Convenience Store Decisions May 2017 by WTWH Media LLC

Volume 19 28 • Number 65 •• JUNE MAY 2017 Volume 2008

Business Solutions for Retail Decision Makers

® A

HARBOR COMMUNICATIONS

P U B L I C AT I O N

Adopting Technology for Tomorrow

The most savvy convenience retailers are applying automation that puts the focus on the customer.

Packaging Sandwiches ....................32 Alternative Ingredient Snacks .........52 Future Forecourt Marketing ...........56

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MAY 2017

•

Volume 28

•

Issue 5

DEPARTMENTS 8 Editor’s Memo: Young Executive Leadership 10 On Location Profile: Alta Convenience

Ready to Grow

14 Front End: CSD’s Quick Bites 16 Front End: Industry News 18 Front End: Clifford Fuel Rebrands as Cliff’s

Local Market

20 Convenience Store Solutions: Difference

Between Success and Failure

28 Technology: Snapshot of a New

Generation

30 Technology: EMV Hopes—An

Implementation Update

38 Foodservice: Positive Outlook Can Boost

Food Sales

40 Foodservice: Spicing Up the Menu

InsidethisIssue

42 Category Management: Chocolate Offers

Sweet Possibilities

46 Category Management: Sweetening Gum

22 Cover Story: Adopting Technology for Tomorrow

and Mint Sales

The most savvy convenience retailers are applying automation that puts the focus on the customer.

50 Category Management: Tobacco

32 Packaging Sandwiches

56 Operations: Future Forecourt Marketing

When it comes to offering sandwiches and other to-go foods at convenience stores, the right packaging can make or break a sale. Retailers and other experts share how they use packaging to catch the eye and whet the appetite of customers.

59 New Stuff!

Accessories Face the Unknown

64 Quick Stop 65 Ad Index 66 Industry Perspectives: Too Many Chiefs

52 Alternative Ingredient Snacks Consumers’ quest for healthier snack options is changing the face of traditional convenience store offerings.

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Convenience Store Decisions

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 .

EDITORIAL

CONTRIBUTING EDITORS

ADVERTISING

COLUMNISTS

President, Harbor Communications Dan Ramella dramella@csdecisions.com (440) 250-1583

Editor-in-Chief,Vice President John Lofstock jlofstock@csdecisions.com

Anne Baye Ericksen

Senior Editor David Bennett dbennett@csdecisions.com

Jim Callahan Ed Collupy Fran Duskiewicz Tim Powell Mark Radosevich

Senior Editor/News & Online Erin Rigik Del Conte edelconte@csdecisions.com Associate Editor Howard Riell hriell@csdecisions.com

PRODUCTION Production Manager Barbra Martin bmartin@csdecisions.com

Group Publisher Tom McIntyre tmcintyre@csdecisions.com (440) 250-1583 Publisher John Petersen jpetersen@csdecisions.com (440) 250-1583

Webmaster Dave Miyares dmiyares@csdecisions.com

Vice President, Sales Tony Bolla tbolla@csdecisions.com (773) 267-1897

EDITORIAL ADVISORY BOARD

NATIONAL ADVISORY GROUP BOARD

YEO BOARD OF DIRECTORS

Robert Buhler, President and CEO Open Pantry Food Marts • Pleasant Prairie, Wis.

Peter Tamburro, Board Chairman Clifford Fuel Co. • Utica, N.Y.

Jim Callahan, Director of Marketing (Retired) Geo. H. Green Oil Inc. • Fairburn, Ga.

Mary Banmiller, Director of Retail Operations Warrenton Oil Inc. • Truesdale, Mo.

Brad Call, Executive Vice President Maverik Inc. • Salt Lake City

Greg Ehrlich, Chief Operating Officer Beck Suppliers Inc. • Freemont, Ohio

Greg Lorance, Dispensed Category Manager Cumberland Farms • Framingham, Mass.

Joe Hamza, Chief Operating Officer Nouria Energy Corp • Worcester, Mass.

Kyle McKeen, President and CEO Alon Brands • Dallas

Brent Mouton, President and CEO Hit-n-Run Food Stores • Lafayette, La.

Billy Milam, President RaceTrac Petroleum Inc. • Atlanta

Robert O’Connor, President and CEO O’Connor Petroleum Co. • Hales Corners, Wis.

John Kelly, Chief Operating Officer and Vice President, Operations Mountain Empire Oil Co. • Greenville, Tenn.

Vernon Young, President and CEO Young Oil Co. • Piedmont, Ala.

Associate Editor Marilyn Odesser-Torpey mot@csdecisions.com

ART Creative Director Erin Canetta ecanetta@csdecisions.com

Scott Zaremba, President and CEO Zarco 66 • Lawrence, Kan.

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

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 2017, Harbor Communications, LLC 6 Convenience Store Decisions

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May 2017

Jared Sturtevant, Board Chairman CST Brands, Director of Marketing

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

OFFICE LOCATIONS

Headquarters

19111 Detroit Rd., Ste 201 Rocky River, OH 44116 (440) 250-1583 (440) 333-1892 (fax)

Editorial and NAG

1420 Queen Anne Rd., Suite 4 Teaneck, NJ 07666 (201) 837-2177 http://twitter.com/CStoreDecisions www.facebook.com/CStoreDecisions

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'SMEMO

Young Executive Leadership

JOHN LOFSTOCK Editor-in-Chief (201) 837-2177 jlofstock@ csdecisions.com Follow me on Twitter @CSDEditor

EVELOPING A SOLID FOUNDATION for through implementation of education and young executives is one of the corner- networking. I can't think of a better way for the stones of the National Advisory Group’s convenience store industry's next generation (NAG) Young Executives Organization (YEO). of leadership to bond and network than joinNow these next-generation leaders will join ing together in the service of others for such an forces this month to build a foundation for a important cause. family in Provo, Utah. NAG’s YEO is extremely focused on bringing YEO is proud to partner with Habitat for great young talent together from across the Humanity on May 23, just prior to the 4th Annual country and giving them a platform to discuss YEO Roundtable at Maverik in Salt Lake City.YEO the successes and struggles facing next-genmembers will travel south to participate in a eration leaders throughout the convenience team-building exercise that will include working store and petroleum industry. There is still time to join us May 24-25 for the a full day at a Habitat for Humanity construction site. The home will be for the Harter family and is Fourth Annual YEO Roundtable to be hosted by Maverik Stores at its new state-of-the-art Base scheduled for completion in early July. Our YEO members are the convenience Camp in Salt Lake City. In addition to networking store industry’s next generation of leaders. I am and a firsthand tour of Base Camp, Maverik’s very proud that they are displaying their lead- test kitchen, training facilities and convenience ership skills, humility and initiative outside of the stores, YEO’s will hear how the chain nurtures c-store business for such a worthy cause. This its outstanding retail culture, communicates is a volunteer opportunity, but the response to with customers through its industry-leading loyalty program, tackles foodservice, staffing and participate has been extraordinary. The goal of Habitat for Humanity is to elimi- developing its convenience store operations. In addition to hearing from Maverik’s retail nate poverty and homelessness by working in partnership with people in need. Using volun- leaders, Lisa Stewart, president of Impact 21, teer labor and donated funds and materials, will conduct a session on Family Succession Habitat works in many ways: new construc- Planning in the Convenience Store Industry. The roundtable, sponsored by Altria, Apter tion, repairs to existing homes, small loans for incremental building and home improvements, Industries, PDI and R.J. Reynolds, is free to attend help establishing title and ownership to land, for NAG and YEO members. YEO is extremely proud to be partnering with advocacy for better laws and systems, disaster prevention and recovery, and more. It then sells Maverik to learn more about how a great conthe homes to low-income families at cost, but venience store chain has created a world-class retail culture. Following up on the successful with no interest added. Habitat is not a giveaway program, but a joint roundtables we’ve had at Family Express and venture in which those who benefit from the hous- RaceTrac Petroleum, I’m sure our members ing ministry are involved in the work at various will have a wonderful experience that will help levels.They help with the construction of their own them grow personally and professionally. And they may even learn a thing or two about nail home, as well as the houses of their neighbors. More importantly, Habitat and its volunteers guns and framing a roof. Visit www.nagconvenience.com/maverikare committed to the cause. Studies show there is a direct correlation between housing quality roundtable to see the full roundtable agenda and the well-being of children. Surveys of Habitat and registration information. If you have any queshomeowners show improved grades, better tions about NAG, YEO or membership, please financial health and parents who are more con- contact me at jlofstock@csdecisions.com. fident that they can meet their family’s needs.

SHAPING TOMORROW’S LEADERS YEO’s mission is to cultivate young talent in the convenience store and petroleum industry 8 Convenience Store Decisions

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FRONTEND PROFILE

Alta Convenience Ready to Grow After a restructuring of ownership, this Colorado chain is in the process of branching out within its marketplace. By David Bennett, Senior Editor

LTA CONVENIENCE C-STORE CHAIN, based in Denver, has undergone big changes in the last few years. The latest transition alteration occurred in October 2016 when Alta Convenience parent Western Alta Holdings LP acquired the retail division and operating company of Pester Marketing Co. from World Fuel Services Corp. It was only eight months prior that World Led by Phil Zaccaria, general partner of the investment group Western Alta and now Fuel Services had completed the purchase the CEO of Pester Marketing Co., and Rich Spresser, company president, the retailer of Pester Marketing Co. and its wholly- is upgrading several areas of Alta Convenience’s retail operation, including its owned subsidiaries, Alta Fuels LLC and Alta merchandising and its foodservice program. Also, the Colorado chain is adding to its regional footprint by acquiring other convenience businesses such as LOCO Inc., Transportation LLC. which Pester acquired earlier this year. The newly-formed company will continue to operate as Pester Marketing. Moreover, the c-stores will operate under the Alta The company is also currently looking at a few locaConvenience brand name. Today, led by Phil Zaccaria, general partner of the tions suitable for new store building projects. The retailer that Pester Marketing acquired was LOCO investment group Western Alta and now the CEO of Pester Marketing, the retailer is making plans to streamline its com- Inc., based in Grand Junction, Colo. With the addipany mission, embracing the operating principles that first tion of the six-store locations, which are currently being rebranded, Pester Marketing currently counts 61 Alta launched Pester as a fledgling retail brand in the 1950s. Long-time Pester executive Rich Spresser, president of Convenience c-stores in Colorado, Kansas, Nebraska and Pester Marketing, said now that dust from the acquisition New Mexico. According to Spresser, Pester Marketing is developing has settled, work on bolstering the company’s retail busiplans for newly-built convenience store sites, which will ness has begun in earnest. “With the new ownership structure, which is led by Phil complement overall organic growth pattern, including Zaccaria, Pester Marketing is back to its original roots as new offerings at Alta Convenience locations as well as strictly a direct store operation with the entire focus being enhancing overall sales. “Most of our so called renovations have come through on the day-to -day store operations,” said Spresser. Also, with Mr. Zaccaria’s penchant to raise private equity, it puts a complete revamping of our in-store merchandise and our overall merchandising program,” said Spresser. “We Pester Marketing in a great position for future growth.” have looked at deleting numerous slow moving items while enhancing other areas of the store including our GROWTH PATTERN The executive group’s growth strategy is already taking offerings of general merchandise, bagged candy and shape, as the company is wasting little time identifying our snack sections.” Another objective the company hopes to achieve is opportunities to enhance its geographic footprint. “We have already purchased a small chain of six stores creating a central in-store image that resonates more this year and have two other acquisition possibilities in with Alta Convenience’s core customer base. “With Pester primarily growing through acquisitions we the very near future,” said Spresser, who has been with Pester 23 years. “At this point there’s a great emphasis on have numerous foot prints and numerous sizes of stores, expanding our store count and the Alta Convenience what we don’t have today is a consistent interior image,” name, both within our current operational area, but also said Spresser. “This will be one of our initiatives over the next 12 months.” outside our current areas.” 10 Convenience Store Decisions

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FRONTEND PROFILE “WE HAVE ALREADY PURCHASED A SMALL CHAIN OF SIX STORES THIS YEAR AND HAVE TWO OTHER ACQUISITION POSSIBILITIES IN THE VERY NEAR FUTURE. AT THIS POINT THERE’S A GREAT EMPHASIS ON EXPANDING OUR STORE COUNT AND THE ALTA CONVENIENCE NAME, BOTH WITHIN OUR CURRENT OPERATIONAL AREA, BUT ALSO OUTSIDE OUR CURRENT AREAS.” - RICH SPRESSER, PRESIDENT OF PESTER MARKETING

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IOWA ROOTS The roots of Pester Marketing Co. can be traced back to one modest Skelly Oil gas station in Jefferson, Iowa. Cloyd and Esther Pester pioneered a business model in the form of a startup 1930s-style station. Cloyd died in 1955 at age 44 after a short but robust and keenly-focused life. Esther assumed leadership of the fledgling company with Jack joining the company after graduation from Drake University. The company soon expanded to 17 locations. Jack Pester, the hard-driving entrepreneur and son of Cloyd and Esther, the southern Iowa co-founders, built Pester Marketing, taking the family business of 17 gasoline & convenience stores and growing it substantially. At its peak in the 1980s, the business had 278 stores, plus a Kansas-based refinery. “PESTER – IT’S A GAS!” became a trade-mark tagline for the convenience chain operating in 11 states. After 1987 reorganization, Pester leased all its marketing properties to the Coastal Corp., and Jack Pester assumed leadership of Coastal’s world-wide refining and marketing programs. Under Jack’s direction after his retirement from Coastal and following the final sale of its remaining properties to Coastal, Pester Marketing Co. started over with seven Denver-based c-stores. In the following years, the company began to grow its portfolio of stores once again, up until the recent changes in ownership. Spresser joined the company in 1994 and during the last 23 years has focused on the day-to-day store operations. CStoreDecisions ecisions .com

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The roots of Pester Marketing Co. can be traced back to one modest Skelly Oil gas station in Jefferson, Iowa. Cloyd and Esther Pester pioneered a business model in the form of a start-up 1930s-style station. Jack Pester, the hard-driving entrepreneur and son of Southern Iowa Co-founders, Cloyd and Esther Pester, built Pester Marketing, taking the family business of 17 gasoline and convenience stores and grew the company in the 1980s, comprising 278 stores, plus a Kansasbased refinery. Since then, the company has experienced ownership changes and the store count has changed, but it remains steadfast in its mission of providing quality service to its customers. FRESH FOOD Pester Marketing is exploring its foodservice option, which now includes both co-branded foodservice partners and proprietary food items. Two quick-service restaurants that can be found at Alta Convenience locations are Subway and Quiznos. On a another scale, Alta Convenience intends to continue to roll out its own foodservice offerings. “We currently have an in-house breakfast burrito program “Alta Premium Burritos” that is being produced out of a commissary that we own and operate,” said Spresser. “This program has grown over the years and is quite successful. We currently service about 25% of our stores with our challenge being: how do we deliver a fresh, consistent product to the other 75% of our stores? Unfortunately the commissary is not situated centrally within our store geography, but actually in the southern part of Colorado.” Fresh food items will play even a bigger part of the c-store line-up, going forward. “Obviously fresh is the new buzz in our industry, we are moving in the direction—sometimes painfully slow,” Spresser said. “We recently partnered with Java City to revamp our coffee program with a completely new cup and image and of course, a new blend of coffee.” Not only has its coffee program gotten a facelift, Presser Marketing is integrating new technology into its stores in an effort to boost operational efficiency. “Probably the biggest, and it was driven by the EMV (Europay, Mastercard and Visa) requirements, was the change in our point-of-sale equipment,” said Spresser. “This past fall we installed new state-of-the-art Gilbarco Passports in all of our stores. This was big for us both from an operational standpoint but also has greatly increased our reporting capabilities.” CStoreDecisions ecisions .com

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FRONTEND

CSD’S QUICK BITES Top Retailers Dominate Buyer Attention

Three Trends Shaping Grocery Retail Future

A new index from The NPD Group’s Checkout Tracking found top retailers such as 7-Eleven and McDonald’s are reaching an extraordinary percentage of buyers at least once a year. Retailer/Restaurant

Index

Walmart

95%

McDonald’s

89%

Target

84%

Walgreens

77%

Dollar Tree

71%

Subway

70%

CVS

69%

Home Depot

68%

Taco Bell

62%

Burger King

60%

Lowe’s

59%

Wendy’s

58%

Shell

57%

Starbucks

48%

Kohl’s

48%

Chick-fil-A

47%

Dollar General

44%

KFC

43%

Amazon

42%

Dunkin’ Donuts

42%

Best Buy

40%

Sam’s Club

39%

7-Eleven

38%

Michaels Stores

38%

Panera Bread

38%

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• is the evolution and expansion of contactless payments.

