Convenience Store Decisions April 2018 by WTWH Media LLC

Volume 29 • Number 4 • APRIL 2018 Business Solutions for Retail Decision Makers

® A

H A R B O R COMMUNICATIONS

P U B L I C AT I O N

Challenges Persist in

HR Management Despite the fact that c-stores are investing capital and resources on recruiting and onboarding, many chains still struggle with stafﬁng issues and high turnover, according to CSD’s 10th annual HR Study.

INSIDE:

Bill Weigel Talks Succession Planning Fostering Proprietary Foodservice Kiosks Enhance C-Store Offerings

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Volume 29 • Number 4 • APRIL 2018 Business Solutions for Retail Decision Makers

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April 2018

Volume 29 • No. 4

CONTENTS 32 COVER STORY

Challenges Persist in HR Management

Despite the fact that c-stores are investing capital and resources on recruiting and onboarding, many chains still struggle with stafﬁng issues and high turnover, according to CSD's 10th annual HR Study.

EDITOR'S MEMO

TECHNOLOGY

8 Cause for Concern Over Car Ownership?

68 Technology, Creativity Aid Loss Prevention

FRONT END

BACK END

10 Company Proﬁle: Sprint Mart Is Now Running Smarter

72 Products Showcase

18 Industry News

77 Ad Index

16 CSD’s Quick Bites

20 CSD Goes to the Races 24 Convenience

Store Solutions: Weighing Odds

and Ends 26 Executive Corner: Weigel’s Succession Plan Begins at the Top 28 CSD’s Human Resources Awards: McMahon Guides Cultural Evolution 30 CSD’s Human Resources Awards: Summers Delivering Results at Casey’s

76 Quick Stop

78 Industry Perspective: Building a Strong Team Fosters

Success

FOODSERVICE 42 Fostering Proprietary Foodservice

48 Quality Equipment Yields Superior Food

CATEGORY MANAGEMENT 52 Opportunity Flows from Fountain

56 Balancing the OTP Category

OPERATIONS 60 Kiosks Enhance C-Store Offerings 64 Coming

Clean: Are You On Top of Restroom Sanitation? 66 Column: Readying for Transportation Trends 4 Convenience Store Decisions April 2018

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THE CSD GROUP Convenience Store Decisions • Leading Through Innovation A H A R B O R C O M M U N I C AT I O N S L L C C O . Convenience Store Decisions

EDITORIAL

Vice President, Editor-in-Chief John Lofstock jlofstock@csdecisions.com Senior Editor David Bennett dbennett@csdecisions.com Senior Editor/News & Online Erin Del Conte edelconte@csdecisions.com Associate Editor Howard Riell hriell@csdecisions.com Associate Editor Marilyn Odesser-Torpey mot@csdecisions.com

EDITORIAL ADVISORY BOARD

Robert Buhler, President and CEO Open Pantry Food Marts Pleasant Prairie, Wis. Jim Callahan, Director of Marketing (Retired) Geo. H. Green Oil Inc. • Fairburn, Ga. Brad Call, President Colour Du Jour • Salt Lake City Bill Kent, President and CEO The Kent Cos. Inc. • Midland, Texas Greg Lorance, Dispensed Category Manager Cumberland Farms • Framingham, Mass. Billy Milam, President RaceTrac Petroleum Inc. • Atlanta Patrick J. Lewis, Managing Partner Oasis Stop 'N Go • Twin Falls, Idaho Scott Zaremba, President and CEO Zarco 66 • Lawrence, Kan.

OFFICE LOCATIONS

Headquarters 19111 Detroit Rd., Ste 201 Rocky River, OH 44116 P: 440-250-1583 • F: 440-333-1892 Editorial and NAG 1420 Queen Anne Rd., Suite 4 Teaneck, NJ 07666 (201) 837-2177 http://twitter.com/CStoreDecisions www.facebook.com/CStoreDecisions www.linkedin.com/CStoreDecisions 6 Convenience Store Decisions April 2018

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Contributing Editors Anne Baye Ericksen Brad Perkins Jeffrey Steele Columnists Jim Callahan Mark Radosevich Dan Killins Creative Director Erin Canetta ecanetta@csdecisions.com Production Manager Barbra Martin bmartin@csdecisions.com

VIRTUALMART ADVERTISING

Group Publisher Tom McIntyre tmcintyre@csdecisions.com 440-250-1583 Publisher John Petersen jpetersen@csdecisions.com 440-250-1583 Vice President, Sales Tony Bolla tbolla@csdecisions.com 773-267-1897

Webmaster Dave Miyares dmiyares@csdecisions.com

NATIONAL ADVISORY GROUP BOARD

Peter Tamburro, Board Chairman Clifford Fuel Co. • Utica, N.Y. Mary Banmiller, Director of Retail Operations Warrenton Oil Inc. • Truesdale, Mo. Greg Ehrlich, Chief Operating Officer Beck Suppliers Inc. • Freemont, Ohio Doug Galli, Vice President, General Manager Reid Stores Inc./Crosby’s • Brockport, N.Y. Joe Hamza, Chief Operating Officer Nouria Energy Corp • Worcester, Mass. Brent Mouton, President and CEO Hit-n-Run Food Stores • Lafayette, La. Robert O’Connor, President and CEO O’Connor Petroleum Co. • Hales Corners, Wis. Vernon Young, President and CEO Young Oil Co. • Piedmont, Ala.

SUBSCRIPTION INQUIRIES

To enter, change or cancel a subscription: Web (fastest service): www.ezsub.com/csd Phone: (844) 862-9286 (U.S. only, toll-free) Fax: (440) 333-1892 Mail: Convenience Store Decisions P.O. Box 986, Levittown, PA 19058 Copyright 2018, Harbor Communications, LLC

YEO BOARD OF DIRECTORS Jared Sturtevant, Board Chairman CST Brands, Director of Marketing

Alex Olympidis, Board Vice Chairman Family Express Corp., Director of Operations Alli Bixler, Director of Special Projects The Kent Cos. Sharif Jamal, Corporate Training Manager Chestnut Petroleum Distributors Lindsay Lyden, Vice President, Development Truenorth Energy Dana Moloney, Strategic Workforce Partner Warrenton Oil Co. Jeremie Myhren, Vice President, IT Road Ranger Bart Stransky, Executive Director, Merchandising RaceTrac Petroleum Inc.

Convenience Store Decisions is a three-time winner of the Neal Award, the American Business Press’s highest recognition of editorial excellence.

Convenience Store Decisions (ISSN 1054-7797) is published monthly by Harbor Communications, LLC., 19111 Detroit Rd., Suite 201, Rocky River, OH 44116, for petroleum company and convenience store operators, owners, managers. Qualified U.S. subscribers receive Convenience Store Decisions at no charge. For others, the cost is $80 a year in the U.S. and Possessions, $95 in Canada, and $150 in all other countries. Single copies are available at $9 each in the U.S. and Possessions, $10 each in Canada and $13 in all other countries. The annual Sales Trend Handbook can be purchased for $75. Periodicals postage paid at Cleveland, OH, and additional mailing offices. POSTMASTER: Send address changes to Convenience Store Decisions, P.O. Box 986, Levittown, PA 19058. GST #R126431964, Canadian Publication Sales Agreement No: #40026880. Materials in this publication must not be reproduced in any form without written permission of the publisher. Direct requests to: Editorial Department, 1420 Queen Ann Rd., Teaneck, Suite 4, NJ 07666. Phone: (917) 601-9623. Copyright 2016, Harbor Communications LLC. All rights reserved. Circulation audited by Business Publications Audit of Circulation, Inc.

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EDITOR’S

Memo

Cause for Concern Over Car Ownership?

NDUSTRIES EVERYWHERE ARE BEING SHAKEN up by the rise of the “Membership Economy,” a business strategy that has organizations working to build long-term, formal relationships with their customers. To do this, some companies charge their members a subscription fee. Others simply charge on a per-usage basis. This brings us to the auto industry, which right now is in the throes of upheaval. Airport parking lots sit empty while ride sharing app pickup zones are packed. A big part of the problem is that Millennials aren’t buying cars the way their parents did. Ride sharing apps and car sub-

Essentially any industry that relies on “marketing to build competitive advantage is ripe for disruption. ” scription brands have cultivated this generation to access transportation whenever and wherever they need it. How all of this plays out will have an enormous impact on convenience stores, and not just fuel sales, but on in-store visits as well. There are still plenty of consumers who prefer to own their own cars, but Membership Economy expert Robbie Kellman Baxter said companies like Uber and Zipcar signal a much bigger disruption looming for the auto industry. “People who 10 years ago couldn’t imagine not owning a car now find that today it’s a very viable option,” said Baxter, author of The Membership Economy: Find Your Superusers, Master the Forever Transaction, and Build Recurring Revenue. “The way consumers view car ownership is shifting dramatically. Disruptor brands like Zipcar and car2go provide a great alternative to ownership. Turo lets you access other people’s cars when they aren’t using them, and Uber, Lyft, and the other ‘ridesharing’ companies have dramatically reduced the appeal of car ownership.” Baxter said these factors have Big Auto seriously thinking about new models. Some auto manufacturers have already responded with their own subscription services, like Maven by General Motors, BOOK by Cadillac, and Ford’s Canvas.

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If you have any questions or have suggestions for future issues, please don’t hesitate to contact me at jlofstock@csdecisions.com.

Under this model, dozens, if not hundreds of people will essentially share a handful of cars. This will significantly reduce trips to convenience stores. More importantly, the shift to a subscription model is often permanent. Baxter stated several cases as to why people are giving up on cars: Car ownership isn’t necessarily the best value for everyone. At one time, people wanted to own a car because of factors like reliability, choice of model, customization and their choice of price point. However, today, factors like depreciation, maintenance costs, taxes and the huge initial price tag give consumers pause—especially when there are so many new ways to access a ride when consumers need one, she said. Owning a car is expensive. It’s far easier for lower income people to come up with a small amount of money for a single ride or even for a subscription to a car-sharing service than it is to save up for a big down payment and hefty monthly payments. People are paying more for experience and less for ownership. “Consumers today like having the best or newest thing more than owning something,” Baxter said. “The same goes for car ownership. People want to ride in style, and they don’t need to own a car to do that.” Baxter also points out that while Big Auto is the industry that should check its rearview mirror now, nearly every industry should be on alert. For example, snack food subscription clubs are popping up, like KIND Snack Club. CPG brands are getting in on the action, like Gillette Shave Club, even the air travel industry has responded with unlimited subscriptions like Surf Air. “Essentially any industry that relies on marketing to build competitive advantage is ripe for disruption,” Baxter said. “That’s because the Membership Economy is all about putting the customer at the center of everything and evolving to serve their needs. The bottom line: Any business that loves their products, processes or employees more than their customers is at risk.”

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FRONTEND

Profile

Sprint Mart Is Now Running Ahead

The growing Mississippi c-store chain recently turned to the cloud to better navigate its workforce issues. By David Bennett, Senior Editor

Sprint Mart, based in Ridgeland, Miss. has been successful in carrying out its expansion plans during the last few years. The need to streamline staffing processes was imperative to keep up with the chain’s growth pattern.

ICTORY MARKETING LLC., to retire, including talent acquisition, WHICH DOES business under performance management, benefits the name Sprint Mart, is like and compensation, scheduling, atmany convenience operators when tendance, Affordable Care Act (ACA) management, attestation and payroll. it comes to the necessity of having to balance workforce requirements CLOUD CONTROL amidst business expansion. The old administrative system Located in Ridgeland, Miss., Sprint was—in a word—cumbersome, said Mart now operates 85 (soon to be 86) store locations, two Subways, two Chris McKinney, the company’s diBurger Kings and fuel distribution rector of human resources. “We were utilizing a combination services. Depending on what time of the year it is, the retailer fluctuates of processes, with time keeping, between 1,200 and 1,300 employees. payroll and human resources (HR) With its growing workforce, Sprint being electronic,” said McKinney. Mart is like other c-stores when it “However, everything outside of those functions was done on paper comes to trying to contain costs while creating a productive atmosphere at (benefit time, insurance enrollment, its stores for its employees. To make along with every other aspect of the the leap from an old administrative company’s human resources needs). system, Victory last year enlisted the Even with the electronic processes help of Kronos Workforce Ready, a of the past, reporting and/or rolling up the data to view the stories it told unified cloud platform from service provider Kronos that supports the en- was a very difficult process.” Now up and running, Kronos has tire employee lifecycle from pre-hire

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allowed Sprint Mart to gain better workforce management, driving a cultural change and a positive work environment where employees have greater control over their work day. For example, since the full system integration was implemented late last year, the cloud-driven platform has enabled Sprint Mart employees to swap shifts with each other without manager intervention and work across different locations. Managers have also gained access to the entire pool of Sprint Mart employees to select from when creating schedules for different locations. The company operates stores in Mississippi, Alabama and Louisiana. REGULATORY REQUIREMENTS In the last few years, Sprint Mart has modernized its store operation, including touchscreen ordering, price book and integration and a kitchen monitor system by Gilbarco

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CMY

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FRONTEND

Profile The Mississippi retailer last year finished integrating a cloud-based platform by Kronos to handle all its workforce management tasks.

Veeder-Root. However, changes in federal labor laws had wrested some of that independent control away from the company. In the summer of 2016, the U.S. Department of Labor (DOL) rolled out proposed changes to the overtime rules under the Fair Labor Standards Act (FLSA), the federal law that mandates minimum wage and overtime pay for certain workers, who are not

otherwise exempt. At the time, businesses such as Sprint Mart had just a few months to prepare to comply with this significant change in wage and hour law, which carried a deadline of Dec. 1, 2016. “Our business was facing massive changes due to many of the proposed changes to the FLSA set to take effect in December of 2016. Every time we settled on a solution to operate within the proposed changes, we were met with a roadblock in terms of our old process,” said McKinney. “It was simply becoming too difficult to remain compliant, while operating efficiently

within the old process. The spark was lit to find a new solution.” Through Kronos, the company was able to gain some control back through a more efficient workforce management system. “The system knows what time employees are scheduled, and what time they punched in (or if they didn’t),” said McKinney. “These systems working seamlessly together has all but eliminated the manual process of attendance tracking.” Not only has technology made the process of monitoring mandated data less cumbersome, McKinney explained the integrated platform has streamlined other administrative tasks pertaining to staffing decisions. “Virtually overnight, the simple process of requesting a vacation day went from a handwritten note you

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P E R F E C T PAI R INGS FOR C-STORE PROFITS

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FRONTEND

Profile Virtually overnight, the simple process of requesting a vacation day went “from a handwritten note you hoped your manager would see, to an electronic one where the employee making the request can see every step of the process.”

