Octane - Jan 2018 by ensembleiq

CANADA’S CAR WASH & PETROLEUM MAGAZINE

PM42940023 • $12.00 CCentral.ca @CCentral360 January 2018

Also inside

The merchandising opportunity

Forecourt Forward

ite Safety S An ounce of prevention CCentral.ca

PROTECTING THE ENVIRONMENT

CANADAâ&#x20AC;&#x2122;S CHEMICAL

& EQUIPMENT SUPPLIER TAP & WASH PAYMENT NOW HERE!

SUPERIOR PRODUCTS UNMATCHED SERVICE MONDO PRODUCTS manufactures and distributes a complete line of concentrated chemicals and equipment for the car wash industry. Mondo is the largest supplier of vehicle washing chemicals in the Canadian marketplace and has built its reputation on supplying superior products at the lowest cost with unmatched service.

MONDO PRODUCTS COMPANY LIMITED www.mondo-products.com 2 |Westney | January 2018 695 Road South, Ajax, Ontario L1S 6M9 | 1.800.465.5676

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January 2018

Volume 23 | Number 1

CANADA’S CAR WASH & PETROLEUM MAGAZINE

ADVERTISERS

CONTENTS

Aerodry Systems, LLC.................................... 27 AIR-serv Canada Inc........................................12 Blendco Systems LLC.....................................26 Cantest Solutions Inc........................................9 Erb and Erb Insurance Brokers........................18 Exact One Ltd................................................. 14 FormaShape.....................................................15 Forte Products.................................................18 Mighty Flame Canada.....................................21 Mondo Products Co. Ltd..................................2 Mosmatic Canada Inc......................................18 Oasis Car Wash Systems................................ 27 PDI Software....................................................13 Pumps & Pressure Inc......................................18 PurClean-PurWater.........................................23 Se-Kure Domes & Mirrors............................... 22 Wash Tech.......................................................26 WashLinks/Sonnys......................................... 22 Washworld Inc.................................................17 Wayne Fueling Systems/ Dover Fueling Solutions.................................... 7 World Fuel Services Canada, ULC....................5 Zep Vehicle Care, Inc...................................... 10

04 Editor’s Message Water, water 06 CIPMA NDP bill to regulate gas prices in Ontario 08 Expert Opinion Business Intelligence 11 Forecourt Forward Self-service sites have enhanced their capability to drive sales through better messaging

16 Car Wash Merchandising The merchandising opportunity 19 Site Safety An ounce of prevention

29 Product News Products, equipment and services 30 CCA Newsletter Industry forum

24 COVER STORY The big clean When vehicles are really dirty, this Alberta site walks the talk.

January 2018

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Financial Services

Contact Gulf Canada Development Team Tel: 1-877-216-9987 Email: JoinUs@GulfCanada.ca Technology Web: www.GulfCanada.ca Solutions 2-5100 South Service Rd. Burlington, ON L7L 6A5 January 2018

CIPMA

NDP bill to regulate gas prices in Ontario feeds industry misconception There is a perception by some in Ontario that gasoline marketers are indeed ‘greedy big oil’ who relish in increasing gasoline prices before long weekends or at other opportunistic times, pocketing the surplus. This notion of toying with consumer dollars for profit also seems to play well politically, and can be seen in the Ontario NDP’s latest Private Members’ bill to regulate gasoline pricing. This perception, quite simply, is false and feeds the inaccurate portrayal of the nation’s gasoline marketing sector.

Jennifer Stewart, President and CEO, Canadian Independent Petroleum Marketers Association

According to Kent Group Ltd, who recently published a report entitled Understanding Retail Transportation Fuel Pricing in Ontario, non-refiner marketers represented 70 per cent of Ontario’s retail sites in 2016, and 78 per cent of sites had their prices set by independent retailers. This means it is independent business owners and companies running the vast majority of our Canadian retail gasoline sites. It’s a competitive, free market landscape and margins, regardless of fluctuating gasoline prices at the pumps, remain slim. In Ontario specifically, the largest single component of the price at the pump is taxes – 36.2 cents per litre on average last year. We saw the pump prices rise an additional 4.3 cents per litre in Ontario as a direct result of the cap and trade program in 2016 - an increase which consumers also pay tax on. The gross margin, from which retailers need to pay all operating costs and expenses, was just 8.2 cents per litre. Adjusted for inflation, marketing margins are only 6 cents per litre higher than in 1991. This will only become more constrained with the hike in minimum wage.

“There is evidence that current price regulations in some provinces are affecting markets in ways that may not necessarily benefit consumers”

are regulated, they are also among the highest in the country. According to the Kent Group report, “as with any regulation, the stated objectives of price regulation are not always consistent with its outcomes, and they can fundamentally alter the competitive dynamics of a market. There is evidence that current price regulations in some provinces are affecting markets in ways that may not necessarily benefit consumers.” Governments and political parties need to be prudent in their recommendations for regulatory change, and should be equipped with the facts before jumping to conclusions. In this scenario, a deeper dive into the actual workings of our province’s - and our nation’s - petroleum marketing sector for the Ontario NDP party is indeed merited. OCTANE

Despite this lean operating model, the report found that often, markets with more volatility generally have lower retail margins. It also showed that Ontario’s 2016 retail margins and pump prices were rational given each market’s characteristics. In fact, the province’s markets showed competitive price behaviour, according to their analysis. While the NDP points to market regulation as the answer to price volatility, the facts don’t support this model. In Newfoundland, where prices

| January 2018

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January 2018

EXPERT OPINION

Business Intelligence Bad data often means failed objectives. Are you working with the best information on projects?

In our data driven world today, it is crucial to obtain precise information and apply the data when making strategic decisions in the retail fuel industry. The first step is to establish your trade or market area. In other words “Where are your customers coming from?”

Ron Conlin, President Site Check Research Group

In urban markets the trade area ranges from 3-kilometres to 5-kilometres, in the rural settings, trade areas will often range from 5-kilometres to 8-kilometres. Some sparsely populated areas may even reach as far as 12 to 15-kilometres. As with any rule there are exceptions. For instance, consumers will travel much farther to a Costco or a major shopping centre. Operators should therefore adjust their trading areas depending on the incentives at a chain or other competing locations. If your focus is on a macro level of entire markets, your area can be delineated by using the SUE (systematic usability evaluation) flow method or Reilly’s Law of Retail Gravitation or customer spotting data from your loyalty card program. Each method will help you determine where your market area stops and the next market area starts. This method is also very effective for establishing fuel trade areas in smaller towns or cities. Once you have defined your market or specific trade area, the data you require will vary depending on the avenue you are pursuing. As overall growth slows and the number of new outlets decline, a chain’s success will depend on its ability to extract the most sales from those locations. If overall growth is strong, the need to expand your network through new locations or expand existing locations through redevelopment becomes your objective. If your objective is to increase market share with new development and redevelopment, it is important to distinguish the shopping pattern of the repeat fuel customer from the non-repeat highway customer. Seventy-two percent of fuel customers purchase fuel close to home, 14.5% near work, and 13.1% enroute to work, with 8.8% near a usual shopping centre, and 4.3% other (112.7% to account for multiple responses). In reference to this data, it is extremely important to focus on the specific residential areas within each market area.

| January 2018

Although the data sets used to increase market share with new development are similar to those used to improve existing operations, the emphasis will differ slightly. Efforts toward a spatial focus are more important with the objective of finding voids and opportunities through the relationship between supply and demand within a geographical trading area. In the demographic data, the number of persons, where they live, the projected population growth and the amount of spending is paramount. Outlet data is more specific and should include, traffic flow at each location, intersection characteristics, sales of each outlet, type of sales, quality of operations, site layout and size. Once you have your objectives and the variables you need you can then apply various techniques to give your data meaning. Some of the techniques that are more commonly applied include: Point system, Ratio, Analogue, Multiple Regression, Gravity and Geo-visualization. Failed objectives without examining the surrounding data can be very costly especially if involving bricks and mortar. A good example of this is when the objective is to rebuild a particular existing station and the surrounding population has matured. The outlet is already maximizing sales due to diminishing sales potential. Another good example could be when the implementation of a made to order soup, sandwich and salad program achieves 40% of the sales objective due to limited daytime population in a suburban residential area. Whether you are rolling out a new QSR concept across your existing chain or have a mandate to build 100 new stores, misinformation or misapplication of the data can often lead to failed objectives. Good data breeds successful projects. What do your numbers tell you? OCTANE

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Forecourt forward

Self-serve sites have enhanced their capability to drive sales through better messaging by Kelly Gray

Photography by Jaime Vedres

It was not that long ago that the majority of gas station customers expected personal service when they pulled up to the pump. Today, about 85% of Canada’s fuel sites are self-service. And, while there are still some holdouts with centres like Richmond and Coquitlam in BC mandating full service, customers seeking to lower the price of a tank of gas and major oil co’s looking to expand their marketshare have continued working to make the gap between self and full service even larger. Most of us now take self-service for granted. Motorists quickly pull off the road, park at a dispenser, get out and fuel up. In less than five minutes tanks are filled and cars are back on the street. Customers want the experience to be fast and efficient, but they have expectations that come from

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the days when forecourt self-service was standard operating practice. Today’s forecourt has evolved into a location that does just this. Dispensers offers fuel, but also merchandise a host of other products and services from cold beverages, to take away meal items, to

automotive needs. The self-service customer in 2017 has far greater choice than the customer from 1997 and retailers that evolved along the way have been able to maximize the sales opportunity. The best of today’s self-service forecourts work hard to mirror some of the benefits of

January 2018

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Canada’s first self-service gas station was in Winnipeg in 1947 at Ken Henderson’s Thriftway Self-Service.

traditional full service. For example, a full serve pump attendant might ask a customer if they know about the in store specials. Do you need wiper blades? Do you need a car wash? At self-service sites, pump dispenser units now communicate these messages and more to customers. “Its all about convenience,” says Bruce Kidd of Hart Highway Husky, Prince George, BC. “People are time pressured and they want solutions. The forecourt is a good place to start given that almost all of us find ourselves cuing at the pump at AirServ_CSN_Can_HalfPage_0118.pdf

Technology to the rescue A good example of leading edge dispenser technology that helps bring those customers in-store as well as offer Pay and Go is Wayne Fueling Systems’ Ovation 2 series. Using a large dispenser mounted video screen with customer interface, Ovation 2 drives targeted product messaging with dedicated media that translates into c-store sales. The company reports that an enhanced media-at-pump experience creates a 16% lift in traffic from forecourt to c-store and a 3% to 5% hike 2017-12-22

in sales. Devices are flexible in capability with media messaging changing through day parts. This means, morning customers are offered coffee and breakfast sandwiches while afternoon customers might like the two for one energy drink promo. Specials for car wash, wiper blades and wiper fluid are constant through the day. Ovation also has 25% more space for branding and other messages dedicated to driving secondary sales. Not to be outdone, Gilbarco, has launched its FlexPay IV platform in Canada. This system enables operators to communicate in-store products and other information via audio and video on dispenser screens. As well, retailers can create product coupons that can be used at the point of sale inside the store and allows them to update their site’s content from the system’s portal which can be set to automatically push content updates to the dispensers on set intervals every day. Working to increase customer throughput and overall service satisfaction levels with its own pay and go system, Esso launched an expanded version of its Speedpass program this past March.