• is the rise of smaller store formats.

: Packaged Facts,“The Future of Food Retailing: Value Grocery Shopping in the U.S.”

Food Thoughts

In a February 2017 Market Force Information Survey, a pool of 11,338 respondents, representing a cross-section of the four U.S. census regions, rated their satisfaction with their most recent fueling experience. When it came to gas stations and convenience stores: • 21% of respondents bought a fresh food item during their last visit to a convenience store. • 86% were satisfied with the quality of that fresh food item. • Kwik Trip and Wawa led in fresh food purchases. • QuikTrip’s customers were most satisfied with CSD/NAG their food quality. Idea of the Month:

Source: The NPD Group

Prepare for an aging population

Today some 46 million people are 65+, but that number is set to skyrocket to 74 million. Retailers should begin considering adaptations to accommodate the changing set of needs that will come with this age shift. Consider lighting changes—including eliminating blue tones from lighting, which can be hard for older people to see. Consider larger lettering on signage and install door latches instead of knobs, which are easier to open. Brainstorm other ways you can make your c-store more user friendly. In doing so you can become a destination The unemployment rate declined to 4.5% in March down of choice for aging from 4.7% in February and the lowest since May 2007. customers. Total nonfarm payroll employment grew by 98,000. Retail trade lost 30,000 jobs in March. Employment in general merchandise stores declined by 35,000 in March and has declined by 89,000 since a recent high in October 2016.

Workforce Matters • • • •

Source: U.S. Department of Labor, April 2017

Source: The NPD Group’s Checkout Tracking

14 Convenience Store Decisions

•is the incursion of e-commerce in food retailing.

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INDUSTRYNEWS 7-Eleven Buying 1,108 Sunoco Locations in Various Regions 7-Eleven has entered into an asset purchase agreement with Sunoco LP. As part of the agreement, 7-Eleven will acquire approximately 1,108 convenience stores located in 18 states. Terms of the deal weren’t disclosed. Joe DePinto, president and CEO of 7-Eleven noted the acquisition supports 7-Eleven’s growth strategy in key geographic areas including Florida, Mid-Atlantic States, Northeast states and Central Texas. 7-Eleven currently has 8,707 stores in the U.S. and Canada. The transaction with Sunoco is expected to close in the second half of this year.

CVS Aligns with Health Drug store chain CVS Pharmacy is reimaging its stores with a focus on “health.” The move comes three years after CVS ended tobacco sales and began an evolution toward more corporate social responsibility. The new design aims to enhance the retail customer experience with a new assortment of healthier food, health-focused products and an expanded beauty selection paired with informational signage throughout the store to help customers discover new offerings. CVS is also removing certain chemicals from beauty and personal care lines and introducing new standards for vitamins and supplements. It is also removing artificial trans fats from all exclusive store brand food products.

Wawa Continues Welcome America Sponsorship

A Long Way From Texas Texas-based Buc-ee’s is set to open a 50,000 square-foot super c-store in Dayton Beach, Fla., marking the chain’s first location outside of Texas. The Daytona Beach News Journal reported that Buc-ee’s agreed to purchase a 35-acre site and plans to open as soon as next year. The convenience travel center would rival the size of other travel centers and even supermarkets in the area. From the gas pumps to the restrooms, beef jerky to Beaver Nuggets, Buc-ee’s is a Texas institution. With nearly 40 locations in all, the stores grew and so did their size, from the 3,000-square-foot stop in Lake Jackson, Texas to the 60,000-square-foot traveler center in the city of Baytown.

Sheetz Introduces New Loyalty Card Program Altoona, Pa.-based Sheetz has introduced a new loyalty card. MySheetz Card holders will now receive points on nearly every in-store purchase and can choose customized rewards. Racking up points with every swipe of their MySheetz Card, customers will climb the Sheetz Rewardz ranks from Fan to Friend to Freak. Cardholders will receive five points per dollar, and the more points earned, the better the reward. Free items can be loaded onto the MySheetz Card by registering it online at Sheetz.com. Customers who register their MySheetz Card will enjoy birthday rewards, surprise offers and random freebies.

Wa wa ’s s p o n s o r s h i p o f t h e Welcome America festival is set to continue for at least three more years. Wawa Inc. announced its title sponsorship is being extended through 2019, marking the 10th year of the company’s title sponGPM Investments LLC and its affiliates have taken sorship of the free July 4 celebration, the Philadelphia ownership of 92 convenience stores with fuel sales Business Journal reported. Last year, Wawa extended its in North Carolina, South Carolina, Tennessee and sponsorship of the festival through 2017. Wawa Welcome Virginia operated by Mountain Empire Oil Co. (MEOC). America is a citywide festival. The 2017 event will run six This acquisition will further develop GPM’s existing portdays, June 29-July 4, and will include the country’s largfolio of stores in the Southeast region. GPM will continue est free concert, fireworks, outdoor movie screenings, to operate these stores under the Roadrunner Market free museum days, neighborhood events and more. This brand name. year marks the event’s 25th anniversary.

GPM Begins Operation of 92 Roadrunner Market Stores

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FRONTEND News

Clifford Fuel Rebrands as Cliff’s Local Market Letting go of the Nice N Easy name, the New York chain is committed to a company-wide rebranding to better showcase its identity and mission. By John Lofstock, Editor

LIFFORD FUEL CO. IS about to undergo a complete makeover and rebranding after 30 years with the Nice N Easy franchise. During the month of May, the company’s 18 stores will be rebranded to Cliff’s Local Market. Seventeen of those locations are currently branded Nice N Easy. “We’ve had a great partnership with Nice N Easy for more than 30 years,” said Jim Clifford, president of Utica, N.Y.-based Clifford Fuel Co., told Convenience Store Decisions. “The franchise has gone through many changes recently and we decided that it was time to end our association with Nice N Easy and change our store chain’s name to Cliff’s Local Market. Our new name and image better represents our company’s identity, mission and strong 55 year history.” During the transition, customers can expect to see changes to both the interior and exterior of their local Clifford Fuel/Nice N Easy locations. Although the look will change, Cliff’s Local Market will remain committed to meeting its loyal customers’ shopping, fueling and car washing needs by providing quality products and excellent customer service by its experienced staff, just as it has since 1961, the company said. END OF NICE N EASY? While the rebranding of Clifford Fuel follows the industry trend of nurturing company-owned brands, it raises the bigger question of what will happen to Nice N Easy. Following the death of company founder John MacDougall in June 2014, CST Brands and CrossAmerica jointly purchased the assets of Nice N Easy. CST Brands vowed to keep the venerable c-store brand alive in upstate New York. However, in August 2016, CST Brands entered into a $4.4 billion merger agreement with Circle K’s parent company, Alimentation Couche-Tard Inc. (ACT). Couche-Tard has been actively looking to expand the Circle K brand throughout upper New York. 18 Convenience Store Decisions

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CLIFFORD FUEL CO. At a glance CLIFFORD FUEL CO. WAS founded in 1961 by Jack Clifford in Dolgeville, N.Y. Located in rural Herkimer County, the company supplied home heating oil, natural gas, farm gas and diesel. It supplied five service stations with gasoline and had just five employees. Today, the third-generation business owns 18 locations. The company also supplies more than 40 locations owned by independent operators. Its headquarters is located in Utica, N.Y.

Multiple sources have told Convenience Store Decisions that Couche-Tard doesn’t have the same loyalty to Nice N Easy as did CST Brands. And they were correct. Couche-Tard spokesperson Marie-Noëlle Cano told CSD that the company plans to rebrand all Nice N Easy and recently acquired Flash Foods stores to the Circle K banner. “In 2015, we announced we were launching our global Brand—Circle K—throughout the world. Upon closing of CST, all stores owned by ACT will be converted to Circle K stores and we are proud to have them join the family,” Cano said. Couche-Tard declined to comment on its growth plans. “As for our business development plans we don’t have any information to communicate at this time,” Cano added. CStoreDecisions ecisions .com

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Convenience Store Solutions

Difference Between Success and Failure The difference between success and failure in business is often quite miniscule. By Jim Callahan

HERE’S A FINE LINE between success and failure.

Sometimes the line is so thin, if it were a pair of pants, it would have only one belt loop. Do you know what else is thin: the difference between profits and loss. It’s my firm belief that it takes just as much effort to lose money as it does to make it. Let’s examine this premise with a payday anecdote. The team that wins the Super Bowl takes home double what the losing team makes. In the last Super Bowl, for the losing team—my team, the Atlanta Falcons—the payment for each player was $53,000—a year’s pay for some, but less than half of what the winning team members of the New England Patriots took home ($107,000).

A DIFFERENCE OF $54,000 My Falcons led the entire game, right until the waning last few seconds and conversely those pesky Patriots were losers until one critical play—a play I might add that earned each Patriot player and coach $54,000 more than each Falcon. The losing Falcon team got just as sweaty and dirty and trained just as hard, and as the saying goes: “Left it all out on the field” just as the Patriots did that Sunday. Yet, one team was SUCCESSFUL and one team was a FAILURE. Surely the difference was, as MINISCULE as miniscule gets—less than 30 seconds in a 60-minute contest. Bet your bottom dollar that the failing team will examine the things including players, coaches and front-office personnel that led to failure and address the changes they feel will make up the miniscule differences between going home with a sick feeling in their gut and joy of hoisting that Lombardi Trophy. The fact that New England quarterback Tom Brady couldn’t keep track of his own jersey is beside the point. Just like in the convenience store and truck stop business, employees get paid regardless of success or failure. If you know anything about either business or football, you realize that a winning team can’t rest on its laurels and as the New England Patriots have proved year after year, will review, analyze and make the difficult decisions it feels necessary to remain a success and stay on top. So, if it takes as much effort to lose money as it does to 20 Convenience Store Decisions

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make money what is the difference? Each team must navigate those 100 yards in order to score. But, it’s in that final 20 yards where you will find the difference between being stifled by challenges or rising up and defeating them. RUNNING FOR DAYLIGHT In football those final 20 yards are referred to as the “red zone.” It’s widely accepted that that piece of terrain is the most fiercely defended on the whole field. Navigating the first 80 yards leading up to the “Red Zone” is admirable and it takes hard work, sweat and frustration. Knowledge, determination and skill are also required to play the game, but it’s to no avail if you can’t traverse those final yards necessary to deliver those points on the scoreboard. Are you delivering for your customers? Are you playing the game the way your business plan was drawn up? Review your scheme and your team. Assess your Red Zone (Profit) proficiency, determine your weaknesses, whether they reside in management, in your employees, inventory control processes, marketing, curb appeal, foodservice, etc. Once they’re identified, address them one by one because unlike football, a losing c-store team does not get to return for many seasons. Money earned is a winning feeling. Lost sales spurred by poor service or bad merchandising is a lowly feeling. This elusive success might be tied to the coaching staff that observed a very small crack in their opponent’s defense and waited for the right moment to capitalize. Maybe, it’s simply the team captain that gives the impassioned speech in the huddle to rally his teammates, driving them to increase their output. It can be a key block or a deflective pass that pays off in the end, but often the difference between winning and losing is effort and the willingness to succeed. You can’t really see it, but it’s there. Industry veteran Jim Callahan has more than 40 years of experience as a convenience store and petroleum marketer. His Convenience Store Solutions blog appears regularly on CSDecisions.com. He can be reached at (678) 485-4773 or via e-mail at jfcallahan1160@gmail.com. CStoreDecisions ecisions .com

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COVER STORY

Adopting

Technology

for Tomorrow

The most savvy convenience retailers are applying automation that puts the focus on the customer. By David Bennett, Senior Editor

NVENTORYING, LOYALTY PERKS, CUSTOMER engagement, forecourt marketing and supply chain strategies carry weight in a successful convenience store operation. How developed each segment is and how well it functions more often than not depends on the degree of technology that’s attached. It’s unlikely that the rise of online predators such as Amazon will be the endgame for convenience retailers. Instead, c-stores might find themselves on the endangered list because of their failure to react swiftly to technological advances in the industry. Stacy Smollin Schwartz, a professor of marketing at Rutgers University, teaches introductory and digital marketing courses to undergraduates, MBAs and executives. Schwartz explained that for retailers to be customer-centric, they should adopt an omnichannel approach, based on the premise that regardless of “internal company silos,” consumers see a brand as one store, regardless of which physical or virtual check-out line they happen to choose for a particular transaction, at a particular point in time. Today’s consumers fluidly flow between channels—in-store 22 Convenience Store Decisions

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experiences are used to make mobile purchases and mobile content (especially social media) is consulted when making in-store purchase decisions. Employing technology that engages today’s consumers, while fully meeting their expectations, should be a c-store’s ultimate objective. “If adopted as part of a customer-centric strategy, digital technologies become simply another platform on which to communicate and connect with customers,” said Schwartz. “Human relationship building is enhanced because the company is treating that human being as a single person, regardless of how he or she happens to interact with the company at a given time, for a given transaction.” A customer-centric approach can add value to a company by enabling it to differentiate itself from competitors that don’t offer the same shopping experience. More and more, convenience retailers are implementing the newest technology to create a positive consumer experience at the point-of-sale (POS) and post-sale. “If a c-store retailer stays customer-centric, then it can maintain a consistent quality experience regardless of CStoreDecisions ecisions .com