”

–- Chris McKinney, director of human resources, Victory Marketing

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hoped your manager would see, to an electronic one where the employee making the request can see every step of the process,” he said. DECLARING VICTORY McKinney can attest to the measurable improvements the new system has delivered to the company in terms of streamlining various ways Victory does business at the main office. “Processing payroll, which has always been weekly in our company, went from a two-day process, to two hours,” said McKinney. “Submitting time sheets, offering benefits, time and labor, reporting—while not only getting easier, has seen significant workload reductions. Paystub distribution, which used to require 1,300 printed pieces of paper per week, are now distributed instantly to every employee’s self service module.” The hiring process at the Mississippi convenience chain was also restructured. The distribution of available job openings are now posted across the internet with a few clicks. The more than 10,000 applications Sprint Mart receives annually are now distributed to hiring managers instantaneously. Perhaps the most significant issue of any c-store is employee turnover. With help from Kronos, even those numbers are improving at Sprint Mart. “While results are still preliminary as we haven’t quite been live for a year, we saw a sharp decrease in turnover during the fourth quarter of 2017. While I have no data to correlate Kronos having a direct effect, this was around the time many of the automated services went live, including benefit/insurance offerings,” McKinney said. cstoredecisions.com

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QuickBites Hand Sanitizer Sales Soar During Flu Season Product

Sales ﬁrst 1.5 months of 2018

Increase over the same period in 2017

Hand Cleaner

$83.6 million

Up 16%

Hand Sanitizer

$17.8 million

Up 37%

Hand Wipes

$11.2 million

Up 30%

Hand Soap

$54.6 million

Up 9%

Source: The NPD Group / U.S. Retail Tracking Service, Dollar Sales, YTD through Feb. 17, 2018 versus same weeks in 2017

ONLINE SHOPPING PERCEPTION GAP Perception Gap

Online shoppers are much more positive about most aspects of online grocery shopping than other shoppers. Yet neither group has a favorable view of the selection of fresh products online. 57%

Convenience

37%

How are Customers Spending Tax Refunds? Of the 65% of taxpayers expecting a refund….

% will put the refund in savings (up from 48% last year and the highest level in the 12-year history of the survey.)

% will put it toward everyday expenses, (the second-lowest level in survey history after last year’s 21%.)

23%

a vacation.

10% will “splurge” on dining out, trips to a spa or apparel.

Source: Annual tax refund survey by the National Retail Federation and Prosper Insights & Analytics.

35%

Ease of finding items

12% will use it for

% will invest in home improvements.

32%

Time spent

% will pay down debt, the lowest level since 2016.

% will make major purchases ranging from a television or furniture to a car.

12%

Selection of available products

28% 9%

Selection of fresh products

n Online Shoppers n All Others

7% 2%

Source: “Food Shopping in America 2017” report, The Hartman Group Inc.

Key Beverage Trends

Crossing Categories - Crossing one beverage category with another.

Behaviors of Healthy Eaters 69% Always look for Clean Labels 57% Buy Organic Whenever Possible 53% Most Loved Food Brand is a Healthy Brand 40% Eat Indulgent Food to Feel Better Source: Foodmix Marketing Communications

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Savory Beverages - Consumers want alternatives to sweet beverages, and ones offering health beneﬁts like drinkable vinegars. Clean Label - Still in early stage of development as critical factor in beverage purchasing decisions. Environmental Concerns - Transparency in methods of production in terms of environmental friendliness, conditions supporting animal welfare, etc. Source: Packaged Facts’ “U.S. Beverage Market Outlook 2018.”

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INDUSTRY

News

Doug Galli, Kirk Leff Elected to NYACS Hall of Fame The New York Association of Convenience Stores (NYACS) has announced that Doug Galli and Kirk Leff have been elected to the New York Doug Galli Convenience Store Hall of Fame. NYACS will induct them at its annual Chairman’s Banquet on May 17, in Syracuse, N.Y. The Hall of Fame honors individual retailers and suppliers for exceptional achievement in, and distinguished service to, New York’s convenience store industry. Doug Galli is vice president and general manager Crosby’s, which has 85 c-stores in western New York and northwestern Pennsylvania and is owned by Lockport N.Y.-based Reid Petroleum Inc. Kirk Leff retired this month after 28 years with McLane Co. Inc., a wholesale distributor based in Temple, Texas, where he most recently served as vice president of sales, marketing and business Kirk Leff development.

7-Eleven Lawsuit Dismissed A lawsuit by The National Coalition of Associates of 7-Eleven Franchisees (NCASEF) filed against the 7-Eleven Inc. parent company that claimed it was reducing franchisees’ profits while increasing costs has 18 Convenience Store Decisions April 2018

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been “dismissed with prejudice” by a California judge, according to a report by the Dallas News. The lawsuit, filed in October, claimed 7-Eleven was exerting more control over the independent businesses of the franchisees. 7-Eleven subsequently filed a lawsuit against NCASEF for trademark infringement and unfair competition in February of this year.

Kent Cos. Announces Management Changes The Kent Cos., in Midland, Texas has made several senior management changes. Effective March 1, Bill Kent, former president and CEO, transitioned to chair- Bill Kent man and CEO. With this change, he will now focus more on the strategy, growth and the company’s best capital structure. Along with Kent’s transition, the company announced that Terry Adkisson, former chief operating officer (COO), has become the president and COO. Adkisson is now fully responsible for all operations and support departments of the company. Adam Sturdivant, former director of operations over Avis Lube, Mr. Payroll, Car Wash and Security, has been promoted to vice president of operations. The Kent Cos. operates 43 convenience stores in Texas, Oklahoma and New Mexico.

M-PACT Wraps Up in Indy The M-PACT Show, which ran March 13-15 in downtown Indianapolis at the Indiana Convention Center, brought

together more than 4,500 professionals from the Midwest, representing the energy and convenience industries for a tradeshow, educational sessions and networking. Next year’s M-PACT Show is set for March 26-28 in Indianapolis.

Abraham & Sons Draws Retailers to Michigan Retailers and manufacturers gathered in Grand Rapids, Mich. at DeVos Place, Feb. 22-23 for Abraham & Sons 32nd Annual Vendor Exhibit & Trade Show. The theme for this year’s show was “SAS BRINGING YOU THE GREATEST HITS OF CONVENIENCE RETAILING” – a Country Music theme. With more than 288 manufacturers including 27 new manufacturers and 460 new items, retailers got a first-hand look at what is a must for their convenience stores by visiting 184 show booths. The show featured a new floor plan featuring the SAS Grand Ole C-Store for those looking for a quick snack or meal on the go.

NJOY Welcomes VP of Sales & Distribution NJOY announced it has appointed Dustin Snyder vice president of sales & distribution. Snyder will oversee all of the company’s distribution & retail sales-related functions, including leadership of NJOY’s experienced and talented sales group. He will report directly to company CEO, Doug Teitelbaum. “Our goals are to increase the density of NJOY’s 50-state brick-and-mortar distribution…” said Snyder, who comes to NJOY from good2grow and c-store industry distributor Eby-Brown, where he was a senior vice president of sales.

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S EW T N OR P SP CA

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FRONTEND

Events

CSD Goes to the Races Going behind the scenes of this year’s Daytona 500, the bond between NASCAR and c-stores is strong. By David Bennett, Senior Editor

t should be no surprise there’s a growing bond between convenience retailers, the suppliers and manufacturers that provide its most popular products and NASCAR. That link was on full display at the 60th running of the Daytona 500 Feb. 18. “We are proud to partner with NASCAR—a sport and organization our guests love—alongside so many other great companies to support the NASCAR family of drivers, owners and most importantly, the fans,” said Wendy Hamilton, senior manager of sales marketing at Pilot Flying J. Pilot Flying J Racing, which spon-

sors the No. 5 Pilot Flying J Chevrolet, is part of the NASCAR XFINITY Series. Joey Logano drives Car No. 22 Pennzoil-Shell Ford for Team Penske. He said that NASCAR and c-stores go hand-in-hand. “When you read demographics about NASCAR fans, or race fans in general, you’ll find that 90% of the time that one of their top interests is cars,” Logano said. “That same 90% will need gas to power their favorite street ride and they will find themselves running to the corner convenience store to pick up these products a majority of the time. Race

fans are also extremely brand loyal, so convenience store retailers find that sponsorship in NASCAR is a great way to grow their customer base and generate strategic business-tobusiness relationships along the way.” GETTING PREPARED Before the big race in Florida, NASCAR changed a rule eliminating the post-race ride-height requirement so cars at Daytona didn’t have to meet a minimum car height. Michael McDowell, driver of Love’s Travel Stops & Country Stores No. 34 Ford, part of the Front Row Motorsports

The 60th running of the Daytona 500—the most popular NASCAR event of the racing season—also reflects a growing relationship between motor sports and the c-store channel, boasting a legion of customers who are fans. 20 Convenience Store Decisions April 2018

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FRONTEND

Events

All kinds of team supporters showed for the 60th running of the Daytona 500, including fans paying homage to team owner Joe Gibbs (left) and driver Kyle Busch (middle).

The official fuel of NASCAR since 2004, Sunoco provides all NASCAR teams with Sunoco Green E15–a 98 octane fuel blend engineered for high-performance engines.

team, said given constant rule changes, Research shows strong parallels in getting to the top of any competitive the core demographics of the loyal NASCAR fans and the core consumer, market is a long journey. “We all have high expectations, but who shops convenience on a regular like any business, just like any industry basis,” said Lebel. “When NASCAR you have to execute, so now is our fans see our brand partnerships in the time to execute and we have to see sport, media and on race day, we are what we need to work on to get to not only building loyalty to our brands, that high level that we all want to be but also preselling convenience at,” said McDowell. “It’s a growing customers so when they walk inside process; it doesn’t happen overnight.” the store and see our brands on display, at the checkout and in line— it’s a perfect bridge.” SUPPLIER DRIVEN To strengthen that connection, The primary sponsor of Joe Gibbs Racing’s No. 18 Toyota, driven by Kyle Mars Wrigley a few years ago set Busch, Mars Wrigley Confectionery’s upon a fully-integrated promotional collaboration with Joe Gibbs Racing effort, including the company’s “50goes back 10 years. Tim Lebel, senior mile radius activation” that targets difvice president of U.S. sales for Mars ferent NASCAR tracks throughout the Wrigley Confectionery U.S., said season. “So within 50 miles of Daytona exposure from the NACAR team has extended into nearly every marketing Speedway, we should have NASCAR and sales channel, especially c-stores. presence and activations. We have “Our partnership with NASCAR displays, stand-up characters. I think without question helps bridge the I saw (a depiction of) Kyle about 20 gap with the convenience customer. times today.”

Football great Peyton Manning shows up at the Daytona International Speedway. 22 Convenience Store Decisions April 2018

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A Pilot Racing Team member checks tire wear during the XFINITY Series race Feb. 17.

Before the Daytona 500 begins, a mechanic makes adjustments to Love’s Travel Stops No. 34 Ford, its sixth year with Front Row Motorsports.

Michael McDowell, who drives the Love’s No 34 Ford in the 2018 Monster Energy NASCAR Cup Series, appeared recently at a Love’s location in Ormond Beach, Fla. to sign autographs.

Kyle Busch has to come in for a quick pit stop during the Monster Energy Daytona 500 Feb. 18.

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CONVENIENCE STORE SOLUTIONS

Weighing Odds and Ends Within the daily operation of a c-store, small things carry as much weight as the big things. By Jim Callahan

PRIL 1 MARKS MY 50TH year in the industry—at the time I never gave much thought to the April Fools’ Day legend and would have ignored it anyway. Early on, I had the great fortune of being trained and tutored by a remarkable duo in the industry. The first half was Robert “Bob” Seng, originator of the “Busy Bee” c-store chain, the third inductee into the National Association of Convenience Stores (NACS) Member Hall of Fame, and a Hall of Fame member of NYACS (New York Association of Convenience Stores). The second person who had a significant influence on me was Edward “Ned” Dewey, the longtime owner of the Reinhardt Oil Group in West Oneonta, N.Y. Ned was also a Harvard alumni and a Wharton School of Business graduate. BIG AND SMALL Through their experience and advice, I learned some tricks of the trade, which I’ve had the good fortune to pass along to other people during my career. Below, I’ve included some odds and ends that you might ponder: • When planning a new store location, carve out at least 18 parking spots that are directly in front of the store—more if your footprint allows. Your customers are always in a hurry. Don’t make them walk one step farther than absolutely necessary. • Study your location and the surrounding competition and determine what’s in demand. Explore other retail locations (not just c-stores) and discover a niche that you can fill. Certainly, fresh food and snacks will help draw a crowd, but dig deeper to offer product opportunities that neighboring competitors don’t. • At times, I’ve heard from a retail entrepreneur, “I own this piece of land and I want to build a convenience store.” I can’t tell you how often I’ve given the following advice to first-time speculators: Hire a professional to conduct a thorough analysis of the real estate, looking at such things as traffic patterns, the whole retail landscape, utilities and other general considerations. • Make this the year you introduce or improve a bonus program for your employees and make it a win, win proposition. If the program is done right, it can dramatically reduce both cash and inventory shrink—if those are areas that 24 Convenience Store Decisions April 2018

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you are monitoring as part of employee evaluations.

Jim Callahan has 50 years of experience as a convenience store and petroleum marketer. His Convenience Store Solutions blog appears regularly on CStoreDecisions.com. He can be reached at (678)4854773 or via e-mail at jfcallahan1160@gmail. com.

POSITIVE SPIN A bonus program will help improve store appearance, increase inside sales due to greater customer satisfaction and likely improve long-term employee retention rates. Think also of the lasting lift in employee pride and morale bonuses provide. You can tailor the bonus to the topics above or chose others you deem to be critical. Structure rewards against performance measures such as man hours, attendance and tardiness. Make it challenging but keep it fair and attainable. Also, never lower expectations so workers think of it as an entitlement. • Explain and emphasize to employees that you are instituting the bonus program on a trial basis and that it will not work or continue without their full cooperation. A well thought out and fair bonus program will pay for itself several times over. • Review your regional, district and store managers at least once a year and maintain timely written performance reviews. Goal-oriented managers will be disappointed if you fail to track their progress. In addition, be on time with all reviews and pay bonuses and earned pay increases as soon as they are due. It should go without saying that every day an earned dollar is withheld, it can greatly diminish the performance that earned the reward in the ﬁrst place. Also, charge store managers with reviewing store employees annually. • Walk the extra mile when it comes to recruiting new employees. Probe deeply and ask follow-up questions of their former employers during the interview process, and conduct careful background checks. It’s better to have an unﬁlled position than it is to hire out of desperation. Lastly, good employees are quite likely to recommend friends and acquaintances who will evolve into good, future employees. The tips above are just one person’s advice. But to someone who never bought into playing the fool, they may be words by which you can prosper. cstoredecisions.com

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EXECUTIVECORNER

Weigel’s Succession Plan Begins at the Top In this edition of Executive Corner, Bill Weigel outlines a blueprint for producing tomorrow’s industry leaders. By David Bennett, Senior Editor

f all the responsibilities convenience owners and operators share, preparing for the future is perhaps the most daunting. Industry veteran Bill Weigel, founder and chairman of Weigel Stores Inc., explains how succession planning can be integrated into the company’s operational agenda. Convenience Store Decisions (CSD): Why is succession planning important to ensure a business is well-placed to continue its goals and strategies? Bill Weigel (BW): The family business is generally the largest asset in a senior family member’s estate. It can be the legacy of the senior family member. It is the asset that enables families to achieve their family mission statement and meet their family core values. The family business often employs younger generation family members who are dependent on the family business for the income needed to support their families. These younger generation family members have expectations of being able to continue to work in the business for many years. At Weigel’s, we employ more than 900 non-family members. These employees and their families are counting on the continued success of Weigel’s to enable them to provide for their families’ needs. CSD: Why is it important that succession planning be driven from the top down? BW: The senior family member leaders usually are the most instrumental in creating or continuing the success of their company. They likely are the longest tenured employees. They have great knowledge of the c-store industry and its future. They also have strong relationships with key vendors and suppliers and other industry members. In addition, they have earned the trust and respect of the employees of their company. They should be the ones mentoring future leaders, preparing them for new roles and responsibilities.