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least a couple of times a month. I like pay at pump. Some suggest that it keeps people out of the c-store where they can add to their gas purchase. I have found that its better to have dedicated c-store customers without the hassle of gas purchase lines at the till. The number of secondary sales do not warrant the hassle and in-store confusion with the added gas customers. If they need something they can come in,” he says, noting that it’s highly important to reach gas customers with in-store messaging while they stand at the forecourt fueling at the dispenser.

Using a Smartphone app, Speedpass+ uses a Cloud-based payment option at more than 1000 sites across the country. Customers pull up, fill and their cellphone takes care of the payment details. The App makes sure loyalty points are awarded and marketing messages appear on cell phone screens

Mobile messaging and contactless payment create new opportunities Coming will be digital messaging through social media where electronic ID like credit cards and drivers’ licence or cellphone will activate an RFID beacon as you near a commercial site. As you approach a business like a self service gas bar, the dashboard display in your car will let you know that Joe’s Gas and Service is having a sale on beverages and its submarine sandwiches are 50% off. Already most smartphones and devices utilize location based service provisions where a phone’s GPS allows the device to let you know the type of businesses near at hand. This ‘beacon’ technology will become more directed to individual users as we move forward.

Photography by Brandon Gray

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January 2018

| 13

Photography by Jaime Vedres

www.exacta.com

EMV INTERAC DEBIT Exacta’s EMV Chip and Pin products now accept all types of secure payments including; Interac Debit, MasterCard Tap & Go, Google Pay, Visa payWave and Apple Pay.

For more details on our exciting new product lines contact our sales department 1.800.492.4226 or sales@exacta.com 4631 Manitoba Road SE Calgary, Alberta, Canada T2G 4B9 • P:1-800-492-4226 • E: Sales@exacta.com Copyright © Exact One Ltd. All Rights Reserved

| January 2018

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According to Michael Cohen, president of the Canadian Marketing Association, 56% of respondents to a survey on beacon systems said they had already used the technology. 45% of mobile users that have used a device said it has led them to make an immediate purchase. “Beacons and location-based services offer an opportunity for businesses looking to take their mobile messaging strategy to the next level. From a marketing perspective, it’s about talking to your customers at the right time, place, and medium,” he says. With this convenience in mind operator Shell has teamed with car manufacturer Jaguar Land Rover to offer its customers a solution to time starvation. New Jags are fitted with a pay app that permit drivers to fuel and go with the car behaving much like an Apple Wallet. Known as ‘cashless motoring’ the objective is for the car to handle all transactions such as drive-thru, tolls, and gas and c-store purchases from the interactive onboard display. Beacon technology will be able to communicate with the car and deliver messages directly to the in-dash video screen. When it comes to new age air and vacuum service, AIR-serv has announced a new contactless-only payment solution at more than 7,000 tire inflation and car vacuum machines located at gas stations in Canada. Working alongside technology provider Monex Group, the new systems eliminates the need for coin to fill tires or vac out car interiors. According to Frank Merrill, executive vice-president at AIRserv Canada, AIR-serv’s new system is PCI certified for tap-only transactions with support for Visa payWave, MasterCard Tap and Go, Interac Flash, and Apple Pay. There is no need for coin, chip and pin, swipe, or insertion. Payments are instantaneous and effortless via contactless-enabled credit or debit cards, or a mobile device. “This is a feature that we knew we had to have as fewer Canadians are carrying coin,” he says. At self-service wash sites, technology is also delivering a stronger service focus with RFID patches and contactless payment options. Here Exact One Ltd. offers a range of solutions that allow customers easy access to wash sites 24 hours a day without the need for coin or interaction with staff. Monex has also rolled out its Tap & Wash contactless payment solution. The company reports it partnered with Mondo Products Company Ltd. and launched the product at the Oshawa Parkway Coin Wash in 2016. Over the last 70 years that Canadian motorists have enjoyed self-service options the basic needs have not changed. Gas tanks still need to be filled, tires need air, and cars need to be cleaned. What has changed is the ease of product and service delivery through technology and the demands of time harried customers. With business more competitive and the driving public more value conscious, operators have to ask themselves if they are prepared to embrace the changes in self-serve and move their business forward. OCTANE

station s a g t s r fi Canada’s ncouver and was in Va PD McLaren’s using ie operated eter. (1907 Camb m new gas St., Vancouver). th and Smy CCentral.ca

January 2018

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Car Wash Merchandising

The merchandising opportunity

Draw in customers, drive traffic and provide a convenient experience with the right assortment of merchandise at your car wash on projects We’ve all been in line at the grocery store or big box store and picked up a few impulse items along the path to purchase. Whether it was a pack of gum, a magazine, or a pack of batteries, these specific items were strategically placed there to encourage you to grab a few more things you didn’t know you needed on the way out the door. Think of your car wash lobby or cash desk area in the same way: you can encourage your customers to add to their purchase by carrying the right assortment of products. Mike Black, co-owner of Ontario’s Valet Car Wash chain, which has 10 locations, believes it’s a smart business move to stock an assortment of products, such as air fresheners, cellphone accessories and snacks. Nikki Lockington, Digital Editor CSN-Canada

“I think offering these additional items is essential. It typically adds about 50 cents per car, so it’s really worth it,” he says, adding that it’s important to figure out what your customers are looking for, and be sure you’re stocking it.

Finding the products Determining your exact product range can be a challenge, but it comes down to knowing your customers and keeping an eye on the trends. Black starts with air fresheners as an obvious choice for car wash operators. He’s sure to carry the biggest and best assortment of fresheners he can. “Just the other day, a lady came up to the cash register and said, ‘I drive all the way here because you’re the only place that has powdered scented air fresheners,’” he says. “We find that because our selection is so vast, we actually have restaurant owners and other business owners come in to buy 20 or 30 air fresheners at a time for their washrooms. The bigger the selection, the better,” Kirby Kazeil, owner of Suds Car Wash in Regina, SK, agrees, saying that if you decide to carry a line of something, such as air fresheners, it’s essential to commit. “My advice is carry a full line; we carry every kind of air freshener

| January 2018

you can think of. People drive from all over just to purchase because they love our selection. It drives traffic, and these people will become wash customers sooner or later,” he says. Kazeil also stocks wiper blades, cellphone accessories, licence plates, emergency kits, flashlights, washer fluid, and hitch covers. Windshield washer fluid is another really big seller for Black, and to top it off, it’s an opportunity to provide top-notch customer service. “It’s a seasonal product, but the advantage we have at the car wash is that we’ll actually put the fluid into the reservoir for people, and everyone always really appreciates that extra bit of service.”

“I think offering these additional items is essential. It typically adds about 50 cents per car, so it’s really worth it.” - Mike Black, Valet Car Wash

At Black’s sites, cellphone accessories, such as charging cords and adaptors, have really taken off. “One thing that’s really big right now is cellphone holders for people’s cars. These holders attach to the dash and the phone sits in it. I think the reason is that people use their cellphones a lot for GPS and this keeps it hands free. We sell these for $13.99.”

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Making a world of difference in

Vehicle Wash Systems Black admits there are trends, so it’s important to keep on top of what’s actually moving. “Certain things will come up and be totally hot, and then a few months later they’re totally not. There was a time when really funky cigarette lighters were selling like crazy, but then they fell off.”

Mind your margins One of the most important things you can do is keep a close eye on your margins. These ancillary items can help to drive traffic and provide convenience for customers, but it should never be at a loss. “It’s like anything else: you’ve got to know what your margins are. So it’s

very important that you track it and have proper spreadsheets. You need to know what you’re buying these items at and what your margins are,” says Valet’s Black. He warns that a lot of times items will go up in price, and if you’re not checking your inventory as it arrives and keeping track of the price, you can shrink your margins very quickly. After all, these items are meant to support your primary business. Keep an eye on the trends, carry what you believe will sell, and ensure you’re promoting these items with proper merchandising techniques; keep the displays, clean organized and always fully stocked to attract the most customers. OCTANE

Self-serve wash? No problem!

Visit Washworld at the Transchem Group Booth Toronto, March 6-7

JJ Woodley, owner of Red Hill Car Wash in Hamilton and the Tech1st CoinPay car wash payment app, says self-serve car washes can still get merchandising right. “We are limited in the products we offer, but our vending machines include the typical selection of air fresheners, towels, and cleaners,” he explains. As an incentive to use the app, Woodley turns to these vending machine products. “The one strategy I have been using is to offer the vending products up as rewards to customers who pay using our mobile payment system from Tech1st Wash Systems. The added incentive to use the app and win these products motivates customers to use the program,” he says, adding that in turn, he has direct access to a substantial user base for marketing purposes.