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COVER STORY

channel preferences among demographic groups or indi- billion devices today, according to the recently published viduals,” said Schwartz. “That said, we are seeing the use “The Internet of Things Ecosystem Research Report” by of new tools that further bridge the digital/in-store expe- John Greenough and Jonathan Camhi of BI Intelligence. riences… augmented reality tools bring digital shopping Broken down, IoT devices will account for 24 billion, while benefits into the physical retail space, and the appearance traditional computing devices (e.g. smartphones, tablets, of a physical retail space within a digital environment. And, smartwatches, etc.) will comprise the other 10 billion. Other findings from the study include: the use of ‘beacons’ allows in-store triggers to generate digi• Nearly $6 trillion will be spent on IoT solutions over the tal communications such as coupons and other promotional next five years. notifications.” • Businesses will be the top adopter of IoT solutions because they will use IoT to: 1.) lower operating costs; INTERNET OF THINGS TO COME 2.) increase productivity; and 3.) expand to new marAs the operating needs of retailers become more highkets or develop new product offerings. tech, technological solutions have come to market more • Governments will be the second-largest adopters, while rapidly. In the last few years, much of that technology has consumers will be the group least transformed by the IoT. migrated to the Internet of Things (IoT). IoT basically refers to a growing network of everyday devices—beyond computers—that are connected and can share information and MAVERIK MOVES Maverik Inc., based in North Salt Lake, Utah, operates perform tasks, even when no one is around. The growth of IoT will continue to take over more fac- more than 270 stores across 10 western states, employing ets of U.S. business. In fact, IoT devices connected to the 4,000 people. As the chain has expanded its operations, internet will more than triple by 2020, to 34 billion from 10 with more assortment complexity—to include extending its CStoreDecisions ecisions .com

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COVER STORY BonFire food line made fresh in stores every day—Maverik leaders a few years ago recognized that the company’s sales data was becoming increasingly siloed and difficult to access by legacy information systems. Ultimately, this situation was limiting the quality and timeliness of available data tied to consumer buying trends across the chain. More than two years ago, Maverik executives began researching available technology options to improve the situation. The team ultimately selected a cloud-based analytics solution from SPS Commerce, which was rebranded as “Mav-Nav” by Maverik. The solution’s highly-intuitive user program equips Maverik with on-demand access to a repository of fresh, aggregated data and metrics for making informed business decisions. Today, 18 customizable reports offer insights on everything from in-store SKU and category performance to POS metrics, consumer analytics and other facets. As of early 2017, there are more than 130 Maverik corporate users including the entire category management team and executives who mine data. Maverik stakeholders in personnel, finance, store operations and foodservice log onto the system almost daily.

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$6 trillion

Nearly will be spent on IoT solutions over the next five years. That’s a big improvement compared to how the company used to do business, said Joey Hobson, executive director of category management for Maverik. “Almost every report allows you to customize your view based on the parameters you choose,” said Hobson. “Further, you can drill down deeper into the data. The operational decisions we are enabled to make are nearly real time and help us react to marketplace conditions, seamlessly.” The technology has changed how everyone at Maverik views category management, including vendors. “We have a completely different dialogue now with vendors,” Hobson said. “There are very few surprises because we look at data the same as our partners and we work really hard to make sure they are educated on our numbers. The conversations are now more geared toward category growth versus simply brand building.” FREEDOM RINGS Last year, Freedom Oil Co., a 33-store chain based in Bloomington, Ill., was looking for a way to reduce store inventory levels in cigarettes and other tobacco products (OTP). The company integrated McLane’s Customer Managed Inventory (CMI) application in conjunction with by-item store level audits. Store managers take a by-item inventory of each category weekly with a smart handheld device, which is then downloaded to CMI. Actual store sales are also downloaded weekly through Freedom’s POS tracking, said Mark Eckhoff, director of store operations of Freedom Oil. CMI then creates the order to bring inventory levels to the retailer’s goals without missing sales and still maintain in-stock levels. Freedom Oil realized a savings of $700,000 in just eight weeks, reducing its cigarette inventory by more than 3,600 cartons and OTP by about 700 rolls. This year, the c-store chain, which operates stores in Illinois and Florida, expanded the program to manage all major categories in its stores, and has eliminated the need for store managers to manually place orders. Everything that Freedom Oil stores purchase from McLane is loaded into the CMI system including candy, groceries and cooler items. Orders are generated, based directly on sales unless management requests a change. New orders are set each week through the data of SKU items sold. In addition, the system allows Freedom to quickly scan and set reclamation quantities. In the end, saving time on the inventory side has allowed Freedom’s employees to CStoreDecisions ecisions .com

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COVER STORY shift their attention to more service-oriented duties. “We were hoping we moved it to where they are doing more customer relations, where they are talking to the customer more,” said Eckhoff. MOBILE PAYS Arguably, nowhere can a retailer engage technologicalsavvy consumers with a higher rate of engagement than at the POS—depending on system capabilities. A recent survey from Boston Retail Partners, a technology consultancy, found that retailers want the POS to improve the customer’s overall experience. A major focus is on customer identification and an improved shopping experience (70%), customer mobile experience alignment (57%) and giving sales associates mobile tools to better perform their jobs (46%). Other concerns include managing data in real time (33%) and the customer’s in-store experience (26%). Of course, every mobile wallet is different. Having a system that’s streamlined, efficient and actually works is a big plus. Some can be found at digital food-ordering kiosks within certain c-stores and others are part of self-checkout stations dotting the convenience channel landscape. Merchant Customer Exchange (MCX) a consortium formed by major retailers, including Walmart, RaceTrac, Sheetz and Wawa, for years tried to launch CurrentC without much success. A closed loop-style, retailer-led mobile payment platform that relied on users linking their checking account to the system, bypassing Visa and MasterCard. CurrentC was intended to store and automatically apply exclusive offers, coupons and promotions from participating merchants during the payment process—an anomaly among mobile wallets such as Android Pay, Apple Pay and Samsung Pay. When J.P. Morgan Chase agreed in March 2017 to acquire MCX’s payments technology last month, the project was officially labeled dead. Instead, J.P. Morgan Chase says it has acquired MCX to help bring Chase Pay to more retailers. While the big players continue to lay claims to mobile wallet terrains, some c-stores are satisfying their customers’ need for speed by offering their own pay programs. Savannah, Ga.-based Parker’s currently operates more than 45 c-stores throughout Georgia and South Carolina. Six months ago, the c-store chain rolled out its mobile payment program to a receptive customer base. “The success has been built on the convenience and speed of using Parker’s MobilePay. Our customers love that they can forget their wallets at home and that the transaction speed is so quick,” said Jeff Bush, director of operations for Parker’s. “Our MobilePay application has been a great accomplishment for our company that our customers can’t get enough of.” When motorists pull up to the pump, they open the Parker’s app, tap the MobilePay button, enter the pump number, their customer pin number, and then the pump is CStoreDecisions ecisions .com

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COVER STORY More and more, convenience retailers are implementing the newest technology to create a positive consumer experience at the pointof-sale (POS) and post-sale. Other c-stores, such as Maverik Inc., are employing nimble, intuitive data analytics to decipher customer purchasing patterns, then make operational decisions and react to marketplace conditions in real time. In the end, such innovations are enabling retailers to better address consumer needs.

line. With the goal of generating an additional visit per member per month, Thorntons is developing specific campaigns geared at targeting members by daypart and encouraging extra purchases, such as breakfast foods or milk. James Meara, Thorntons’ senior manager-loyalty, said the program operates using Paytronix software, which allows it to deliver highly-relevant, one-to-one messages, strengthening the engagement patrons experience. “Refreshing Rewards has been very important to our guests and their interaction with our brand,” said Meara. “Thorntons created the Refreshing Rewards loyalty program to give value to our guests. The program was quickly adopted and continues to be widely used today.” activated. “App, Tap, Pump, Pin,” said Bush, referring to COUPONS ATTRACT Just as smart devices are a normal extension of the modthe straightforward sequence to remember. “We see the expansion of MobilePay as the future of pay- ern shopper, digital coupons are also growing in popularity. ment everywhere,” said Bush. “I predict you will see a According to eMarketer data; by the end of 2016, mobile coumuch larger attrition from debit cards in the future as our pon users were expected to increase 11% to 104 million users. Late last year, Brentsville, Tenn.-based MAPCO rolled out customers become more comfortable using their mobile devices to complete transactions. Once customers try it out a digital initiative able to send personalized mobile offers based on loyalty participation and shopper intent, incorpothey are hooked.” rating MAPCO’s loyalty program as well as its POS. With the POS integration, Koupon will help MAPCO apply discounts LOYALTY REIGNS Gone are the days when a business could stay com- on the transaction level, enabling secure, fraud-proof mobile petitive with traditional forms of advertising. Now, most coupons that cannot be applied to another transaction, said customers turn to the internet and social media networks Ruth Picha, director of marketing for MAPCO. With the loyalty integration, MAPCO, which operates for information on products and services. In fact, 81% of shoppers report that they research online before they make 370 store locations, will be able to send offers based on what customers have self-identified as enjoying, have purchased a purchase, according to Retailingtoday.com. Evolving technology is driving c-store loyalty programs in the past, etc. The customer first sees the mobile offer within MAPCO’s that deliver varying levels of rewards based on guest visit, distribution channels. The customer is then able to click the spending and purchase behavior. More and more, convenience retailers are bypassing offer he or she would like to redeem to see offer details. generic loyalty programs for customized systems that cre- Once the customer is in the store and is ready to purchase ate a unique shopping experience for patrons. That’s what the product, he or she is able to pull up the offer where the Thorntons set out to do when it enlisted Paytronix Systems cashier then scans their unique barcode and the discount is Inc. to oversee the creation of the Thorntons Refreshing applied. The Tennessee retailer is excited about the program’s Rewards program. The platform has given the c-store chain the ability to capitalize on the opportunity to increase the potential. “We expect that the integration of Koupon’s platform visits of existing customers and has proven a valuable will have a profound effect on the way we engage with engagement tool. Headquartered in Louisville, Ky., Thorntons operates MAPCO customers on mobile devices,” said Picha. “With 185 c-stores Kentucky, Illinois, Indiana, Ohio, Florida and the integration of Koupon’s platform, we will be able to deliver a more customized, personal mobile offering that Tennessee. Refreshing Rewards is generating one extra visit per mem- will help engage our customers in real-time and reward ber per month, which adds substantial dollars to its bottom them for their loyalty.” CSD 26 Convenience Store Decisions

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TECHNOLOGY

Snapshot of a New Generation Millennials have taken over the marketplace, but Generation Z is hot on their heels. By Erin Rigik Del Conte, Senior Editor

ILLENNIALS AND GENERATION Z after them are

changing the world, from the way they prefer to shop, how they pay and what they eat to their lifestyles and how they spend their time. The age range that defines a Millennial or a Gen Zer changes depending on the research firm. Most list Millennials as being born somewhere between

1978—1996, while Gen Z is the newest demographic that retailers are planning for. Partly due to the Great Recession, Millennials have been slower than previous generations to marry or move out on their own and have a different relationship with ownership, which has inspired a sharing economy that has given rise to companies like Airbnb and Uber.

TIMES ARE CHANGING Percent of 18-31 year olds who are married and living in their own household is less than half of what it was a generation ago:

RiSiNG

23% in 2012 56% in 1968

Millennials—in this case defined as born between 1982 and 2000— numbered 83.1 million in 2015, representing more than one quarter of the nation’s population. That figure easily outnumbers the 75.4 million baby boomers accounted for that year.

— Pew Research Center

— U.S. Census Bureau

A DIVERSE GROUP

44.2%

of Millennials are part of a minority race or ethnic group (a group other than non-Hispanic, single-race white), making them more diverse than previous generations.

— U.S. Census Bureau

SNACKING TO CLIMB

Gen Zs and Millennials demonstrate their preference for consuming snack food at main meals—a trend that is expected to continue. Annual occasions per capita of consuming snack food at main meals is forecast to grow by 12% by 2024.

— NPD’s Generation Study:“The Evolution of Eating.”

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MILLENNIALS SHOP ONLINE

Compared to other generations, Millennials shop more frequently at brick and mortar stores, but spend more money when shopping online. Amazon was recognized as having the largest overall e-commerce penetration among Millennial buyers in 2016.

— NPD Group’s Checkout Tracking.

GEN Z PREFERS MOOD-ENHANCING, HYBRID DRINKS

Of Millennials (defined here as ages 22-39 in 2016), 72%, the most of any Generation, agree hybrid drinks—that combine two or more drink categories—encourage them to try new drinks that they normally would not try. Older ‘iGens’ (or Gen Z) aged 18-21 are significantly more likely than consumers overall to point to mood-enhancing attributes in their ideal hybrid drink. — Mintel,“Beverage Blurring U.S. 2017” CStoreDecisions ecisions .com

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COLUMN TECHNOLOGY

EMV Hopes – An Implementation Update As retailers struggle with compliance, chargebacks from the liability shift have been larger than anyone in the industry anticipated. By Ed Collupy

HE IMPLEMENTATION OF EMV (Europay, Mastercard and Visa) chip card acceptance should be history for inside payment transactions at convenience stores after the much-anticipated October 2015 shift in liability to merchants for counterfeit and lost/stolen card fraud. But 19 months later, by estimates, less than half of the U.S. c-stores have fully implemented and enabled EMV. There is only cautious confidence of completing the implementation in the months ahead as merchants talk “struggle” along with service providers who together “hope” or “think” that there will be more conversions this year. While the root of the c-store/petro implementation situation is in the complex ecosystem that slows technology development upgrades, there seems to be a healthy amount of knowledge about EMV from major merchants outside of the industry. Some in the card payment industry believe, across retailers, consumer adoption and usage of chip cards has been normalized and a consumer’s first instinct is to dip as opposed to swipe their payment card. But they point out small merchants, of which there are tens of thousands in the c-store industry, need to catch up. For c-store/ petro retailers, the current situation only grows as the October 2020 liability shift for at the pump transactions approaches and they look at what other retail segments have experienced after their initial implementations. To help, the U.S. Payment Forum and its Petroleum Working Committee with leading experts are working “collaboratively to identify, review and resolve” the challenges within the industry and to develop new educational opportunities.

There are reports regarding EMV that some chip card transactions exceed 25 seconds while others are half of that.