CSD: What are some steps that current leadership should take when identifying and developing high-potential employees to eventually assume key leadership roles? BW: Every family business has its own unique culture. Successful family businesses have an employee workforce that embraces the company culture and its core values. The company culture and its core values will undergo changes over time. The future leaders of the company should em26 Convenience Store Decisions April 2018

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Bill Weigel

brace the company’s current culture and core values and not seek to make radical changes to them. Current leadership should share their knowledge and experiences with these future leaders. Over time, the future leaders of the company should earn the trust and respect of its employees, key vendors, suppliers and other members of the c-store industry. CSD: Skill gaps can derail even the most promising young executives. How does Weigel’s determine the training and development required to prepare members for advancement? BW: Teamwork is key at Weigel’s. A regular topic of discussion among our senior management team is the leadership team of the future and the skill sets that will be needed for each leadership position. We have an organization chart for the future (next three-five years) that’s updated at least quarterly. The chart seeks to identify both new positions that will need to be filled in the future and the timeline to fill each, as well as positions that are expected to open up due to events such as retirement and the timeline to begin training someone to fill each position. Weigel’s also has a strong outside board of advisors with diverse skill sets. At the quarterly board meetings, members of the management team—including future leaders—interact with the board on various topics. Weigel’s believes in promoting from within whenever possible. Promoting from within allows Weigel’s to train and develop its future leaders. CSD: In closing, when establishing an effective succession plan, what is an important consideration convenience companies tend to overlook? BW: Some c-store companies underestimate the breadth of a successful succession plan, its many component parts and the time it takes to implement it. Succession planning is an ongoing process. Great communication is essential for its success. The three next-generation Weigel family members attend the quarterly board of advisors meetings. The Weigel family has semi-annual meetings in January and July where we work on our succession plan. The three next generation family members live in three different states. They also have a monthly conference call in those months without a board or family meeting.

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Human Resource AWARDS

McMahon Guides

Cultural Evolution At Cumberland Farms, HR helps shape company culture through training and commitment to core values.

John McMahon

By Erin Del Conte, Senior Editor

s the senior vice president and chief human resources officer for Westboro, Mass.-based Cumberland Farms, John McMahon leads human resources (HR), and is responsible for leadership in developing and executing HR strategy in support of the company’s business plan and strategic direction. Convenience Store Decisions is recognizing McMahon with an HR award for his 35 years of experience, six at Cumberland Farms as well as his role in making Cumberland Farms a ‘Great Place to Work.’ During his six years at Cumberland Farms, which operates nearly 600 stores in eight states across the Northeast and Florida, McMahon and his team have worked to create a people-centric culture built on a core set of values: never settle, tell it like it is, own it and succeed together. “Our values are the foundation of our company culture and evolving our culture is an ongoing process,” McMahon said. “We incorporated these core values right into our performance evaluation plan to emphasize to our team members just how important they are.” Employees are measured now on not only on what they did, but on how they did it, and rewarded accordingly. The culture shift is evident in the ‘Great Places to Work’ Engagement Survey. Five years ago when Cumberland Farms first participated it scored a 69%. In 2017, 83% of employees believed Cumberland Farms is a ‘Great Place to Work.’ “Without the total support from CEO Ari Haseotes and the talented and committed HR team I have had the privilege to lead, we would not be nearly as far along as we are today on our journey. This has been a true team effort.” McMahon spearheaded an increase in manager training five years ago, developing a program called “Management Essentials,” which helps managers learn to lead, coach, motivate, engage and recruit team members. Managers participate in a variation of the program every year. The numbers speak for themselves. Five years ago, Cumberland Farms’ hourly turnover surpassed 100%, today it’s tracking in the low 60s. 28 Convenience Store Decisions April 2018

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DIFFERENT BACKGROUND McMahon began his career with a degree in criminal justice, followed by six years on the Westchester County New York Police force, including as an undercover narcotics agent. From there he became director of industrial security at defense company Raytheon, where he also used his detective background to lead interviews when the company was hiring. Afterward, he took a position in the personnel department. Later McMahon spent 10 years in ITT corporations and a variety of HR roles where he developed his depth and breadth of experience. McMahon obtained a Masters degree in HR Management and went on to hold positions at a number of companies, including as the head of HR for kid’s shoe retailer Stride Rite and global distribution giant Arrow Electronics. He was recruited to join Cumberland Farms in January 2012. CULTURAL EXCHANGE McMahon’s favorite aspect of leading HR is the panoramic view it provides across a company. “It gives you the opportunity to shape and influence the culture across the entire business with the right programs, policies, approach and culture.” If people believe in the culture and see it as a family and a community, they’ll give extra effort that will separate you from the competition, he said. He attributes three qualities to HR success: Confidence, Competence and Courage. Over the last six years, the HR team has changed the perception of Cumberland Farms. “HR used to be administrative. It’s now a strategic business partnership with the whole company. The foundation has been built for continued focus on building talent through the leadership ranks, including an in-depth succession planning process,” McMahon said. “Make sure you have the right bench to fill critical roles and give people the opportunities to become strong leaders,” he added. “People will follow good leaders for the right reasons.”

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3/26/18 2:35 PM

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3/23/18 6:22 AM

Human Resource AWARDS

Summers Delivering

Results at Casey’s From shaping future leaders to recognizing military employees, Summers is rewriting the HR standard at the Iowa convenience chain.

Cindy Summers

By Erin Del Conte, Senior Editor

certified, and then turned her focus to compensation and employee relations. In 2005, she joined Casey’s HR department, and five years later became the head of HR.

PATH TO HR Summers originally set out to become a paralegal and eventually a lawyer. After college she joined an insurance firm aiming to work in the legal department, but migrated to training instead. “I loved learning new things, and then training and developing others,” she said. Her love of training led Summers onto the HR path when she was asked to create and facilitate HR-related training topics such as sexual harassment and code of conduct. “From there, I was hooked,” said Summers. She worked as an HR generalist, became PHR (Professional in Human Resources) and SHRM-CP (Society for Human Resource Management Certified Professional)

CREATING CONNECTIONS Today, Summers said she is grateful to interact with people in all facets of the business and hear incredible stories about employees. When Summers was in high school, her grandmother worked at the local Casey’s and Summers remembers the way she would laugh and converse with customers, remembering them by their first names. That atmosphere of employee and customer connection still exists today in every store Summers visits. “It stirs up a sense of pride for me to be a part of something she was part of,” she said. Summers is most proud of Casey’s military recruitment efforts. Former CEO Robert Myers was instrumental in Home Base Iowa, an initiative that connects veterans to careers and resources. Summers served on a related committee and traveled on an Honor Flight with hundreds of WWII and Korean War veterans to Washington, D.C. Moved by those experiences, “I worked to become creative in our environment with military hiring and recognition,” Summers said. She learned of military challenge coin practices and implemented the program at Casey’s. Every new Casey’s hire with a military background receives a specially-designed coin with a letter from current CEO Terry Handley, presented by supervisors during a ceremony. Summers noted the biggest challenges she sees facing HR are talent acquisition and retention. “The qualified applicant pool isn’t as a deep as it was in the past and employees are easily lured to other companies for minor reasons,” said Summers. In 2018, Summers is looking to become more involved in philanthropy and sharpen her ability to strategically lead while developing others to be future leaders and helping build a company that thrives far into the future.

s senior vice president of Human Resources (HR) at Ankeny, Iowa-based Casey’s General Stores, Cindi Summers oversees strategy for HR, payroll and training/development departments, driving results and innovation that strengthen the company while aligning with its goals. Convenience Store Decisions is recognizing Summers with our HR award for her 28 years of experience in HR including 13 of those years at Casey’s, which operates more than 2,000 c-stores in the Midwest, and helping Casey’s meet its goals in creating efficiencies. These include building employee self-service capabilities and using workforce analytics to gain engagement and productivity insights. Summers said she’s fortunate to oversee a number of strong teams of competent employees who come together to create amazing results while supporting each other. Most recently Summers spearheaded the transition from an outdated payroll system to a human capital management system that also integrates employment eligibility, recruitment, onboarding, scheduling, etc. Casey’s eliminated paper use by 90%, converting a completely paper system for pay adjustment, employee action and recruiting to an electronic system. “The project took about three years from selection to implementation and we are actually finalizing rollout now,” Summers said.

30 Convenience Store Decisions April 2018

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Cover Story

2018 Human Resources Study

Challenges Persist in

onvenience Store Decisions and Humetrics recently collaborated on our 10th annual Human Resources Benchmarking Survey. The results reported here are based on the respondents’ recent experiences and expectations and will give you some industry-wide insight as well as a number of useful benchmarks. A few ﬁndings of interest include: • As has been the case every year since 2009, stafﬁng issues continue to be the biggest industry-wide challenge. • A majority of respondents (71%) reported their voluntary termination rate was greater than 50%. This means more than half of their new hires were not a good match for the job and quit. • While hiring personnel seem to recognize the importance of hiring for attitude, they still report sky high involuntary turnover and attribute it to attitude problems.

DEMOGRAPHICS This year’s survey asked 38 questions (several about general business conditions and demographics, but the majority about human resources issues). Responses were collected from mid-February through mid-March. Respondents’ employers ranged in size from 25 or fewer employees (21%) with less than $1 million in annual revenues (4%) to more than 500 employees (26%) and more than $500 million in annual revenues (22%). Most respondents (60%) fell in the 100 to more than 500 employees range while 56% reported revenues between $1 million and $50 million. When we look at the respondents by job title, 40% are corporate HR personnel; another 39% are“corporate other.” Owners and store managers accounted for 21%. 32 Convenience Store Decisions April 2018

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cstoredecisions.com

3/27/18 7:27 AM

THE CHALLENGES When asked: “What are the biggest challenges facing your organization today?,” staffing outstripped the other contenders by a wide margin. A notable change for this survey is “the competition” ranked fourth in 2017 (after staffing, government regulations and technology challenges). In 2018, competition ranked second. 100%

2018 89%

80% 60% 40%

Staffing is one of the biggest challenges facing the convenience store industry in 2018. Some 40% of c-stores chains reported expecting to raise headcounts this year.

43%

20%

16% and employee selection at 20% each, which, compared to the reported 50%-plus voluntary separation rate, raises the question: “Why isn’t employee selection seen as a major challenge for convenience stores?”

Fuel Costs

16% Technology Challenges

The Competition

Staffing

Government Regulations

16% 0%

STAFFING, TURNOVER & RETENTION

Of lesser concerns are marketing challenges (15%), succession planning (11%) and vendor relations (7%). As for the specifics of the staffing challenges, 96% cited recruiting as the most frustrating task, followed by employee retention at 40%. Employee compensation ranked 22%, just narrowly edging out managing benefits

SPECIFIC STAFFING CHALLENGES: Training Selection

(hiring the right person)

Managing Benefits/Costs

Employee Compensation Retention

(keeping the best onboard)

Recruiting

(getting enough quality applications)

0% cstoredecisions.com

32-38_CVR_HR_Study.indd 33

20%

40%

60%

80%

100%

About 50% of companies reported staffing levels stayed about the same in 2017 and expect that level to continue in 2018. However, 40% expect headcounts to rise this year due in some cases to store openings and, as one store manager put it: “new technology, while seemingly more automated, is actually more complicated and labor intensive.” When asked “When it comes to motivating and retaining your best people, which one strategy or tool seems to work best?” the results were: The consensus is family-friendly 2% 2% policies are most effective when Time Off Education it comes to hourly employee motivation and retention. This is a significant 12% change from 2017 Recognition when the employeremployee personal 14% 42% Personal relationship was Family Friendly Relationship seen as most effective (greater than 60%), followed by 28% compensation (greater Compensation than 40%) and recognition/awards, which tied with family-friendly policies (greater than 20%).

April 2018 Convenience Store Decisions 33

3/27/18 9:02 AM

Cover Story

2018 Human Resources Study

The most labor-intensive staffing responsibilities— recruiting, interviewing, onboarding and training—continue to be handled most often by store managers, while prescreening and reference checks are more or less evenly split between managers and the HR department. HR manages drug testing for just over 70% of these respondents. Looking at turnover, we find that approximately 60% said their turnover rate was about the same in 2017 and expect a repeat in 2018. Thirty percent saw turnover go up last year and 11% expect it will increase again this year. A majority of respondents (71%) reported their voluntary termination rate was greater than 50%. This means more than half of their new hires quit. This is a waste of time and money that seriously underscores the need for better selection systems. For all separations, it was estimated about 25% of those former employees stayed in the convenience retailing industry, meaning one in four employees that resigns settles at a competitor. Make sure to conduct exit interviews to find out the real reason people are leaving. What they write on a paper often varies when they get a chance to speak to a company leader.

The reasons hourly employees most frequently give for leaving are: 1. more money; 2. family related reasons; 3. scheduling conflicts; or 4. differences with the manager/supervisor.

New technology is generally viewed as an operational mulitplier. Solutions such as WorkAlertz are helping retailers seamlessly communicate with employees.