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www.washworldinc.com

January 2018

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Tailored Coverage for Carwash and Gas Bar Operators

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CANADIAN

• Commercial Vehicle Wash Equipment

CARWASH ASSOCIATION President Scott Murray EZEE CLEAN Vice-President Carwash Owners/Operators Diane Parker

OCTOBER 2011

INDUSTRY FORUM

• Cleaning Equipment

SECOND QUARTER WASH VOLUME IMPROVES

• Automatic Car Washes

RIMS AND ROVERS AUTO AND PET WASH Vice-President - Oil Companies Mike Dietrich PIONEER PETROLEUM

hen the second quarter of 2011 is compared to previous second quarters since the Wash Volume Report (WVR) started reporting data in 2004, it ranks either first or second depending on how you are counting. The average wash cycles per site were 6,459, compared to 5,982 for 2010, which was a 10.7 per cent gain yearto-year. The only other second quarter to have better results was in 2007, which saw average wash cycles at 6,668. The second quarter’s average cycles per site was down significantly from the previous quarter, which had been 8,801 cycles. This decline from the first quarter to the second is a normal occurrence as the first three months of the year remain the best wash volume months. Average revenue per site was the highest ever for a second quarter, at $49,644. The increase in revenue per site was up 6.4 per cent from the $46,666 average of the second quarter of 2010. The closest second quarter average revenue was the average revenue for 2009, which was $46,957. Average revenue per cycle, the measure of an average wash price, declined 1.5 per cent from the previous quarter in 2010, however, it was up 3.2 per cent from the first quarter of this year. Average revenue per cycle was $7.69 in the second quarter of 2011, $7.80 in the second quarter of 2010 and $7.45 in the first quarter of 2011. The average price has climbed continuously since the inception of the WVR. After starting out at a low of $5.95 in the first quarter of 2004, it saw a high of $8.42 in the last quarter of 2010. The trend is to have prices at their lowest in the first quarter, often dipping below the previous fourth quarter average, but then continuing to climb up to the fourth quarter.

Coverage is Nationally Available Vice-President - Secretary/Treasurer Al MacDonald

CANADIAN TIRE CORPORATION LIMITED Vice-President -

Manufacturers/Distributors/Suppliers Nancy Schmautz ODESSA DEVELOPMENTS Past President Richard McKinnon MIAMI CAR CARE CENTRE INC. Executive Director Jorge de Mendonça Operations Manager Karen Dalton

Directors Brad Baldwin – ECOLAB/BLUE CORAL Nick Dudley-Smith – SUNCOR/PETRO-CANADA Nathan Ewing – TRANSCHEM INC. Brad Goetz – MONDO PRODUCTS CO. LTD . Brad Laurier – MACNEIL WASH SYSTEMS LTD. Bob Walsh – FERNROB PCS Inc. JJ Woodley – RED HIlL CAR WASH INC. NATIONAL OFFICE Canadian Carwash Association 4195 Dundas Street West, Suite 346 Toronto, ON M8X 1Y4 Tel: 416.239.0339 Fax: 416.239.1076 office@canadiancarwash.ca www.canadiancarwash.ca

The average revenue per cycle has risen an average of 5.5 per cent each year since the inception of the WVR. At the same time, AVERAGE

CYCLES

PER

SITE

12,000 10,000

• Air Compressors

• CAT Pumps & pumps of all kinds

• Cleaning Chemicals

• Pressure Washers

• Car Wash Accessories

8,000 6,000 4,000 2,000 0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2007

2008

2009

2010

2011

AVERAGE REVENUE PER SITE $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2007

2008

2009

2010

2011

AVERAGE REVENUE PER CYCLE $8.60 $8.40 $8.20 $8.00 $7.80 $7.60 $7.40 $7.20 $7.00 $6.80 $6.60 $6.40

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2007

2008

2009

2010

2011

AVERAGE CYCLES PER YEAR 28,000 27,000 26,000 25,000 24,000 23,000 2004

2005

2006

2007

2008

2009

2010

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| January 2018

ing

n clea sure

SELF-SERVICE

CAR WASH

An ounce of prevention Crime is a major hazard to fuel site staff. Making positive changes to workplace environment, establishing good operating protocols, and using some common sense all go a long way toward combating this continuing challenge. by Kelly Gray Photography by Lawrence Herzog CCentral.ca

January 2018

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Back in 2005 Grant De Patie was a teenager working his shift at a Maple Ridge, BC. gas station. He was killed by a 17-year old gas and dash criminal who ran him down as he tried to stop the theft. This tragic incident speaks to the need for greater security within fuel retail sites where drive offs are estimated at 20,000 occurrences each year in BC alone. Indeed, WorkSafe BC estimates that gas and dash losses to operators run on average $2,000 to $10,000 a year. Grant’s family stood up to the challenge and worked with the province to enact changes to Occupational Health and Safety regulations. These changes that have worked to tighten up security for those in the gas and convenience retail sectors have become known as ‘Grant’s Law’. The regulations in BC mandate that all people must pay first before they pump gas and late night c-store workers who work alone must be protected with barriers and locked doors. Across Canada there is lots of talk, but not a lot of action on the challenges to things like gas and dash. Ontario had a private member’s bill years ago, but it died on the order paper. Alberta is discussing regulations similar to ‘Grant’s Law’ but the province has been foot dragging since 2015. Helping to push the envelope is Husky Energy, a company that has stepped up for its staff by instituting pay at pump at all its Alberta locations following a market test last year in Edmon-

| January 2018

ton. Expect Husky to roll this requirement into Manitoba, Saskatchewan and Ontario some time soon. “We took this step to minimize the risk to attendants and the public associated with fuel payments, in light of a number of tragic deaths over the past few years,” says Husky Energy spokesperson Kim Guttormson, who mentions to Octane that action came about after they lost a member of their team two years ago in a gas and dash that deeply affected everyone at Husky.

Crime prevention is just good business practice At Circle K Stores, a Couche-Tard brand with 1,200 convenience and fuel sites in Canada and the US, Sean Sportun is their Central Canada manager, security & loss prevention. He suggests that safety training and crime prevention is an essential component to good business practices. He reports that staff

When operators put the onus on workers to make good on drive offs it is more likely the employee will chase the vehicle and get hurt in the process. It’s not worth it on any level - Sean Sportun

at Circle K receive ongoing training to minimize crime risks and have a strict ‘no confrontation, no chase’ policy when it comes to staff engaging incidents, including gas drive offs. Offering some explanation as to why employees in the industry have made the decision to “chase” after a vehicle who has just stolen fuel, Sportun explains it comes down

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Sell the Sizzzle. Designated Health & Safety reps at each Pennisula Co-op location discuss hazards with team members

to either employees not following their company policies or employees having their wages deducted for the associated losses. “This almost forces the employee to try and stop the incident because they will be out of pocket for the loss. Organizations who do not adhere to labour laws and deduct losses from their employees are breaking the law and should stop this practice immediately. Staff should never have to pay for thefts. When operators put the onus on workers to make good on drive offs it is more likely the employee will chase the vehicle and get hurt in the process. It’s not worth it on any level,” says Sportun He tells Octane that at Circle K Stores they audit each site to make sure its safe for workers whether they are alone or in a team. Stores are watched randomly with an eye to discovering where the security and safety challenges lie at the location. “We identify and provide immediate feedback if we see a potential hazard, like a safety issue or a security shortcoming. This is just good business practice,” he says, adding that sites must have good lighting and lots of visibility, especially around the pay point area, workers should have an escape route and each store must have a time delay cash system and a personal panic pendent. To help matters further Circle K Stores in Central Canada operates a state-of-the-art 24/7 monitoring centre out of their Toronto offices to keep an eye on its locations and stick handle incidents such as hold-ups or drive offs. “With CCTV monitoring this offers an added level of security that allows us to respond quickly and offering real time assistance to our employees in times of crisis, while providing valuable information such as suspect images and CCTV video to our law enforcement partners.” He suggests “barriers” are not an effective solution for robbery prevention and present other safety concerns. “These barriers can actually make a location less safe and for the most part are easily defeated”.

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Pass through windows are another tool that some organizations turn to as a way to limit access to staff and goods during late night shifts. Sportun sees these as yet another challenge. “Pass through windows can leave customers at risk for robbery.” His advice is to get a drop safe and use it. “And, let people know you have limited cash on site. Robberies are typically crimes of opportunity. If criminals know you have lots of cash they will find a way to get in, a barrier will not stop them.” Circle K, as well as other retailers such as Petro-Canada have been beneficiaries of good crime deterrent programs in partnership with Peel Regional Police. This group developed ‘Clear Zone’, a robbery prevention program for businesses in its catchment. It then worked to bring this best practice message to other areas with presentations and speaking engagements at events such as The Convenience U CARWACS Show (plan to attend Peel Regional’s presentation at The Convenience U CARWACS Show March 6-7, Toronto Congress Centre). Safe staff wear the right gear for the job at hand

According to Peel Regional Police Constable Amy Boudreau, Mac’s (Circle K) was the first retailer to adopt the Clear

We ensure cash drops are done regularly and all office doors are kept locked when deposits are being counted. Tobacco cabinets in offices are also kept locked at all times, so even if an intruder could gain access into an office, they will not easily get tobacco. - Tom Humphreys

Zone program back in 2013 with a test at all 14 locations in the Peel area. They saw robberies fall dramatically and decided to take the program beyond these stores to locations in Toronto, Thunder Bay and Ottawa. “They saw a 95% reduction in robbery after roll out of the program,” says Boudreau. She explains ‘Clear Zone’ helps establish environmental design change at store locations. “We found that by altering a store’s environment we could change

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behaviour of those considering a crime like a hold-up,” she says, telling that sites are advised to clear up clutter around the pay point area and make the interior more visible to the outside. “When people can see into the gas bar there is a greater potential for witnesses to a robbery or theft. This puts the criminal on stage and works as a psychological deterrent that has proven very effective.”

Total company buy-in In BC, Peninsula Co-op is an operator that takes safety and robbery prevention seriously. “All staff complete emergency response scenarios when hired. These scenarios take them through all of the potential situations they could run into on the job, and offers appropriate ways to respond to occurances such as fires, explosions, spills, needle punctures, and abusive /aggressive customers, as well as propane leaks, and armed robberies,” says Tom Humphreys, petroleum operations manager with the Vancouver Island-based Co-op. “We ensure cash drops are done regularly and all office doors are kept locked when deposits are being counted. Tobacco cabinets in offices are also kept locked at all times, so even if an intruder could gain access into an office, they will not easily get tobacco.” Tom reports that at Peninsula staff are trained to greet and acknowledge all customers when on site. “This will discourage potential criminal activity,” he says, noting that Peninsula locations operate with a minimum two-person complement on site at all times, from open to close. He mentions that with BC being a mandatory pre-pay province, gas and dash is not a significant issue. “We ensure staff are following pre-pay procedures so that the opportunity is never there.” At Peninsula Co-op they see safety as a proactive affair. “We have a company Health and Safety (H&S) committee that meets monthly. As well, we have a designated H&S rep in every location. They are called once a month and asked about any potential issues at their site that needs to be tabled at the next H&S meeting. We also have “Safety Week” once a year, where we identify staff doing the right things and award them $10 gift cards on the spot,” he says, concluding that Peninsula’s # 1 company value is PEOPLE FIRST. “Everything we do is first and foremost to keep people safe. In the end this is just good business.” OCTANE

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January 2018

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The big clean

When vehicles are really dirty, this Alberta site walks the talk. by Kelly Gray | Photography by Paul Forges

| January 2018

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The site has seen some 70,000 heavy duty trucks and about the same number of passenger cars and light trucks go through the system since 2008.

