, Ohio Chevron Corp.

San Ramon, Calif.

Exxon Mobil Corp.

Irving, Texas BP North America Houston Casey’s General Stores Inc. Ankeny, Iowa Sunoco LP Dallas Andeavor Corp.

San Antonio

$11,914,604

4,406

12

4,394

Circle K, Corner Store, Dairy Mart, Diamond Shamrock, Flash Foods, Gas Express, Holiday, Kangaroo Express, Nice N Easy Grocery Shoppe, On the Run, Petro Express, Quick Stop Shell

$17,154,280

4,395

2,725

1,670

Marathon, Rich Oil, Speedway

$28,758,600

3,812

290

3,522

Chevron, Chevron ExtraMile, Texaco

$9,083,308

3,303

0

3,303

Exxon, Exxon Tiger Mart, Mobil, Mobil Mart

$11,373,908

3,009

0

3,009

$7,761,000

2,082

2,082

0

Amoco, ampm, Arco, Arco Thrifty, BP, BP Connect, BP Shop Casey’s General Store

$9,462,960

1,771

65

1,706

$6,059,092

1,485

516

969

$3,529,448

1,425

0

1,425

$2,999,620

1,204

1,204

0

$3,323,112

1,164

0

1,164

$6,178,796

939

559

380

Cumberland Farms, Gulf

$4,498,520

831

0

831

Valero

$5,593,120

798

798

0

$9,334,780

795

795

0

Fresh Eats MKT, Kroger Express, Kroger Fuel Center, Kwik Shop, Loaf ‘N Jug, Quik Stop, Tom Thumb, Turkey Hill Minit Market Wawa

$9,709,700

783

783

0

QuikTrip

CITGO Petroleum Corp.

Houston GPM Investments LLC Richmond, Va.

12

17

Annual ACV* ($000)

Wawa Inc. Media, Pa. QuikTrip Corp.

Tulsa, Okla.

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

APlus, Aloha Island Mart, Coastal, Menehune Food Mart, Sunoco ampm/Andeavor, Flyers, Giant, Giant Service, Howdy’s Foodmart, Mustang, SuperAmerica, Tesoro, USA Fuel Center, USA Gas, USA Mini Mart, USA Petroleum CITGO Admiral Petroleum, Apple Market, BreadBox, Crenco Food Store, Fas Mart, Jiffi Stop, Jiffy Stop Food Marts, Li’l Cricket, Next Door Food Store, Roadrunner Markets, Scotchman, Shore Stop, Village Pantry, Young’s 76, Conoco, Phillips 66

Sometimes a fresh perspective is the best ingredient.

To Our Valued Customers and Partners,

For nearly 150 years, consumers have welcomed Campbell into their homes. With annualized sales of approximately $10 billion (including our recent acquisitions), our portfolio includes iconic brands that are found in nearly every aisle and on every kitchen table around the world.

Today, the entrepreneurial spirit that began with our founders is being reinvigorated with a fresh perspective. As eating habits and food preferences evolve, Campbell stands ready to serve new generations of consumers with everything from our namesake soups, simple meals and beverages to new organic soups, delicious snacks and packaged fresh foods.

Our industry is changing and so is Campbell…for the better. We’re reevaluating and updating our portfolio to accelerate our growth and yours. What’s not changing is our dedication to our customers, employees and consumers. Likewise, our commitment to sustainability, transparency and making a difference in our communities remains steadfast.

Campbell was a great company yesterday. It’s a great company today. And Campbell will be a great company tomorrow. The entire Campbell organization is excited about the opportunities that lie ahead, and we’re ready to strengthen our partnership with you.

Kindest regards,

Keith McLoughlin Interim CEO Campbell Soup Company

COVER STORY

Store News in March, these acquisitions were opportunistic in terms of both timing and location. They allow the retailer to fill in several markets faster than it could with new-to-industry sites.

density, brand recognition, and employee opportunity.

Upon integration of the 69 stores, Enmarket expects to benefit from its larger footprint by creating greater value from this new larger scale. The growth will enhance the operator’s designated market area (DMA)

2018 2017 Rank Rank

19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Company, City, State

RaceTrac Petroleum Inc. Atlanta 20 Pilot Flying J Knoxville, Tenn.

19 Military Arlington, Va. 23 Kwik Trip Inc. La Crosse, Wis. 21 Sheetz Inc. Altoona, Pa. 25 TravelCenters of America LLC Westlake, Ohio 27 Love’s Country Stores Inc. Oklahoma City 26 CHS Inc. Inver Grove Heights, Minn.

28 Kum & Go LC Des Moines, Iowa 29 COPEC Inc. Brentwood, Tenn.

30 Stewart’s Shops Corp.

Ballston Spa, N.Y. 32 Allsup’s Convenience Stores Inc. Clovis, N.M. 33 Maverik Inc. Salt Lake City 37 Murphy USA Inc. El Dorado, Ark. 38 United Pacific Long Beach, Calif.

42 Global Partners LP/Alliance Energy Corp.

Waltham, Mass.

39 Jacksons Food Stores Inc. Meridian, Idaho 31 Dunne Manning Allentown, Pa. n/a Cal’s Convenience Inc. Frisco, Texas 41 Landmark Industries Inc. Houston 40 Fikes Wholesale Inc. Temple, Texas 35 United Refining Co. of Pennsylvania Warren, Pa. 18

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

Annual ACV* ($000)

“Longer term, it makes us more attractive for recruiting talent, becoming a more cost-efficient organization by leveraging our new size,” Giesick explained. “It also forces us to drive more process through our organization to manage our new store count.”

Not unlike Enmarket, Pester Marketing nearly doubled in size as a result of three moves since mid-2017. Most of the company’s growth to 110 stores came from its acquisition

Total U.S. CompanyFranchise/Licensee Primary Store Count Operated Stores Stores Store Names

$5,572,320

736

481

255

RaceTrac, Raceway

$2,806,700

679

652

27

$4,100,200

667

667

0

$4,372,940

611

611

0

Flying J, Mr. Fuel, Pilot Express, Pilot Food Mart, Pilot Travel Center Coast Guard Mini Mart, Marine Corps Shoppette, NEXCOM Mini Mart, Shoppette, Troop Store Kwik Star, Kwik Trip, Tobacco Outlet Plus Grocery

$6,689,020

568

568

0

Sheetz

$4,271,800

484

462

22

$1,276,860

454

454

0

$860,080

413

47

366

$2,286,960

409

409

0

Kum & Go

$1,663,480

346

346

0

$1,505,920

338

338

0

Delta Express, Discount Food Mart, Favorite Market, MAPCO, MAPCO Express, MAPCO Mart Stewart’s Shop

$244,036

316

316

0

Allsup’s

$632,580

315

315

0

Maverik

$491,400

292

292

0

Murphy Express, Murphy USA

$1,169,740

245

241

4

$597,740

239

239

0

$306,280

232

232

0

C Stop, My Goods Market, United Oil, We Got It Food Mart Alltown, Convenience Plus, Fast Freddie’s, Honey Farms, Mr. Mike’s, Xtra Mart Jacksons Food Store

$730,808

231

163

68

$1,730,300

221

221

0

Choice, Express Lane, Hy-Miler, Joe’s Kwik Mart, Rocky Top Market, Uni Mart, Zoomerz Stripes

$522,860

218

218

0

Timewise Food Store

$243,360

215

215

0

CEFCO Food Store, Food Fast

$955,500

207

203

4

Country Fair, Kwik Fill, Kwik Fill & Smokers Outlet

Minit Mart, Petro Stopping Center, TravelCenters of America Love’s Country Store, Love’s Travel Stop Ampride, Cenex, CHS, Zip Trip

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COVER STORY

2018 2017 Rank Rank

41 42 43 44 45 46 47 48 49 50 51 51 53 54 54 56 57 57 59 60 61 61

of Western Convenience Stores Inc. earlier in 2018. In addition to those 43 locations, Pester Marketing acquired the eight-store Kwik Stop chain based in Canon City, Colo., and formed a five-store joint venture with R.H. Smith Distributing Co. Inc. in Washington State.

the umbrella of San Antonio-based Western Alta Holdings LP. The convenience stores operate under the Alta Convenience banner.