The survey found, once again, that employees are most frequently fired due to a bad attitude. This is despite the fact that when asked (chart below) to “choose the top three most important attributes to matching with a right-fit candidate,” 89% responded: “attitude.” 100%

Other reasons mentioned for quits were health insurance, issues with a coworker and “job abandonment (they just stopped showing up.)” The most frequent reasons the convenience store chains surveyed gave for involuntary terminations (being fired) over the past 12 months are:

89%

80%

73%

67% 60% 40%

20% 22%

20% Drug Use

Dishonesty Absenteeism

20%

40%

34 Convenience Store Decisions April 2018

60%

80%

100%

Over age 16/18

Experience

Proximity to Work

Would Not Meet Performance Standards

Shift availability

Tardiness

Attitude

Personality

Could Not Meet Performance Standards

32-38_CVR_HR_Study.indd 34

16%

In the comments section, respondents added specific attitudes like work ethic, customer service orientation, reliability and flexibility (able to adapt and multitask). When we asked a similar question with different data points later in the survey the results were: Attitude (79%), previous work experience (7%), personality (5%), skills (5%), industry experience and the ability to learn new things (2%

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Cover Story

2018 Human Resources Study

74% find recruiting more

difficult now than it was in 2017.

each). Not a single respondent marked ﬂexibility, physical capacities or education as important hiring criteria. By all measures, it seems hiring personnel recognize the importance of hiring for attitude, but still report sky-high turnover that they attribute to attitude problems.

EMPLOYEE RECRUITMENT Absolutely no one thinks recruiting is any easier now than it was in 2017 and, while 26% think it takes about the same amount of effort today, 74% ﬁnd it more difﬁcult. Respondents report they compete for employees not only with other convenience stores, but with fast food outlets, grocery stores, other retailers, warehouse/distribution centers, casinos and manufacturers. When we look at the recruiting methods used to attract hourly employees, the tools deemed “most effective” were:

MOST EFFECTIVE RECRUITING TOOLS 2017

2018

1. In-Store Ads/Outdoor Signage

2. Employee Referrals

3. Internet Job Boards

4. Craigslist

4. Social Media

5. Company Website

This year, Craigslist fell to the end, displaced by social media. Other tools evaluated as less effective were: job fairs and local newspapers. When we look at proven employee retention tools, current usage for those who responded is as follows: 84% Performance reviews 84% Informal employee recognition program 82% Standardized onboarding/orientation program 70% Formalized employee recognition program 48% Pre-shift huddles 46% Retention interviews (“Stay Conversations”) Other retention tools mentioned were expanded employee discount program, employee engagement action planning and employee communications app. 36 Convenience Store Decisions April 2018

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Recruiting Tips for Small Business

When you operate a small business, every team member matters greatly, and an open position can drastically impact your production. Hiring expert Scott Wintrip revealed three key tips to help small businesses find superior job candidates more quickly and easily. “Small business owners are competing with one another for quality employees,” said Scott Wintrip, author of “High Velocity Hiring: How to Hire Top Talent in an Instant.” “The internet leveled the playing field, and now your company and all others—big and small— are able to reach out to top talent. This is straining an already tapped out talent pool and has left many small business owners searching far and wide for talented and resourceful job candidates.” As chains continue to grow and offer more services at the store level, they must look to drive effective, efficient HR practices. All evidence suggests that the more you improve your HR processes, the more it will become a strategic differentiator in attracting top talent. Wintrip offered three tips to make hiring efficient: Leverage the most productive streams of talent. Asking for referrals and networking with other business people has long been a highly effective way to locate talent, Wintrip said. Business owners who carve out time each week for networking and referral generation discover a secret: The labor pool isn’t as tapped out as they originally thought. They simply weren’t taking a disciplined approach to recruiting. Conduct hands-on interviews. The standard approach to hiring is to conduct interviews where candidates talk about work. Not only is this a huge drain on time, it’s also an inaccurate way to assess whether a candidate fits your job. That’s why many small business owners have turned to doing hands-on interviews. “In a hands-on interview, you experience the candidate doing sample work,” Wintrip said. “By watching the candidate in action, you save time while also making a more accurate assessment of whether or not someone is a good fit.” Line up key people before you need them. “Some roles are more vital than others, and when these roles are left unfilled, they can harm your business,” said Wintrip. “Instead of waiting until an employee in an essential job quits or gives notice to start recruiting, do yourself a favor and recruit ahead of time. Dedicating 30 minutes to recruiting each week pays off by creating a pipeline of potential talent ready to be hired the moment that vital job becomes open.”

cstoredecisions.com

3/27/18 7:29 AM

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Cover Story

2018 Human Resources Study

We have raised the minimums for our roles by over 20% since 2014;” “Starting salaries are running to $12-$14/ hour at fast food.” There have been no significant changes in the array of benefits offered to full-time staff as compared to the responses given in 2017 although it appears more of this self-selected sample offers paid vacation and sick leave than medical benefits. Other benefits mentioned were uniforms and vision care.

In this year’s HR survey, 96% of respondents cited recruiting as the most frustrating task that companies face, followed by employee retention at 40%.

TRAINING TO RETAIN

Credit Union Education Benefits Company-Matched IRA Profit Sharing Incentive Pay On-Going Training Wellness Programs Paid Personal Time Off Life Insurance Bonuses Dental 401K Medical Paid Vacation/Sick Leave

5% 14% 14% 21% 23% 37% 37% 44% 44% 49%

51% While 70% said their commitment to training stayed the 63% same in 2017 and 51% think it will remain the same in 2018, 77% 30% saw training budgets and/or activities increase in 2017 and 47% expect they will rise again this year. The bulk of 88% this year’s investments will focus on customer service, foodservice safety/sanitation and teamwork. Sixty-three percent have a standardized hourly employee 0% 20% 40% 60% 80% 100% training program and spend about $650 per employee per year on training. The onboarding and training process for new employees THE YEAR AHEAD ranges anywhere from two to 90 days and the average falls Finally, when asked: “How was business in 2017 and how between three and five days. do you think 2018 will compare in each of the three categories listed below?”

LABOR COSTS & BENEFITS

Approximately 89% (10% more than last year) report they start new hires anywhere from 30 cents to $9 above minimum wage with an average of about $1.70 an hour above the legal requirement. The hourly wage range for full-time employees is $8 to $35 per hour; the average is $11.50. The hourly wage for part-time employees ranges from $7.75 to $13 per hour; the average is $9.90. When asked: “Which statement best describes your current pay policies?” 40% cited pay for performance programs or raises based on productivity and another 30% employ 1-3% raises across-the-board with 24% opting for selective raises. Sixty-seven percent expect labor costs will be higher this year and 31% predict they will remain about the same as 2017. Comments included: “Wages pressuring up, competition is tight;” “Higher due to budgeted increase for starting wages for each role in our c-stores. 38 Convenience Store Decisions April 2018

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2017 (%) Much Better

Better

The Same

Worse

Much Worse

Don’t Know

Our Company

6.8

54.5

27.3

6.8

4.6

Our Industry

2.3

47.7

43.2

2.3

4.5

U.S. Economy

11.5

54.4

34.1

2018 (%) Our Company

22.8

43.2

27.3

6.7

Our Industry

11.6

41.8

39.6

4.7

2.3

U.S. Economy

18.2

40.9

34.0

4.6

2.3

It’s interesting to note the significant increases in the number of responders who predicted things will be “much better” in 2018 as compared to 2017. Our thanks to all those who took time out of their busy schedules to participate. CSD

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Committed to building profits and relationships! The National Advisory Group (NAG) is an association of small, mid-sized and family-owned c-store chains and the executives that run them. This exclusive, member-driven group convenes annually to exchange ideas with the motivation to improve their business performance and ultimately their bottom line. The setting of this conference encourages an extremely educational, yet highly social environment. The schedule consists of top-notch speakers, retail information exchanges, opportunities to address burning issues within your business, a chance to get to know your peers in similar size operations and much more!

3/27/18 9:23 AM

SNEAK PEEK AT THE SESSIONS FAMILY BUSINESS PLANNING: HOW TO BUILD AN OUTSTANDING CULTURE FROM THE TOP DOWN Family businesses are the backbone of the convenience store industry. Having a winning culture is often the crucial difference in attracting great employees and gaining a competitive advantage over other retail chains. Family business owners are generally driven by a sense of responsibility for the stewardship of the business. They seek to manage not only the assets and performance of the business, but also the family’s most important heritage—the values that are passed on from generation to generation. Values that underpin the sustainability of the family business, and its culture. In this session hear from three leading convenience store retailers that will highlight the importance of family leadership in the c-store industry. FOODSERVICE: DOING MORE WITH LESS Foodservice remains a high-growth category for convenience store owners. Given the category’s enormous proﬁt potential, operators must embrace foodservice to attract a steady stream of customers. In this session, convenience store retailers will offer fresh ideas for maximizing the foodservice menu in small spaces. Combi-ovens, ventless fryers and other modern equipment can perform multiple functions, boosting food quality that enables growing sales and optimizing proﬁts. THE MACHINE REVOLUTION: ARE ROBOTICS RIGHT FOR CONVENIENCE STORES? From robots in the aisle to customer service bots, this session will deal with emerging robotic technology and how this technology will change retail in the future. Already, leading U.S. retailers such as Amazon, Lowe’s, Stop & Shop and McDonald’s are using robotics as a way to manage wage increases and rising training costs. Learn what the technological future holds for convenience stores. FOODSERVICE: REIGNITING THE DINNER DAYPART Daypart sales are growing, but this has been a tough mealtime to crack for convenience stores. This session will deal with getting a better understanding of what customers want at this important daypart, where they are currently shopping for dinner and what it will take to get them in your stores. This panel will also discuss the components of building strong take-home menus that satisfy busy customer lifestyles. BUILDING A BETTER CAR WASH: CLEANING UP IN THE FORECOURT Car wash usage is surging in the U.S. and convenience stores are in a prime position to capitalize on this growing trend. But not all car wash operations are equal. Due diligence is needed when selecting the right location, deciding how much money to invest, what type of equipment is best and which cleaning chemicals are right for your market. Learn from successful car wash operators what it takes to make such a business shine and how to generate consumer interest.

STORE DESIGN AND LAYOUT: IDENTIFYING THE BEST CONCEPTS YOUR CUSTOMERS WILL FIND APPEALING A good retail store layout starts on paper, where details such as building specs, customer trafﬁc ﬂow and product placement come together. Every design step requires thoughtful planning and some trial and error, but when the doors are open, a stellar store layout will encourage customers to browse and buy. Hear from leading retailers on how their design successes are helping drive sales.

Young Executives Organization (YEO) Breakout Session:

LEADING THE NEXT GENERATION: HOW TO MANAGE EFFECTIVELY AND WITH AUTHORITY When it comes to successful leadership, attributes like vision, communication and integrity never go out of style. But today’s business environment is constantly evolving and executives face new pressures every day. Executives must be able to build strong teams in the face of recruiting and retention challenges, keep up with the latest technology and demonstrate strong business acumen. As young leaders take charge of a growing workforce, they are also faced with complex issues such as sexual harassment in the workplace and the growing use of social media. In this YEO breakout session, learn how you can stay out in front of these issues and effectively manage a crisis situation when one arises.

Information Exchanges Breakout Sessions: » Beneﬁting from the Supplemental Nutrition Assistance

Program (SNAP) in Convenience Stores. How the new rules affect your business. » EMV Compliance. How it affects convenience stores and what you can do to save money. » Storm and Disaster Preparedness. Whether it’s a hurricane, an ice storm or a human emergency, c-stores and gas stations should plan on how to respond effectively. » Private Label Product Branding. Environmentally-friendly packaging, bulk offerings, new coffee opportunities, how to maintain freshness. » Human Resources. How technology and Web-based apps are helping stafﬁng, scheduling and training employees.

FOR MORE INFORMATION:

RETAILERS should contact John Lofstock 201.837.2177 • jlofstock@csdecisions.com SUPPLIERS should contact John Petersen 440.250.1583 • info@nagconvenience.com

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3/25/18 7:43 AM

Foodservice

Lunch & Dinner

Fostering Proprietary Foodservice To put a brand on their brand, more convenience retailers are entering the proprietary foodservice pool. By Jeffrey Steele, Contributing Editor

Fast Facts: » Branded programs are often best suited for c-store operators seeking less risk. » Proprietary programs work well for those seeking more control over offerings. » Which option is chosen should ﬁt with your level of expertise.

42 Convenience Store Decisions April 2018

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s convenience stores increasingly become go-to options for breakfast, lunch and dinner, more and more operators are mulling the decision to launch proprietary foodservice options or partner with a co-brand. They know either alternative carries the potential of mouth-watering profit gains from increased customer traffic and dollar sales from the lunch and dinner crowds. While breakfast is a growing trend in the channel, lunch and dinner are stalwart dayparts for many retailers such as Fishkill, N.Y.-based Flory’s Convenience and Deli, which serves New York’s Hudson Valley. The popular c-store chain has tried both branded and proprietary programs. Director of Operations Paul DiPalma said the four-store chain has in the past used branded programs from Blimpie and Vie de France. It currently has one location with a Dunkin’ Donuts, but leases out the operation. It chose to move away from branded and create its own proprietary program based around the Flory’s brand. “We prefer not to be told what to do,” DiPalma said. Flory’s features hot food at both lunch and dinner, promoting with online ads and faxed and emailed promos to local employers. Homemade sausage and peppers, steak with onions and a Friday tilapia are all proven winners with hungry customers. Lunch represents the big meal seller for the stores. Dinner decidedly is less so, DiPalma said. At dinner, Flory’s offers what DiPalma called “a KFC-style chicken with fries,” as well as packaged items prepared earlier for mid-day. “We package soups and meals in the cold case for people to take,” said DiPalma. “What’s most popular at dinner are the cold specialty sandwiches and salads. During the day, it’s the hot items.” The chain features two sit-down and several more stand-up tables frequented by local business folks and construction workers at lunch time. “We have more seating outside—eight tables—and they’re always filled during the summer,” DiPalma said. When mulling the consideration of whether to embrace proprietary or branded foodservice programs, a company’s current level of expertise must be a consideration. cstoredecisions.com

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Foodservice

Lunch & Dinner

So said Jeff Lenard, vice president of strategic industry initiatives with the National Association of Convenience Stores (NACS). If you’re coming at foodservice as a newbie, branded programs are a solid option because a co-branded partner has the tools,

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PROPRIETARY PROGRAMS

Proprietary programs also provide a number of advantages. If you are able to create specific items you can prepare better than others, patrons have no other option than to visit your establishment, Lenard said. “That makes you more of a destination,” he added. “You also have more control over the menu. You can switch things up more.” Many argue an operator has to be “all in” when launching a proprietary program, and must bring aboard the right people with the right expertise, not just in preparing food, but in food safety, equipment and more. Lenard agrees these can be daunting hurdles. But added today more than ever, solutions exist to address the challenges. “The good news is there are an awful lot of graduates of culinary schools, who are attracted by the idea they can own a menu, try something new in a smaller space and not have to be the third or fourth in line at a fancy restaurant seating a couple hundred people,” he said. “They’re the same skills, but executed in a smaller space.”