When big mud covers big rigs it’s a big job. In Lloydminster, AB. TransCanada Automatic Truck Wash is certainly up to the challenge. The centre is North America’s largest automatic truck and heavy equipment wash facility with tunnels for both passenger vehicles as well as some of the dirtiest trucks and equipment this side of Sudbury. General Manager Greg Jones, notes that it’s all about getting the water to do the job. And, the job is often huge. Jones reports their 1.5 million litre settling pit can catch as much as 400 tons of mud and filth a month with the biggest pit cleanout hitting the 700-ton mark. “One driver had 4 tons of mud on his rig. This is a significant cost to drivers and one that keeps truckers coming in on a regular basis,” he says. The facility got its start in 2008 after people in the group saw how effective an old fire truck was at hosing off mud and grime with low pressure high volume water. “A Google search was all it took to find a company that offered equipment that could replicate the clean people had found with the fire truck,” says Greg, reporting that they went with InterClean, a US-based manufacturer that is represented in Canada by Calgary’s NoviClean Inc.

Greg Jones, General Manager at TransCanada Automatic Truck Wash in Lloydminster, AB CCentral.ca

At TransCanada Automatic Truck Wash they do everything from cars to super B trains in less than eight minutes with two automatic tunnel systems (one drive-thru and one with conveyor for small vehicles). The heavy truck wash is 200 ft long and can wash any vehicle up to 8 ft, 6 in. in width and 13 ft., 10 in. in height. “Truckers January 2018

| 25

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we only see challenges during extreme weather like minus 40ºC in the winter. You just cannot spray this volume of water without some problems in the cold,” he says. The site has seen some 70,000 heavy duty trucks and about the same number of passenger cars and light trucks go through the system since 2008. The site uses a total of 4,500 gallons per minute on the undercarriage with nozzles spraying just 40 psi in the undercarriage system. The upper area uses 5 gallons per minute per nozzle to an overall maximum of 900 gpm. “It’s the sheer volume of water that makes this work,” he says, noting that the undercarriage pressure would be

similar to your garden hose. TransCanada Automatic Truck Wash uses biodegradable soaps and supplies alongside its reclaim system. “Environmental responsibility is high priority at TransCanada Automatic Truck Wash. Our system is completely self contained, using recycled water. Our water system uses a combination of softening, EQ module cleaners, and reverse osmosis, ensuring that the water used to clean your vehicle is extremely high quality,” he says. Lloydminster’s automatic truck wash employees a crew of nine persons. “If we tried to accomplish this kind of clean with wands and workers the tunnels would require eight or nine people each

operate their vehicles at a rate of one second per foot of tunnel to get through in eight minutes,” he says, noting that costs run about $34 for a flat deck with a dual axel to $300 for a Super B that might go through twice. “Our light vehicle wash tunnel can wash a car, van, or truck in less than three minutes. Both washes are completely touchless and use a patented combination of high volume, low pressure water applied to the body and undercarriage of each vehicle.” Light duty three minutes washes use spinners in addition to directed nozzles with packages starting at $11 and include an underside spray with options for wax. The quality of the wash comes from the array of nozzles that feature as many as 350 directed jets for the undercarriage and 80 wide-arch jets along the walls to clean the body and upper areas. “The idea behind our wash is low pressure high volume water that is reclaimed and reused. We obtain our water from wells under our site and then clean and recirculate it holding back toxic elements that are removed. Because we don’t have roll overs and tire scrubbers and other pieces of automated equipment maintenance is easier and typically

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January 2018

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to achieve the same kind of clean and it would take more time. Our customers don’t have more time.” The site, that also features a small c-store (no tobacco or lottery to discourage theft and robbery), is located just outside the city boundaries, a fact that makes for fewer regulatory hurdles. “Our goal is to be the cleanest and the fastest and we don’t cut corners when it comes to the environment,” says Jones reporting that with the uptick in the oil and gas sector he expects even more filthy mud caked transport trucks to make their site a quick stop for a fast clean-up. OCTANE

| January 2018

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Forte Products The TwoFoldtm Pole Mount Windshield Center is a functional and innovative fixture that will refresh your forecourt appearance. It has many distinctive features such as single or double washer bucket, dual & lockable towel dispenser and ample ad space. This superb unit is made of sturdy plastic material for longevity and to resist harsh environments, rust, corrosion, dents and scratches. It is easy to install with a strong and secure mounting block that attaches to a variety of surfaces. The TwoFold requires minimum maintenance and it is a tremendous value for operators. 816.813.3337 forteproducts.com

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CANADIAN CANADIAN

CARWASH CARWASH ASSOCIATION ASSOCIATION

january 2018

Directors Christopher armena Brad Baldwin Mike Dietrich

– Mark VII

– parklanD Fuel CorporatIon

Domenic DiMonte terry Fahey

– Crosstown Car washes

– Fahey eleCtrIC/CapItal

wash systeMs

Brad Goetz

Be vigilAnT when CheCking BAnk noTes

– Zep VehICle Care InC.

Bank of Canada is reminding carwash operators and other retailers to be Counterfeiters see busy retail line-ups as a prime opportunity to pass Tfakehevigilant. notes. The Bank’s advice: don’t let them.

– MonDo proDuCts Co. ltD.

jason kaye

– BayVIew Car wash ltD.

kevin krystik sean McBride

– sunCor enerGy

– CleanInG systeMs InC.

Matt McCulloch

– transCheM InC.

Christal narday

– Valet Car wash

kirsten potvin Chandra saran

– Carwash FInDer

– CanaDa washworlD

rudy van woerkom

– BelVeDere teChnICal

serVICe ltD.

NATIONAL OFFICE Finance Director Karen Dalton cae operations Director Kiki cloutier Manager Membership elizabeth Tang Canadian Carwash association 783 annette street toronto, on M6s 2e4 tel: 416.239.0339 Fax: 416.239.1076 office@canadiancarwash.ca www.canadiancarwash.ca

Find a

CaRWaSH › The carwash search feaTure ‹

canadiancarwash.ca/search

on the CCA website has close to a thousand member sites on it. Is your carwash listed? Member sites are listed for free, so contact office@canadiancarwash.ca for more information.

Routinely checking all bank notes allows you to intercept counterfeits, keeping them out of the till and out of Canadian’s change. Always look at two or more security features when checking bank notes. All five denominations in the Polymer series have the same security features. If you have doubts when verifying a note, refuse it, ask for another note and check it too. Please contact info@bankofcanada.ca for more information or to schedule a free training session.

CCA BoArd memBer hAs new posiTion wiTh Csi Cleaning Systems, Inc. (CSI) recently announced the hiring of Sean McBride to the position of Lustra key account manager. McBride is a veteran in the carwash industry, having spent the past 12 years with Belanger Inc. working with accounts across the U.S. and Canada. He held product manager positions in both the tunnel and in-bay segments of the industry and managed national/key accounts throughout North America. McBride was quoted as saying, “In addition to a great team culture, CSI has always stood out to me as a company leading the way in technology and quality products when it comes to carwash chemistry. I am very excited to be joining the team and representing the brand.”

CCA Agm And lunCheon The Canadian Carwash Association (CCA) will be hosting the association’s annual general meeting on Wednesday, March 7, 2018 at the Toronto Congress Centre. Members in good standing are entitled to vote during the AGM and we encourage non-members to attend this event as well. Pre-registration is required, there will be no on-site registration for this session.

INDUSTRY FORUM INDUSTRY FORUM De DIcaTeD TO sharING KNOwLeDGe aND BesT PracTIces IN The carwash INDusTrY

Join us ››› AT CArwACs for Bus Tour And seminArs ››› CCA semi- AnnuAl CArwAsh Tour Hosted by the Canadian Carwash Association (CCA), the third annual CARWACS Carwash Tour will take place in Ontario. The tour will visit a number of CCA member carwash sites across southern Ontario as carwash operators enjoy a morning of networking, lunch and interactive site tours. Buses departure from the Toronto Congress Centre at 9:00 a.m. on March 6, 2018 and return to the Toronto Congress Centre for the CCA hosted Luncheon at 12 noon. ››› Bill 148 – how does iT AffeCT your operATion? As most of you know, the Labour and Employment Laws in Ontario changed January 2018. There are significant changes that will have a direct impact on the profitability and sustainability of your business. The Canadian Carwash Association (CCA) in partnership with the Canadian Federation of Independent Business (CFIB) will be discussing the impact of Bill 148 (Fair Workplaces, Better Jobs Act) and the effect it will have on your business. ››› sTATe of The indusTry in CAnAdA

wAsh volume 3rd QuArTer resulTs The Canadian Carwash Association released the 2017 third quarter results of the Wash Volume Report (WVR) reporting that average revenue per site was up 30% at $58,673 compared to $44,745 in the third quarter of last year. The average cycles per site was also up 28% at 6,956 compared to 5,437 for the quarter in 2016. The average revenue per cycle was up just 2% at $8.44. Undertaken for the CCA by Kent Group Ltd., a research firm specializing in the gas station and car wash industry, the WVR is a national quarterly survey of 780 carwash sites across Canada. Members of the CCA may participate in the WVR program and receive results specific to their regional at no extra cost beyond their membership fee. All CCA members can access the full national 2017 results on the CCA website. Also available online is information on how you can add your carwash site to the WVR.