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CURRENT STATE Some major oil brands have led the way supporting operators with enabling EMV. But amongst several leading unbranded chains that I’ve been in touch with, representing thousands of stores, only a handful of their stores have EMV acceptance enabled. Point of sale (POS) software that supports chip card transactions, with the combination of PINPads and payment acquirers, has been delivered slowly and is compounded by a certification process where queues remain robust—given the number of first rounds and requests from other merchant groups to certify add-on functionality such as contactless EMV. The associated chargebacks from the liability shift have been larger than anyone in the industry anticipated. To mitigate this new payment card-related expense some chains have ‘turned on,’ for inside the store transactions, AVS (Address Verification System) and/or CVV (Card Verification Value) prompting and validation. Some relief from the card brands around small tickets and limiting the number of chargebacks from a single account have been helpful, but this is only a stop gap measure that will go away in 2018. The concern with how long an EMV transaction takes for some c-store retailers is real. One, with multiple POS payment scenarios, reports some chip card transactions exceeding 25 seconds while others take 12-15 seconds. Another retailer, with hundreds of stores, is in a wait-andsee mode before enabling EMV given the added transaction time versus the mitigation steps they’ve taken to successfully reduce chargeback exposure. Transaction timing seems to be driven by the implementation approach; many retailers my colleagues work with are seeing chip transaction times close to mag stripe times. ON THE FORECOURT In the face of both delays with implementing inside EMV transactions and the liability shift date for at-the-pump transactions, service providers are continuing to move forward with development projects that will support chip card transactions at the nearly 1.5 million pumps in the U.S. CStoreDecisions ecisions .com

4/26/17 8:41 AM

COLUMN TECHNOLOGY c-store/petro industry stakeholders are not slowing down and are anticipating there will be some certifications for Automated Fuel Dispensers this year. Petro retailers, however, have varying plans that run the gamut from it’s barely on their radar, to deferred initiatives or no specific target dates, while others again “hope” they will be complete in a couple of years. Most say though, that part of their strategy is to follow regular pump upgrade schedules and to have those dispensers EMV ready. Some chains told me and others announced they will make store-by-store decisions as to which sites will be EMV enabled. Retailers who have begun moving forward with dispenser EMV upgrades and many with plans have looked at the investment details and plan to move forward with a key objective of implementing features and functions that dispenser solutions offer that will provide a return beyond limiting the exposure of the liability shift. Others who have started outdoor projects are building in time to allow the solution to be fully vetted and to deploy at a more reasonable pace and funding schedule.

IT’S NOT OVER Looking at non-c-store retailers it’s clear there are lessons learned and more to come after the initial chip cards are being accepted at checkout. Consider the following: • Stay focused; first pilot stores should be about learning and capturing feedback from sites and consumers, and then adjust for configuration validation prior to rollout. • Work closely with PINPad and POS providers to optimize checkout time and to take advantage of the flexibility in the customer prompts. • Watch chargebacks: In a chip read failure situation, don’t allow the transaction to go from chip straight to hand key and skip swiping. Merchants have tweaked parameters without recertifying causing data quality issues, which result in an increase of declines and chargebacks. Clearly, significant work needs to be done to complete the EMV migration inside the store and to be better positioned for the 2020 liability shift date. Ed Collupy, executive consultant at W. Capra Consulting Group, can be reached at ecollupy@wcapra.com or visit www.capraplus.com.

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FOODSERVICE

Packaging Sandwiches When it comes to offering sandwiches and other to-go foods at convenience stores, the right packaging can make or break a sale. Retailers and other experts share how they use packaging to catch the eye and whet the appetite of customers. By Marilyn Odesser-Torpey, Associate Editor

GROWING NUMBER OF C-STORE

retailers are putting more emphasis on fresh foods but, in many cases, they don’t think about packaging until the end of the development process. As a result, a too-large number of fresh and delicious grab-and-go sandwiches and other to-go foods sit unsold in coolers until their sell-by dates run out. “Your grab-and-go packaging conveys more than what food is inside; it conveys your entire brand message,” said Harry Milloff, a partner with Franklin, Mass.-based food and beverage industry advisors, the Moseley Group. “It’s a big communication device, a touchpoint not only inside the store, but even after the food has left the store.” Lynn Dyer, president of the Foodservice Packaging Institute (FPI) agreed that convenience store operators should understand that packaging is more than just a cost to them, it’s a branding opportunity.” “Just think about how often you see people carrying branded cups from 32 Convenience Store Decisions

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May 2017

one of the giant coffee chains, letting you know that there’s one close by,” Dyer said. Packaging doesn’t have to be fancy or expensive to be effective. In fact, Milloff explained, the best packaging is minimalist either clear or with a clear window to emphasize the quality of the product inside. The branding element could be a simple logo on the sticker label. “Highlight the key ingredients of the sandwich by positioning them in the packaging so that they clearly show, for example, with the cut sides facing out,” said Milloff. “There’s no better way to encourage an impulse purchase than with a tempting visual.” At Git ‘n Go Market with four stores in eastern Tennessee, basic plastic wrap does the trick for keeping sandwiches in full view and making sure that they stay fresh. “We actually train our employees how to wrap sandwiches so they’re nice and tight and so that the folds don’t obstruct the customers’ view of the food,” said company CEO William Baine.

FREE ADVICE TODAY, SAID LYNN DYER, president of the Food Packaging Institute (FPI), retailers have more packaging options than ever before so it’s important to keep up with what’s new in the industry. FPI offers free membership to convenience store operators to keep them up to date. On the organization’s website, www.fpi.com, there is a strategic sourcing guide that is free to download. It can provide answers to many of the questions retailers may have about what kind of packaging can best meet their needs. CStoreDecisions ecisions .com

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FOODSERVICE Even though some people still have the tired “roller grill mindset” about convenience store fresh food [i.e. prepared food left out for long periods of time], the industry has to work harder than quick-service restaurants to overcome that image, Baine said. At Git ‘n Go, customers can be confident that their sandwich will be fresh because it has the date it’s made right on the label.

SMART PACKAGING IN THE MARCH 22 issue of “The Packer,” a publication for the produce industry, Jim Gorny, vice president of food safety and technology for the Newark, Del.-based Produce Marketing Association, explains that “smart packaging is on the near horizon.” He explained that the packaging will have sensors that turn the label a different color when they detect a certain gas or aroma indicating the presence of salmonella.

FRESHNESS & SAFETY In the early years of Honey Farms Stores’ fresh foods program, sandwiches were presented in modified atmosphere packaging (MAP), otherwise known as reduced oxygen company’s sandwiches now are cello to best display them at retail. packaging, said Marketing Director made to have only a 3-5-day shelf Wedge sandwiches are packaged in Karen Campbell. During this pro- life, Honey Farms, which has 33 loca- triangular containers. Most of the cess, the oxygen is flushed out of the tions in Massachusetts and one in New other subs are packaged in plastic, package and replaced with a different Hampshire, recently revised its pack- tamper-evident showcase containers gas or mixture of gases before seal- aging to a single step, eliminating the with a 360-degree seal. “The seal not only prevents the ing to inhibit oxidation and growth of MAP process. “Now our products are in clear con- packaging from being opened and the microbes. This extends the shelf life of the product “tremendously, sometimes tainers so that all of the product can be product compromised, it also helps seen,” Campbell said. “We have also maintain the integrity and shelf-life of as much as 17 days,” Campbell said. After the sandwich underwent the upgraded our labeling to promote a the product,” she added. FPI’s Dyer acknowledged that tamMAP process, it was placed in a win- fresher look and high-end product per-evident packaging is one of the dowed bag for display. That meant quality.” Campbell noted that smaller subs biggest issues grab-and-go foodservice double the packaging materials and and rolls in the company’s proprie- providers face today. It’s an imporlabor for Honey Farms. In keeping with the fact that the tary Beantown line are wrapped in tant component whether the foods are prepared in stores, in a proprietary commissary or come from an outside supplier. Campbell explained that Honey Farms worked with its supplier Garber Brothers to develop packaging options that would make freshness and safety paramount considerations. “When developing a new product, we always consider packaging as part of the process and spec out the packaging to new vendors,” Campbell said.

When it comes to offering sandwiches and other to-go foods at convenience stores, the right packaging can make or break a sale. Some experts say the best packaging is minimalist, either clear or with a clear window to emphasize the quality of the product inside. The branding element could be a simple logo on the sticker label. 34 Convenience Store Decisions

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PROPRIETARY PROGRAMS Kent Kwik Convenience Stores, with 42 locations in Texas, New Mexico and Oklahoma, packages its proprietary Kwik Eats Express sub sandwiches made fresh in its kitchen with 12-by-12-inch cello wrap that is heat sealed. “Not all cello wrap can be heat CStoreDecisions ecisions .com

4/25/17 11:37 AM

Join us for the 2017 National Advisory Group conference!

September 10 thru13 th

The National Advisory Group (NAG) is an association of small, mid-sized and family-owned chains and the executives that run them. This group convenes at an annual conference 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, retailer information exchanges, opportunities to address the burning issues within your business, a chance to get to know your peers in similar size operations and much more!

THANK YOU TO OUR SPONSORS:

Nashville, TN Downtown Hilton

Visit www.nagconvenience.com for more information 2017 NAG 4-pager.indd 1

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Sunday, September 10, 2017

10:30-10:45 am: Break

1:00 – 7:30 pm: Registration

10:45 – 12:15 pm: INFORMATION EXCHANGES PART 1 The Information Exchanges are the heart and soul of what makes NAG so unique. Attendees will be formed into small groups of non-competing chains to discuss relevant business issues. We all want uninterrupted time with people who “do what we do,” but rarely do our busy lives allow us the luxury of benchmarking what we do and how we do it with other professionals. As you listen, learn and share with your small group of retailers, you will find that what you are doing right will be validated, what you might be doing wrong will be challenged, and how you might do things better will be encouraged. The relationships formed in this intimate setting will last a lifetime and be firmly measured in increased profitability and decreased legal liability.

1:00 – 4:00 pm: Pow Wow Room Open 4:00 – 5:00 pm: NAG/YEO Board Meeting 6:00 – 7:00 pm: NAG Welcome Reception Hosted by the Young Executives Organization 7:00 – 9:00 pm: NAG Dine-Around at the Hilton Nashville Downtown 9:00 – 12:00 am: NAG Hospitality Room

Monday, September 11, 2017 7:00 – 8:00 am: Breakfast 8:00 – 8:15 am: Welcome/Conference Overview by NAG Executive Director John Lofstock 8:15 - 9:15 am BURNING ISSUE 1: The Impact of Family Business on Convenience Retailing: Since the inception of the modern convenience store industry more than 75 years ago, c-stores have provided the foundation for retailing excellence. This commitment to excellence begins with an outstanding corporate culture and an unwavering loyalty to employees and customers. So while bigger corporate entities have their sights set on family-owned chains—as much for their superior culture as for their balance sheets— they cannot replicate the value family businesses have in the communities they serve. In this session, hear from three of the convenience store industry’s most respected chains about their commitment to employees, customers and the tradition of family-owned business. SPEAKERS: • Joseph Sheetz, President and CEO, Sheetz Inc. • Jeff Miller, President and CEO, Miller Oil Co. Moderator: John Lofstock, Executive Director, the National Advisory Group 8:46 am: Moment of Silence in Observance of 9/11 9:15-9:30 am: Break 9:30-10:30 am: BURNING ISSUE 2: Navigating Stafﬁng: Attracting, motivating and Retaining Millennials. Words used to describe Millennials: entitled, lazy and spoiled as well as tech-savvy and smart. As the largest generation in the workforce, they aren’t going away. Those retail organizations that learn how best to lead Millennials will have a competitive advantage in the marketplace. The process begins with understanding why they are different from prior generations and what motivates them in the workplace. The answers may surprise you. SPEAKERS: • Cherrie Clay Clark, Professor of the Practice of Management at the Owen Graduate School of Management, Vanderbilt University Moderator: Jonathan Ketchum, Senior Vice President of Retail, Alon Brands

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12:15 – 1:15 pm: Lunch 12:45 – 5:00 pm: NAG Golf Outing, Hillwood Country Club Nashville (boxed lunch will be served.) 1:15 – 5:00 pm: Free Time/Spouse Events 6:30 – 9:00 pm: Retailer/Supplier Dinners to Experience Nashville 9:00 pm – 12:00 am: NAG Hospitality Room

Tuesday, September 12, 2017 7:00 – 8:00 am: Breakfast 8:15 – 9:15 am: BURNING ISSUE 3: Competing On Fuel: Understanding RIN’s, alternative fuels and declining gallon sales. The Renewable Fuel Standard (RFS) is changing fuel economics across the country and not for the better. Credits for renewable identiﬁcation numbers (RINs) are escalating and convenience store chains are having a harder time competing on price and in some cases they are being forced to retail fuel at a loss. Combined with these regulatory requirements, enhanced fuel-efﬁcient vehicles and alternative power sources are muddying gasoline’s future. Learn what you can do to protect fuel sales to remain competitive in the gasoline business. SPEAKERS: • Bob Anderson, Senior Fuels Policy Advisor, Chevron Inc. • Stanley Roberts, President & CEO, Capital Oil Inc. • Wendy Chronister, President & CEO, Chronister Oil Co. Moderator: Suzanne Murray, Partner, Haynes and Boone, Lead Counsel for the Small Retailers Coalition

4/26/17 2:34 PM

9:15 - 9:30 am: Break 9:30 - 10:30 am: BURNING ISSUE 4: The Future of Fresh Foods in Retail: As consumers increasingly seek fresh options in convenient formats, retailers are rising to meet the demand. While customers have a tendency to talk healthy and eat otherwise, there is a clear need for quick, healthy foodservice solutions and convenience stores are in a prime position to meet this demand. Driven by the consumer’s demand for convenience, food retail concepts, formats and locations are converging. Today’s shoppers are pushing convenience retail businesses to expand, invest in fresh foods and provide a consistent brand experience. SPEAKERS: • Brenda Gerow, Vice President, Branding/Marketing & Human Resources, R.H. Foster Energy • Mario Spina, CEO, The PRIDE Stores Inc. Moderator: Matt Lally, Manager, Analytics & Insights, Nielsen Perishables Group 10:30 - 10:45 am: Break 10:45 am - 12:00 pm: BURNING ISSUE 5: Developing Real Estate: How to Find and Invest in Great Locations: The retail industry is more dynamic than ever. Retailers must evolve to succeed over the next decade. However, the cost of real estate continues to rise so convenience store operators must make wise decisions about how to develop properties. This includes capital investments, site selection, store design and layout and the service offered. Other strategies, such as sale-leasebacks, can help c-stores access capital to acquire new locations. This session will explore the best practices of real estate development to help retailers stay ahead of the competition. SPEAKERS: • Charlton Bell, Senior Vice President of Facilities, Tri Star Energy • Robert Buhler, President & CEO, Open Pantry Food Marts • Jack Kofdarali, President & CEO, J&T Management Inc. Moderator: Mark Radosevich, President, PetroActive Services 12:00 - 1:00 pm: Lunch 1:00 – 2:30 pm: Information Exchanges Part 2 2:30 - 2:45 pm: Break 2:45 - 3:45 pm: YOUNG EXECUTIVES ORGANIZATION (YEO) BREAKOUT SESSION: What does omnichannel mean to convenience retail? Omnichannel retail is a multichannel approach to sales that seeks to provide customers with a seamless shopping experience whether the customer is shopping in-store, online or from a mobile device. What distinguishes the omnichannel customer experience is that there is true integration between channels on the backend. Using an omnichannel approach means retailers know and respond to their customers’ shopping preferences and can tailor marketing efforts to meet their needs. Presenting a uniﬁed physical and digital customer experience in the age of Amazon is an essential requirement for today’s convenience stores.