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44 Convenience Store Decisions April 2018

He recalls seeing statistics at a restaurant industry trade show indicating 80-90% of new restaurants close within a year of opening. A factor in the high mortality rate is that restaurant entrepreneurs allocate too much money on the opening. “But you still need money to sustain the operation,” Lenard said, pointing out yet another reason for strongly weighing the advantages of a branded program. The downside of co-branded partnership is that a c-store splits the profits along with the risk. Moreover, there’s less say in menu offerings. “You don’t have as much control, risk or as much work to do on brand recognition,” Lenard said.

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Foodservice

Lunch & Dinner

in being able to cater to late diners, ations, as opposed to being married Lenard observed. “That dinner hour with children, the dinner hour is often may go considerably later than seven not at the traditional hour. It could be o’clock,” he said. “That dinner hour after the movies, after working out or whenever you think dinner should be. may go all the way to breakfast. “Also, with such a high percentage That could present opportunities in of people today in single-living situ- grab-and-go or fresh-prepared foods.”

Flory’s Convenience and Deli, located in upstate New York, has gathered a loyal following not only for its colorful interior designs, but also for its vast deli selections.

NACS has commissioned surveys regarding when consumers are most inclined to make gasoline purchases, Lenard said. The ﬁndings have strong and intriguing implications for those seeking to launch or tweak food service programs.

UPSCALING FOOD It’s no secret c-stores with foodservice programs are increasingly moving toward higher-quality, healthier-foryou offerings. Among the operators witnessing the trend at both his and other stores is Steve Magestro, president of the 11-store Saukville, Wis.-based Mad Max Convenience Stores chain, serving the southeast quadrant of the Badger State. Magestro is seeing “more healthy foods, but hamburgers and hot dogs still sell well,” he commented. “We removed roller grills from our locations. We are looking for better foods, which our customers are asking and looking for.” Rather than trying to cater to the lunchtime snacking demographic, Mad Max is running monthly promotions on various key food items. Nor has the chain spent much time experimenting with meal kits, take-home meals or other dinner approaches. CSD 46 Convenience Store Decisions April 2018

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cstoredecisions.com

3/26/18 2:58 PM

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3/22/18 8:56 AM

Foodservice

Equipment

Quality

Equipment Yields

Superior Food

Equipment that caters to the needs of c-stores can help elevate a program to new heights. By Brad Perkins, Contributing Editor

Fast Facts: » Consider how many uses a piece of equipment has and how complicated it is to use. » The introduction of restaurant-quality food in the convenience store arena is due mainly to improvements in equipment and the availability of more choices. » As companies look to upgrade equipment in search of faster food delivery, they should consider ease of use, space and output as well as speed.

48 Convenience Store Decisions April 2018

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onvenience store foodservice has come a long way in recent years, and equipment is a big reason why. With advances in speed, durability and technology, foodservice equipment now allows convenience stores to provide food that is fast and high quality, two things that used to be mutually exclusive. “If you look at the evolution over time and the trends that have helped take food from restaurants into the convenience sector, equipment has enabled it,” said Mike Sherlock, vice president and chief food and beverage officer at Wawa, which operates 750 stores in the Northeast and in central Florida. “Whether it’s quick cooking technology, convection cooking or high-quality espresso equipment that’s fully- or semi-automated; years ago, you would think you could only find that at a highquality restaurant or beverage shop. Now you can find something available that you wouldn’t have expected years ago.” As food and equipment technology has increased, there have been increases in the quality of grab-and-go, breakfast and snack items. “Manufacturers are getting better at fully-prepared, quality foods,” said Ryan Krebs, director of food service at Rutter’s Farm Stores. “There are ovens that do sous vide, roast, baste, put grill marks on—it comes out like that already finished. I can put it in my TurboChef and have it come out that way. The fact that manufacturers have gotten better at preparing finished products has been a win.” That’s why MFA Oil worked with Antunes to install Antunes’ Egg Station with Dual Zones in its BreakTime stores in Arkansas and Missouri beginning in November 2016. The Egg Station allowed MFA Oil to increase its cooking quantity because the range has two cooking zones and the ability to cook different portions at the same time. It can also cook up to 12 eggs at once and uses heat and steam to provide a consistent product, giving BreakTime an easier way to prepare egg dishes. “We were frying eggs on flat top griddles in some locations and using frozen egg product in others,” said Stephanie Mahoney, food services development manager at MFA Oil. Since adding the Egg Station, which Mahoney said is “simple to operate, easy to clean and provides consistent results,” MFA Oil launched a breakfast sandwich program, which led to a 30% increase in fast food sales. That success led MFA Oil to upgrading other foodservice areas, including cstoredecisions.com

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As companies look to upgrade equipment in search of faster food delivery, they should consider ease of use, space and output as well as speed. “Speed is good to a certain degree because a conventional oven is not going to work in a convenience store,” Krebs said. It’s also best to consider equipment with multiple uses when possible. “If it has one use and it’s a toaster, that makes sense, but if it’s something that takes up a lot of space and only does one function, it doesn’t have as much value considering the footprint we have in each location.” Manufacturers are listening and delivering products for c-stores for smaller spaces with high output needs. “The end product is all about quality, speed and affordability and how we can deliver a high-quality product for our customers as fast as possible and how we can do so at an affordable price, “Sherlock said. “So we need equipment that is operationally efficient, works well in our environment and doesn’t take up a lot of footprint. We’re very high volume and it needs to be durable and hold up.” Technology is another area where manufacturers are listening. In addition to improved cooking technology, recent equipment improvements include cooking presets, diagnostics and food technology. “Technology can work in several different ways,” Sherlock said. “It can link into a piece of equipment to see from a diagnostic standpoint if it needs service or preventative maintenance before it even needs service call. It can be in programming equipment with different recipes or settings that really take it out of the hands of associates by pre-programming to press one or two buttons.” That technology allows the corporate office to set and adjust settings, while enabling the store employees to set cooking teams seamlessly. Sherlock said Wawa tests two different manufacturers’ equipment at the same time to see which one is best. “There have been times when we’ve done a 20-store test with one piece of equipment and were simultaneously testing with a piece in five stores and quickly learned that that was ultimately the best piece of equipment to roll out,” said Sherlock. Testing. Relationships. Technology. Quality. They’re all important. But the main thing to keep in mind in expanding your foodservice footprint is to keep at it. “We’re constantly evolving. Over the past 10 years we’ve put in a specialty baking program, espresso machines, frozen blended beverage smoothies,” Sherlock said. “We continue to evolve the offer almost annually. We are constantly adding new equipment and cycling old equipment out.” CSD cstoredecisions.com

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Category Management

Cold Dispensed

Opportunity

Flows from

Fountain

More drink ﬂavors and savvy promotions can help wring the most out of a c-store’s cold dispensed beverage program. By Howard Riell, Associate Editor

Fast Facts: » Flexibility in cold beverages is proving a boon for many convenience retailers. » The facets of a successful program require less innovation than basic attention. » Bundling and price promotions help boost beverage sales.

rom teas to functional carbonated beverages and specialty frozen drinks, the cold dispensed category is seeing an influx of new opportunities to capture customer dollars as traditional carbonated soft drinks decline. “Fountain is a staple, and the majority of our cold dispensed unit sales,” said Lisa Luben, foodservice sales manager for 72-unit Country Fair Inc., based in in Erie, Pa. “We have a great partnership with f’real—smoothies, milkshakes, frozen coffee—follow planograms, and promote both with LTOs (limited-time offers) and pricing from time to time.” Luben pointed out a good dispensed beverage program is about competing and generating sales. “We are not the most convenient—we have no drive-throughs—and therefore require a compelling reason for customers to choose our channel over quick-service restaurants,” said Luben. “Therefore, a successful program needs (operators) to know who their customers are—coffee drinkers in Boston, super-sugar, frozen carbonated beverages in Texas—and provide a compelling offer to drive trafﬁc. What makes an offer compelling? Variety, a roomy, pleasant shopping experience, freshness and cleanliness and value.” Frozen uncarbonated beverages don’t

52 Convenience Store Decisions April 2018

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spike sales, Luben noted. “But (they) are an economic way, equipment-wise, to get into a frozen beverage program.” Frozen carbonated drinks, on the other hand, provide differentiation from quick-service restaurants (QSRs) since they are thought of as a beverage destination for some consumers, and offer a lower cost-per-ounce opportunity. “The first thing retailers can do to increase their cold dispensed and frozen beverages is to ensure they are selling a quality product,” said Steven Montgomery, president of b2b Solutions LLC in Lake Forest, Ill. “The primary ingredient in both is water. This is an often-overlooked fact when trying to increase their sales.” Retailers should ensure they are properly filtering their water, Montgomery added. “This means changing the filters as required or, in some cases, utilizing a double-filter system.”

COOL CONCEPT David Collins, president of Birmingham, Ala.-based DC Oil Inc., which operates Quick Shop c-stores in central Alabama, emphasized brand recognition. “Frozen carbonated is by far the best product. Always have the best-selling ﬂavors available. Waste is much higher than you think, so consider that when setting your prices.” cstoredecisions.com

3/26/18 2:37 PM

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Category Management

Cold Dispensed

Bob Schulte, director of commercial sales for Cubby’s Inc., which operates 36 convenience stores and supermarkets in Nebraska, Iowa and South Dakota, said a component to a strong c-store dispensed cold and frozen beverage program lies in operations. “Four or more flavors/ heads, (and) never be down.” The facets of a successful program require less innovation than basic attention. “One of the biggest keys to getting people to try new products is merchandising them well so the products stand out and don’t get lost in the myriad of products convenience stores carry,” said Gary Hemphill, managing director of research for Beverage Marketing Corp. “Placing a new product near checkout is a tried-and-true way to encourage impulse purchases of new products. Sampling is another option; people are more likely to buy a product if they have the opportunity to try it first.” Impulse sales are often generated by beverages, noted Nicole Leinbach Reyhle, founder and principal of Retail Minded, a consulting firm in Denver. “Customers may not even be thirsty, but the idea of a refreshing cold drink is enticing. Keeping this in mind, consider how multiple displays versus just one in your store can help increase sell-thru.”

TWO FOR ONE

some extended free fountain or coffee for not just foodservice, but to maintain and even grow, in some cases,” said Luben. When it comes to signage, Luben feels digital with motion works best. “Our target audience has a short attention span. We are challenged to get their attention in the store, let alone when they are identifying our store versus some other offer within or outside our channel.” Cubby’s Schulte said his stores’ limited-time drinks are kept on hand for a month and, if popular, are brought back sooner rather than later. A series of monthly promotions helps sustain interest through the colder months. Thirtyfoot storefront banners hung above main entryway help draw attention to the deals. “Feature the largest size at the smallest size cup’s price,” he advised. “For us, it has been branding the fountain program and offering any size for 99 cents,” said Jeff Chase, controller/director of convenience store operations for Ed Staub and Sons Petroleum, Inc. in Klamath Falls, Ore., which operates 18 Ed’s Fastbreak locations. Chase said he advises c-store operators that promotional products should be left in place for about two months. “I feel if they come in and out too quick you never really get good traction—but if it remains too long, it may get stale.” Ed’s Fastbreak stores also use window clings or snap frames in the front of the store, and danglers in other areas.

DC Oil’s Collins recommended retailers try to get their frozen beverage company to install two machines if there is space. “This way you will have one running if the other goes down, and it allows you CLEANLINESS MATTERS to offer more flavors. The most important thing is to keep Sanitation is paramount to a successful dispensed prothe machine running.” gram, Luben stressed. Collins explained that sales can drop by as much as “Cleanliness determines if a customer buys from you or 50% during winter months, and suggested running a lower someone else,” said Luben. “The equipment and sales area price for all sizes. “For example, any size $1.29. You will not requires constant vigilance for cleanliness, and a schedule/ make much on the largest cup, but most people buy small checklist must be maintained to ensure that sanitation stanor medium anyway. Your distributor might give you some dards are maintained.” product to help with promotion.” “Get set up on a thorough preventive-maintenance Country Fair’s Luben said limited-time flavors should be program and promote, promote, promote the product,” kept on seasonally, for three months. “It allows variety while Schulte urged colleagues. “Use national branded flavors not exaggerating the inventory issues between promo- (like) Coke, Mountain Dew, Dr Pepper, Sunkist Orange, tions.” In northern states, she continued, sales are seasonal. A&W Root Beer” and others. “Have no less than four heads, “That is why hot dispensed is so important for having and preferably eight heads.” He added that dispensing an integrated dispensed beverage program,” said Luben. machines must be put in thaw mode and cleaned weekly. “Extending sales is helped with our stores when we offer/ Robert Grimes, director of property and maintenance market bundled sales with our highly-successful foodser- for CoGo’s Company in Pittsburgh, which operates 47 vice program.” convenience stores, advised having store staff clean the Luben also favors price promotions to entice customers. dispensing units weekly at a minimum. “We schedule daily “When we are faced with a new competitor, we’ve done cleanings of certain parts, and a full cleaning weekly.” CSD 54 Convenience Store Decisions April 2018

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Category Management

Smokeless

Balancing the OTP Category Will smokeless tobacco be able to capitalize on reduced-risk classiﬁcation? By Anne Baye Ericksen, Contributing Editor

ast year, convenience store owners and operators issues were behind us,” said Tim Cote, vice president along with other tobacco retailers were forced to of marketing for Plaid Pantry. The Beaverton, Ore.empty out several slots of their smokeless tobacco based retailer operates more than 100 locations in the racks because of a nationwide recall issued by the Pacific Northwest. The impact was felt in the Midwest, also. U.S. Smokeless Tobacco Co. (USST), a division of Philip “Smokeless is a big part of the business; it’s huge Morris International’s Altria Group. The mandate ordered numerous products from top- today compared to 10 years ago. Fortunately, in my selling brands Copenhagen, Skoal, Cope and Husky to store, the category stayed strong throughout [the be pulled. Not surprisingly, the result was a substantial recall],” said John Archer, owner of Shell Food Mart drop in sales growth for the second and third quar- in Hinsdale, Ill. “People chose other options and kept ters of 2017. In fact, the economic measure fell below buying. But since then, it’s definitely rebounded.” Indeed, analytics indicate the other tobacco product 1% after posting steady improvement for the previous (OTP) subcategory has regained a strong momeneight quarters. “Outs hurt the category a bit early in the year. But tum. By the end of 2017, volume growth was up to sales were up a bit in units and cans once the USST 1.5%, and this year started strong, too. Nielsen data reported by Wells Fargo Securities totaled dollar sales of smokeless tobacco in all retail channels at nearly $6 billion for the 52 weeks ending Feb. 24, 2018. Dollar sales gained 3.9% for the 12 weeks ending Feb. 24. Wells Fargo Securities Senior Analyst Bonnie Herzog » Sales of smokeless tobacco in all retail cites brand loyalty as a primary driver for the positive performance. “Notably, dollar sales of [Altria’s] channels tallied up to nearly $6 billion Copenhagen (+9.1%) strongly outpaced [British for the 52 weeks ending Feb. 24. American Tobacco’s] Grizzly (+1.2%) as Copenhagen volume benefits from [Altria’s] portfolio approach, up » Dollar sales of chewing tobacco gained 3.9% while Grizzly volume decelerated by 6%.” 3.9% for the 12 weeks ending Feb. 24. Stoker’s from the National Atlantic Trading Co. was another brand to post positive year-over-year unit » USST plans to ﬁle a Pre-market Tobacco sales (3.3%) for the four weeks ending in late February. Product Application for Verve Discs It also enjoyed an 8.5% boost in dollar sales, which can and Chews. be attributed to a 5% price increase along with solid volume gains.