– mArkeT dATA AnAlysis

The Canadian Carwash Association’s Wash Volume Report Committee will be hosting a one-hour session to update carwash owners on the existing industry data and explore enhancements to the program that add value to CCA members and the carwash industry. This session will give you opportunity to learn more about wash volume cycles and benchmark your site against industry standards. Kevin Krystik, Senior Advisor, Strategic Development, Suncor Energy and CCA National Board Member as well as Suzanne Gray, Senior Analyst, Consulting, Kent Group will be leading this presentation.

new CCA memBers in 2017 The Canadian Carwash Association was pleased to welcome new carwash operators and suppliers to the industry association in 2017. The following 35 companies became members of the association. Jim’s Carwash, Brooklyn; AndersonDeconsulting Inc, Calgary; Blackstone Capital Corp., Indian Head; Goddard, Sutton West; Patel, Calgary; Braithwaite Management Consulting Ltd., Edmonton; Vance Motors, Bancroft; Gilbert’s Corner Auto, Shediac Cape; Black to White, Weybur; Red River Cooperative Ltd, Winnipeg; Mac’s Convenience Stores Inc., Toronto; Deloitte, Montréal; Shine-On Wash Services, Beaumont; Luxury Car Wash, Cambridge; Smokinq Wands Ltd, Westlock; 2012304 Alberta LTD, Caroline, David Tran, Edmonton; Suds Car Care Inc., Regina; Charlie’s Auto Wash, North Vancouver; SERIOUS Detailing, Brampton; StoreWest, Calgary; 1859 Private Wealth, Calgary; Hawk Wash Ltd, Calgary; Ten20 Truck & Auto Spa, Regina; Pristine Auto Wash, Saskatoon; Railside Wash, New Hamburg; Best Boys Car Wash, Chilliwack; Noce Consulting Ltd, Edmonton; Park Avenue Holdings, Thornhill, Cleaning Systems Inc, De Pere, Wis. CANADIAN CARWASH ASSOCIATION CANADIAN CARWASH ASSOCIATION

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JANUARY 2018 | CCentral.ca

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1 Custom BASES II Light Report, OPEN-ENDED LIKES, General Population - January 2017

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January 2018 Volume 1 | Number 1

ADVERTISERS

CONTENTS

CardTronics...................................................... 11

05 Editor’s Message Get ready for your new beginning!

CCentral.ca .................................................4, 37 The Convenience U CARWACS Show - Toronto.............................29 Havana House.................................................35 Hershey Canada Inc..........................................2 ITWAL Limited................................................26 Mondelez Canada Inc...........................13, 22, 31 Nestle Canada Inc........................................... 19 Payment Source Inc........................................25 Regal Confections............................................21 Scandinavian Tobacco Group Canada........... 16 Spa Springs Mineral Water Company Ltd........ 7 Western Refrigeration & Beverage Equipment Ltd.............................24

06 The Buzz Cross-Canada round-up 08 Quick Bites Gen Z is the next big thing 10 Money Matters The great debate TFSA versus RRSP? 12 Top Ops Prepaid fraud: How you can arm yourself against scams

17 COVER STORY Local pride New owners reinvent 107-year-old Willows Park Grocery

32 Category Check Turning the chill of coughs, colds and flus to your advantage

23 Who’s laughing now? Penetanguishene couple defy the odds with their Green Block Trading Post corner store

34 Snapshot C-stores must find consumers’ sweet spot

27 Jubilee Junction Convenience Standing out from the crowd by exceeding expectations

36 Backtalk 6 New Year’s questions for Rashid Aziz

14 CNUE Preview New trends, opportunities and strategies to succeed CCentral.ca

January 2018

WHERE RETAILERS GO TO CONNECT JOIN THE CONVENIENCE COMMUNITY AND GET:

 ADVICE FROM RETAILING PEERS  TIPS FROM TOP SUPPLIERS  THE LATEST INDUSTRY NEWS  ACCESS TO EXCLUSIVE CONTESTS & PRIZES

THE BUZZ Cross-Canada round-up People, places, news and events

A warning from Canada’s corner stores

A white paper from the Canadian Convenience Stores Association warns that the federal government’s proposed new plain packaging legislation will jeopardize c-stores across the country and increase sales of illegal tobacco. Cannabis, on the other hand, will be permitted to have limited branding, more room for promotion, and taxed at a much lower rate than tobacco products.

More taxing news

Beware Bitcoin It appears the online currency is becoming a favourite form of payment for fraudsters, many of whom are using Bitcoin ATMs. One of the most recent scams involved callers posing as representatives from “Canada Immigration” demanding payment to prevent an alleged warrant from being executed. According to the Toronto Police Service, legitimate government agencies do not request debts to be paid by Bitcoin, pre-paid credit cards or gift cards.

Guarding against skimming In an effort to prevent payment card skimming at gas pumps, silver holographic anti-skimming decals bearing the Crime Stoppers logo are being used on all Petro-Canada and Circle K gas pumps across Canada. The decals are designed to enhance customer awareness and make it more difficult for fraudsters to compromise fuel dispensers.

New point of view An internal report indicating that Health Canada may raise tobacco taxes to as much as 80% of the sale price is expected to be good news for the black market – and unwelcome news for c-stores. The report, obtained by CBC News, contends that cigarette taxes have been the most effective tool for reducing smoking rates for nearly two decades.

| January 2018

Kids may have been excited about Santa coming last December, but convenience store owners were more excited by the arrival of Pointy, a special system that automatically creates a webpage of a store’s products simply by plugging a special box into the barcode scanner. For a one-time fee of $399, products are automatically displayed online to help shoppers find what they need in their local area.

Openings and more C is for convenience

Halifax has its first online convenience store, Room Service. Everything from kettle chips to energy drinks to baby food can be ordered online from noon to 3 a.m. and delivered to addresses on the city’s peninsula within 45 minutes. The brainchild of Johnathan Cannon, his two brothers and their father, Room Service is a hit with university students and local military bases. A $2 delivery fee is charged on most orders.

A helping hand When sales at Jay Lee’s convenience store in Lower Coverdale, NB, plummeted by 80% in the wake of highway construction to repair a broken bridge, the community stepped up to help out. Residents in the area made it a point to shop at Brians Variety, often driving 15 minutes out of their way to support the family-run business. Locals also erected signs to let residents and passing motorists know the c-store was still open. And in the spirit of community and cooperation, Lee offered free coffee to the construction workers putting in the new bridge.

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Illustration by Freepik.com

And the award goes to … Top employer

Excellence in operations

For the second year in a row, Irving Oil has been named one of Canada’s Top 100 Employers for its diversity and inclusion programming, training and skills development opportunities, community involvement, and safety performance, among other factors. Irving has more than 3,000 full-time employees, most of whom are based in Saint John, NB. The company was among more than 7,500 organizations from across the country to submit applications for the annual honour.

At the Atlantic Convenience Stores Association’s 9th annual Retail Convenience Awards Gala, four convenience store owners were honoured with the President’s Excellence award for demonstrated operational quality and community engagement. A round of applause for Dwight Fraser, FMI Group, Woodstock, NB; Jerry Scholten, Scholten’s Grocery & Video, Fredericton, NB; John and Patricia Snow, Mister T’s Ultramar, Gander, NL; and Lee-Anne Hagerman, Gottingen Street Corner Store, Halifax, NS.

ENERGIZE YO U R SALES!

Save the Dates March 6-7 The Convenience U CARWACS Show, Toronto Canada’s largest, gas, wash, and convenience trade show and conference Keynote speaker David Coletto, CEO of Abacus Data, will discuss the new generation of shoppers and how they are changing convenience stores. NEW LOCATION! THE TORONTO CONGRESS CENTRE 650 Dixon Rd., Toronto, ON Visit toronto.convenienceu.ca/for details

April 10-12 NACS State of the Industry Summit CCentral.ca

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Meet your youngest generation of consumers

Gen Z is the next big thing Pretty much every Baby Boomer in Canada has heard of Wayne Gretzky. Many know the story of Wayne’s father Walter flooding a backyard rink and coaching young Wayne to become the greatest scorer the game has known. The key to Wayne’s success – Walter taught him to “skate to where the puck is going, not where it has been.” With such a direct and simple principle, it’s not surprising that everyone from Steve Jobs to Warren Buffet has used a version of this vision as a guiding principle for business success. Easier said than done. Everyone is hunting for the Next Big Thing, and many tales of corporate ruin find their roots in the pursuit of the flavour du jour. So, what’s the next big thing for c-stores? Or more importantly, WHO’s the next big thing for convenience retail? And how will demographic patterns impact convenience store performance down the road?

Exhibit 1 is the Statistics Canada medium population projection for the major demographic groups in Canada from present day to 2050. Look out a few years and you’ll notice the group following the Millennials – the so-called Generation (Gen) Z – rising. And it’s not just in Canada. The numbers around Gen Z are staggering. Globally, there are over two billion people

Sales of Foodservice items in convenience had a constant dollar compound annual growth rate of

+1.6%

in this cohort. Over the next decade or two, Gen Z will be on the cusp of becoming one-third of the population in Canada – bigger than both the Boomers and the Millennials. The billion dollar question is “What will they want?” For Gen Z, the answer is foodservice. Market research provider Euromonitor International analyzed convenience sales growth in Canada between 2011 and 2016. Overall, Euromonitor found the trend was essentially flat in terms of constant dollar sales. However, sales of Foodservice items in convenience had a constant dollar compound annual growth rate of +1.6%. Mintel, a global market intelligence agency, published an analysis in March of 2017 on foodservice sales performance in convenience stores in the U.S. As Exhibit 2 clearly shows, Mintel projects that the largest growth opportunity in

Exhibit 1

Whither the Boomers... Here comes Gen Z! Canada Projected Population (000s) by Generation

Source: Statistics Canada

| January 2018

CCentral.ca

the convenience foodservice sector is projected to be in prepared foods. According to Mintel, sales of prepared foods, specifically sandwiches, will be the driver of foodservice growth in the future. Mintel recommends that operators add more sandwiches to menus, expand and vary offerings based on current culinary trends, and seek out unique ethnic flavours that represent ‘white space’ opportunities that fill gaps. This fits fully with the kinds of options that Gen Zers are looking for. Ipsos FIVE for R’12M is a daily online diary that tracks individual consumption habits, motivations, situational dynamics, item preparation, health statuses and purchasing behaviour driving food and beverage item choice. According to the

The largest growth opportunity in the convenience foodservice sector is projected to be in

prepared foods.

Ipsos FIVE for the period ending June 2017, Gen Z food habits, beliefs, and perceptions, are distinctive and unique. While convenience remains a driver of behaviour, other factors have led to a shift in Gen Z choices. Ipsos notes that teens were once the cornerstone of the convenience and gas marketplace in Canada. However, Ipsos’s research reveals that expanding option availability and emerging health priorities have influenced this cohort away from the convenience channel to other options like drug, mass and foodservice retail. This is something to consider in keeping this cohort shopping at c-stores… and an opportunity to tailor your offerings accordingly. Still not convinced about Gen Zers? Just think back to that classic Boomer game, Scrabble. The outcome in Scrabble always turns on how well you or your opponents are able to score using the money letters – X, Y, and, not to forget the very valuable Zs. ◗ Darren Climans is a foodservice insights professional with close to 20 years’ experience partnering with broadline distributors, CPG suppliers, and foodservice operators. His practice is to understand issue-based decisions by taking a data-driven approach to strategic decision making.

born between 1995 2015 Who are the Gen Zers and what matters to them? • • • • • • • •

Value-conscious Digital natives Want it now Forget the clock – breakfast anytime Quality matters Pixel-ready Corporate responsibility Environmental stewardship

DID YOU KNOW?