Pester Marketing has gone through quite a few iterations since it was founded by Jack Pester in 1958. Today, the company is under

“First, it was opportunity; they were for sale. Secondly, we had looked at the Kwik Stops for many years. It was a family-owned business located in the middle of where we

Company, City, State

Two Farms Inc. Baltimore 43 Thorntons Inc. Louisville, Ky. 44 Meijer Inc. Grand Rapids, Mich.

45 United Dairy Farmers Cincinnati 47 Giant Eagle Inc. Pittsburgh 50 QuickChek Inc. Whitehouse Station, N.J. 52 Sinclair Oil Corp.

Salt Lake City 54 Hy-Vee Food Stores Inc. West Des Moines, Iowa 55 Krauszer’s Food Store Edison, N.J. 51 Convenient Food Mart Inc. Mentor, Ohio 31 CrossAmerica Partners LP Allentown, Pa. 56 Blarney Castle Oil Co. Bear Lake, Mich.

57 Go Mart Inc. Gassaway, W. Va. 108 Enmarket Inc. Savannah, Ga. 53 Kwik Stop Inc. Plantation, Fla. 59 Martin & Bayley Inc. Carmi, Ill. 49 Clark Brands LLC Naperville, Ill. 58 Englefield Oil Co. Heath, Ohio 62 Terrible Herbst Inc. Las Vegas 60 7-Eleven Stores of Oklahoma Oklahoma City 61 Plaid Pantries Inc. Beaverton, Ore. 110 Pester Marketing Co. Denver 46

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

Annual ACV* ($000)

Opportunity was the main driver behind its recent growth, Pester Marketing President and CEO Rich Spresser told CSNews.

Total U.S. CompanyFranchise/Licensee Primary Store Count Operated Stores Stores Store Names

$408,720

193

193

0

Royal Farms

$708,760

192

192

0

Thorntons

$1,659,060

185

185

0

Meijer Gas Station

$605,280

169

169

0

United Dairy Farmers

$1,644,240

160

160

0

GetGo

$1,099,280

156

156

0

QuickChek

$348,764

145

0

145

$342,940

138

138

0

$266,760

133

0

133

Krauszer’s Food Store

$247,260

132

59

73

Convenient Food Mart

$301,340

130

130

0

Freedom Valu Center, Jet Pep

$510,640

130

130

0

E Z Mart

$590,980

123

123

0

Go Mart

$557,960

122

122

0

E-Z Shop, Enmarket

$272,480

122

0

122

$679,120

121

121

0

$322,140

119

0

119

$487,240

119

119

0

Duchess Shoppe

$138,060

114

114

0

Terrible Herbst

$232,180

112

112

0

7-Eleven

$221,780

110

110

0

Plaid Pantry

$367,380

110

110

0

Alta Convenience, Kwik Stop, Smitty’s

Sinclair Hy-Vee Gas Station

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COVER STORY

operate. We’ve had an interest in them for several years. They were a well-run company. When that opportunity came along, that was something we had been looking at for a long time,” he explained.

The Western Convenience acquisition was a bit different. The Colorado-based chain filed for Chapter 11 in late 2015, exiting from bankruptcy in September 2016. Pester Marketing received word of what Spresser

2018 2017 Rank Rank

63 64 64 66 67 68 69 69 71 71 73 73 73 73 77 77 79 80 81 81 83 84

Company, City, State

Mirabito Energy Products Binghamton, N.Y. 64 Little General Stores Inc. Beckley, W. Va. 65 Stinker Stations Boise, Idaho 68 True North Energy Brecksville, Ohio 66 Town Pump Inc. Butte, Mont.

69 Panjwani Energy LLC Houston 75 C.A.R. Enterprises Inc. Upland, Calif.

72 M.M. Fowler Inc. Durham, N.C. 86 Croton Holding Co. Pittsburgh n/a Empire Petroleum Partners LLC Dallas 71 Express Mart Franchising Corp.

Syracuse, N.Y. 84 Sampson Bladen Oil Co. Inc. Clinton. N.C. 94 BW Gas & Convenience LLC Beverly, Mass.

67 Sam’s Food Store Rocky Hill, Conn.

74 Victory Marketing LLC Ridgeland, Miss.

70 Tri Star Energy LLC Nashville, Tenn.

73 Reid Stores Inc. Lockport, N.Y. 76 Gulshan Enterprises Sugar Land, Texas 79 Johnson Oil Co. Rock Falls, Ill. 77 Toot N Totum Food Store Inc. Amarillo, Texas 78 The Spinx Co. Inc. Greenville, S.C. 83 Newcomb Oil Co. Bardstown, Ky. 63

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

Annual ACV* ($000)

termed “a little bit of a distressed sale” in October 2017 and closed on the deal this January.

“The turnover was relatively quick. We were very familiar with the company and familiar with their stores. They, again, fit us regionally,” he said. “The majority of the stores are located in Colorado, and really located in towns and areas where we already operate.”

Pester Marketing continues to operate all eight Kwik Stop locations, according to Spresser, who calls the stores

Total U.S. CompanyFranchise/Licensee Primary Store Count Operated Stores Stores Store Names

$246,480

108

108

0

Mirabito

$506,480

106

106

0

Little General

$313,924

106

106

0

Stinker Stores

$245,700

105

105

0

True North

$306,020

100

100

0

Town Pump

$192,920

90

90

0

Star Stop

$417,300

89

89

0

2 Go Mart, Rebel

$236,600

89

89

0

Family Fare

$336,440

88

88

0

Par Mar Stores

$544,960

88

88

0

Fast Market, Fiesta Mart, Quik Way Food Mart

$164,580

87

78

9

Express Mart

$147,160

87

87

0

Han-dee Hugo’s

$240,760

87

87

0

Yesway

$168,220

87

87

0

$134,680

85

85

0

Chucky’s Food Store, Hess/Aldin Associates, Sam’s Food Store Sprint Mart

$273,780

85

85

0

Daily’s, T Fuel, Tri Star Energy, Twice Daily

$124,800

84

84

0

Crosby’s

$150,280

82

42

40

$162,760

81

81

0

Express Lane

$204,620

81

81

0

Toot N Totum

$256,100

80

80

0

Spinx Store

$257,140

79

79

0

Five Star Food Mart

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COVER STORY

“really good assets.” Upon closing the Western Convenience transaction, Pester Marketing decided to sell one location and not reopen another.

materialize. Once you get the reputation of being an acquirer, Spresser said the calls start coming in from those interested in selling.

“The opportunities are still out there — mainly from smaller chains,” he explained. “There are still a lot of opportunities, but they have to fit regionally.”

From year to year, Spresser said the company does not lay out an acquisition game plan; rather, it lets opportunity dictate how many stores it adds in a particular year.

Moving forward, Pester Marketing is focused on acquisitions in its core operating region of western Kansas, northern New Mexico, Colorado and Nebraska. Rural areas work especially well for the company.

“We’ve never sat down at the end of the year and said, ‘OK, next year, we want to have this many stores,’” he said. “It’s always been growth through acquisitions, but we want to be smart about our growth and target the right acquisitions.”