Fast Facts:

56 Convenience Store Decisions April 2018

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Category Management

Smokeless

Despite the USST recall affecting so many of its leading products, the company continues to command both dollar and unit share leadership. According to Nielsen, it holds more than 56% of dollar share and 52% of unit share, whereas BAT trailed with 35.4% dollar and 33.4 unit share. When it comes to drawing distinctions between moist chew and snus, it appears there’s a healthy mix, based on anecdotal observations. For Archer, moist chews routinely outperform snus. “For a long time, snus was really slow. But I have to tell you, some (brands of) snus, like Camel Snus, are selling a lot more than they ever did. Camel Snus has gained a foothold and is making inroads over the last year,” said Archer. “Marlboro never did well and Skoal snus is still slow.” Select snus is going well, particularly General Snus from Swedish Match, added Cote.

REDUCED-RISK FUTURE

CHEWING IT UP While dollar sales of chewing tobacco products continue to ebb and flow, ultimately, they add up for retailers. RETAIL $ SALES FOR 52 WKS Ending 2/24/18

% SALES CHG FOR 4 WKS ending 2/24/18

% SALES CHG FOR 12 WKS ending 2/24/18

Copenhagen

$2.15 B

9.1%

6.4%

Grizzly

$1.62 B

1.2%

6.7%

BRAND

Skoal

$1.0 B

-3.5%

-1.6%

Camel

$227 M

2.2%

8.6%

Kodiak

$205 M

-5.8%

-2.2%

Red Seal

$176 M

-7.8%

-8.5%

Longhorn

$129 M

-0.9%

0.4%

Red Man

$127 M

-10.3%

-7.7%

Stoker’s

$32 M

8.5%

12.6%

Kayak

$15 M

-6.8%

-6.6%

Alongside sales picking up, the other big news hitStarr $10 M -7.2% -1.8% ting this OTP subcategory was the announcement that Beech-Nut $9.0 M -9.2% -9.7% the two largest producers would seek government Source: Nielsen Total US xAOC Including Convenience Database and Wells Fargo Securities LLC, March 6, 2018 approval to sell select items as reduced-risk products. Late last year R.J. Reynolds Tobacco Co., owned by “There are a lot of people who do both,” Archer BAT, confirmed it will seek a modified-risk status from the U.S. Food and Drug Administration (FDA) for six said. “When they can’t smoke at work or in public, they styles of Camel Snus: Frost, Frost Large, Mellow, Mint, will use chew or snus.” However, Big Tobacco seems to want to capitalize Robust and Winterchill. USST also intends to submit a Modified Risk on the FDA’s new campaign to lower nicotine levels Tobacco Product (MRTP) application to the FDA for its in tobacco products. For example USST’s plans to file a Pre-market Tobacco Product Application for its Copenhagen Snuff within the first quarter of this year. A few years ago, Swedish Match North America Verve Discs and Chews sometime in 2018. Originally Inc., submitted an MRTP for a few of its General brand introduced in 2012, Verve is a tobacco-less nicotine product that can be sucked or chewed. The company products, however, officials rejected that request. If USST or BAT products are granted the modified- has been testing the product in 50 stores in Virginia, risk status, these items could be marketed as posing retailing for $3 for a pack of 16 discs. less risk for individuals who quit smoking, and use these snus or snuff in place of traditional combustible REGULATORY SWAY cigarettes. However, analysts caution that FDA review Chewing tobacco and snus have come under scrutiny and evaluation could take a year or longer. by local and state lawmakers, and even Major League Meanwhile, c-store operators and tobacco category Baseball. Minor and major baseball venues throughmanagers have yet to determine whether this type of out the country have prohibited patrons, coaches and development will impact sales. athletes from using any smokeless tobacco product on “I don’t think the consumer will be overly impressed their premises. Cities have enacted, or are contemplatwith the tag of modified risk, unless modified risk ing enacting, regulations banning flavored tobacco meant modified taxes,” said Cote. products, including mint and menthol in many cases. “I think some customers will pay attention, but it will Although Plaid Pantry hasn’t incurred these types all come down to satisfaction,” said Archer. “If a prod- of restrictions, Cote understands the negative impact uct is less deadly, but less satisfying, I think customers they could have on convenience stores. will still go with the product that’s more satisfying.” “If mint-type items were banned, the category would Archer isn’t convinced smokers will choose smoke- definitely see volume losses, at least in the short term,” less tobacco as a total replacement for cigarettes. Cote said. CSD 58 Convenience Store Decisions April 2018

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SQUEEZE THE DAY SPIKED LEMONADE

MARCH 2018

Limited Edition

AVA I L A B L E

For more information, contact your Swedish Match representative. 800-367-3677 | customer.service@smna.com | whiteowlcigar.com

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3/22/18 9:01 AM

Operations

Kiosks

Kiosks Enhance C-Store Offerings Digital kiosks are providing retailers the ability to provide a wider range of services. By Erin Del Conte, Senior Editor

A Fast Facts: » Kiosks offer c-stores a way to increase valueadded services without increasing labor costs. » Options for self-checkout continue to evolve due to expanding technologies. » Multiple channels that compete with c-stores are testing new ways of using kiosks. 60 Convenience Store Decisions April 2018

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s disruption across channels continues, due to Amazon’s on-going innovation, changing consumer demands and rapidly developing technologies, many channels are turning to kiosks to manage labor costs, introduce new value-added services and increase speed of service. From food to self checkout to product pickup to financial, DMV (department of motor vehicles) and key copying services, kiosks have the ability to provide services efficiently and can also create an experience for shoppers using new technologies. While c-stores have been in the touchscreen food-ordering kiosk game for more than a decade, it is by far the quick-service restaurant industry that is currently leading the charge into the future with food kiosks. Wendy’s embarked on plans to install self-ordering kiosks in about 1,000 of its U.S. franchises at the end of 2017. In January 2018, McDonald’s confirmed plans to add touchscreen ordering kiosks to half of its U.S. restaurants by the end of 2018. Big box and grocery chains are experimenting with kiosk technology too. This past February, Costco announced it was testing four self-service food kiosks where customers can order their meal using credit or debit cards in four Costco Wholesale food courts. In June, Walmart revealed it was testing a grocery kiosk where customers can pick up their online groceries at any time, while simultaneously experimenting with pickup towers, which it announced in November were expanding to 500 locations. At grocery stores, Coinstar kiosks are using 3D holographic displays from Provision Interactive Technologies to attract customers via augmented reality. For example, Dryel, an at-home dry cleaner, is running a campaign where shoppers will see a 3D, holographic image of a Dryel product floating in thin air. Once they approach the Coinstar kiosk, customers can access a coupon for Dryel cstoredecisions.com

3/25/18 7:55 AM

Unmask the thief...

...with Virtual Line Up The masked person who robbed your store has probably been there before…disguised as your everyday customer. Now you can reveal their identity with Virtual Line Up. The patented technology of Virtual Line Up assigns a unique anonymous ID to each of your customers. When customers return, Virtual Line Up detects them no matter when they come back even if their head or face is covered. With the capability to single out violent criminals from valued customers Virtual Line Up is a must-have to protect your store. Add it to your current solution or bundle it with the many video surveillance solutions form ClickIt. Recording

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Operations

Kiosks

touchscreen ordering at all locations in 2002, and Rutter’s joined the touchscreen ordering in game in 2007. Today, 56 of Rutter’s 69 c-store locations feature touchscreen kiosks. The other 13 stores have minimal foodservice. The kiosk allows for greater customization of its made-toC-STORES ADD VALUE In a similar vein, some c-stores, such as The PRIDE Stores order program. As a chef it’s challenging to pinpoint exactly what the with 12 locations in Chicagoland, are offering Amazon lockers—self-service kiosks where customers can pick up majority of customers will love. “What the kiosks do is allow me to start with quality items I want to sell, but lets the cuspackages they ordered from Amazon.com. Dallas-based 7-Eleven is among companies offering the tomer really build it any way they want. I think that’s a big KeyMe Kiosk, where customers can create copies of their differentiator in the kiosks that you can create things any keys. The kiosk also allows users to store digital copies of way you want,” said Ryan Krebs, director of foodservice keys, so if a customer is locked out, they can make a spare for Rutter’s. The kiosks at Rutter’s offer more than 4 billion combinakey via the kiosk. Altoona, Pa.-based Sheetz offers DMV kiosks at four tion options. “There’s about 3 million different ways that locations in West Virginia where customers can renew their you can use just produce on our kiosks,” Krebs said. Because touchscreens are common in Pennsylvania West Virginia driver’s license or vehicle registration. The DMV kiosks first rolled out at Sheetz Convenience c-stores, most customers find the interface easy. Still, Stores located at 1408 North Eisenhower Dr., Beckley, W.Va., Rutter’s team members are trained to read customers’ faces and 3522 Monongahela Blvd., Star City, W.Va., in February and if someone looks confused by the touchscreen process, 2017. This past summer, Sheetz introduced another DMV offer to assist them in placing their order. kiosk at its 101 Stoneybrook Rd., Clarksburg location and in fall 2017 it added one to its 887 National Rd., Wheeling site. CHECKOUT KIOSKS “At Sheetz, we strive to be the ultimate one-stop-shop. This Whitehouse Station, N.J.is another way to deliver on that for our customers. It is a great based QuickChek has always service for people who live a long distance from a traditional been a leader in technology. DMV center,” said Nick Ruffner, public relations manager for It began offering touchscreen Sheetz, which operates more than 560 stores is six states. food ordering kiosks in To renew their driver’s license customers just bring their 2000. In 2009, it became current or expiring driver’s license, renewal form with pin the first c-store chain to number and credit card to one of the kiosks. introduce self-checkout “We have received plenty of positive feedback on the lanes with cash readers machines from our customers, who report that the instruc- and coin dispensers. Today, tions for using the kiosk are easy to follow. Some have even QuickChek offers selftold us that this is the only way they will renew their driver’s checkout in more than 40 license in the future,” Ruffner said. stores. Sheetz customers are no strangers to using kiosks. In New technologies are 1995, Sheetz became the first U.S. c-store chain to feature raising the bar on what self-checkout touchscreen foodservice ordering, introducing the food might look like in the future. ordering kiosk at one store in Altoona, Pa. Before that cusAmazonGo introduced its checkout-free store in January, tomers used paper forms to fill out their food orders. and Recode reported the ecommerce behemoth plans In addition to foodservice ordering kiosks and the DMV to open as many as six more locations—with three sites kiosks, Sheetz also offers lottery kiosks that come from in Seattle and one in Los Angeles already identified. The different state lotteries across its coverage area, includ- move has spurred questions about the future of checkout ing Pennsylvania, North Carolina, Virginia, West Virginia, at retail and how other channels can compete. Maryland and Ohio. The kiosks offer customers the opporIn February, AiFi, a computer vision technology company, tunity to play online games (such as Powerball), daily announced it was introducing the first scalable checkoutnumbers and scratch offs. free solution for stores ranging from small c-stores to mega retailers. It uses sensor and camera networks, as well as AiFi’s proprietary computer vision algorithms and “lowFOOD AT YOUR FINGERTIP Local c-store competitors Wawa, Pa.-based Wawa and power mobile devices to run multi-person behavior tracking York, Pa.-based Rutter’s were quick to introduce touchscreen and product recognition in real time,” according to a press ordering after Sheetz upped the ante. Wawa introduced release from the company. CSD products. Such expanding technologies are giving retailers new opportunities to add value and create an experience for shoppers using kiosks.

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Operations

Sanitation

Coming Clean:

Are You on Top of

Restroom Sanitation? By CSD Staff

ustomers are clear: restroom cleanliness majorly impacts their view of a business, its overall sanitation, food quality and their likelihood of spending their dollars at the location. Following are some recent numbers that show how important restroom management is to a convenience retailer’s bottom line.

RESTROOM PAIN POINTS

76% have experienced a clogged toilet

When asked about the biggest pain points in restrooms, an overwhelming majority identified the following circumstances as “extremely” or “very” aggravating:

49% have experienced foul restroom

83% Toilet clogged or not ﬂushed

RESTROOM PERCEPTION MATTERS in a public restroom.

odor due to a clogged toilet.

Percentage of customers who say a clogged toilet would negatively impact their perception of the business:

71% of restaurant customers

72% Overall appearance is old, dirty or unkempt Source: Bradley Corp.’s 2018 Healthy Hand Washing Survey

Source: February 2018 Harris Poll on behalf of Sofidel.

33%—the increase in foot trafﬁc seen by gas stations with above-average ratings for restrooms on GasBuddy in Q3 of 2017.

74% Partition doors don’t latch 73% Unpleasant odors

49% of grocery store customers 47% of retail store customers

RESTROOM QUALITY = FOOT TRAFFIC

78% Toilet paper dispenser empty or jammed

THE TOP-RATED C-STORE BRANDS FOR RESTROOM QUALITY:

1 Buc-ee’s 2 Kwik Trip 3 Kelley’s Market

GasBuddy and Cuebiq, quarterly joint study examining foot traffic of GasBuddy users to convenience stores and gas stations across the U.S. in Q3 2017.

SANITATION IMPACTS CUSTOMER BEHAVIOR Almost half of Americans say they will “deﬁnitely” or “probably” spend more money at a business with clean, wellmaintained restrooms.

Nearly 60% of Americans visit a speciﬁc business because they know it has nice restrooms.

82% think a restaurant with dirty restrooms is “extremely” or “fairly” likely to have a dirty kitchen.

70% of Americans report having an unpleasant restroom experience.

42% said they had a bad experience within just the past two months.

Source: Bradley Corp.’s 2018 Healthy Hand Washing Survey.

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Register today to attend the 5th Annual YEO Conference, which will be held at Cumberland Farms May 16-17 in Westborough, Mass. To register visit: www.nagconvenience.com/2018-yeo-conference This premier industry event is open to next-generation leaders 40 and under and is free for members of the National Advisory Group (NAG). YEO is the convenience store industry’s exclusive organization for next-generation leaders and up-and-coming decision makers.