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SPEAKER: • Pat Lewis, Partner, Oasis Stop ‘N Go, Twin Falls, Idaho 5:30 – 6:30 pm: NAG Reception Hosted by the Young Executives Organization (YEO) 6:30 – 9:00 pm: NAG Conference Dinner & Awards Ceremony 9:00 pm–12:00 am: NAG Hospitality Room

Wednesday, September 13, 2017 8:00 – 9 am: Breakfast 10:45 am - 12:00 pm: BURNING ISSUE 6: Foodservice: Delivering the goods. UberEats and Amazon have muscled into the foodservice market and are changing how consumers purchase their meals. Other services like Doordash and Instacart are also gaining momentum, keeping customers away from convenience stores in favor of home delivery. Emerging services such as Munchery deliver food directly from commissaries, bypassing the brick-and-mortar stores altogether. To remain competitive, convenience store operators must keep pace to maintain sales in this crucial category. SPEAKERS: • Bonnie Riggs, Director, Industry Analyst – Foodservice, The NPD Group Moderator: Ed Burcher, Chief Operating Ofﬁcer, Coen Markets 10:15 –10:30 am: Break 10:30 am –12:00 pm: IDEAS BOOT CAMP: Game-changing ideas retailers can take home with them that are guaranteed to boost retail proﬁtability. 12:00 pm: Conference Wrap Up and Takeaways (Speakers booked through April 30)

4/26/17 2:34 PM

As the convenience store and petroleum industry continues to evolve, training the leaders of tomorrow is more important than ever before. To help young executives have a group that is solely focused on exchanging personal experiences with peers in their age group, the National Advisory Group (NAG) is proud to announce that it has relaunched the Young Executives Organization (YEO). YEO’s mission is to cultivate young talent in the convenience store and petroleum industry through implementation of education and networking. YEO accomplishes this mission by leveraging the experience of NAG members to help foster superior leadership skills. YEO members are industry leaders who are approximately 40 years of age or younger. Members are entrepreneurs, leading top businesses and actively pursuing a higher level of professionalism in the convenience store and petroleum marketing industry. Membership in YEO provides young convenience store and petroleum industry executives with an opportunity to network with other NAG members and inﬂuential industry leaders. It also gives young executives a platform to express their ideas, leadership abilities and vision for the future of convenience retailing. Membership in YEO is open to all NAGmember company employees at no cost. If you are not a NAG Member, join NAG now at www.nagconvenience.com. If you are a young executive or if your operations has a young up-and-coming executive please join us in Nashville! For additional information, contact John Lofstock at jlofstock@csdecisions. com or YEO Board Chairman Jared Sturtevant at jared.sturtevant@ cstbrands.com.

PGA Class A Head Professional Mike Lathrop oversees the 18-hole, par 72 golf course at Hillwood Country Club. Originally designed by legendary golf architect Dick Wilson, the 7,000+ yard course opened for play in 1957 and was renovated by Bruce Hepner of world-renowned Renaissance Golf in 2003 & 2011. HOW TO REGISTER Go to: www.nagconvenience.com. NAG will conﬁrm your hotel room and your meeting registration. A credit card number must accompany your registration. HOTEL PRICING

A block of rooms has been reserved for the NAG Conference at the special rate of $249/night, inclusive of guest room, high speed Internet and exclusive of taxes. Your hotel costs are NOT included in the cost of the conference and should be booked through the NAG registration site. Please make your room reservation by 8/7/17. It is NOT necessary to call the hotel. Please contact the NAG Event Coordinator for suite pricing and availability at NAGRegistration@mocandco.com.

CONFERENCE REGISTRATION RATES Member Super Saver available until July 11th: Super Saver Price, $549 Early Bird July 12th - August 11th: Early Bird Price, $699 Standard August 12th onward: $749 Non-Member Super Saver available until July 11th: Super Saver Price, $649 Early Bird July 12th - August 11th: Early Bird Price, $799 Standard August 12th onward: $849 Spouse/Guest $399 Registration for the conference is open to retailers only at this time. Suppliers interested in attending should contact info@nagconvenience.com.

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SAVE THE DATE! The convenience store industry’s exclusive organization for next-generation leaders and up-and-coming decision makers will be held May 24-25 at Maverik’s Base Camp headquarters in Salt Lake City. A team-building Habitat for Humanity project will take place on May 23. In addition to networking and a firsthand tour of Base Camp, Maverik’s test kitchen, training facilities and convenience stores, YEO’s will hear how the chain nurtures its outstanding retail culture, communicates with customers through its industry-leading loyalty program, tackles foodservice, staffing and developing its convenience store operations.

Registration for the 2017 YEO Roundtable is now open! http://www.nagconvenience.com/maverikroundtable Thank you to our sponsors:

For information on NAG and YEO membership or to reserve a space in the the 2017 YEO Roundtable, contact NAG Executive Director John Lofstock at (201) 837-2177 or jlofstock@csdecisions.com.

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FOODSERVICE

PACKAGING

PROVIDES INFORMATION PACKAGING WILL PLAY A central—and in some cases, active—role as the produce industry moves forward with its food safety efforts, said Jim Gorny, vice president of food safety and technology for the Newark, Del.-based Produce Marketing Association. Packaging does a lot more than hold product: it conveys information, he said. “When you pick up a head of lettuce or (an) apple, you don’t know what brand it is, but with more packaging, you can see traceability down to the package label,” said Gorny. In the future, food packaging innovations will extend even further. “I think you’re going to see a lot more time-temperature indicators—basically, sensor technology through nanotechnologies that are becoming readily accessible,” Gorny added.

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May 2017

“YOUR GRAB-AND-GO PACKAGING CONVEYS MORE THAN WHAT FOOD IS INSIDE; IT CONVEYS YOUR ENTIRE BRAND MESSAGE,” - HARRY MILLOFF, THE MOSELEY GROUP

sealed; we’ve tried a lot of them and melted more than a few,” said Stormy Williams, the company’s director of operations-foodservice division. “This wrap is unique because it can go from hot to cold, from freezer to cooler to hot box without changing color, getting brittle or melting,” said Williams.

Wedge sandwiches are packaged in containers with a safety seal. The company switched to the safety seal packaging about three or four years ago. “We’ll do anything to make people who don’t really know us to feel more comfortable buying food here,” said Williams. CSD

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COLUMN FOODSERVICE

Positive Outlook Can Boost Food Sales Macroeconomic drivers might help spur sales of grab-and-go foods in 2017. By Tim Powell

ONVENIENCE STORES SHOULD FEEL optimistic about

2017 considering the overall conditions of the U.S. economy thus far, especially when it comes to opportunities in foodservice. In our latest research, Q1 Consulting found that all convenience store retailers expect grab-and-go foods to increase in demand this year compared to two years ago. This is important, particularly considering c-stores have counted on prepared foods to drive traffic and bolster profit margins. Q1 expects growth to continue over the next 12-18 months due to some favorable macroeconomic factors that correlate directly to food away-from-home spending: • The consumer drives 70% of economic growth and gross domestic product has been stable for the past year averaging 2-3% real growth. While recession remains on the horizon, other factors seem to be fueling the current economic cycle that has been in positive territory since 2009. • Consumer confidence is at an all-time high. Consumers are more likely to spend on retail and foodservice items when they believe they are secure financially. The stock market daily hits new highs and the “wealth effect” is driving much of this optimism. • Disposable income (DPI)—the money consumers have after taxes—has been stable to rising. A direct correlation

Core Economic Factors Impacting C-Store Prepared Foods in 2017 FACTOR

POSITIONS

Consumer spending

Down in March — Mixed

Disposable Personal Income (DPI)

Economic Growth (GDP)

Positive

Employment

Better than market expectations in March 2017

Wage growth

Mixed

Inflation (CPI)

Around 2.5% down in March

Consumer Confidence

Highest level since 2000

Source: Q1 Consulting

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to retail spending on food and beverage is DPI, which increased in the first two months of 2017. When consumers are confident and personal income ticks upward, retailers are often in a favorable position. • Inflation has remained low. The consumer price index (CPI) dropped to 0.3% in March. Inflation for food has been hovering around 2.5%, with food-at-home inflation increasing faster than at restaurants. Convenience store retailers are able to offset higher retail food prices by increasing the mix of prepared food sales. • Employment growth is strong. The unemployment rate dropped to 4.5% in March, showing that the job market is near full employment. Wage growth, however, has been relatively flat, and influences retail spending on food and beverage. • Consumer spending is one area that is mixed. In March, retail sales for goods dropped at stores, restaurants and online by less than 1%. However, these figures do not include sales of services—such as healthcare and housing. Moreover, Millennials are spending a share of their income on “experiences,” such as concerts and events, which are also not reflected in this data. Also, online sales—particularly delivery services—have been increasing sharply and Q1 expects c-stores will have to adjust to the new normal of this business disruptor and the Millennial shopper. • There are clearly other indicators—such as capital investment, legislation (such as tax breaks), fiscal stimulus, healthcare reform and the policies of the new presidential administration that will impact convenience store retailers over the next 12-18 months that stakeholders must monitor. From the retailer’s point of view, there are other sectorspecific trends they believe will have an equal if not larger impact on in-store growth over the next 12 months. These include health and wellness (66%), an emphasis on delivery (47%) and snacking (46%). As long as convenience stores continue to execute and listen to their patrons, they will continue to build a loyal consumer base that will help maintain prepared foods sales in a dynamic economic environment. Tim Powell is a senior analyst with Q1 Consulting LLC in Chicago. See more information on his practice at www.q1consultingllc.com. CStoreDecisions ecisions .com

4/25/17 11:38 AM

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FOODSERVICE

Spicing Up the Menu Ethnic foods continue to trend as consumer demands evolve to include house-made and authentic cuisine. Nick Powell

By Erin Rigik Del Conte, Senior Editor

ONVENIENCE STORE DECISIONS SPOKE with Nick

Powell, corporate chef for QuikTrip Corp. on how the ethnic flavor trend is playing out at the c-store chain and what he’s doing to spice things up for its customers. Powell has been a corporate chef at Tulsa, Okla.-based QuikTrip since 2009, before the chain had even added in-

ETHNIC FLAVORS FIND APPEAL The National Restaurant Association’s “What’s in Store 2017” report surveyed 1,300 chefs on the hottest menu trends for 2017. Among the list of Top 20 Food Trends ethnic-type foods appeared several times (which are called out in bold type below). Another big trend was house-made items, from condiments to ice cream, showing that food origin continues to be a consideration for customers. Here are the top 11: 1. New cuts of meat (e.g. shoulder tender, oyster steak, Vegas Strip Steak, Merlot cut) 2. Street food-inspired dishes (e.g. tempura, kabobs, dumplings, pupusas) 3. Healthful kids’ meals 4. House-made charcuterie 5. Sustainable seafood 6. Ethnic-inspired breakfast items (e.g., chorizo scrambled eggs, coconut milk pancakes) 7. House-made condiments 8. Authentic ethnic cuisine 9. Heirloom fruit and vegetables 10. African flavors 11. Ethnic spices (e.g. harissa, curry, peri peri, ras el hanout, shichimi) 40 Convenience Store Decisions

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“FOR MILLENNIALS, EVERYTHING HAS TO BE SHARE WORTHY. CUSTOMIZATION IS KEY. PRETTY MUCH EVERYTHING CUSTOMERS CAN ORDER AT OUR KIOSK SCREENS OR ON THE MOBILE APP IS HIGHLY CUSTOMIZABLE.” store kitchens. Today, the chain features full-service kitchens and made-to-order foods in all but a handful of its more than 730 c-store locations.

CSD: House-made condiments are

another trend in 2017, from special srirachas to made-from-scratch wasabi mayo. What is QuikTrip doing with condiments? Convenience Store Decisions (CSD): NP: We don’t make any sauces in house The National Restaurant Association’s right now, but we work hard with our “What’s Hot 2017” predicted the eth- suppliers to get just the right flavors nic food trend will begin to impact made for us. The Sriracha Ranch and the breakfast daypart this year. Is creamy Chipotle are the most popular. QuikTrip offering any ethnic-inspired breakfast items currently? CSD: Millennials are increasingly Nick Powell (NP): “We’re not offering exploring global food flavors. How it currently, but we had some success do you cater to this demographic with recently with a Chorizo Squarewrap. The your food menu? Chorizo Squarewrap is chorizo patty, egg NP: For Millennials, everything has and cheese in a tortilla that’s folded into a to be share worthy. Customization is square. We’ve done a couple of chorizo- key. Pretty much everything custombased breakfast items that were pretty ers can order at our kiosk screens or popular. (The Chorizo Squarewrap has on the mobile app is highly customizbeen one of my favorites). I wouldn’t be able. And we’re testing made-to-order surprised to see chorizo make its way sub sandwiches in a few stores, so back for breakfast at some point. they can order great subs like the Big Italian or the Gardener or build their CSD: Is QuikTrip offering ethnic- own creation from the ground up and inspired flavors in food items during add things like fresh jalapeños—the crispy jalapeños are popular, too—and any other dayparts? NP: We’ve tried to put together a great Frank’s Red Hot Sauce. selection of items that have a little kick to them: habanero cheese taquitos, CSD: What are some of the best ways jalapeño cheese sausages, southwest to incorporate ethnic /spicy or other chicken wraps, spicy condiments flavors into the food menu? like our Sriracha Ranch and creamy NP: Condiments, sauces or other addChipotle sauce...even our nacho ons are probably the easiest, most cheese has got a little more oomph to approachable way. They’re a pretty it than you typically see. We even had easy change for the kitchen to make, a Cinnamon Crush doughnut recently and a low-risk way for consumers to with bright red cinnamon icing, like a be able to branch out a little from what Red Hot or Hot Tamale cinnamon. they might normally buy. CSD CStoreDecisions ecisions .com

4/25/17 11:39 AM

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4/26/17 8:37 AM

CATEGORYMANAGER’S NOTEBOOK

Sweet Possibilities Could new product releases from big-brand confectioners boost the chocolate category for c-stores? By Anne Baye Ericksen, Contributing Editor