“Those would be growth areas for us. At this point, it is growth through acquisitions. That is how Pester was built. We did some ground-ups in the mid-90s, but since that point, it has all been through acquisitions,” Spresser said.

Often, a few deals will trigger others to 2018 2017 Rank Rank

85

82

85

80

87

n/a

87

81

89

89

90

87

91

88

92

91

92

90

94

100

95

93

95

97

97

101

97

98

97

107

100

96

100

99

Company, City, State

FKG Oil Co. Belleville, Ill. Buchanan Oil Co. Omaha, Neb. Turn Outz Inc. Roanoke, Va. C. N. Brown Co. South Paris, Maine Southwest Georgia Oil Co. Bainbridge, Ga. MFA Oil Co. Columbia, Mo. Gate Petroleum Co. Jacksonville, Fla. CHR Corp.

York, Pa. Family Express Corp.

Valparaiso, Ind. Southeast Petro Distribution Cocoa, Fla. 7-Eleven Hawaii Inc. Honolulu Weigel’s Stores Inc. Powell, Tenn.

Sunmart Inc. Spring, Texas Dandy Mini Marts Inc. Sayre, Pa. Clark’s Pump-N-Shop Inc. Ashland, Ky. Walters-Dimmick Petroleum Inc. Marshall, Mich.

Certified Oil Co. Columbus, Ohio

Annual ACV* ($000)

Total U.S. CompanyFranchise/Licensee Primary Store Count Operated Stores Stores Store Names

$317,460

78

78

0

Moto Mart

$332,020

78

78

0

Bucky’s

$274,820

77

40

37

$157,560

77

77

0

Big Apple

$197,600

76

76

0

$131,040

75

75

0

Inland Sun Stop, S&S Food Store, Sun Valley Market & Deli Break Time, MFA Oil, Petro Card 24

$172,380

72

72

0

Gate

$112,580

69

69

0

Rutter’s

$157,560

69

69

0

Family Express

$174,460

67

51

16

$85,540

66

66

0

7-Eleven

$174,980

66

66

0

Weigel’s, Jug O Milk Store

$183,300

65

37

28

$144,820

65

65

0

Dandy Mini Mart

$182,520

65

65

0

Clark’s Pump-N-Shop

$159,120

64

64

0

Johnny’s Markets

$40,612

64

64

0

Certified

One Stop WV, Stop In

Sunshine Express, Sunshine Food Mart

Sunmart

Source: Nielsen TDLinx, May 2018 Only U.S. stores are included in this ranking. *All Commodity Volume (ACV) is provided by Nielsen TDLinx. ACV is an annualized range of the estimated retail sales volume of all items sold in a store that pass through the retailer’s cash registers. Lottery sales are not included; gas sales are included where applicable. The Nielsen TDLinx ACV is an estimate — a directional measure to be used as an indicator of company size.

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

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COVER STORY

Picking Up the Pace By a rough count, 2018 merger and acquisition (M&A) activity in the convenience channel as of press time has included at least nine notable deals, either completed or pending. The most significant is the pending merger of Andeavor and Speedway LLC parent Marathon Petroleum Corp. that will create a nationwide retail and marketing business of approximately 4,000 company-owned and -operated locations and approximately 7,800 branded locations.

This seems to be the new normal in the c-store realm.

“All the M&A activity doesn’t surprise me anymore. It’s been going on for five or six years now and if there is any surprise, it’s that it has not slowed down at all,” Spresser noted.

He does admit, though, to being surprised by some smaller deals being done by big chains. “It’s like all the big guys have been gobbled up,” he said. “When you are seeing chains of 20 to 30 stores being purchased by some of the bigger guys, that’s a little bit of a surprise.”

M&A mania in the convenience and gas (C&G) sector remains very strong, according to John Sartory, managing director of Petroleum Capital & Real Estate LLC, a provider of transactional advisory services.

“The market forces, such as generational succession issues for many existing operators, the long-term capital investment requirements to remain competitive in the retail industry, the need for the publicly traded C&G companies to continue to grow market

BIGGEST MOVERS COMPANY

Enmarket, Savannah, Ga. Pester Marketing Co., Denver Andeavor, San Antonio Yesway, Beverly, Mass.

Croton Holding Co., Pittsburgh Sampson Bladen Oil Co. Inc., Clinton, N.C. Clarks Pump N Shop Inc., Ashland, Ky.

2018 RANK

54 61 10 73t 71 73t 97

Source: Nielsen TDLinx, Convenience Store News Market Research

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

2017 RANK

108 110 36 94 86 84 107

SPOTS MOVED

54 49 26 21 15 11 10

share and cash flow, etc. — to only name a few — that have driven this consolidation have not subsided,” he noted.

However, Sartory believes it’s a little too early to state that 2018 is going to be a record year in the number of acquisitions completed in the convenience and gas industry.

Steve Griffin, managing partner of Downstream Energy Partners LLC, says in his opinion, 2018 appears to be robust compared to other years. And his company expects to see even more.

“Some of the activity may be holdover from 2017, given that was an election year where M&A activity tends to be stagnant. However, multiple consecutive years of strong financial performance have given marketers an opportunity to consider finally selling their equity,” he said. “Many of our clients wish there were more acquisition opportunities to consider.”

Driving Forces Cheap money and continuing industry consolidation are key factors behind the pace of activity, according to Terry Monroe, president of American Business Brokers & Advisors.

“If I can get cheap money, then I can buy more stores and therefore increase my buying power, which relates to lowering my costs to operate,” he explained. “That enables me to have more profit, so the cycle continues until the cheap money goes away. But, by then, I will have a bunch of stores and a lot of locations tied up around the country.”

The days of cheap money may be coming to an end soon, however, as mortgage rates rise — and the Federal Reserve appears to favor that trend, noted Steve Montgomery, president of b2b Solutions.

“If a significant rate increase should occur, we will see a slowdown in M&A activity as buyers factor higher discount rates into their valuations,” Griffin echoed. “Wall Street buyers generally, and MLPs as a subset, are hyper-rate sensitive.”

In addition, sellers who previously may have

COVER STORY

been picky about their exit timing now may be looking favorably at exiting, the Downstream Energy Partners exec pointed out.

“Recent financial results have been stronger than normal, particularly with fuel margins boosting EBITDA, and while the sale multiples seem to be holding, market conditions are positive for those exiting,” he said, adding that crude price increases foretell a fall in fuel pool margins with a commensurate drop in EBITDA, correspondingly reducing exit prices.

There is another factor behind the M&A push: the relative cost and time requirements of buying vs. building. “Even at today’s multiples, it is cheaper and faster to buy than to build. This strategy works well for chains that can adapt their business model to the acquired sites,” Montgomery said.

Big players are also seeing big opportunities in taking over companies that are accretive to earnings, and low corporate tax rates are resulting in more liquidity to do so, according to Dennis Ruben, executive managing director of NRC Realty & Capital Advisors LLC. “People have more liquidity to do acqui-

NEW ADDITIONS TO THE LIST • EG Group, Cincinnati • Cal’s Convenience Inc., Frisco, Texas • Enmarket Inc., Savannah, Ga. • Pester Marketing Co., Denver • Empire Petroleum Partners LLC, Dallas • Turn Outz Inc., Roanoke, Va. • Sunmart Inc., Spring, Texas • Clarks Pump N Shop Inc., Ashland, Ky. Source: Nielsen TDLinx, Convenience Store News Market Research

sitions — not just the big players; everyone’s looking out for things,” Ruben told CSNews. “People have come to us asking what we have that they can look at. We’re seeing a lot more of that.”