Registration for the 5th Annual YEO Conference is open! Visit www.nagconvenience.com/2018-yeo-conference for details.

“NAG’s YEO is extremely focused on bringing great young talent together from across the country and giving them a platform to discuss the successes and struggles facing next-generation leaders throughout the convenience store and petroleum industry,” said Jared Sturtevant, YEO board chairman and supervisor of digital marketing for Couche-Tard Inc.

For information on NAG membership or NAG’s Young Executives Organization (YEO) contact NAG Executive Director John Lofstock 201.837.2177 • jlofstock@csdecisions.com

Thank you to our sponsors:

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Operations

Column

Readying for Transportation Trends Whether it’s horse-drawn wagons, gasoline-powered cars or electrical vehicles, there’s opportunity for convenience retailers to become part of the transportation movement trending at the time. By Mark Radosevich

hile driving through a small town near my office in Tennessee recently, I was surprised to see an Amish horse and wagon tied to a hitching post outside a local dollar store. On the way back, I pulled in to investigate some. The manager explained that they were experiencing a growing level of Amish customers and wanted to make it easier for them to stop and shop. Thus, they installed the hitching post to accommodate these new customer requirements. I stifled the urge to ask her if there’s an approved hitching post vendor list or if the installation process is now part of the chain’s official operations manual. It did strike me that a national chain store was willing to accommodate a horse-drawn mode of transportation. Last year, I wrote about the growth of the dollar store industry and the potential negative impact to the c-store business. Seeing the wagon and the accommodation that the store offered those customers got me thinking about the commonality of horse-drawn wagons and gasoline and electric cars. The answer is simple. They all have four wheels and are modes of transportation. All three are designed to move us from A to B and the fact that an electric car and a gasoline car look the same doesn’t make them the same. HORSE POWERED This fact has been lost on many of us in the retail petroleum business, as electric cars have as much an affinity for petroleum as horses and their wagons do. Yet many in our industry still delude themselves in thinking that as the electric vehicle industry expands, recharging said vehicles will naturally migrate to retail petroleum facilities. Using the hitching post as an example, the dollar store was able to naturally accommodate a customer need as it arose. What’s to stop them, or another retail business with 66 Convenience Store Decisions April 2018

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Possessing more than 35 years of downstream petroleum experience, Mark Radosevich, president of PetroActive Real Estate Services, offers confidential mergers & acquisition representation and financing services exclusively to petroleum wholesalers. He can be reached by email at mark@petroactive.net or at (423) 442-1327. His full professional bio can be found at www. petroactive.net.

wide coverage to adjust their focus to accommodate the recharge needs of the electric motoring public? As an aside, the words “motoring” or “motorist” actually better fit an electric vehicle, as it’s powered by a motor and not a combustion engine. Historically, the petroleum industry should have been referring to its customers as “engineists” to better align with a gas vehicle’s means of propulsion. Doesn’t seem to flow as well though, but I digress. Ignore for a moment the current demographic differences between electric car owners and dollar store customers, and simply focus on the big picture. Capturing this growing market segment seems much easier for retail businesses that are not burdened by the baggage associated with c-stores in terms of underground storage tanks, fuel dispensers, piping and the related environmental and regulatory considerations. REDDY OR NOT Companies that have not taken the leap to fossil fuels like dollar stores, quick-service restaurants or maybe a new

This parking lot in Tennessee was recently adapted to accomodate horse-drawn carts. It’s also a lesson for c-stores to be open to different transportation modes.

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retail incarnation that I just came up with five minutes ago, the Redi-Watt Chargestop. This concept shouldn’t be confused with that little electric guy from the 1930’s, Reddy Kilowatt. He’s an old cartoon character and not a fast growing, potentially profitable electric charging business. The infrastructure required to set up recharge centers is diverse and much less expensive than that of the oil business, and it is a fallacy to assume that the c-store industry can turn on a dime and capture this market when critical carcount mass is achieved. Many current retail sites will be constrained by facility layout, property size and other limitations. For interested c-store operators, the first step is to conduct a comprehensive investigation to determine if this is a business worth getting into, and if so, where dollars should be invested using the 80/20 rule (80% of all electric vehicles will recharge at 20% of currently available sites). I don’t believe that electric vehicles will overtake the combustion engine in our lifetime or that the traditional convenience store industry is going to be seriously challenged. I do believe that electric vehicles are here to stay—vehicle counts will grow and demographic adoption will diversify.

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If traditional convenience store operators want to capture a significant share of the future recharge market, serious long term planning needs to take place including probable growth patterns (urban and suburban in the beginning), new facility designs, existing facility modeling to determine optimal candidates for retrofits, and a budgetary commitment to produce meaningful and sufficient scale. Late last year, Ikea department stores had committed to installing charging centers at 355 stores in 30 markets. This is just a drop in the bucket, but is a clear indication that other non-petroleum retailers are beginning to grasp the seemingly untapped potential of shifting transportation trends. It probably won’t be long until larger non-petroleum regional or national chains leverage their coverage and strive to become recharge destinations of choice. This is clearly a business model in flux where the exact retail solution is yet to be determined. But if the local dollar store is any indication, feel free to give me a call if you wish to license my Redi-Watt Chargestop concept or order a Made-in-America, Wild West Hitching Post kit. CSD

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Technology

Security

Technology, Creativity Aid Loss Prevention

Innovative technologies, human ingenuity and novel community-centric initiatives are combining to create increasingly successful store security solutions. By Marilyn Odesser-Torpey, Associate Editor

Fast Facts: » Loss prevention can make stores more proﬁtable. » Security programs should combine technology and human ingenuity. » Think beyond the box for smart crime deterrents.

istorically, loss prevention pany so far, just take the number of crimes in any organization is seen as a reduced and multiply it by $100,000,” source of spending. There seems Sportun said. “That promotes a clearer to always be the need for new understanding about how security has impacted the bottom line.” cameras, alarms or other equipment. But a case study prepared by Harvard University Business School revealed that COMMUNITY SERVICE Circle K (formerly Mac’s Convenience Getting the community involved to Stores) in Canada was able to increase aver- keep their neighborhoods and the stores age sales by $62,371 per store, above and in them safer is a priority for Circle K. Since beyond the average annual sales increase 2012, the company has been posting robof roughly $30,000 per store, at locations bery suspects’ photos and videos captured where one of the company’s community- by the in-store closed-circuit (CCTV) surbased initiatives, a mural program called veillance systems to Facebook, Twitter and StreetART, was put into action. YouTube as well as on television screens in Under StreetART and other programs the stores. Anyone with information about developed by Sean Sportun, manager of the event and/or perpetrators is encoursecurity and loss prevention for Circle K— aged to call Crime Stoppers. Central Canada, in-store robberies fell by Tipsters are offered a reward through 49% between the ﬁscal years 2007 and 2017 Circle K. and associated losses by 90% from $117,467 Canadian dollars to $11,538. Incidents of robbery and other crimes decreased from 184 to 93 over that same period. When a robbery occurs, an even greater expense than the loss of products and/or cash is the $100,000 average cost to the company’s worker’s compensation premiums for each employee who takes a leave of absence due to trauma. “To determine how much our crime prevention programs have saved our com-

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CStoreDecisions ecisions .com

CStoreDecisions.com is geared toward C-Store retailers, convenience store suppliers, and distributors looking to stay abreast of industry trends, new product offerings and category management best practices.

Thank you to our Key Partners:

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Technology

Security

Left: Local law enforcement particpates in a community mural painting event at a Circle K store. Right: Sean Sportun, manager of security and loss prevention for Circle K, has been successful in reducing robberies at Circle K (formerly Mac’s) in Canada over the past decade.

a motion-sensitive camera that automatically sends a text about any suspicious behavior to the store supervisor, who can then monitor the back-door area on a video live-stream via smart phone. At the same time, the equipment uses a silent alarm to alert the local police about the presence of the would-be thieves. “Once a thief has broken into the store, it takes him tops two minutes to clean it out of the cigarettes that have the highest street value, so the silent alarm sent by the motiondetector camera buys a little time by alerting the police before the break-in,” he said. It also helped the supervisor to identify the multiple break-in suspect by the very distinctive, brightly-colored tennis shoes he wore when he broke in as well as when he visited the store as a “customer” during the day. On the front of a troubled store with only one entrance/ exit, Collins installed a Tag Camera, which can provide a broad view or zoom in with the sensitivity to read everything on a license plate. “I can see numbers and every other detail on the plate and identify the face of a person in any car that enters or exits the store location,” he said. Inside two of his stores he added cameras that offer 360-degree views of their surroundings to cut down the number of cameras needed to view certain areas.

By 2017, the program, labeled Circle K Crime Busters, had posted 609 robbery and other criminal incidents with 531 arrests made, 538 cases cleared and paid out $8,075. (Only 17-22% collect their rewards, giving the program an even higher return on investment, Sportun pointed out.) “We paid $6.57 to catch a bad guy,” said Sportun. Not one to be boxed in by convention, Sportun took what was once an unsightly and expensive activity—graffiti—and turned it into a bonding situation for Circle K, its neighborhood stores and the surrounding community. “We wanted to create works of art specific to the neighborhood with images such as local landmarks and other representations of the community that could be sources of TO THE RESCUE pride to residents there,” he said. New technology such as David Collins, president of DC And the strategy is working. Since the first mural was artificial intelligence can iden- Oil Co., which operates Quick painted in 2012 all the stores that have them have sig- tify potential problems before Shop C-Stores, installed rollnificantly reduced or even eliminated criminal activity, they occur or escalate and down wire mesh doors inside including one store that had been experiencing robberies alert corporate security and the store to discourage thieves from breaking the glass to at least once a month. law enforcement, said Lisa Currently there are 22 murals and the company has LaBruno, senior vice president gain entrance at night. plans for another six to 10 this summer. Harvard Business of retail operations for the School was so impressed with the project that it provided a Retail Leaders Association (RILA). One new tool can detect $60,000 grant to continue the work. Depending on the size people wearing masks or brandishing or concealing weapof the walls, the murals cost about $2,500 to $4,000 each, ons and report them to corporate security and local law but it is a significant savings over the $5,000 the chain had enforcement before they come into the store. Enhanced spent annually to paint over vandals’ graffiti. recognition capabilities on cameras make it easier to identify people who commit theft. Other technologies can help reduce shrink by immeDETERRING THEFT After the same burglar broke into one of his Birmingham, diately tracking and reporting unusually high activity and Ala. Quick Shop convenience stores for the third time, David removal of products from shelves, she said. The origiCollins, president of DC Oil Co., which owns and operates nal function of this technology is to control inventory by Quick Shop, knew he would have to search beyond traditional monitoring on-shelf availability of products, preventing outsecurity measures to keep tenacious intruders out. One fix was of-stocks. By working together with retail asset protection to install a roll-down wire mesh door inside the store to dis- executives, tech companies can find out how to fully leverage and enhance their technology to make it more valuable courage smashing the glass to gain entrance at night. To solve this problem, Collins’s company also installed to retailers. CSD 70 Convenience Store Decisions April 2018

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PRODUCTShowcase Chocolate Dusted Nuts Fans of the signature silky smooth taste of DOVE Chocolate will go “nuts” for the brand’s latest product innovation—DOVE Chocolate Covered Dusted Almonds and Cashews, which are available now. The experts at DOVE Chocolate have crafted three bold varieties: Cinnamon Dusted Dark Chocolate Almonds, Sea Salt Dusted Milk Chocolate Cashews and Cocoa Dusted Dark Chocolate Cashews. Each bite is perfectly balanced with the crunch and nutty flavor of cashews or almonds and the silky smooth texture of DOVE Chocolate that fans know and love. Finished with a kick of spice, these delectable bite size treats will have them reaching for more. DOVE Chocolate Covered Dusted Almonds and Cashews have a suggested retail price starting at $1.99 for a 1.6-ounce slim pack and $3.99 for five-ounce and 5.5-ounce stand-up pouches. Cinnamon Dusted Dark Chocolate Almonds and Sea Salt Milk Chocolate Cashews will be available in both slim packs and stand up pouches while Cocoa Strongbow Hard Ciders has Dusted Dark Chocolate Cashews will be available only in stand up pouches. introduced its newest fla- Company: Mars Inc. vor, Rosé Apple, a semi-dry www.dovechocolate.com hard cider with a touch of red-fleshed apples. With a light, refreshing, fruity taste and 5% ABV, this newest addition to Strongbow’s award- Hoshizaki America Inc. reveals a new look to its popular AM-50 series undercounter icewinning line is reminiscent of makers with the stylish addition of a full-length, stainless-steel door handle. The AM-50BAJ a rosé wine but with 50% less and AM-50BAJ-AD models include the new tubular handle and the door remains field sugar than leading U.S. hard reversible. The AM-50BAJ-DS and AM-50BAJ-ADDS models allow customers to add their ciders. Strongbow Rosé Ap- own custom cabinetry to the icemaker and the door is field reversible with an optional kit. The 14-7/8-inches wide and 22-5/8-inches deep icemaker ple, along with all Strongbow cabinet still comes in two different heights; 33-1/2inches tall and products, contains no artificial 31-1/2-inches tall (-AD, -ADDS models) which complies with the flavors or colors and is availAmericans with Disabilities Act (ADA) guidelines. The AM-50 seable since February 2018 in ries icemaker produces up to 55 pounds of top hat shaped ice six-pack, 11.2 ounce bottles, cubes daily and can store up to 22 pounds within the built-in bin. the Strongbow variety 12Company: Hoshizaki America pack, and, for a limited time, www.hoshizakiamerica.com 5.1 ounce mini-cans. Strongbow is supporting the launch of Rosé Apple with massive, limited-time only spring and fall offers of four-pack miniRapidly becoming an e-cig category leader, JUUL is the simcans to drive trial and awareply satisfying vapor experience designed for adult smokers. ness of the new flavor. The JUUL is on the forefront of vapor innovation with its unique launch of Rosé Apple will satisfaction profile, simple interface and variety of flavors. Unalso be supported with a full like standard e-cigarettes, which use free-base nicotine, JUUL range of MIR and IRC offers. uses nicotine salts as found in the tobacco leaf to meet the Rosé Apple will also replace standards of smokers looking to switch from cigarettes. JUUL Strongbow Orange BlosStarter Kit comes with everything a smoker who is ready to som in the 12-bottle Strongswitch needs: a JUUL device, a USB magnetic charger and a bow Variety Pack, alongside flavor multipack with four different flavors: Cool Mint, Virginia Strongbow Artisanal Blend, Tobacco, Crème Brûlée and Fruit Medley. Learn more about Strongbow Gold Apple, and becoming a JUUL retailer at the link below. Strongbow Cherry Blossom.