Next generation will be called Alpha

Exhibit 2

Total US Convenience Store Foodservice at current prices, by segment, 2011-21

Source: Mintel Canada

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January 2018

MONEY MATTERS

by Mike Jaczko and Max Beairsto

The great debate

TFSA versus RRSP? The RRSP deadline looms the end of February, so we thought we’d bring this age-old debate into focus for convenience store owners. Which will it be when you want to invest in a tax-advantaged fund? Ideally, it would be great to maximize contributions to both RRSPs and TFSAs, but in some cases convenience store owners can’t afford to do both every year.

Both are tax-sheltered Both TFSAs and RRSPs allow your investments to grow in a tax-sheltered environment. With an RRSP, you can deduct your contribution from your income, which will earn you a tax refund. However, the investment money becomes fully taxable at your marginal tax rate (read: highest) when you take it out later on.

The TFSA experience is the reverse, namely you do not receive a tax break on contribution, but you don’t pay tax on withdrawals either. So when deciding between the two alternatives, your question comes down to when you’re prepared to pay the tax person. “Pay me now or pay me later”. Your answer hinges on where you expect your tax rate is heading in the future. Conventional thinking says that if you are in a higher tax bracket when you put the money in than when you take it out, it’s better to use an RRSP. This notion makes sense given your original RRSP contribution offers you a juicy tax rebate now, and the tax person takes a smaller piece on withdrawal. However, if you take the money out when you are in a higher tax bracket than you’re in now, it’s better to top up your TFSA first.

Flexibility is important For example, you will fare better with a TFSA if you’re saving for a family home and may need access to your nest egg. In these cases consider using a TFSA as a vehicle to park money and allow it to build in a tax-free environment. Dipping into a TFSA never has a tax impact, whereas you may be on the hook to pay some tax in the event that you draw on your RRSP for an emergency while still working. Note that you can take out a specified amount from your RRSP without tax con-

| January 2018

sequences for a first-time home purchase or for education, but you will need to repay those amounts based on some rigid timetables or suffer significant tax consequences. (Check your most recent “Notice of Assessment” that you received in the mail last spring to determine your current contribution limit.) In addition, dipping into an RRSP results in a permanent loss of your contribution room, whereas you can place money into and draw money out of a TFSA with the proviso that you wait until the next calendar year.

Time to convert? A third consideration focuses on the fact that you will be forced to convert your RRSP to a RRIF (Registered Retirement Investment Fund) or an annuity by the year you turn 71 and subsequently be required to make annual minimum withdrawals. In contrast, TFSAs come with few strings attached from a withdrawal perspective. So if you need flexibility and particularly if you might need the money while still working, using a TFSA may be your best bet. However, long-term focus on building a nest egg through an RRSP is also prudent and may be advisable. ◗ Mike Jaczko CIM®, a small business owner by background, is a portfolio manager, partner and member of K. J. Harrison & Partners Inc., a Toronto-based private investment management firm servicing families across Canada. Max Beairsto, B.Sc., MBA, CVA is a certified valuation analyst and business intermediary with Enterprise Valuators, an Edmonton-based valuation and business sales advisory firm.

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TOP OPS

by Grace Caputo

Prepaid fraud

How you can arm yourself against scams The prepaid category is a great traffic driver for convenience retailers, offering consumers a wide selection of products ranging from prepaid mobile top-ups and gift cards to prepaid Visa and MasterCard, among others. But it’s important to be aware of the types of fraud that could affect these products and how you can protect yourself and your customers.

Common types of prepaid fraud affecting retailers

Common types of prepaid fraud affecting customers

Fraudsters are looking for ways to maximize the amount of money they can gain by fraud from a victim. For this reason, convenience retailers sometimes become fraud targets. Here are two “popular” scams:

Convenience retailers who sell prepaid products should be aware of the types of fraud that can affect your customers:

Supplier impersonation scam In this scenario, the fraudster calls convenience store operators and impersonates either their prepaid supplier or a prepaid product vendor. The fraudster will insist the retailer print out a “Test PIN” for a particular prepaid product and ask that they disclose the PIN number or Claim Code associated with the product. It’s important to remember that your prepaid supplier will never ask you to disclose the PIN number or Claim Code. Providing this information over the phone is like handing out cash.

Product update scam Similarly, in this scenario fraudsters impersonate either the prepaid supplier or prepaid product vendor but claim the system is out of date or there is an error with one of the products, which requires a new product update or software download. The fraudsters try to gain access to user names and passwords by pretending they need this information to improve the system. By providing this information, c-retailers make themselves vulnerable to additional theft. It’s important that you never disclose user names or passwords for any of your systems.

| January 2018

Fake online purchases Buyer beware! If it is too good to be true, it probably is. An online purchase scam occurs when scammers portray themselves as sellers on popular sites such as Kijiji or eBay. The seller will ask to receive payment for the merchandise using prepaid products such as Prepaid Visa, Prepaid Mastercard or paysafecard. Unfortunately, these products do not actually exist and the buyers only realize this after paying, and the product is never received.

Romance scam In this scenario, fraudsters present themselves as eligible bachelors/bachelorettes on popular dating websites. They create realistic profiles and engage their victims in dialogue to gain their trust. Once the victims’ trust has been established, then the fraudsters ask them to send money for either a personal emergency or to travel to meet them in person. Sadly, the romance never establishes beyond this and the victims are often defrauded of significant amounts of money.

Malware or ransomware scams Ever had access to your phone or computer locked and been asked to pay using a prepaid voucher? Never give a prepaid product to anyone claiming to remove this encryption or virus from your computer. Often customers will lose their money and their

computer will not be fixed, with their information continuing to be in the hands of the criminal. If you become a victim of this scam, contact your antivirus supplier for advice on how to restore your computer.

CRA scam Canadians have fallen victim to telephone scams where the caller claims to be from the Canada Revenue Agency (CRA) The fraudster uses threatening, aggressive and forceful language to convince victims they owe money to the CRA. Victims are asked to provide payment via prepaid cards such as Prepaid Visa, Prepaid MasterCard or iTunes. Victims are threatened with jail or court charges. In this scenario, you are at risk of identity and financial theft. Hang up and contact the CRA directly. ◗

Top tips to protect yourself and your customers • S tay informed. There are several resources available online to help such as www.paymentsource.ca/ebookfraud-cost-consequences. • I nstitute a store loss prevention/fraud training program. • W ork with your prepaid provider. Ask what controls they have in place to identify suspicious transaction. • T rust your intuition. If something doesn’t seem right, if the caller is asking for too much information, hang up and call your prepaid provider to ask if the sale is legitimate. Grace Caputo is the general manager at Payment Source.

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The Convenience U CARWACS Show Text by Talbot Boggs Photography by John Packman

New trends, opportunities and strategies to succeed

Amit Parmar, owner of Hanmer Kwik Way in Hanmer, ON, is excited to take part in his fourth Convenience U CARWACS show in Toronto on March 6 and 7, 2018. As a regular attendee he is looking forward to seeing the industry’s newest products and services and learning about emerging trends, techniques and technologies, all designed to improve his business and prepare him for the future. “The conference has continued to change as the industry changes,” Parmar says. “I do see more of a presence of the petroleum industry – all of the major players were there last year – and I have taken away quite a few concepts and products that I have been able to implement in my store. Going to the show has been a very wise decision for me.” There are an incredible number of changes taking place in the convenience industry today. “There are changes in the customer base, changes in consumer needs and wants, changes in product and service offerings that customers expect from retailers,” says Michael Cronin, Vice President and General Manager, Events, at EnsembleIQ Canada. “To succeed in this environment, you need to anticipate change before it happens. The Convenience U CARWACS Show is the only event where you can be the first to see the trends before they happen. It’s here that you’ll be able to experience first-hand the latest innovations in categories, like foodservice for example, that may be the lifeblood of your business.” Amit Parmar has certainly come away with new ideas for his store. “The F’real milkshake and Tyler slush machine programs have performed really well for me and have increased the customer footprint in the store,” he says.

| January 2018

The show offers a winning combination of educational seminars and a comprehensive trade show floor, and brings together major manufacturers, distributors, service providers and industry-leading experts speaking on a variety of topics and trends, all together under one roof. “It’s a great way to get information on the newest trends, products and technologies, explore top-selling equipment and fixtures, attend informative seminars, network with peers, interact with industry experts and learn about new payment systems like Apple and Android pay,” Parmar adds.

The Convenience U CARWACS Show is the only event where you can be the first to see the trends before they even happen.

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This year’s show will feature a carwash tour luncheon and carwash educational seminars, plus a number of presentations, workshops and roundtable discussions on leading c-store issues.

Thought-provoking sessions At this year’s show you’ll be able to learn who the new generations of c-store shoppers are, why they think and act as they do and how they are changing convenience stores. Generational change and the future of convenience stores will examine behavioural changes, the role of retail and how the younger generations are influencing all sectors of the economy.

I have taken away quite a few concepts and products that I have been able to implement in my store. Going to the show has been a very wise decision for me. - Amit Parmar

Retailers also will discover how the expansion of the base of lottery players through technology can boost overall revenue. They’ll be able to discover how to leverage OLG’s new technologies to enhance the retail customer experience and generate incremental sales. Retail technologies are changing rapidly and affecting how customers pay for products, how they interact with c-stores and how products are delivered. Experts will give their thoughts on what the future will look like for convenience retail operators and the petroleum forecourt. Convenience stores already are trending toward an evolving tobacco presence, healthier choices for consumers and enhanced foodservice offerings. Find out from industry experts how key c-store categories are expected to evolve and how you can best manage these products. The Convenience U CARWACS Show provides an ideal opportunity to discover what’s in store for your retail c-store and gas business. For the latest updates, visit http://toronto.convenienceu.ca/ ◗

4 top tips to get the most out of the show Plan ahead Choose the exhibitors you want to visit and make appointments ahead of time to maximize your time on the trade show floor.

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Take in the education

Choose your focus

These sessions are designed to share the latest trends, often before they become industry trends.