Although sweet snacks remained among the top 10 category performers, the category generated a 1.3% per store the trifecta for chocolate sales. Not only do these holidays traditionally highlight per month increase over the same period. When comparing the sweet treat as a special indulgence, but they’ve year-to-year gross margins, candy rang up an increase of become a prime marketing opportunity for confectioners to 0.59%, while sweet snacks fared better with 1.27%. “Overall, I would describe chocolate sales as surpristest out new flavor profiles, shapes and sizes. Marcia Mogelonsky, director of Insight for Mintel Food ingly stable with slight dollar increase over last year,” said and Drink explained recently that data from the research Jody Sandberg, manager for field merchandising for United firm indicates seasonal chocolate offerings are tops among Refining Co. (URC). In addition to its petroleum refining new chocolate products—a testament to the popularity of operations, the Warren, Pa.-based company owns approximately 300 Kwik Fill/Red Apple Food Marts retail locations seasonal treats among consumers. In fact, Mintel reports seasonal items represented one- in three states and 70 Country Fair convenience stores. It fourth of worldwide chocolate product introductions in 2016. also services more than 30 independently-owned Keystone Now that Easter’s come and gone, and it’s several months fuel retailers. “We should see an increase with the addition of counter until Halloween, c-store sales of chocolate candy likely will settle back into everyday levels. However, those levels shipper units going into all stores not presently involved haven’t budged much over the past few years. According to in the larger shipper program and by decreasing the mint/ Euromonitor International, volume sales of chocolate confec- gum by one shelf and making more chocolate offerings,” tions grew by 1% in 2016. The numbers don’t improve much Sandberg added. when examined on the smaller scale of the convenience store channel, which accounts for 25% of the market according to NAME RECOGNITION Other than seasonal promotions, most new additions the National Confectioners Association (NCA). In its state-of-the-industry assessment, the National to the chocolate confections category have come from artiAssociation of Convenience Stores (NACS) revealed san and premium brands, which NCA defines as chocolate both candy and sweet snacks showed restrained growth. upwards of $11 per pound. “Premium continues to lead all growth, clocking in at Specifically, candy was identified as the sixth strongest category performer in c-stores, but experienced slightly more +10% in 2016. Because premium is often sold in smaller than a 3% increase in sales per store per month between quantities, we’re also seeing robust growth in the box, bag, and bar smaller than 3.5 ounces segment; that grew 2015 and 2016. ASTER, HALLOWEEN AND VALENTINE’S DAY make up

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CATEGORYMANAGER’S NOTEBOOK 3.2% over the 52 weeks ending March 19, 2017,” said Jenn Ellek, NCA’s senior director for trade marketing and communications. Many of the smaller brands have been trying to capitalize on the better-for-you trend. To entice people to give into their cravings for a chocolate treat, this group of confectioners often feature dark chocolate instead of the more sugary milk chocolate, and stir in fruit and other ingredients consumers typically regard as healthier. That trend, however, is being challenged this year by Hershey, Mars Inc. and Mondelez International. The big three chocolate producers all have announced or released new product formulations under their most recognizable brands, hoping to boost market share and recapture customers’ loyalty. “We all go through that healthier stage in our lives, but I truly feel the majority will always come back to their childhood favorite and totally forget the ingredients on the package, and just enjoy what really brings them comfort and immediate satisfaction,” said Dennis Peters, URC merchandise manager. Mars has announced an ambitious new product campaign, starting last December when it rolled out a variety of Dove options, including Dove Fruit Mixed Berries Dipped in Dove Dark Chocolate and Dove Fruit Dark Chocolate Cherry & Sea Salt Almond. In April, it launched Dove Peanut Butter & Dark Chocolate Promises, with a price point of $4.09 to $4.79 for a 7.94-ounce laydown bag. While the Dove product line has welcomed new flavor combinations from time to time, Mars has been reticent to alter people’s expectations with its leading brands of Snickers, Twix and M&M’s, until now that is. Already on store shelves is the Snickers & Hazelnut Bar, offering fans a nutty twist on the original recipe. The company hopes consumers will embrace adding caramel to M&M’s Chocolate Candies, even though this brand already enjoys one of the highest household penetrations of any chocolate product, per Nielsen as reported by Food Business News. Company executives want to take advantage of the current caramel favoritism. According to Nielsen findings, caramel has been one of the fast-growing flavors over the past 18 months. M&M’s Caramel Chocolate Candies is expected to hit the retail space this spring. “When it’s launched, we’ll add it,” said Charlotte Havely, director of marketing for Weigel’s Farm Stores, headquartered in Powell, Tenn. “We’ve added the Snickers & Hazelnut Bar and Twix White Chocolate Cookie Bars into our set, too.” Introduced last fall, Hershey’s Cookie Layer Crunch exemplifies the “snackfection” concept of pairing chocolate with ingredients such as fruits, nuts, seeds and pretzels. The candy bar features layers of cookie pieces and fillings coated by chocolate. It’s available in three flavors: Caramel 44 Convenience Store Decisions l May 2017

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with shortbread cookie; vanilla crème with chocolate cookie; and mint with chocolate cookie. Another snackfection offering is Hershey’s Cookies ‘n’ Crème Crunchers or Reese’s Crunchers. These combos provide a multitextural sensation and come in single-serving bags. Not to be outpaced, Mondelez partnered its two biggest brands with the Milka Oreo Chocolate Candy Bar, available in three sizes: 0.44 ounce, 98 cents suggested retail; 2.88 ounces, $1.69 suggested retail; and king size 3.52 ounces with $1.70 suggested retail. There’s also the Milka Oreo Big Crunch Chocolate Candy Bar, 10.5 ounces for a suggested retail price $4.99, which had a limited rollout last fall before going nationwide earlier this year. Havely also added these options to each of the company’s 64 stores. “We have them in our set. Some Dove varieties are just peg items with whole fruits, and we have the caramel and mint Hershey’s Cookie Layer Crunch,” Havely said. “It has been a prolific year of innovation in the chocolate category. We’re eager to see how they perform in the new candy sets.” The same expectation goes for United Refining. “We have incorporated many of them into our (planograms) sets for the 2017 calendar year. If not in our sets, they will be in shipper form at a later time,” said Sandberg. In terms of new chocolate offerings, the convenience channel has proven to be a strong market. “C-stores have been extremely successful in leading new item introductions and cross-merchandising chocolate as a little treat when in the store to buy gasoline or other items,” Ellek added. ON DISPLAY Ellek also anticipates the “new” theme to continue to grab the spotlight at this year’s NCA Sweets & Snacks Expo in Chicago later this month, where more than 760 confectionary and snack manufacturers are slated to exhibit. “Manufacturers will be ready to introduce their new items and lines to the retailers and the buyers will be searching to put together a unique assortment to drive differentiation,” Ellek said. “Retailers of all channels recognize the opportunity in ‘new’ and added 4% more chocolate items in 2016.” CSD CStoreDecisions ecisions .com

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CATEGORYMANAGER’S NOTEBOOK

Sweetening Gum and Mint Sales

Unique flavors, packaging and promotions help boost the category with younger consumers. By John Lofstock, Editor

sumed by teenagers or children as a fun indulgence. The store—which is why retailers must work hard to segment relies on bright colors, creative formats and unique flavor innovations to maintain interest, and so has been less make sure they never get overlooked. Operators must also keep up on product and affected by consumer shifts from gum to mints for breathconsumer trends, which continually serve to reshape the cat- freshening purposes. “People are tremendously brand loyal about gum, so it’s egory. For instance, Euromonitor International research noted that gum’s key role as a breath freshener continues to be sup- important to offer a broad selection of gum and mints— planted by mints, which saw value sales jump by 8% in 2016. especially those targeting fresh breath,” suggested Ryan Mintel predicted that the mint category alone will grow Mathews, founder of Black Monk Consulting in Eastpointe, to $9 billion by 2019, an increase of 25% over current sales, Mich. “Gum is a big impulse item, so it should be merchandue to candy, gum and mints following other industries’ dised close to the checkout area. It’s also an easily stolen lead in resealable, portable and multi-size packages as item, all the more reason to display it where an associate can well as the desire for impulse purchases. The increase con- keep a careful eye on it.” tinues to come at the expense of chewing gum. Gum sales in the U.S. have been declining since 2010, according to ENGAGING PROMOTIONS Retailers should be aware that gums and mints often Euromonitor International. Sales last year were about $3.5 have a high cross-purchase with foodservice and foodserbillion, the consulting group reported. “Younger consumers continue to be drawn to the conve- vice beverages, reminded Steven Montgomery, president nience, innovation and intense breath freshening offered of b2b Solutions in Lake Forest, Ill. “For example, many by mints, and this shift has dramatically affected sales of people have a piece of gum or a mint after having a cup gum,” a Euromonitor report said. “In this challenging of coffee. This means merchandising gums and mints near environment, gum manufacturers looked outside of breath- foodservice items or on the consumer path from the foodservice area to the pay point.” freshening occasions to spur sales growth in 2016.” Montgomery pointed out that the c-store industry is Though a smaller segment, bubble gum is typically conUM AND MINTS CAN be easy to miss in a crowded

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CATEGORYMANAGER’S NOTEBOOK

AVERAGE CHEWING GUM STATISTICS IN THE U.S. Annual U.S. chewing gum sales

$2 billion

Total number of sticks of chewing gum made every year

1.74 trillion

Total number of chewing gum manu115 facturing companies Number of U.S. chewing gum companies

Tons of chewing gum consumed each year

100,000 tons

Total time gum would be chewed every year if each piece of gum was chewed for 30 minutes

187 billion hours

Average amount of sticks of gum each person chews every year

280

Source: Statistic Brain Research Institute

noted for being the place to buy new items. “Distributors provide information on new items so the retailer can have them in stock when the manufacturer’s ad campaign starts. The ads create awareness and the retailer has to be ready to meet the consumers’ desire to try the item.” Showcasing and updating these products also help generate some excitement at the store level. “When it comes to gum, mints and other small products, it’s important to keep them visible to the customer, and prevent them from getting overlooked in the crowd of other products,” said Scott Simon, president and CEO of Swiss Farms, the Delaware County, Pa.-based drive-through market with 12 locations. Visibility is a key selling point for these products because, more often than not, they’re the type of purchase that a customer may not have in mind prior to seeing them. “It’s beneficial to keep these products in the front of your retail space, or in other high traffic locations,” Simon said. “Visibility always leads to consideration.” Like with chocolate and other confections, package sizes and value play a serious role in driving gum and mint sales. “I envision most candy planograms to be even more weighted toward king size or sharing-size pack sizes,” said Jared Scheeler, managing director of The Hub Convenience Stores, while noting that even though healthier options are popular across many food segments, size of candy still matters. Simon called it imperative not to let these products get 48 Convenience Store Decisions l May 2017

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lost in the array of products that are essentially competing for the customer’s attention. “Don’t stock irrelevant or incongruous products next to each other. When you’re pressed for space and put gum next to cereal, it no longer acts as an asset and becomes a distraction. Customers don’t need their thoughts crowded by gum or mints when they’re trying to decide what juice boxes they want.” Mathews likewise stressed visibility. “Don’t hide the gum and mints in the middle of an aisle somewhere where they can be easily missed and/or stolen, offering a limited selection and/or cross-merchandising with beer and wine— even though that may be tempting.” DEMOGRAPHIC DRIVERS Tim Cote, vice president marketing for Plaid Pantry, which operates 110 stores in Oregon and Washington State, recommended executing frequent resets to get new items set in a permanent home quickly. “Get some of the category on the check stand, but not so much that you eliminate the usefulness of the gondola set. Utilize shippers, and merchandise kid gum low enough in the schematic that a kid can reach it.” On the other side of the equation, Cote added, operators should avoid over-extending the assortment to qualify for a manufacturer contract. The deal to carry a product has to be in the best interest of the retailer. “No matter how trustworthy a manufacturer is, if they are a good partner they should negotiate with you.” CSD CStoreDecisions ecisions .com

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CATEGORYMANAGER’S NOTEBOOK

Tobacco Accessories

Face the Unknown

Tied to the fortune of cigarettes, sales of tobacco auxiliary products begin an uphill climb. By David Bennett, Senior Editor

so it’s paid by military customers. Gregory Moore, senior tobacco buyer, Army & Air Force ers, rolling papers and other product lines produce an excellent margin for convenience retailers— Exchange Service (AAFES), said the added cost will likely between 40-50% in some cases. More importantly, affect every tobacco category. “The most pressing challenge to the category for accessosales have been steady for the past decade, despite the ries in 2017 is the declining use of cigarettes in the military decline of cigarette smoking. Private-label lighters and other accessories have done as well as the recent DoD changes in pricing policy,” said Moore. “As customers will purchase their accessories at the well in the c-store channel during the last few years. According to Information Resources Inc. (IRI), conve- same place as their tobacco, the need for accessories will nience store sales of tobacco accessories for the 52-week diminish along with the sales of tobacco.” There are 700 AAFES stores on U.S. military bases period ending March 19, 2017 totaled $252.4 million, a 0.96% increase compared to the same period a year ago. Tobacco throughout the U.S. and abroad, which include Exchange accessories include everything from lighters, cigarette-roll- Express convenience stores. AAFES’ tobacco sales are expected hit a significantly ing machines, humidors, pipes and pipe cleaning supplies lower plateau this year. to tobacco pouches, cigar cutters and rolling papers. “Tobacco accessory sales are expected to decline at the same rate as cigarettes,” said Moore. Therefore, we expect a HAND-IN-HAND Often, cigarette sales have a direct effect on c-stores’ 7% decline in sales in fiscal year 2017.” tobacco accessory profits. When cigarette sales dip, rolling papers at times will spike. However, lighter sales—by far A GROWING MARKET As tobacco endures an onslaught of challenges, an evolvthe most popular segment—often dip, too. Current trends show that many consumers are moving ing business segment could positively impact tobacco back to purchasing in patterns more characteristic of past accessory sales as pockets of consumers help the market years, where premiumization and volume sales were down. expand in states such as California, Colorado and Maine. VMR Products, a manufacturer in the vapor technology Some industry analysts project a deceleration of cigarette industry, last month announced the results of a commissales in 2017, resulting in an estimated 7% decline. Reasons for the deceleration vary, but include the grow- sioned study examining cannabis users’ opinion on the ing passage of local and state tobacco regulation. For impact that the Obama and Trump presidencies have had— example, Californians last year voted to increase taxes on and will have—on cannabis legalization. When respondents were asked their thoughts on the best cigarettes and other tobacco products by $2 per pack. Tobacco regulations aren’t restricted to just the state approach for marijuana regulation in the U.S., 70% felt that level. Tobacco users are seeing sharp price increases in mil- the U.S. should have national legalization and cannabis itary stores in some states under a 2016 U.S. Department of should be regulated the same way as alcohol and tobacco. Defense (DoD) policy being implemented in a further effort Moreover, 22% felt the issue should be decided state-bystate and don’t agree with national legalization. to discourage tobacco use. For the survey, 300 adult cannabis users across the U.S. Current law requires that military exchanges, commissaries and other resale outlets on installations sell tobacco at were polled. In April 2016, Pennsylvania passed legislation to legalize prices set no lower than the lowest price in the civilian community. But the civilian tobacco price used for comparison medical marijuana, bringing the number of states, including doesn’t currently include state and local taxes. The federal Washington, D.C., with some form of legal pot to 24. Similar cigarette tax of $1.01 is included in the manufacturer’s price, measures are being consider in multiple other states. CSD IVEN THE MARKET FOR tobacco accessories, light-

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CATEGORYMANAGER’S NOTEBOOK

Alternative Ingredient Snacks Consumers’ quest for healthier snack options is changing the face of traditional c-store offerings. By Howard Riell, Associate Editor.