Rosé Apple Cider

Updated Undercounter Icemakers

New JUUL Innovation

Company: Heineken www.strongbow.com

Company: JUUL www.juulvapor.com/retail

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PRODUCTShowcase Refreshing IPA Beer Samuel Adams is introducing New England IPA, a refreshingly juicy and hazy IPA. Previously available only in New England, Sam Adams brewers listened to drinkers’ enthusiasm for the beer, which was the best-selling growler of 2017 at the Boston Brewery, and are responding by rolling it out across the country for craft beer lovers to enjoy. Developed in Sam Adams’ experimental nanobrewery in Boston, New England IPA is a medium-bodied, unfiltered brew with a slight sweetness that is perfectly balanced by the unique combination of Mosaic, Citra, Galaxy, Simcoe and Cascade hops. The hops bring a big-fruited pineapple and grapefruit hop character to the beer, and at 35 IBUs, the brew is neither bitter nor harsh on drinkers’ palates. At 6.8% ABV, the unfiltered IPA is a mouth-watering refresher with a smooth, clean finish that leaves drinkers wanting another sip. Beginning in April, New England IPA will be available in four-pack 16-ounce cans for a suggested retail price of $8.99—$9.99. Prices vary by market.

Company: Samuel Adams www.samueladams.com

Easy End To Wobbly Tables Retroﬁt your existing tables with FLAT Equalizers to end wobbling and create aligned tabletops for group dining. Equalizers replace a table’s existing screw-in feet and adjust to uneven surfaces with just a press on the tabletop. Stabilize tables and help align multiple adjoining tabletops with FLAT Equalizers.

Company: FLAT Technologies www.ﬂattech.com

New Flavor Fanta Introduced in 1940, Fanta is The Coca Cola Co.’s secondoldest brand and third- largest global brand. In the U.S., Fanta introduced an exciting new flavor profile and vibrant new color, Fanta Green Apple, in February 2018. The new Fanta Green Apple has a Granny Smith apple flavor profile – equally sweet and sour. Fanta Green Apple is made with 100% natural flavors and is caffeine free. Fanta Green Apple is offered in 20-fluid-ounce PET bottles as well as 12-fluid-ounce cans and two-liter bottles.

Jerky In Large Bag Oberto Beef Jerky will now offer its three signature jerky ﬂavors, Original, Teriyaki and Peppered in an authentic style nine-ounce clear bag. The jerky category has seen massive growth in packages where consumers can see the product clearly and get a strong value with a larger size. Now the jerky category will have an all-natural, high-quality option in this authentic-style format. This launch strengthens the brand’s laser focus on differentiating itself in the booming meat snacks category, which has exploded to more than $3 billion dollars in annual revenue (according to Nielsen ScanTrak). The new nine-ounce authentic-style bags began rolling out in February and are expected to expand rapidly in key retailers.

Company: Oberto Brands www.oberto.com

Company: Coca-Cola Co. www.coca-cola.com cstoredecisions.com

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PRODUCTShowcase Upgrade Your Forecourt

Tropical Flavored Swisher Take a trip to the Hawaiian Islands with the vibrant tropical taste of pineapples in Swisher Sweets Limited Edition Maui Pineapple. Zesty, fruity blends continue to be a customer favorite and there’s no doubt that this sweet and satisfying pineapple blend will be too. Swisher Sweets Maui Pineapple is available for order in a resealable two-count pouch with the “Sealed Fresh” guarantee and is ready for shipment to all stores nationwide in February 2018. It is offered in “Save on 2”, “2 for 99 cents” and “2 for $1.49” options. This limited edition of Swisher Sweets is available only while supplies last. Additional limited tastes are expected throughout 2018.

Company: Swisher

Organic Valley has introduced new Organic Valley Snack Kits — organic, betterfor-you snacks with organic cheese, crackers and meat — an option that provides the only organic trifecta on the market. Available in three all-organic combinations — sharp cheddar and summer sausage; pepper jack and summer sausage; and mozzarella and roasted garlic summer sausage — Organic Valley snack kits offer six slices of meat, six slices of cheese and six stone-ground wheat crackers. They’re nut-free, 230 calories or fewer, boast nearly 40% less sodium than leading competitors, and pack 13-14 grams of protein per serving. Organic Valley snack kits have an SRP of $4.99, and have been available since mid-March.

Forte’s Convenience Plus Waste/Windshield Station is a new unit that will make your forecourt look refreshed. This efficient valet encompasses all the features to meet your customers’ needs for convenient and easy access to a trash can, paper towels and windshield fluid. The Convenience Plus has a covered top, an ergonomic pull-out waste bin drawer with a 42-gallon capacity that is ideal for hightrafficked areas and requires maintenance less often. Each windshield station is equipped with an ample washer bucket that stays filled longer and a towel tray dispenser for either center-pull or C-fold towels. All components of the windshield station are detachable and fit inside the waste bin, allowing the complete unit to be shipped in one single carton for freight saving costs. The Convenience Plus full dimensions are 45-inches (W) x 27-inches (D) x 43-inches (H) and installation is simple and effortless.

Company: Organic Valley www.organicvalley.coop

(816) 813-3337 www.forteproducts.com

Organic Snacking

Company: Forte Products

(800) 874-9720

http://trade.swishersweets.com/ maui-pineapple

Delicious Sundaes Blue Bunny is bringing even more fun to the freezer aisle with the launch of its innovative, new ice cream line: Load’d Sundaes. The new treat offers ice cream lovers an indulgent, out-of-home ice cream sundae experience right from the freezer. Load’d Sundaes are made with premium ice cream that’s specially crafted to be soft and ready to dig into, straight from the freezer, so there’s no need to wait for it to temper. Load’d Sundaes are ﬁlled to the brim with signature Blue Bunny treats—chunky cookies, crunchy nuts, rich chocolate pieces and Blue Bunny’s signature candy B’s—deliciously swirled together with gooey syrups in a single-serve container. Load’d Sundaes come in eight ﬂavors and starting in April, will be available nationwide at convenience stores in individually-packaged 8.5-ounce cups, each with a suggested retail price of $2.99.

Company: Blue Bunny www.bluebunny.com 74 Convenience Store Decisions April 2018

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PRODUCTShowcase Better Vaping Kit REV GTS Kit V.2 has ﬁnally arrived. Now customers can enjoy these mods with tanks in matching colors in one kit. Better-looking and with a clear screen, the product now comes with a 510 screw in the middle and upgradeable new ﬁrmware. It also features VTC &VPC to customize your vape style. With REV GTS Kits customers can start out their wonderful vaping journey straight away. REV Vape Mods are developed using the latest and most sophisticated technology, providing the best vaping experience for the REV community around the globe. The impeccable craftsmanship of REV Tech results in ever so unique menu systems, screens, build quality and design, leading the race in all aspects.

Company: REV Technology www.rev-tech.com

Countertop Lid Organizer Tomlinson Industries introduces the new Countertop Lid Organizer to its Modular Dispensing Systems product line. Tomlinson’s new lid organizer features a durable stainless-steel, welded-frame construction and a sturdy plastic insert with three rows for lids and a bottom row for condiments and straws. Removable plastic insert allows for easy cleaning. Available in large and small designs to suit various countertop footprints. The large Lid Organizer measures 12-1/4-inches wide and 16-3/4-inches deep. The small Lid Organizer measures 8-1/4-inches wide and 16-3/4-inches deep.

Company: Tomlinson

Industries

(216) 587-3400, ext. 112

www.tomlinsonind.com

‘No-Added-Sugar’ Cranberries Graceland Fruit is introducing an improved no-added-sugar dried cranberry for the retail consumer market. Graceland Fruit No Added Sugar Dried Cranberries provide a good source of fiber, contain no artificial sweeteners, and have 10% fewer carbohydrates and calories than those in conventional products. They also contain no artificial colors, flavors or preservatives and are non-GMO and gluten free. They’re also low fat, cholesterol-free and packed with flavor.

Company:

Graceland Fruit

www.gracelandfruit.com

Quality E-Juice The true value of a product is determined by how it makes people feel. And to date, e-cigarette products have made roughly 9 million people feel strong by helping them live a better lifestyle. A pioneer in the e-cigarette industry, Mt Baker Vapor knows what a quality product is and what it can do. With every signature bottle of e-juice mixed, packed and shipped in-house and with over 2.5 million orders shipped worldwide, Mt Baker Vapor is that household name that new and old vapers have come to love, trust and rely on. The company offers more than 50 different ﬂavors. Some of the bestselling ﬂavors include Hawk Sauce, Desert Rain, Extreme Ice, Thug Juice, Forestberry Fusion, Green Apple, Cinnamon Roll and Blueberry, just to name a few. MSRP: $7.99 for 30-milliliter bottles, $14.99 for 60-milliliter bottles, and $39.99 for 240-milliliter bottles.

Company: Mt Baker

Vapor

www.mtbakervapor.com cstoredecisions.com

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Classifieds /Ad Index

ADD Systems

800.922.0972 / www.addsys.com

800.441.7146 / www.apterindustries.com

800.933.2121 / www.brakebush.com

Apter Industries Brakebush

Cash Depot

12, 67

800.776.8834 / www.cdlatm.com

ClickIt

631.686.2900 / www.clickitinc.com

www.CokeSolutions.com/Retail

Coca Cola

Crown Imports

23, 55

www.crownimportsllc.com

Del Monte Fresh

800.950.3683 / www.freshdelmonte.com

312.483.9452 / www.cuevapor.com

888.426.3454 / www.FIJIWater.com

E-Alternative Solutions FIJI Water Company

Gulfcoast Software Solutions, Inc. 727.449.2296 / www.gulfcoastsoftware.com

888.815.8460 / www.hatcocorp.com/dryheat/

800.367.8325 / www.rollerbites.com

800.438.6087 / www.hoshizakiamerica.com

Hatco

Home Market Foods Hoshizaki America

John Middleton Co.

Krispy Krunchy

800.290.6097 / www.krispykrunchycash.com

KT&G

29 5, 7, 9

www.ktngusa.com

Little Debbie

800.315.6208 / www.LittleDebbieCStore.com

2018

LSI Industries

www.lsi-industries.com/vertex

www.mars.com

516.693.7367 / www.RogueNicotine.com

866.481.4604 / www.nynab.com

866.353.5798 / www.pepco.com/business

www.yum.com

800.338.5122 / www.pcbakery.com

www.EngageTradePartners.com

www.ruizfoods.com

843.793.5826 / www.snagajob/com/employers/recruitment

www.sw-expo.com

805.309.2400 / www.sparkvapor.com

203.877.4281 / www.subway.com

Mars Wrigley Confectionary NicoGen Pharma Solutions North American Bancard Pepco

Pizza Hut

Prairie City Bakery R.J. Reynolds Ruiz Foods Snagajob

2018 Southwest Fuel & Convenience Expo Spark Industries Subway

Swedish Match

800.367.3677 www.GAMECIGARS.com www.whiteowlcigar.com

15, 39 59

Swisher International

800.874.9720 / www.experienceacid.com

www.TexasPeteFoodservice.com/Dust

Texas Pete

SAVE THE DATE

Line up for NAG 2018 at the beautiful Ponte Vedra Inn & Club September 9th thru 12th II Ponte Vedra Beach, FL RETAILERS should contact John Lofstock at 201.837.2177 • jlofstock@csdecisions.com SUPPLIERS should contact John Petersen at 440.250.1583 • info@nagconvenience.com cstoredecisions.com

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INDUSTRY

Perspective

Building a Strong Team

Fosters Success

John Matthews is the founder and president of Gray Cat Enterprises Inc., a strategic planning, operations and marketing services firm. With more than 25 years of senior-level experience, Matthews has recently written “Game-Changing Strategies For Retailers,” which is available on Amazon. In addition, he has two step-by-step manuals, “Local Store Marketing Manual for Retailers” and “Grand Opening Manual for Retailers,” which can be obtained at www.graycatenterprises.com.

There are many factors in creating good managers. Trust is a key consideration. By John Matthews

• How they make decisions: etailers require good people to reach their goals and convenience stores are no exception. Sur- Thinking (T) or Feeling (F) • How employees deal with rounding yourself with talented people enables all ships to rise—the company, the employees and yourself. the outside world: Judging (J) While developing an impressive team does not hap- or Perceiving (P) Combine these attributes pen overnight, it’s critical for the manager of that team to set the stage and let people excel in their roles. The together and your team memmanager’s role, in my opinion, isn’t to do the job of your bers can fall into one of 16 clasteam, but rather create an environment that enables each sifications. Understanding what member to contribute to the overall success of the team. makes each employee tick is critical for a manager to maxiMANAGING SUCCESS mize productivity out of each of Before a team can best be constructed though, several the employees and ultimately the team overall. areas need to be addressed in advance: Hire People Smarter Than Know Your Management Style. One of the most important abilities of a manager is to know their own man- You. A progressive manager will look beyond their own agement style. Knowing how you manage others will of- capacities and hire brilliant people to work on the team. ten dictate the personalities of the people you hire. I have The higher the echelon of the team (i.e., more senior), the always lived by the philosophy that when I hire, I look more technical experts are required to fulfill the roles on for two qualities: Smarts and passion. Hiring the smart- the team. The manager becomes less of a content-driver and est people enables your team to constantly challenge the status quo and combining that with a passion for excel- more of an administrator/coach helping the entire team lence, fosters a team environment that is second-to-none. guide their way through the corporate bureaucracy that The key to success in that scenario, though, resides permeates most organizations. Once the team is in place, with the confidence and willingness of the manager to the manager is charged with holding each of the team members accountable. encourage continual strength of the team. Communicate Vision, Goals, Expectations and Time Know Your People. Not every team or team member is built the same way. It is critical for the manager Lines. Once the team is in place, weaving together a wellto understand each of the personalities on the team and thought-through strategic business plan is mission No. 1 manage the group through the myriad of personalities. In for the manager. The strategic plan should outline the some cases, it can become evident to the manager that vision, communicate goals, create expectations and chothe reason the team is faltering, is not due to talent, but reograph the deliverables in a timely fashion. Every successful team has an effective leader at its helm rather misguided talent. One gauge of personality types is through Myers-Briggs testing, which essentially “classi- that can outline the strategic plan and yet simultaneously hold their team accountable for its tactical execution. fies” personalities through a number of metrics: Know The End Game. Hiring smart and passionate • How people interact with others: Extraverted (E) or Introverted (I). For example extraverted people always people ensures that the company expectations will be met want to know “what could be.” They are adept at under- while excelling the upside of both the manager and highstanding the external environment, but they always want growth employees. The old adage clearly applies here— you are only as strong as your weakest link. Constantly reto take it one step further. • How the team members process information: Sensing evaluating the talent pool of the team is not only a good practice, but should be expected of its management. (S) or through Intuition (I)

78 Convenience Store Decisions April 2018

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