If you’re looking to add more foodservice to your operation, for instance, look for the many foodservice suppliers on the floor. If carwash equipment is top of your list, target those suppliers.

Take breaks The Convenience U CARWACS Show is big and can be exhausting. Don’t forget to take time to pause, network with other operators, and enjoy the show experience.

January 2018

| 15

Tobacco advertising is not available in the digital issue

COVER STORY

Local pride

New owners reinvent 107-year-old Willows Park Grocery Text and photography by Lawrence Herzog

When Karen and Bruce Singbeil bought a historic Victoria-area convenience store last fall, they knew they wanted to build on its deep local connections. Operating since 1911, Willows Park Grocery is the longest-running business in the municipality of Oak Bay and perhaps the secondoldest grocery store in continuous operation in the region.

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January 2018

| 17

“There’s a real appetite for great quality and that’s where we’ll succeed in the long term.” - Karen Singbeil

Willows Park Grocery’s

top tips

Build local connections

with your suppliers and customers.

Listen to what your

“Our focus is all about building local pride and working with our local suppliers,” Karen says. “Baked goods and fresh sandwiches, taquitos, sausage rolls and wraps quick and ready to go – all of it sourced locally.” She also bakes in-house, sometimes using century-old recipes handed down through her family. And they’ve built traffic with local high school kids by installing a hot dog roller. The Singbeils are gaining customers by listening to what the neighbourhood wants. “The response has been wonder-

ful,” Bruce says. “The community wants this to stay as a convenience store, and they are grateful. Most of our business is repeat, and we know many of our customers by name already.” A licensed realtor for 22 years, Karen was looking to shift gears and the couple originally decided they wanted to open a coffee shop. “We knew about this store,” Bruce says. “We looked at it, put it on the shelf, then came back to it once we thought we could make it a store with coffee.” Continues on page 20

regulars want and provide it.

Tempt with quality

and fair prices that keeps customers coming back.

Source interesting local

products your competitors don’t carry.

Create a welcome,

invigorating store with inside-and-out seating.

Satisfy grab-and-go

customers and those who want to linger a little.

| January 2018

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Bruce loves getting to know his customers and seeing them coming back again and again

Now they are one of just two Victoria-area retailers of Neil McDonald’s Black Bear Artisan Coffee, a direct trade local roaster of high quality beans. Bread, buns and pastries come from Portofino and Six Mile, two of Vancouver Island’s renowned artisan bakeries. Small tables and chairs inside and out encourage customers to relax awhile, enjoy a cuppa and enjoy some great local treats. To evoke comfort and friendliness, they chose wood finishes and furnished the interior with an array of antiques like a vintage weigh scale, a Coca-Cola machine and a 1949 Schwinn B6 autocycle. “We may need another store, though,” Bruce laughs. “We have more in storage.” Since they are tucked into a neighbourhood and away from arterial roadways, they need to grow destination business to succeed. Their assortment of collectibles is drawing its own traffic. “Some days a dozen people stop by just to have a look at the antiques,” he says. “Not necessarily to buy anything, mostly to look.” Not all of the changes have been “antique” though. Five energy-gobbling coolers were replaced with one efficient modern unit. By bringing down overhead, they’re better able to keep price points competitive. “On some of our items, our pricing is lower than local grocery stores,” Karen says with pride. But there’s another wrinkle that has nothing to do with running a convenience store. Sometimes customers come through

| January 2018

the door and ask Karen, “Don’t I know you from somewhere?” And they do, as it turns out. Many recognize her from Big Brother Canada. She was runner-up on Season 5 after spending 69 days of constant seclusion locked in a house with 16 strangers, cut off from the world outside. “It was really hard being away from family and friends for that time, but I met such great people that have become such great friends to us,” she says.

Old hand at convenience While being locked away in a house on Big Brother Canada was definitely a new experience for Karen, running a c-store is not. She operated a convenience store in Scottsdale, Arizona 30 years ago and says this is a bit like coming full circle. “We’ve always been self-employed people, and this might be our last. Or not.” Bruce loves getting to know his customers and seeing them coming back again and again. “It’s like seeing old friends. It’s a great social experience, and we’re really enjoying it.” Now the Singbeils hope to expand their selection with locally-sourced produce that will retail on stands outside the front door and scoop ice cream through the warmer months. “We’re building those connections one by one,” she says. “Looking for great producers and telling customers about all the great stuff we have found. There’s a real appetite for great quality and that’s where we’ll succeed in the long term.” ◗

Willows Park Grocery’s

Snapshot

2405 Eastdowne Road, Victoria, BC Operating since 1911, the oldest business in Oak Bay Hours: 8 a.m. to 6 p.m. Monday to Friday, 10 a.m. to 4 p.m. Saturday and Sunday Number of employees: 2 owner/operators and 1 or 2 more family members when needed Top sellers: coffee, hot dogs, baked goods, deli items Top draws: artisanal coffee, in-house baking

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January 2018

| 21

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Who’s

laughing now?

Penetanguishene couple defy the odds with their Green Block Trading Post corner store Text and photography by Mark Cardwell

Mike Cadieux says many people thought he and his wife Nancy were crazy in 2007 when they bought a rundown heritage building in Penetanguishene, Ont. and opened a large convenience store in it. “We knew it was the perfect place for the store we had in mind,” recalls Cadieux, a Métis who grew up near the picturesque town on southern Georgian Bay, 150 kilometres north of Toronto. “But the building was in such bad shape that my lawyer said we were buying a future lawsuit, not a viable business.”

But who’s laughing now? After a decade of hard work, including a years-long stint without a single vacation, the Cadieux have created a flourishing business that has breathed new life into a local landmark.

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Called the Green Block Trading Post, the two-storey building was built in the 1840s by Penetang’s first mayor (and my great-great-grandfather) Alfred Andrew Thompson. Thompson founded and ran a general store on the main floor and rented out offices on the second. He was also a wellknown fur trader who dealt with Métis, Indigenous and French trappers from across Ontario who could then paddle up to the back of the downtown store on the aptly-named Water St. with their wares. In the 1980s, Penetang commissioned a giant mural on one side of the store

that shows Thompson trading furs with several Métis. A descendant of the French/Métis who relocated from Drummond Island to the Penetang area in the 1820s, Mike Cadieux says he always considered the mural to be as much a commemoration to Thompson as to his own ancestors. “In an era when aboriginals were not even considered human beings, Thompson traded with them and brought them into his home to sleep,” says Cadieux. “When he died, elders came here and did a burial ceremony. You can still feel that spirituality here.”

January 2018

| 23

“We Drummond Islanders have always been traders. It’s in our blood. I’m keeping an old tradition going here.”

Cadieux says he was saddened by the store’s decline in both appearance and as a retail outlet over the past several decades. The once-thriving general store became a shoe store, a flower shop and finally a threadbare corner store when he and Nancy, who is a Mohawk, bought it.

The corner store, which takes up half of the main floor (the other half is a professional services office) is notably a leading independent tobacco seller for both RBH (now Philip Morris) and Imperial Tobacco, winning several quarterly sales growth awards for both the region and across Ontario.

The couple moved into the largest of three apartments on the building’s second floor and went to work fulltime in the revamped store below, ending their 17-year career as a husband-and-wife driving team doing long-haul transport across North America.

“We took this store from being one of the worst to one of the best in tobacco sales,” says Cadieux. Tobacco customer traffic, he adds, also generates brisk sales for lottery tickets and regular c-store merchandise.

A one-time partner in a corner store in the nearby village of Port McNicoll, Cadieux says that experience, together with Nancy’s and his Indigenous heritage, have helped restore the Green Block’s business lustre.

Those sales, however, represent only about a quarter of store revenues. The majority of sales now come from the ever-growing number of Indigenous gifts and crafts that are now packed into the store’s aisles.

| January 2018

“When we first opened we didn’t openly promote the fact that we were aboriginal and that we had aboriginal products,” says Cadieux. “But times are changing and aboriginal people are no longer afraid of repercussions or social stigma because of their identity.” He adds that Indigenous products are now in high demand and speak to renewed interest in aboriginal identity. “This is the perfect place for our business,” says Cadieux. “Thompson planted the seed in this community that allows us to do this. And we Drummond Islanders have always been traders. It’s in our blood. I’m keeping an old tradition going here.” ◗

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Snapshot 1 Water St, Penetanguishene, ON Store size: 1,500 sq. ft. Renovation investment: $500,000+ Services: regular c-store merchandise, lottery tickets, tobacco products, Indigenous arts and crafts, including leather and fur goods and clothing, moccasins, handcrafted carvings, pottery, jewelry, etc.

top tips Keep your prices reasonable “You have to be competitive in today’s market,” says Mike Cadieux. “People shop around and they go online. I tell people who say they found something cheaper online, come back and tell me that after you’ve factored in the exchange rate and shipping charges.”

Number of employees: 6 full time, including Mike and Nancy Cadieux.

Understand your products “People today want authentic, locally-made items. So you need to know where your products came from and who made them.” Put in the hours “You need to work long hours to be successful in this business. There’s no way around it. People shop at all hours now. You can’t expect to do well if you work Dolly Parton 9-to-5.”

Store hours: Every day from 6:30 a.m. to 10 p.m.

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Jubilee Junction Convenience

Text by donalee Moulton Photography by Aaron McKenzie Frazer

Standing out from the crowd byÂ exceeding expectations

From left to right: Michael, Nick and Al Habib

Michael Habib has been working in the convenience store sector for more than 30 years. His approach to business – and a key ingredient in his sustained success – can be summed up in five words. Stand out from the crowd.