Grow or Go? A lot of smaller companies are looking to buy or sell — it cuts both ways, said Ruben.

“Because the big guys are getting bigger, the smaller guys are looking to see how they can compete. Some are saying maybe it’s time to get out,” he explained.

Smaller regional chains that have the financial flexibility and ability to expand, and have made the strategic investments necessary to compete with the larger consolidators such as 7-Eleven, realize that acquiring a competitor can be one of the quickest and most costeffective methods to expand their existing retail footprint, explained Petroleum Capital & Real Estate’s Sartory.

7-Eleven, Couche-Tard, Speedway, etc., are not interested in every M&A opportunity for a variety of strategic, geographic and operational reasons and, as a result, they are not going to bid on every acquisition opportunity.

For example, an opportunity that contains a number of dealer-operated sites is most likely not going to interest a number of the larger consolidators that are primarily focused on acquiring larger company-operated sites.

Instead, Sartory said these type of acquisition opportunities are prime targets for smaller operators that have the ability and financial flexibility to expand, and the strategic patience to rationalize and improve the retail assets acquired.

In its representation of sellers, Downstream Energy Partners has seen middle-tier competitors (under 125 stores) bid assertively to grow their footprints, particularly for assets they believe to be strategic.

“The middle tier understands they, too, must grow to defend their markets, or exit,” Griffin said.

Smaller chains feeling the need to go big or go home can effectively compete in the M&A arena, but they need to address four basic strategy considerations, according to Montgomery: • Who are their target customers?

• What are the need states they want to fulfill?

• What retailers are in their customers’ consideration set(s)?

• What are their points of differentiation?

The latter may be the most important. “They need to become more of a destination and less of a ‘me too’ retailer,” Montgomery advised.

Positioning for Acquisition It’s possible some of the moves by smaller chains up the Top 100 ladder may represent a strategic play to make themselves an attractive acquisition target.

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

COVER STORY

“As the old saying goes, it takes a willing seller and buyer to have a transaction. The market seems to have a healthy number of willing buyers,” Montgomery said.

If smaller chains want to be sold, they have to make themselves “sale ready.” This may require very little work for some, and a lot of work for others. Sell-side companies are very good at highlighting the upsides a buyer might extract from a site, but they need something to work with, the b2b Solutions executive explained.

NRC’s Ruben believes smaller chains could very well be the next round of M&A. “We’ve been talking to a lot of clients.

We’re seeing guys who have five to 25 to 30 stores ask, what does their future hold?

Maybe, this is the right time for them to get out,” he said.

In fact, Monroe’s American Business Brokers & Advisors is selling stores to private-equity clients whose thoughts are to build a larger chain of stores that will later be sold to an even larger chain of stores.

“We are taking small chains of stores (10 to 50 stores) and consolidating them into a number above 100 stores so that eventually a larger chain will buy them,” Monroe shared.

“The more stores that are involved in a transaction, the easier the transaction. Meaning it is easier to do a 50-store deal than it is to do a 10-store deal.”

While setting themselves up for acquisition may be the current strategy for some smaller chains, it is not an acrossthe-board trend, in Sartory’s view.

If a privately owned c-store company is not dealing with succession issues, and has made the investments necessary in its business to compete with the larger operators in its trade areas, then these operators are not under pressure to sell, he pointed out.

“Many of our clients love the convenience store business and have no plans or desire to exit the industry,” Sartory said. “They are primarily focused on growing their business and making sure their retail network remains competitive in a marketplace that will continue to consolidate for the foreseeable future.”

The Rise of Smaller Chains The unceasing consolidation in the c-store industry is having multiple effects, including evolution in the very definition of a “smaller chain.” According to Monroe, a smaller chain used to consist of 10 c-stores. Now, that number has jumped to 30.

“The idea of a large chain is becoming more elusive every day. When you look at the top 100 stores in the U.S., it’s almost like looking at the haves and the have-nots. We go from a chain of stores in the thousands, to a few chains who have several hundred stores, and then we drop down into the number of owners who have less than 100 stores,” he observed.

Even as the big chains keep getting bigger, there is still a needed role in the market to be played by smaller chains and midsize players. “Very much so,” said Pester Marketing’s Spresser.

“We are not a national brand like a 7-Eleven, but we have developed a regional brand, so we have brand recognition and we’ve found a niche,” he said.

“Also, these [big] guys are not going into some of these rural areas. 7-Eleven’s selfHoliday Cos. Inc. distribution of their food items Acquired by Alimentation Couche-Tard Inc. limits where they can go,” he added. “I think there is a niche E-Z Mart Stores Inc. for us, and I think there is a Acquired by GPM Investments LLC niche for us going forward, particularly on a regional basis.” CSN Jet Pep Inc.

DROP-OFFS FROM LAST YEAR CST Brands Inc. Acquired by Alimentation Couche-Tard Inc. The Kroger Co. Sold convenience store division to EG Group Western Refining Inc. Acquired by Tesoro Petroleum Corp. (now Andeavor)

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

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FEATURE

Making Cents of the Dollar Store Threat How much will the infiltration of the penny-profit channel cost convenience stores? By Renée M. Covino IN THE GREAT RETAIL ARENA, DOLLAR STORES

are moving from the background to the foreground, expanding rapidly and building smaller-format stores.

Two leading players, Dollar General Corp., based in Goodlettsville, Tenn., and Dollar Tree, based in Chesapeake, Va., continue to blanket North America, each now operating more than 14,000 stores.

Savvy convenience store operators are keeping close watch on the dollar channel, especially now that convenience is a solid factor in their business model.

Consider these recent news headlines:

• Dollar General cut the ribbon on a new convenience store format, DGX, in downtown Nashville, Tenn., in January 2017. At approximately 3,400 square feet, the DGX format is said to provide urban shoppers with a focused selection of consumable items and instant-consumption options.

• Dollar Tree is rolling out its “Snack Zone” initiative to hundreds of more stores after a successful launch in 214 locations. The Snack Zone encompasses cold beverages, candy, snack cakes and salty treats, and is designed to provide customers with a compelling assortment of immediate-consumption products at the $1 price point to drive incremental sales. Dollar Tree plans to add the Snack Zone to 750 more stores in fiscal 2018.

• Dollar General plans to execute approximately 2,000 real estate projects this year, comprising 900 new stores, 1,000 store remodels and 100 store relocations.

Last year, the retailer bought 42 former Walmart Express small-format stores.

• For the first quarter of 2018, Dollar Tree delivered a 4-percent same-store sales increase, with growth in both average ticket and customer traffic.

• Dollar General posted a 2.1-percent increase in same-store sales for 2018’s first quarter, along with a 9-percent jump in profit to $364.9 million.

Given all this buzz, should c-store operators be worried about the dollar channel?

The way industry expert Keith Daniels, a partner at corporate restructuring and investment banking firm Carl Marks Advisors, sees it, “There is a threat, but the size of the threat may not be that great.” He says the core product offering is a calming differentiator: C-store assortments are typically focused on quick-service foods, snacks and drinks, while dollar store assortments are traditionally focused on general merchandise.

Where c-stores need to be concerned is if dollar stores begin selling fuel. “If the price of gas is competitive, this will likely drive customers to dollar stores, reducing c-store foot traffic and the sale of highermargin impulse purchases of food items that c-stores enjoy,” Daniels reasoned.

Looking at it from another angle, a broad assessment of the consumer packaged goods (CPG) brick-and-mortar retail

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

landscape indicates that approximately $2 trillion of retail sales are generated across 275,000 stores annually, according to data compiled by Cadent Consulting Group in Wilton, Conn. C-stores comprise nearly 60 percent of all traditional outlets, but only about 15 percent of merchandise sales.