Indeed, according to Packaged NEW NATIONAL STUDY BY Amplify Snack Brands and the Facts, sales of alternative ingredient Center for Generational Kinetics snacks in 2017 are forecasted to reach indicates Millennials have been $1.2 billion. For the second consecutive year, the driving force behind the growth of alternative snacks, a category driven the better-for-you snack category. Among the findings, 64% of by protein- and energy-rich items, Millennials—more than any other reached the top 10 in-store merchangeneration—believe that fewer ingre- dise categories, also signaling a desire dients mean a snack is healthier. In by consumers for immediate/healthier addition, 79% of Millennials said that snacking options. The growth of variety in the subunderstanding all the ingredients increases their level of trust in a pack- category has understandably resulted in slowed sales for some traditional aged snack. This trend has created a thriv- snacks. For instance, for the 52-week ing market for so-called alternative period ending Feb. 19, 2017, market ingredient snacks—those made using research firm Information Resources vegetables and grains such as chick- Inc. (IRI) reported that c-store sales of peas, sweet potatoes, kale and spinach, snack nuts surpassed $618 million, a as well as pulses (including dry beans, dip of 1.19% from the previous year. dry broad beans, dry peas, chick- Sunflower and pumpkin seed sales peas, cow peas, pigeon peas, lentils, totaled $314 million, a 3.63% decline during the same period. Bambara beans, vetches and lupins). 52 Convenience Store Decisions

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CONSUMERS IN MOTION The audience for alternative ingredient snacks may well be larger than many retailers assume, noted Ryan Mathews, the president of Black Monk Consulting, based in Eastpointe, Mich. “A lot of people will probably say Millennials and Gen Z, but I think that’s a mistake,” said Mathews. “Lots of lower-income people, for example, turn to health foods because they can’t afford complex medical care. Older customers also tend to be on restricted diets, so I think the potential may be broader than most people think.” Mathews sees the healthy snack equation in relatively simple terms. “I think consumer demands are best understood by thinking in terms of two apparently opposite concepts: good equals the absence of some ingredients—gluten, sugar, salt, GMOs, hormones, etc.—and good equals the CStoreDecisions ecisions .com

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CATEGORYMANAGER’S NOTEBOOK THE SURPRISING 70% IN PACKAGED FACTS’ DECEMBER 2016 “National Consumer Survey,” the research firm asked consumers if they ate salty snacks or crackers made from alternative ingredients including those made from pulses, seaweed, or those using whole, multi or so-called ancient grain formulations made from vegetables. The survey revealed that a surprising 70% of adults had eaten at least one of these types of snacks in the last 30 days. Whole grain and multigrain formulations were the most popular type of alternative ingredient snack, while the fewest number of adults ate seaweed-based snacks. Among the reasons consumers named for choosing alternative ingredient snacks were novelty and nutritional variety and taste. One aspect the survey, according to Packaged Facts’ Norman Deschamps, revealed is that people living in urban areas are the biggest fans of alternative ingredient snacks, even more so than people who live in suburban areas and far more than those living in rural settings. The report revealed that sales of alternative-ingredient snacks increased to approximately $1.2 billion in 2017. As Packaged Facts’ Research Director David Sprinkle said, "Looking at both present trends and towards the future, alternative ingredient snack sales are going to continue moderate to strong growth over the next few years, building on the larger healthier-for-you trend affecting the overall snack market and on the unique flavors and textures consumers are also craving." The biggest contributor to rising sales in 2016 was alternative vegetable-based snacks, especially in salty varieties. Packaged Facts estimates that the salty snack segment of the alternative-ingredient snack market grew almost 7% in 2016, outpacing the salty snack category. In the decade leading up to 2016, adults who usually snack on healthy foods increased from 24% to 30%.

presence of other ingredients—super fruits, organics, etc. C-store customers, like everyone else, are demanding both forms of good.” At this time, the healthy snack category seems a moving target for c-store retailers. “Today’s darlings are tomorrow’s despised,” said Mathews, who pointed out it’s hard to go wrong now with quinoa, which is known for its health halo, but in time another food trend is likely to take its place. “But again, this is an area where good is more often defined by what is not in a product than by what is,” he said. For Mathews, the key to igniting this category is simple, but tricky. “There are a lot of c-store shoppers looking for that sugar/sale fix, so you can’t afford to send them en masse to the competition.” Mathews said that while product sampling is clearly the best way to stir trial, he has not seen much of it happening in convenience stores. “I’m

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better-for-you indulgent snacks like trail mix with chocolate.” Kum & Go stores augment those healthful offerings with a selection of fruit cups, yogurt, an egg white breakfast offering, salads and some healthy lunch sandwich options to meet the demands of customers. CSD

ALTERNATIVES ABOUND “The healthy snacks sell really well for us,” reported Michael Mendez, the owner of Mendez Fuel Holdings LLC in Miami, Fla. “It’s definitely a growing segment for us, so much so that we are looking at healthier drinks, as well.” Mendez said that he has been carrying alternative ingredient snacks in his four stores for quite some time. “We carry a lot of dairy-free items that are also part of that alternative/ healthier snack segment. That’s a big thing, as well, in the healthy area: dairy-free.” Chief among the popular alternative ingredient brands are Pro Bars. “They really do well for us.” The plantbased line was an early innovator of non-baked bars with raw ingredients, marketing itself as supporting nonGMO and organic agriculture. “We also carry a lot of paleo products that also do very well for us,” Mendez added. “We have a huge healthy snacks section. In fact, it’s bigger than our regular candy section.” C-store operators are well advised to merchandise both indulgent and better-for-you options together within the parent category section in the store. For example, according to Louisville, Ky.-based marketing firm Price Weber, meat snacks perform best when merchandised in the jerky section as opposed to being merchandised in a better-for-you section stocked with healthier options from a mix of categories. Some stores have broken out small organic sections next to conventional items, with signs drawing the attention of consumers. Though specific product selection might vary, the desire for healthier snacking among c-store shoppers remains unmistakable. “Our healthy shoppers haven’t so much been demanding alternative ingredients like kale, sweet potatoes, chickpeas, etc.,” said Kristie Bell, direc-

tor of communications for West Des Moines, Iowa-based Kum & Go, the fifth-largest privately held, companyoperated convenience store chain in the U.S. with more than 430 convenience stores in 11 states. “Instead, they are looking for basic high-protein items like Quest bars and beef jerky, or

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COLUMN OPERATIONS

Future Forecourt Marketing Current loyalty programs provide a good foundation, but in order for a convenience retailer to garner brand affinity with its customers, a mix of the old and new may be required. By Mark Radosevich

HE EARLY DAYS OF my petroleum career involved

extensive retail marketing for a major oil company during the advent of the industry’s official embrace of the convenience store concept. Although they had been around for many years, the widespread convergence of the store to gasoline was just beginning. By the early 1980s, the majors finally realized that the “c-store” phenomenon wasn’t a passing fad. The days of the multi-bay service station were over and various “Shop” or “Mart” incarnations began to emerge. My firm was responsible for the transformation of a 2,500 store chain spread across 22 countries, speaking four different languages. What fun it was informing hundreds of long-time service station dealers that their stations were slated for a raze and rebuild and that they now had to focus on selling snacks and cigarettes versus oil changes and the sale of tires, batteries and accessories (TBA). But that’s a subject for another article. IN THE BEGINNING Our marketing responsibilities began with modularizing and then training in a standard grand opening process to the marketing teams in each country, and then extended 56 Convenience Store Decisions

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to an aggressive quarterly promotional calendar focused on the forecourt. Being fuel-centric since the advent of the automobile, our marketing programs focused on increasing fuel volume, a new fuel additive, packaged motor oil (inside the store) and sometimes fountain and roller grill features. The store side of the business was usually an afterthought. When considering the current state of forecourt marketing, it’s enlightening to look back at some of these promotional concepts and the high level of customer engagement and sales results that they generated. Back then, marketing on the forecourt featured concepts such as “Scratch-Off, Instant Win Games” with prizes awarded in the store; “Grand Prize Sweepstakes” that tiedin with cruise lines, local quick service restaurant chains or vacation destinations. “SelfLiquidations” and “Free Offer” promotions usually generated tremendous motorist participation. A free glassware promotion that featured imprinted images of the oil company’s feline mascot moved millions of glasses and increased fuel sales by 25% during each promotion period. Most of the sales increases came at the expense of our competitors and temporarily disrupted the brand loyalty that they enjoyed with their customers. CStoreDecisions ecisions .com

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COLUMN OPERATIONS

These types of marketing activities are generally a thing of the past. Today with the advent of the internet, social media and mobile devices; forecourt marketing relies upon various manifestations of digital concepts with the objective of creating higher levels of motorist engagement. Initially embraced by one or two major oil companies in an effort to tangibly demonstrate brand value and continued relevance against sophisticated unbranded store operators, an entire loyalty industry has blossomed. A brief walk around the recent Upper Midwest Convenience and Energy show in St. Paul, Minn. uncovered numerous distinct vendors, each offering a unique loyalty program approach. Loyalty has become as important an operational feature as fuel dispenser card readers or quality foodservice programs for small to mid-sized store operators to profitably compete in the market today. Given the clutter of so many branded and unbranded programs, the ability to increase new customers through a specific program is questionable. The best a store operator can expect may be for their loyalty program to help maintain a customer base and prevent competitive poaching. The initial objective of these programs is to build brand loyalty, whereby a customer will only purchase products from one brand or retail chain over all others. Once brand loyalty is achieved, the next objective is to move the customer to a higher level of engagement: brand affinity. At this level, the customer enjoys a personal, emotional relationship with the business, making it much more difficult for a competitor to break. A customer with brand affinity believes a particular store or chain is inherently superior because of the personal connection and bond that they have with it. During the research for this column, I interviewed several branded marketers and discovered that most quality store operators tend to embrace up to three separate types of loyalty concepts: 58 Convenience Store Decisions

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• National Loyalty: Oil company sponsored programs that encompass a specific fuel brand and include other third-party sponsor businesses. Earned points from purchases at the various participating sponsors enable fuel price rollbacks at participating c-stores. One of the marketers that I interviewed stated that his program was now enjoying double-digit levels of customer engagement, whereby 10% or 12% of customers were regularly participating in the program. A program vendor confirmed that this level of engagement is typical across the industry. That still leaves a vast untapped majority on the sidelines, either because they haven’t yet enrolled or because they aren’t active in social media and may never be adequately engaged. • Internal Loyalty: Programs that provide rewards for store purchases made within the marketer’s c-store chain. Points are then accumulated for fuel price rollbacks or discounts in the store. • Fuel Debit: Programs that enable a motorist to garner regular fuel price discounts by using a marketer’s proprietary fuel card. Once enrolled, the card is swiped at the pump and the price is automatically rolled back and the customer’s checking account is debited for the purchase. Fuel discounts tend to run between seven and 10 cents per gallon. A promotional card—provided to me by Tommy Hunt, president of Calloway Oil Co., based in Maryville, Tenn.— illustrates to customers the “Three Ways to Save” program that the company currently features at its 22-store E-Z Stop Food Mart chain. It also captures all three loyalty concepts (see the E-Z Stop card, page 56) in a comprehensive format. Looking forward, it seems certain that forecourt loyalty programs are here to stay. Stopping them would be as difficult as an airline trying to unwind its frequent flyer mileage program. The challenge is to discover ways to capture a wider level of motorist engagement. The current reliance on social media, mobile devices and the internet motivates a limited customer demographic. Proactive retail marketers should consider employing some successful marketing concepts of the past and integrate them into their annual forecourt marketing calendars. This will help engage a wider range of customers and add some fun, excitement and differentiation from competitive brands and programs. Possessing 35 years of downstream petroleum experience, Mark Radosevich is the president of PetroActive Real Estate Services LLC, offering confidential mergers & acquisition representation and financing services exclusively to petroleum wholesalers. Mark can be reached by email at mark@petroactive.net and directly by phone at (423) 442-1327, web address www.petroactive.net. CStoreDecisions ecisions .com

4/26/17 8:44 AM

NEWSTUFF Creations & Innovations to Convenience Products and Services

CUT EQUAL SLICES

SPICE UP FOODSERVICE

The Portion PadL reduces food waste, boosts sales and increases profits and acts as a compliance tool for U.S. Food and Drug Administration (FDA) required menu labeling. Effective May 5, 2017, chains of 20 or more must report calories of regular menu pizza items for the whole pizza and by each slice. Non-compliance could be costly. Pizzas cut into unequal slices could face non-compliance fines and false advertisement lawsuits. When you cut equal slices using the Portion PadL you can expect a return on investment in about three weeks. Do you sell whole pizza? When a customer opens your pizza box you only have one chance to make a good first impression. Unequal slices and uncut crust give a sloppy appearance to a pizza that may result in the loss of repeat customers. Why use a traditional cutting board or peel only to loose customers? The Portion PadL is made in the USA with NSF-approved composition material, resists harboring bacteria, is easy to manually clean, durable and easy to store. It can be custom made to your pizza shape, slice and slice application.

Huy Fong Sriracha Hot Chili Sauce Ketchup by Red Gold has earned recognition as one of America’s most innovative products for 2017. The National Restaurant Association (NRA) announced the Food and Beverage Innovation Award (FABI) by saying that the spicy ketchup is “the perfect addition of sweet heat in an operation’s condiment offering.” This year’s 36 FABI Award recipients were selected based on their positive benefits to restaurant operators and consumers by an independent panel of experts, representing a variety of both commercial and non-commercial industry segments. Huy Fong Sriracha Hot Chili Sauce Ketchup is available to operators in convenient portion-control packets, 20-ounce squeeze bottles and 1.5-gallon dispenser pouches.

For More Information From Portion PadL

For More Information From Red Gold LLC wwww.redgoldtomatoes.com

(330) 608-5928 www.portionpadl.com

‘UN-FLAVORED’ CIGARS WARHEADS CLOUD DISPENSER

CandyRific has teamed up with WARHEADS and created a WARHEADS Cloud Dispenser. It’s CandyRific’s first item with WARHEADS, and the company is excited to bring the WARHEADS Cloud Dispenser to retailers throughout the U.S. in time for Christmas 2017. Wally looks great as a dispenser. Just press down on the cloud to dispense the extreme sour tastes of Black Cherry, Lemon, Apple, Watermelon and Blue Raspberry. The large refillable dispenser, approximately 9.5-inches wide and 9.5-inches tall, comes with 1.75-ounces of assorted fruit-flavored candy, packaged in a small plastic container. SRP: $12.99. Ships in four individually-boxed dispensers per case.