“I offer things nobody else offers. I create things nobody else creates” - Michael Habib

That big, bold attitude is evident before customers even walk through the doors of Jubliee Junction Convenience, a c-store in central Halifax that Habib opened in 2006. An outside wall is emblazoned with street art created by a customer. A train is pulling a giant, one-of-a-kind ice-cream sandwich (for which the store is renowned), and an old-fashioned shake, complete with red and white twizzle straw, proudly proclaims, “Try the best milkshake in the city.” “I offer things nobody else offers. I create things nobody else creates,” says Habib, who runs the store with his brother Al and his son Nick. The ability to meet customers’ needs isn’t happenstance. Habib makes it a point to ask people what they are looking for and if they need a hand to find something. Nobody, he notes, knows the store as well as he does and customers – always greeted with a warm “hello” – are intrigued that he offers assistance. The inquiry and the friendly greeting reflect the 54-year-old’s outgoing personality, but they are also good business. “I don’t want a customer to walk out if I can help them,” says Habib, whose family fled Lebanon in 1976 as civil war erupted. Invariably, customers will walk out satisfied. Jammed into every corner of the 1,000 sq. ft. corner store (literally on a corner) are items as diverse as tennis balls, candy cigarettes, chili sauce and poker chips. “People aren’t here looking for deals,” stresses Habib. “They’re looking for convenience.” It’s a regular occurrence, he adds, for customers, often harried and frustrated, to walk into his store looking for an item they have not been able to find at three or four or five other stores, including department and big box stores. Fortunately, their luck usually changes at Jubilee Junction. The diversity of items in the store, known as J.J.s by the locals, echoes the diversity of customers who pop in to pick something up. The c-store is situated on the corner of Jubilee Rd. and Preston St., Continues on page 30

| January 2018

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MARCH 6-7, 2018

CONGRESS CENTRE

a neighbourhood which represents a mix of single family residences in an older, established area of the city. Close by are Dalhousie University and the University of King’s College, and many students routinely make their way to Jubilee Junction for snacks, groceries, and special treats. Getting people in through the doors is a critical ﬁrst step, says Habib. But once in, he realizes you also have to keep their interest. Recognizing the growing importance of food offerings, Habib opened a small snack bar in the back of the store two years ago where customers can grab a slice of pizza, a fresh-off-the-grill burger, poutine slathered in gravy, and more. The impetus for the expansion: the convenience store across the street started selling food. “People are creatures of habit,” says Habib. “Once you pick up one thing, you pick up another.” Z

SNAPSHOT 6273 Jubilee Rd. in central Halifax where university students, seniors and young families live and shop. Store size: 1,000 sq. ft., most of which is covered with items for sale Opened: In 2006, Michael Habib opened Jubilee Junction, but the location has been operating as a convenience store for more than 60 years. Most popular items: pizza, Death by Chocolate milk shake, ice cream sandwiches

JUBILEE JUNCTION’S TIPS for a SUCCESSFUL STORE

Store hours: Mon.-Wed., 8:30 a.m. to 1 a.m. Thurs., 8:30 a.m. to 1:30 a.m. Fri., 8:30 a.m. to 2 a.m. Sat., 9 a.m. – 2 a.m. Sun., 9 a.m. – 1 a.m.

Understand location. Every neighbourhood is different, and you must know what people in your area need – then meet, and exceed, those needs. Continue to grow. Keep an eye on trends – like Facebook and favourite snacks – then try to incorporate those into your daily operations.

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Category Check

by Jack Kohane

Cold comfort

Turning the chill of coughs, colds and flus to your advantage Every month this winter, about one-third of Canadians (according to the Centers for Disease Control) will suffer through headaches, nasal congestion, sore throats and coughs – just some of the achy signs that accompany the common cold. And, while according to Health Canada there is no way to prevent the common cold, consumers do tend to buy products they know will address their specific symptoms. When making those purchases, convenience is a key factor. “Convenience makes up a big portion of sales as they are often the first stop for consumers suffering from throat and sinus ailments,” says Voula Papadakos, marketing manager for Markham, ON-based TFB & Associates, which distributes Fisherman’s Friend throat lozenges in Canada. “We also notice that in convenience a lot of the purchases are impulse driven. Offering counter displays, which come in a variety of flavour assortments, allows the convenience store owner to decide which product mix is the best fit for their customers.”

“Convenience makes up a big portion of sales as they are often the first stop for consumers suffering from throat and sinus ailments” - Voula Papadakos

Papadakos points out that convenience stores are ideally positioned to expand on their current almost nine million dollars’ worth of sales in the Canadian cough and cold market, representing almost 13 per cent of the total cough singles business in this country in convenience-gas (source: Nielsen MarketTrack, L52Wks as of Oct. 14, 2017). With more than 200 different viruses known to cause the symptoms of the common cold, sniffles are nothing to sneeze at.

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Weather can be another major factor in driving the market’s seasonal growth. With this winter’s forecasted colder than normal temps, the incidences of cold and cough in our population are expected to rise, and in turn boost growth of the throat lozenges market generally.

Cross-market and extend the selling season Blustery winters or not, a sure way to help boost cough and cold sales year-round is creating a savvy product merchandising strategy. “C-retailers can do a better job with the category by giving more format options for their customers in peak season and by cross-selling other categories with cough and cold,” urges Diane Shields, customer insights manager for Mondelez Canada in Toronto, maker of the

Halls cough drops brand in Canada. In addition to carving out a dedicated cough and cold section in your store, she suggests placing cough and cold displays beside areas containing breath fresheners, as well as orange juices, vitamin waters and isotonic (sports) drinks. “Because, although treating cough and cold symptoms is the main usage of cough drops, consumers

also use cough drops to avoid dry mouth, to freshen breath and hide or mask smoking odour,” she says. Visibility is the bottom line to help maximize cough and cold sales. Traditionally, the category has been stuck behind the till with a smattering of medicinal confectionery lines put out on the counter. Shields advises liberating cough and cold symptom relief products from their hiding place and getting them out there and in the faces of your customers. “Displays serve as a reminder that consumers may want these products,” she says. ◗

“C-retailers can do a better job with the category by giving more format options for their customers in peak season and by cross-selling other categories with cough and cold” - Diane Shields

Key cough-cold takeaways

Consider counter displays if your store has limited floor space.

Stress the best by focusing on your top-selling cough and cold SKUs with prime placement on the top shelf at the front counter.

Position cough and cold products close to the checkout for impulse purchases.

Place related products (facial tissue, lip balms), close to or beside your cough and cold lineup.

Always stay in stock of your best-selling cough and cold products throughout the year. This category shows robust sales even off-season.

The cough & cold category in C&G at a glance: L52Wks growth is +2.2% within C&G channel, however pacing stronger within National Grocery + Drug + Mass at +9.2%.

Illustration by Freepik.com

Off-season cough/cold months (April-August) showed strong growth within the C&G channel, with average monthly growth of 6.8% (source: Nielsen MarketTrack, L52Wks, PE Nov 25, 2017).

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January 2018

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SNAPSHOT

by Isabel Morales

The drive to innovate

C-stores must find consumers’ sweet spot Compared with adjacent retail channels, convenience stores have boasted relative strength and sales growth in recent years. Built on the premise of speed, convenience stores are modelled to deliver on specific consumer needs that competing channels don’t yet address fully. While Nielsen research suggests that the strength of convenience stores will continue, it’s not guaranteed, particularly as consumer shopping trips decline, competing channels diversify and e-commerce grows. For inspiration, convenience store operators have myriad examples to draw from. In the QSR realm, speed has become an essential service element. Convenience stores need to follow suit, ensuring that customers looking for a quick meal can get in and out swiftly.

TIP

Positioning the deli at the front of the store, possibly with separate check-outs, will be a big customer pleaser.

TIP

For a slightly elevated experience, retailers can enhance their offerings by providing restaurant-style seating and broadening their menus for in-store service.

Competition from QSRs Today, convenience stores are highly relevant to consumers’ on-the-go lifestyles and are well equipped to deliver products that meet their immediate needs. But channel distinctions are starting to blur. E-commerce, click-and-collect options and a trend toward stores with smaller footprints and diverse offerings are raising the bar of competition. Quick-serve restaurants (QSRs) are also evolving by freshening their menus and remodelling their stores to appeal to younger consumers. When it comes to food offerings, convenience stores can no longer afford to stick to the basics. Leading on fresh, natural food trends will be essential going forward, particularly as other channels have diversified into everything from sushi to gourmet sandwiches – offerings a step above from what they can make easily at home. Being transparent and

| January 2018

health conscious – and displaying these attributes – will also be critical.

Constant need to innovate Aside from food and store layout, convenience retailers need to be continually innovative. This includes marketing more intelligently and across digital platforms, developing personalized offers and rewards that are determined directly by individualized consumer shopping and purchase habits. Brands and companies can never afford to get too comfortable and complacent in their positions. Competition can crop up at any time – and in many ways, on any device. Staying in touch with consumer preferences and needs is, and will always be, the way to stay ahead of the pack, even for those currently at the front of it. ◗

“When it comes to food offerings, convenience stores can no longer afford to stick to the basics. Leading on fresh, natural food trends will be essential going forward”

Isabel Morales is the manager, consumer insights for Nielsen Canada.

In 2017 the categories leading growth were: $ % Growth

Vol % Growth*

Carbonated water

Ice cream

Natural cheese - non deli

Candy confections

Energy & nutrition

Milkshakes & eggnogs

Bathroom tissue

-3

Commercial baked desserts

Meat sticks & beef jerky

* Volume measured in tonnage – unit of measure may vary by category Source: Nielsen MarketTrack, National Convenience & Gas Banners, 52 Weeks Ending September 16, 2017

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Tobacco advertising is not available in the digital issue

BACKTALK

6 New Year’s questions for Rashid Aziz What are your resolutions for 2018? #1. R etain the management and operations team. #2. I ncrease profitability for the company and increase income opportunity for team members (profit sharing for the management team). #3. F ind alternative options to maximize square footage to compensate for decreasing tobacco sales. What did you resolve in 2017 and did you follow through? We put checks and balances in place (for optimal operations and increased profitability, for example following up on credit notes and shopping around for better rates on expense items). We followed through by giving monthly and quarterly performance reviews to the team members based on site operations and profitability.

What was your best new offering in 2017? Novelty items – summer dresses, skulls and knives. What did you try that didn’t quite work out? We tried to compete with big corporates like Fas Gas, 7-Eleven and Mac’s on cigarette pricing, but they are too aggressive with better buy rates. What was the most surprising thing you learned about your business in 2017? The need to stay informed because the business environment is changing very rapidly. To do so, we need to go to trade shows and follow changes big giants like Walmart and Loblaws are making. Big corporates (Parkland, Mac’s and 7-Eleven) are growing and acquiring while small businesses like us are worried about alternate energy and how it will affect the gas convenience business.

What are you taking a good look at for 2018? We’re looking to bring more novelty and food items to make up for decreasing tobacco sales. We want to increase profitability by bringing in high margin products. We are going to work on retaining team members by offering incentives, focus on training our team members, and continue to provide better customer service. ◗ C

Rashid Aziz is the co-owner of K.A.R.M Holdings, one of the leading independent and priJ vately owned gas/convenience station operators in Western Canada. CM MJ

CMJ

“we need to go to trade shows and follow changes big giants like Walmart and Loblaws are making.”

Photography by David Watt

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