“Dollar stores may be attracted to the sheer number of convenience stores and the potential for fuel sales,” noted Don Stuart, managing director of Cadent Consulting.

“While testing fuel may be enticing, we believe it makes far more sense to leverage dollar stores’ specific strength, which is price vs. grocery/mass.”

Therefore, Stuart sees the biggest opportunity for the dollar channel to be food/ snacks and freshness, which has the potential to hurt the convenience channel but,

The Pros & Cons of Dollar Stores Strong points of the dollar-store format: • Provides competitive pricing in a manageable, convenient store format, essentially the intersection of value and convenience.

Dollar General already has a convenience store format called DGX. The inaugural DGX store in Nashville, Tenn., measures 3,400 square feet.

more so, supermarkets.

“Traditional supermarket outlet unit sales are declining, and there are significant opportunities across both dollar and limited-assortment discount stores — such as Aldi — to capture this potential,” Stuart told Convenience Store News.

The Fuel Factor Still, experts can’t seem to discount the competitive match-up of the dollar channel vs. the convenience channel when considering the fuel factor.

• Small formats cater to time-conscious consumer needs with quick and easy solutions.

Back in the summer of 2016, Dollar General made headlines when it bought 41 former Walmart Express locations and said it would continue to operate the gas pumps at 37 of these stores, newly rebranded as Dollar General. The chain also previously ran a test of a Dollar General location with gas pumps three years earlier.

• Millennials and Generation Z consumers are on the verge of conversion as the dollar channel’s freshness focus continues to intensify.

But ultimately, does fuel really make sense for dollar stores?

The consensus seems to be “not really.” However, c-stores should stay on their toes, nonetheless.

• Offers real value to a broad consumer group.

• As the middle class shrinks and income disparity continues to grow, the format has greater future appeal.

Weak points of the dollar-store format: • Low profit margins.

• Walmart, while less convenient of a shopping experience, has a broader assortment and is always in direct competition, especially in the improving economy.

• A “ho-hum” store experience, especially when contrasted with top-tier c-stores.

• No fuel and their typical strip mall locations are not conducive to fuel stations.

• Technology and internet/mobile shopping is lagging.

“Dollar stores may be attracted to the potential for fuel sales. However, fuel is a highly visible and pricecompetitive commodity, which often does not generate traffic into the stores and, in the future, could fall victim to charging stations and electric cars,” noted Stuart.

“Dollar stores may be chasing after very few pennies of profit if they try to fuel up.”

Another limiting factor is that many dollar stores are located in strip malls, making it difficult to add a forecourt.

“Expansion of gas as an offering will be limited to standalone stores with enough land to expand, which may only be viable in certain parts of the country,” affirmed Daniels.

Joseph Bona, president of New York-based Bona Design Lab, expanded on the constraining role of real estate in many of the markets where dollar chains operate.

“In the densest markets of the country, like the Northeast, most dollar stores are in strip malls in areas where drugstores and convenience stores already own the best

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corners,” Bona said. “Because of the costs involved, it’s unlikely that dollar stores would buy the kind of large, multi-acre sites they would need to accommodate their footprints, the gas pumps and the supporting parking.”

He agrees that breaking into the gasoline business in such places would be quite difficult — but the same cannot be said for other locales.

“The calculus is quite different, though, in a place like rural Alabama, where land is cheap and dollar chains already operate plenty of freestanding stores,” Bona told CSNews. “A low-price fuel strategy certainly drives traffic to Costco. In those markets where the economics pencil out, it is at least possible that dollar stores could pursue a similar strategy.”

Emerging Generations Dollar stores are poised to have a bright future with respect to today’s up-and-coming generations, analysts and experts predict. The popularity of dollar stores with millennials, in particular, should be of concern to the c-store sector, according to Bona.

firm The NPD Group that millennials now make up about 25 percent of the six-figure-income customers who shop at any of the three biggest dollar store chains.

As for Generation Z — those born from the mid-1990s to the early 2000s — “we could see them reject dollar stores for one reason or another, but I wouldn’t count on it,” said Bona. “It’s part of the reason that differentiation is so important for c-stores, today and in the future.”

According to Daniels, technology can be a key part of the differentiation equation because right now, dollar stores are lagging.

“With the middle class shrinking and income disparity continuing to grow, dollar stores remain well positioned for future growth,” said Daniels. “Like other retail shoppers, the target customer of the dollar store would like to shop online, but often does not have an Amazon Prime account and are late adopters.”

If and when the dollar store customer gravitates to internet/mobile shopping, particularly as the younger generations that are more tech-savvy age, dollar stores will need to play a quick catch-up.

Along with embracing technology, Stuart adds that with the proper freshness focus — which he believes should be easier to achieve for dollar stores than c-stores — millennials and Gen Zs can be converted.

Protecting Your Turf How can c-stores protect their business from the infiltration of dollar stores?

“They need to continue offering competitive pricing on gas to drive customer foot traffic to their locations,” stated Daniels. “They also need to stay true to their concept.”

“Differentiation is key,” according to Bona, who adds that savvy c-stores are moving away from grocery and fill-in missions and toward “foodvenience.”

Dollar Tree is rolling out a “Snack Zone” initiative at hundreds of its stores. The Snack Zone encompasses cold beverages, candy, and sweet and salty snacks.

“The easiest thing to do, with respect to millennials, is to trade in stereotypes. This is where we get the images of bearded hipsters drinking out of Mason jars and clamoring for all things ‘small batch,’” he said. “The truth, though, is a lot more complicated.

Millennials aren’t at all afraid of being seen in dollar stores, even though there’s nothing particularly hip about them.”

If you look at the transcripts of earnings calls from Dollar General, what you find is that “even affluent millennials are shopping at dollar stores in droves,” he continued.

In fact, Bona cited findings from research

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“That is to say, they are embracing food-on-the-go, served up in appealing store environments,” Bona said, highlighting that instead of mostly selling bread, milk, eggs, cigarettes and lottery, today’s c-stores are offering up the likes of Korean barbecue, pulled pork paninis, fresh salads and caramel mocha coffee with nonfat milk.

“The level of sophistication of food at top-tier convenience retailers is remarkable and helping to position these companies as destinations,” he added.

Still, c-store operators would be wise to keep watch on how much innovation dollar stores are willing to undertake as they continue to expand.

“If they push the envelope in the years ahead, there is a risk that we’ll see some erosion from the traditional key destination categories for the convenience channel,” Bona acknowledged. CSN

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FOODSERVICE

What’s Hot on C-store Menus?

Stewart’s Shops’ “cheesecake in a cone” is cold and refreshing for the summer AHHHH! SUMMER IS HERE,

OPERATOR: Stewart’s Shops ITEM TYPE: Limited-Time Offer DATE: April 2018 PRICE: $2.14 Cheesecake-flavored ice cream with raspberry and amaretto swirls.

and consumers will be reaching for refreshing convenience store snacks and sweets whether on the road or at work. Stewart’s Shops has taken a classic restaurant dessert and converted it into a cold treat in a cone: Raspberry Amaretto Cheesecake Ice Cream. This dessert limited-time offer (LTO) draws consumers with its uniqueness and strong value.

They’ll Make the Trip Sometimes, people just want a cold, sweet treat to hit the spot on a hot summer day. The cheesecake ice cream can work well in this area: It hit the 87th percentile for Draw, which means consumers are likely to keep this treat in mind and go to Stewart’s Shops just for this item. Its price doesn’t hurt either at $2.14.

A Scoop With Females & Teens The Raspberry Amaretto Cheesecake Ice Cream resonates the strongest with women and Gen Z (those between the ages of 13 and 20), according to SCORES. It also ranked particularly high with Hispanics.

Just the Right Amount of Different Raspberry is already a well-established seasonal fruit for summer that Americans enjoy. According to Datassential’s FLAVOR platform, 70 percent of consumers love or like raspberry. The addition of amaretto flavoring brings a touch of the sweet Italian liquor. Consumers see the item as unique yet still crave-worthy. The ice cream hit the 92nd percentile for Uniqueness in the Datassential SCORES survey.

Datassential, a Chicago-based food and beverage industry research and consulting firm, brings clients real-world insights on flavor trends, foodservice and consumer packaged goods, globally.

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TOBACCO

Putting Cigars in the Fast Lane Five tips for getting the most out of this high-speed growth segment of tobacco By Renée M. Covino REV YOUR ENGINES, tobacco category decision makers.

Cigars are not only growing in the convenience channel, but they’re accelerating at a faster and faster clip.

Is your cigar strategy set to the right speed?

Sheetz Inc. is just one convenience store chain on-trend with cigars and devoting more and more space to the segment, according to David “Woody” Woodley, executive vice president of sales and marketing for the Altoona, Pa.based retailer, operating more than 540 stores throughout Pennsylvania, West Virginia, Virginia, Maryland, Ohio and North Carolina.

“We believe cigars will continue to grow, so we are going to continue to dedicate the space to the segment,” Woodley told Convenience Store News.

If recent data is any indication, Sheetz is on the right track. Industry dollar sales for cigars were up in the lowto mid-single digits in 2015, up in the mid- to high-single digits in 2016, and up nearly 15 percent in 2017. Unit growth is even more impressive. Industry data shows that cigar units have been growing at double-digit monthly rates for several years and, according to market researcher Nielsen, cigar units grew 18 percent during the latest six months, while sales dollars grew by 17 percent.

“What is interesting is that the monthly cigar growth rate is accelerating over the last two years; it’s actually growing by a faster and faster rate, in both units and dollars,” noted Joe Teller, director of category management at Swedish Match, manufacturer of the White Owl and Game cigar brands.

Teller says the cigar segment is unique in that there is “abundant organic unit growth,” compared to the typical declines seen in cigarette unit growth.

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“The cigar category has been growing in all major classes of trade, but fastest in convenience stores,” he said. “That means convenience stores are gaining market share of the cigar category.”

No Time to Idle With so much growth potential, this is no time to sit idly by. C-store operators can get the most out of the cigar segment by following these five tips: 1. Rev up the natural and rolled leaf subsegments By far, the fastest-growing cigar subsegments currently are Natural Leaf (think Game and Dutch Masters) and Rolled Leaf (think Backwoods and Game Leaf), according to Teller. Woodley confirmed that natural leaf cigars are performing well for Sheetz, and more space is being dedicated to this subsegment.

For clarification, natural leaf cigars are mass-produced cigars with a tobacco leaf on the outside as a wrapper.

The inside of the cigar is homogenized tobacco leaf (HTL), basically pulverized in a similar way to how paper is made.

Rolled leaf cigars are made exclusively of tobacco leaf.

They appeal to consumers because they have a more premium look than regular, mass-produced HTL cigars, yet are competitively priced.

According to Nielsen large c-store chain data, Natural Leaf grew 34 percent in dollars over the last six months, while Rolled Leaf grew 63 percent, far faster than other subsegments.

“Together, these two comprise half of all cigar category growth,” stated Teller.

2. Go wide on variety With so much activity in the cigar segment, c-stores are wisely ensuring there’s adequate space with a large variety to choose from, said Teller. Woodley affirms that at Sheetz, the

TOBACCO

Growth Accelerating (percent change in industry dollar sales) chain has upped the SKU count and “set space to sells.”

3. Update regularly Retailers should be much more vigilant now about updating their cigar assortments than in years past, Teller advised. Part of this strategy means keeping new products in stock, added Woodley.

4. Make limited-edition options part of the regular updates Limited-time cigar products allow for continuous real-world testing of new and interesting flavors, the best of which end up becoming everyday cigars. This trend has become expected by c-store cigar smokers, who often come into the store more frequently expecting to find new and limited-time cigars.

5. Be sure to highlight foil resealable packages Foil pouches represent about two-thirds of total cigar category volume, according to Nielsen large-chain convenience data.

“Cigar smokers make an average of 7.4 visits per month to c-stores to buy cigars, which is among the most frequent c-store consumers,” reported Teller, citing industry statistics. “The result is that the average cigar smoker spends

2017 . . . . . . . . . . . . . . . . . 14.6% 2016 . . . . . . . . . . . . . . . . . . 7.5% 2015 . . . . . . . . . . . . . . . . . . 4.1% 2014 . . . . . . . . . . . . . . . . . .0.9% 2013 . . . . . . . . . . . . . . . . . -0.1% Source: Convenience Store News Industry Report, 2014-2018

29 percent more dollars per year at a convenience store than the overall average of all c-store shoppers.”

The bottom line is that c-store retailers are wise to cater to cigar smokers, who increasingly see the value of buying through the channel. Cigar consumers have become very loyal to c-stores that have the everyday variety, new limited-time products and fair prices they seek.

On the flip side, “there is a large downside risk to a retailer’s cigar unit and dollar sales if cigar smokers’ needs are not met,” concluded Teller. CSN

Premium Moves Premium cigars are not necessarily a convenience store’s domain, but if upcoming legislative moves go a certain way, more stores may want to dabble in them. At the very least, it’s smart strategy to keep abreast of the latest legislative and regulatory action: • Republican Senator Joni Ernst of Iowa became the 21st U.S. senator to co-sponsor S294 or the Traditional Cigar Manufacturing and Small Business Jobs Preservation Act, which was originally introduced by Florida Senators Bill Nelson and Marco Rubio. It seeks to amend the federal Food, Drug and Cosmetic Act, intended to exempt traditional large and premium cigars from regulation by the Food and Drug Administration (FDA).

• Meanwhile, a second bill, with language intended to exempt premium cigars from FDA regulation, was approved by the U.S. House of Representatives Appropriations Committee in mid-May. The FY2019 Agriculture and Rural Development Appropriations Bill would move the predicate date — also known as the grandfather date — for deeming tobacco products from Feb. 15, 2007 to April 25, 2014. The cigar industry applauded this move, with the Cigar Association of America, the International Premium Cigar & Pipe Retailers Association, and Cigar Rights of America issuing a joint statement saying the language in the bill addresses significant concerns that the premium cigar industry has maintained since the FDA’s deeming rule was proposed in 2014.

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• As of press time, Republican Congressman Bill Posey sent a letter signed by 32 of his colleagues (31 Republicans and one Democrat) to Mick Mulvaney, director of the Office of Management and Budget, urging the federal government to extend the comment period to Sept. 23, 2018 for the advance notice of proposed rulemaking on premium cigar regulation, which was set to end June 25, 2018. In the letter, the legislators also asked for a delay in the implementation of new warning statement requirements on all packages and advertising related to premium cigars. Set to go into effect Aug. 10, 2018, the warning label requirements have been a highly contested point of friction between many manufacturers, retailers and the FDA since the announcement of the deeming rule affecting cigars in 2016.

• As the FDA accepts public comments on whether premium cigars should be exempt from agency oversight, J.C. Newman Cigar Co. revived its “Save Cigar City” campaign against cigar regulation in May. The company distributed 100,000 postcards to its network of retailers, which came preaddressed to the FDA and urge the agency to “exempt premium cigars from regulation and save J.C. Newman’s historic cigar factory in Tampa, Fla.” The company also hung a “Save this Factory” banner outside its factory, and relaunched its Savecigarcity.com website.

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STORE SPOTLIGHT

Transforming Errands Into Engaging Experiences

Photos by John Magor Photography

Dash In debuts an all-new, large-format store that emphasizes personal connection By Danielle Romano

Dash In spent three years developing a reimagined brand experience.

At a Glance Dash In

Location: 12441 Hull Street Road, Midlothian, Va. Size: 5,600 square feet Unique features: An assortment of local products prominently displayed, elevated freshfood options, and a new growler and crowler craft beer program

AFTER THREE YEARS OF COLLABORATING with its design and construction partners to develop a reimagined brand experience, Dash In unveiled the fruits of its labor with an all-new, large-format “neighborhood concept store” in Chesterfield County, Va., that prominently showcases local products and the retailer’s elevated fresh food and beer/wine offering.

“[This store] achieves what we’re trying to do at Dash In. Other c-stores focus on transactions associated with normal customer pit stops, but for us and our mantra, we want to make time more rewarding for people by emphasizing a sense of local and personal connection that transforms the necessary errands of today’s busy lives into engaging experiences,” said Julian B. Wills, president of La Plata, Md.-based Dash In, a Wills Group company.

Having been in the Richmond, Va., market for some time, Dash In is fairly new to the Chesterfield County market, which made it the right fit to introduce the reimagined store model from a real estate perspective, Wills explained. Working with L2M Architects, Dash In developed a design that reflects its vision and ties it to the local community. Situated on 2.4 acres of land, the 5,600-square-foot convenience store opened March 9 and is Dash In’s largest store to date.

“The beauty of this site was knowing we had the real estate to be able to do this and go

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to the larger store format. We think we’ve created that convenient, one-stop shopping with this location,” Wills expressed.

Making It New & Fresh Located in an area that has a healthy mix of residential and commercial activity, the prototype’s interior branding uses sepia tone imagery of Richmond landmarks, allowing Dash In to capitalize on the personal connection customers have to this specific marketplace.

The store also features earthen materials like brick and elevated wood siding, open ceilings and subway tile. Exterior elements of the store are influenced by Jeffersonian architecture.

An expansive kitchen serves as the centerpiece of the Chesterfield County location, allowing customers to clearly locate it upon walking into the store. The move to put foodservice at the epicenter of the store design was intentional.

“From a trust perspective, we wanted customers to be able to see the food being produced because we wanted to have that transparency. It also illustrates the freshness of everything being made on-site, on demand,” Wills explained.

Its Chef’s Craveable foodservice program — which includes all-day breakfast, artisan sandwiches, grab-and-go wraps and salads that are prepared in-house daily — has

been adapted to fit the concept of localized. Specific to the Chesterfield County location, Dash In is testing two new menu items: a Buffalo Chicken Quesadilla and Chicken Parmesan sliders. The latter is the seventh variety in the retailer’s slider sandwich program.

Photo by John Magor Photography

Thanks to the size of the kitchen, Dash In anticipates using this location to introduce and test more localized menu items before rolling them out to its other stores.

Turning to its beverage offerings, the retailer has introduced a growler and crowler program in this new format. Although alcoholic beverages aren’t something the chain is explicitly looking to get into, the program is a unique characteristic that the retailer wanted to incorporate given the prominence of craft brewers in the Richmond market.

“The thing we like about offering the growler and crowler program in this market is that there are 32 craft breweries in the Richmond market, so the area skews very high for being craft-beer connoisseurs. We figured it would be a logical fit, knowing that there’s a strong demand in the marketplace and knowing it could be incorporated in future Richmond locations,” the Dash In president said, noting that in other regions where it operates, the retailer isn’t permitted to sell alcoholic beverages, but it is in Richmond.

Over time, Dash In is planning to elevate its non-alcoholic beverage offerings as well. The lineup in the new-format store currently consists of: • A basic cold-dispensed menu, with 16 rotating varieties from national partners; • Flavored-infused waters and fruit-infused teas; • A full coffee program; • Mountain beverages, including ices and blended milkshakes; and • A progressive assortment of emerging brands within the nonalcoholic cooler, such as artisan ginger and root beer, health-driven energy drinks, and Yerba Mate.

When it comes to amenities, the Chesterfield County location is the first to feature Dash In’s more modern and expansive seating package. Although seating is available at a few locations, it has never been part of

Photo by Donnell Wallace at DW Celebrity Photography LLC

As part of the program, eight taps change frequently and feature beer selections from local and regional craft breweries. Currently, Dash In has tapped 21 Virginia breweries, 20 local breweries and six micro-breweries. Customers can purchase a 32-ounce canned crowler or a 64-ounce glass growler, or refill their own growlers as part of the retailer’s refill program. According to Wills, Dash In is the first retailer in the Richmond market to sell crowlers.

Customers can purchase 32-ounce canned crowlers or 64-ounce glass growlers and fill them with various beer selections from local and regional craft breweries.

a prototype, Wills noted. Inside, communal tables made from reclaimed wood are completed with bar-top seating, charging stations and free Wi-Fi. Outside, built-in seating benches are complemented with contemporary umbrellas and planters.

“We wanted to accommodate customers and invite them to spend time in the store and linger when they have the time,” noted Wills.

Other standout features of Dash In’s new neighborhood concept store are: • An assortment of local products situated in the front of the store, including Good Earth Peanuts from Skipper, Va., which is about an hour away from Richmond; • An expanded wine selection; • 16 fueling positions; and • Dash In’s proprietary Splash In ECO Car Wash, a 53-footlong rollover car wash that’s open 24/7 and features six free vacuum stations with weather canopies. This marks the 38th Dash In location to include the car wash.

Building Brand Equity When asked about the future of Dash In’s new prototype,

Photo by Donnell Wallace at DW Celebrity Photography LLC

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Wills told Convenience Store News that the retailer will work on redeveloping legacy sites for modernization. Additionally, new stores will feature a selection of elements from the Chesterfield County store, with decisions being made based on each store’s size and location.

The Richmond market will remain a focal point for Dash In, as the retailer is currently active in looking for more real estate. Within two years, Wills anticipates that Dash In will have another three or four locations in the Richmond market.

Photo by John Magor Photography

“The best part of the Dash In brand is that regardless of location, we work to create meaningful, personalized experiences that enrich our customers’ lives,” he said.

“That’s one way we feel like we can set ourselves apart and differentiate from the competition of some of the other regional and national brands that don’t go to that level of personalization.”

“This is our approach for all markets because we think to have any sort of scale, you need to have at least a half-dozen stores for that sound awareness and equity,” he concluded.

This Dash In store marks the chain’s 38th location with a car wash.

Dash In operates more than 50 stores throughout Maryland, Virginia and Delaware. CSN

New Year ...

New Look And Continued Evolution for

Convenience Store News magazine has been the leader in convenience retailing information for more than 40 years. As the c-store industry has evolved, CSNews has changed to stay at the forefront of industry developments. With our January 2018 issue, we are excited to unveil the next step in that evolution with a fresh update to the look and feel of the magazine.

www.CSNews.com

Industry’s Favorite Magazine has a new look that matches the evolution of the convenience retail market.

LING L R E TA I ND FUE IENCE A CONVEN NEXT IN W H AT ’ S

Temperate Optimism

pliers and retailers, sup ing Convenience about the com are upbeat rs uto trib ations. dis a few reserv year — with

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NEW HORIZONS

The Power of the She-E-O No matter their titles, women perform like CEOs and they should be recognized for it IN MY HOUSE, MY HUSBAND AND I AGREE: I’m the CEO/COO and he’s the CFO/CTO.

Many women, especially working moms, perform like accomplished CEOs, both at home and at work.

By Sarah Alter, President & CEO, Network of Executive Women

At home, these She-E-Os set the tone, establish spending priorities, manage operations and act as the main point of contact between the household (spouse, children and helpers), external stakeholders (teachers, professionals, plumbers, family and friends) and outside partners (community and religious groups).

At work, too, women are acting like successful CEOs, no matter where they are on the org chart. They’re using their leadership, organizational and people skills to determine strategy, allocate resources, build bridges, communicate changes effectively and ensure everyone is rowing in the same direction.

few women are recognized and valued for them — and most women are uncomfortable sharing them.

At home — and on social media — women are quick to share news of a child’s or partner’s achievements, but less likely to toot their own horn. At work, it’s not much different.

Researchers Michelle C. Haynes and Madeline E. Heilman conducted a series of studies that revealed women are not likely to take credit for their role in mixed-gender group work, unless their roles were explicitly understood by outsiders. Women gave more credit to their male teammates and took less credit themselves.

So, how can senior leaders create workplaces where women can leverage their She-E-O skills, perform as confidently as their male peers do, and get recognized for their results?

Here’s how:

But while many women have the same skillset used by accomplished corporate leaders and a record of proven results,

Embed gender diversity at all levels, including the C-suite. Women are less likely to believe their achievements will lead to advancement — or self-promote those accomplishments — if they see talented women being overlooked in hiring and promotions.

Create clear career paths that lead to the top. If women don’t understand how they can build their resumes to advance, they won’t seek the opportunities or assignments that will move them ahead. And they’ll be less likely to risk alienating peers by speaking up if someone else takes credit for their ideas or successes.

Establish specific criteria for jobs. The clearer the criteria for evaluating candidates for promotion, the less likely gender stereotypes will play a role in talent management.

Job-knowledge test scores, for example, are gender-blind. Asking candidates to provide specific, gender-neutral information, such as role-related expertise, will reduce the opportunity for gender bias to creep into the selection process. Everyone should be confident they have been hired or promoted — and evaluated — based on their ability to do the job. Period.

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NEW HORIZONS

While many women have the same skillset used by accomplished corporate leaders and a record of proven results, few women are recognized and valued for them — and most women are uncomfortable sharing them.

Make sure job criteria does not favor men over women. Does each role’s criteria set the employee up for success, regardless of their gender or life stage? Or does it create barriers for applicants who are women, particularly during their career and life pivot points?

Clarify everyone’s role and responsibilities. It’s easier for all employees to collaborate, work on individual areas for improvement — and take credit where credit is due — if everyone in an organization has a clear understanding of what each person’s role is.

Convenience Store News is pleased to continue this series of exclusive educational columns by the Network of Executive Women (NEW), coinciding with the annual CSNews Top Women in Convenience awards given out each fall. Forty-five female managers, executives and directors who work in the convenience store industry will be honored in our 2018 program. In addition to being a presentation sponsor for the Top Women in Convenience program, NEW and CSNews have partnered to develop this series of columns directed at helping corporate leaders drive more inclusive company cultures.

Founding & Presenting Sponsor:

Platinum Sponsors:

When workforce policies are gender-neutral and workplace cultures are bias-free, we’ll see more She-E-Os stepping into the C-suite — and our companies will be better for it. CSN Sarah Alter is president and CEO of the Network of Executive Women, a learning and leadership community representing nearly 11,000 members, more than 800 companies, 100 corporate partners and 21 regional groups in the United States and Canada.

Learn more at newonline.org.

Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.

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ADINDEX Add Systems ..................................................................... 29 Advance Pierre Foods/Tyson, Inc. ............................ 84 Altria Group Distribution - Phillip Morris................ 2–3 Anheuser-Busch Inc. ...................................................... 11 Blu eCigs............................................................................. 7 Boston Beer/Samuel Adams Brewery Tour........... 20 Campbell Soup Company ............................................ 39 Cash Depot Ltd. ............................................................... 22 Cookies United ................................................................. 27 E-Alternative Solutions ................................................. 49 Goya Foods Inc. ............................................................... 47 Hunt Brothers Pizza ...................................................... 59 Inline Plastics .................................................................... 34 ITG Brands ........................................................................ 61 John Middleton Company............................................ 31 Krispy Krunchy Chicken................................................ 33 Liggett Vector Brands ................................................... 51 McLane Company ........................................................... 23 Nestle Worldwide............................................................ 41 Old Wisconsin Sausage Inc. ....................................... 15 P2PX Expo ......................................................................... 19 Perfetti Van Melle USA Inc........................................... 25 Procter & Gamble Distributing Company .............. 43 Reynolds American Trade Marketing Services .... 9 Sargento Foods, Inc. ...................................................... 21 Swedish Match North America LLC ......................... 17, 83 Swisher International ..................................................... 35 The Hershey Company .................................................. 45 The Wonderful Company ............................................. 5 U.S. Food and Drug Administration ......................... 12–13

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Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 8550 W, Bryn Mawr Chicago, Il 60631.

Copyright © 2018 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 Deerfield, IL, and at additional mailing offices. POSTMASTER: Send address changes to Convenience Store News, P.O. Box 1842, Lowell, MA 01853.

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GETTING TO THE CORE

Coming to the Rescue of the Time-Starved What do consumers think of today’s expanding array of convenience-oriented services?

There may be 24 hours in a day, but many consumers would say that’s still not enough time for them to accomplish all they need to in their lives and have some free time leftover to enjoy. Coming to the rescue of time-starved consumers, retailers are rolling out an array of convenience-oriented services, such as click-and-collect, curbside pickup, home delivery and fuel delivery. EIQ Research Solutions, an EnsembleIQ sister company of Convenience Store News, recently surveyed 500 consumers who shop a convenience store at least once a month to gauge their interest in such services, should their favorite c-store start offering them.

Thinking about any products you may purchase from a convenience store, how likely would you be to use each of the following methods if offered?

$5.17 The mean amount convenience store shoppers would expect to pay for home delivery.

(percent responding definitely would or probably would) Click-and-collect with in-store pickup 47%

(order online, then pick up items in the store)

Click-and-collect with curbside pickup (order online, go to store, then products are brought to your car)

46%

Home delivery (order online, then products are brought to your home same day)

37%

Base: 500 consumers who shop a convenience store at least once a month Source: EIQ Research Solutions

39%

The percentage of c-store shoppers who say they definitely would or probably would utilize on-demand fuel delivery if offered at a reasonable price by their local c-store.

Want to collaborate and share expertise with your peers? The Council of Retail Experts (CORE) is an exclusive network of convenience store retail leaders who do just that. For more information on how to join CORE, please visit www.cvcoreinsights.com.

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What types of products would you consider purchasing in this way?

CURBSIDE Prepared foods Packaged foods Fresh bakery items Prepared beverages Non-alcoholic bottled or canned beverages Alcoholic beverages Non-food/beverage items Cigarettes & other tobacco products Lottery

PICKUP

HOME DELIVERY

62% 55% 49% 48% 43% 30% 29% 22% 16%

64% 58% 50% 37% 45% 36% 40% 22% 15%

Base: 500 consumers who shop a convenience store at least once a month Source: EIQ Research Solutions

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

About one-third of c-store shoppers (33%) say they would use in-home delivery if offered, where products are physically brought into your home even if you’re not there.

AVAI L ABLE

Š2018 SMCI Holding, Inc.

APRIL 2018

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