Swedish Match North America is introducing new White Owl Emerald & White Owl Platinum. White Owl Emerald and Platinum are ‘un-flavored,’ ‘unsweet’ cigars made with an all-natural premium blend of the finest tobaccos from around the world. White Owl Emerald has a distinct green wrapper and White Owl Platinum has a traditional brown wrapper. Both are being introduced with eye-catching packaging that will be sure to have your cigar section all glittery and shiny. These new everyday items are such a “gem” of an idea, it will be a “precious” addition to your shelves and we are confident that sales will set a “Platinum record.” These everyday offerings are available in “two for 99 cents,” “two for $1.49”, and “Save on 2” formats.

For More Information From Swedish Match North America (800) 367-3677 customer.service@smna.com

For More Information From CandyRific www.candyrific.com CStoreDecisions ecisions .com

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NEWSTUFF Creations & Innovations to Convenience Products and Services

FLAVORFUL CHICKEN JERKY

HANDCRAFTED SANDWICHES

The New Primal, makers of the world’s healthiest, most responsibly-sourced meat snacks, have introduced Autoimmune Protocol (AIP)-Friendly Date & Rosemary Chicken Jerky. The product debuted at the Natural Products Expo West trade show on March 9. Like all of The New Primal’s products, the newest release is Paleo, gluten-free, Top-8 allergen friendly, and free of soy, added sugars, hormones and antibiotics. The new Date and Rosemary Chicken Jerky is sweetened with dates instead of honey, which results in lower sugar, sodium and calories but higher potassium, iron, calcium, magnesium and phosphorus. The New Primal sources free-range chicken that is raised with certified non-GMO feed, hormone and antibiotic free and GAP 3 rated. SRP: $7.59.

Raybern’s Philly Cheesesteak sandwiches are high quality, microwaveable sandwiches. Each sandwich is made with 100% beef (no fillers) and American cheese, on pillow-soft bread. Each Raybern’s sandwich is handcrafted and wrapped in premium butcher paper to preserve freshness. Raybern’s Philly Cheesesteak sandwiches ship frozen and can be sold either frozen (oneyear shelf life) or refrigerated (14-days shelf life). Heat and serve in the butcher paper in less than two minutes. Raybern’s Philly Cheesesteak is the No. 1 selling Philly sandwich in the USA. Your customers will love the quality, variety, convenience and value of all Raybern’s sandwiches.

For More Information From The New Primal

For More Information From Raybern’s Cheryl Hoefs, vice president of sales, choefs@rayberns.com

www.thenewprimal.com

COOKING OIL MANAGEMENT Having a convenience store operation that functions as efficiently as any commercial restaurant kitchen is critical to producing the quality of food consumers expect. A trusted partner for more than 20 years, Restaurant Technologies is a provider of cooking-oil management to top names in convenience such as Krispy Krunchy Chicken, Enmark and Circle K. Restaurant Technologies helps make back-of-house operations safer, smarter, more efficient and more sustainable through automated oil storage, handling, filtration monitoring and disposal management systems. The oil management solution is a simple and easy program for convenience stores to implement and because it’s so simple and easy, it drives productivity improvements. By eliminating manual oil handling, convenience stores reduce the amount of time wasted on non-value-added tasks and create a safer, smarter operation by increasing efficiencies.

For More Information From Restaurant Technologies

FRESHLY BREWED TEA TEAse ice tea has the pleasing flavor of wild berries, smoothed with a silky blend of freshly brewed premium black tea and ignited with a kiss of sweetness. Freshly-brewed green tea is subtly blended with honey, and graced with enchanting ginseng extracts, or tweaked with the snappy flavors of pomegranate and açai berries. Sound good? They are good for you with natural antioxidants and metabolism-boosting qualities. Tired of carbonated, syrupy drinks? Ours will refresh and delight you, day or night. There are no GMOs, artificial flavors, colors or preservatives. Made with organic cane sugar and pure all natural honey.

For More Information From CSI Beverages LLC (856) 931-0300 www.teaseIcedtea.com

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SMALLEST CIGARETTE FILTER MEATY TREATS AIRIO Micro Filter is the world’s smallest cigarette filter. AIRIO filters are pressure applied to the end of traditional cigarettes, making them extremely easy to use. AIRIO only adds one-fourth of an inch to the end of a cigarette making it the ultimate choice in discreet filtering. AIRIO’s patent-pending design uses cyclonic action to take out most of the tar and other harmful chemicals from a traditional cigarette. There are 20 AIRO Micro Filters per pack and 12 packs per display. Airio is sold by Smokey Mountain Chew Inc.

For More Information From Smokey Mountain Chew Inc. www.smokeymountainsales.com

FROZEN FLAVORED TEA

Thanasi Foods’ Duke’s brand has introduced a new Brisket line and Cajun Andouille Shorty Sausages. Duke’s new brisket line includes 100% grass-fed brisket steak. The brisket line will be available in April/May in three flavors: Chipotle BBQ, Honey Bourbon and Traditional Sea Salt, in 2.5-ounce bags. Duke’s new Andouille-style Smoked Shorty Sausages are smoked with real hickory hardwood plus a special blend of Cajun spices. The product will be available in spring/summer in five-ounce bags. Duke’s Shortys contain no hormones, nitrates or liquid smoke and are gluten free. Duke’s Shorty Sausage sales were up over 77% versus the previous year across all channels (IRI MULO + Convenience - 52 weeks ending Dec. 25, 2016).

For More Information From Thanasi Foods www.thanasi.com

Boost your beverage program with Fruzen Frozen Tea. Available now in Citrus Green Tea and Peach Tea, these refreshing new drinks will increase your customers’ satisfaction and drive sampling. Additional green and black tea flavors are coming soon. New to the marketplace and made with real tea, Fruzen Frozen Teas are the perfect addition to any c-store café. Millennials are driving today’s tea boom, with some 87% of Millennials preferring tea. FRUZEN Frozen Tea is a fresh new beverage alternative sure to please these coveted customers.

For More Information From Red Diamond www.reddiamondbevservice.com

CLEAN LABEL BARS PowerBar is launching its new Plant Protein bars this spring. This new line of “clean label” bars were officially previewed at Natural Products Expo West in Anaheim this March. The new PowerBar Plant Protein bars are made with nuts, seeds and crisped rice, are free of artificial flavors or sweeteners, and are dipped in dark chocolate. Each bar contains 10-11 grams of plant-based protein (from almond, cashew or peanut sources, depending on flavor), and 7-8 grams of fiber. The three flavors at launch include Dark Chocolate Almond & Sea Salt, Dark Chocolate Peanut Butter and Dark Chocolate Salted Caramel Cashew.

For More Information From PowerBar www.powerbar.com

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NEWSTUFF Creations & Innovations to Convenience Products and Services

GREEN GOOD DESIGN The Merrychef eikon e2s—the smallest high-speed oven with the largest cavity to footprint ratio—has been awarded one of the Green GOOD DESIGN Awards. The prestigious Good Design awards, founded in 1950 by The Chicago Athenaeum: Museum of Architecture and Design, this year joined forces with The European Centre for Architecture Art Design and Urban Studies to present the new Green Good Design Awards. This new edition of Good Design aims to bestow international recognition to those who demonstrate an inspired and exceptional level of progress towards a more sustainable and ‘Green’ way of working. Merrychef eikon e2s models boast high-speed cooking up to 20 times faster than a conventional oven, excellent finished products and a multi-award winning design, further emphasized by this latest achievement. The Merrychef eikon e2s is also the best in class in terms of performance in measureable green features, including standby energy, noise levels and easiness to clean. The entire process from product design to manufacturing methods and supply chain partners is dedicated to delivering sustained improvements to the Merrychef environmental performance.

For More Information From Merrychef

ARTISAN CRUST PIZZAS Inspired by Old World recipes and hometown pizzerias, NEW Rich’s Fully Topped Artisan Crust Pizzas make it fast and easy for you to deliver a true, on-trend artisan pizza experience. Featuring savory toppings piled onto groundbreaking par-baked artisan crust, these pizzas offer exceptional quality with freezer-to-oven convenience. Your customers will love the fresh-baked aroma and incredible flavor—they’ll never know you didn’t make it from scratch! Rich’s Fully Topped Artisan Crust Pizzas are perfect for operators with restrictive space, equipment or labor challenges. Even inexperienced staff can deliver amazing pizzas quickly, simply and consistently. Pizzas are 16-inches and available in Classic Cheese and Primo Pepperoni varieties. Bake them as-is or add toppings to create your own signature pie.

For More Information From Rich’s Foodservice www.richsfoodservice.com/pizza

www.merrychef.com

EXTRA-STRENGTH APPLE PIE Living Essentials LLC announces that its new MLB-themed Extra Strength Apple Pie flavored 5-hour ENERGY shot is available to order now.The product slides into home in the company’s deal with Major League Baseball as it becomes an official partner of the 2017 and 2018 MLB All-Star Game. As part of the deal, the MLB silhouetted batter logo will appear on the Extra Strength Apple Pie flavored 5-hour ENERGY bottle and will be featured in unique baseball-themed displays. The deal also includes season-long advertising and activation around 2017 MLB All-Star Week, which begins July 7 in Miami, as well as large-scale sampling at MLB All-Star FanFest and other MLB All-Star Week events. Additionally, Living Essentials plans to feature an MLB player in its upcoming commercial to promote its new Extra Strength Apple Pie flavor. Contact your distributor or sales representative.

For More Information From 5-hour ENERGY (866) 960-1700 62

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ABV TEA Stout Brewing Co.’s signature Flavored Malt Beverage Specialty brand, Great America, is expanding its portfolio with the addition of a new seasonal flavor, Tea with Lemon. The new flavor began shipping to distributors in early April and was expected to hit retail shelves shortly thereafter. Encouraged by consumer and distributor feedback, Stout Brewing Co. felt the timing was right to introduce a tea seasonal flavor to the Great America line. With this limitedtime-only addition, Stout Brewing Co. is confident that Great America will continue its upward trajectory in the flavored malt beverage category. Tea with Lemon is served in a traditional 23.5-ounce mason jar and is available in 14% ABV six-packs. The Tea with Lemon seasonal joins Great America’s line-up of six, year-round flavors, and is supported with attractive point of sale materials for retailers.

For More Information From Stout Brewing Co. LLC www.stoutbrewingcompany.com

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PIZZA PREP TABLES Hoshizaki America Inc. has added door and drawer combo cabinets to its refrigerated pizza prep table line up. The 67-inch wide cabinet, CPT67-D2, includes two stainless-steel drawers and one spring-assisted, self-closing door. The 93-inch cabinet can be ordered with four drawers and one door, CPT93-D4 or with two drawers and two doors, CPT93-D2. Each drawer can accommodate two full-size pans, six-inches deep. Each door section comes with two epoxy shelves. All Hoshizaki pizza prep tables feature an adjustable ducted air distribution system for pans in the rail. This allows the operator to adjust the refrigeration airflow for any kitchen environment. With a stainless-steel exterior, as well as, stainless-steel interior walls, floors and ceilings these refrigerators are durable and easy to clean. In addition to these new models, Hoshizaki continues to manufacture 46-inch, 67-inch, and 93-inch wide pizza prep tables with either doors or drawers. Single and double overshelf kits are also available.

For More Information From Hoshizaki America Inc. www.hoshizakiamerica.com

SMALL-BATCH COFFEE BREWING FETCO has introduced new CBS-2121 Series Pourover Coffee Brewers to the marketplace. They’re the ideal solutions for small venues that need a way to offer their guests, employees or customers a fresh cup of coffee. These 0.5-gallon brewers are available for thermal and glass servers. Each brewer features elegant front-of-house looks and reliable performance, making these cost-conscious brewers a great fit for any small business. Features include a lighted switch on front panel for easy access and power control; a bright green LED that illuminates when ready to brew; a simple switch interface with dedicated switches with icons for top and bottom warmers; and self-adjusting warmers with temperature-limiting technology which resists overheating and maintains optimal serving temperature. This saves energy and helps preserve freshness (unlike some competitors’ models that continuously heat). The streamlined design makes it easy for staff of any skill level to quickly and efficiently brew a single pot of coffee for behind-the-counter coffee service. The brewers are also perfect for creating a unique self-serve experience for guests.

For More Information From FETCO

ON-THE-GO CONTAINERS Inline Plastics has launched new SnackWare food containers, the newest members of the company’s patented breakthrough Safe-T-Fresh line of tamper-evident products that ensure product protection. Now a wide variety of retail locations can offer healthy combinations with the versatility these products provide. This new line of Safe-T-Fresh products is unique in that it’s the only one-piece tamper-evident clamshell on the market, and it will soon be found on store shelves locally. Food processors love the sharp clear packaging that’s different from the rest and the variety of products they can display to the consumer in these robust rigid containers. These products will safely stack well on the shelves and be a space saver at the store level. The new SnackWare line includes three different sizes all with the same footprint and new SureGrip technology. Sizes include one, two and four compartments to accommodate different types of food combinations.

For More Information From Inline Plastics www.inlineplastics.com CStoreDecisions ecisions .com

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(800) 338-2699 www.fetco.com

CASH DEPOSIT SOLUTIONS Gunnebo US, a sales company of The Gunnebo Group has introduced a full line of intelligent cash deposit solutions for c-stores and gas stations. Its multi-line of cash deposit safes deliver advanced security protection for small, mid-sized and large retail businesses. Gunnebo’s cash deposit systems make front-counter checkout and entire store operations more secure and efficient through point-of-sale note deposits, online cash management, and real-time cash monitoring and reporting. The under-counter smart safes combine automatic cash deposit capabilities with proven intelligence to capture note value data, check for counterfeit notes, and store notes in a certified safe, reducing risk for robbery and theft, while improving efficiencies in retail operations.

For More Information From Gunnebo US www.gunnebo.us May 2017

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ADD Systems ..................................17 800.922.0972 / www.addsys.com

Altria Group Distribution Co. ..................2 www.altria.com

Apter Industries ................................11 800.441.7146 / www.apterindustries.com

Campbell’s Beverage .........................9 www.campbellsfoodservice.com

Cash Depot ........................................31 800.776.8834 / www.cdlatm.com

CB Distributors ..................................49 888.824.3256 / www.cbdistributorsinc.com

Chef’s Cut Real Jerky .......................55

GasBuddy ..............................45

North American Bancard ...............64

Gulfcoast Software Solutions, Inc. ........3

NRF Protect .....................................24

Hatco Corp. ...................................37

Prairie City Bakery ...........................25

www.business.gasbuddy.com

727.449.2296 / www.gulfcoastsoftware.com 888.815.8460 / www.hatcocorp.com

Hershey ...........................................43

www.hersheyconvenience.com

Home Market Foods ...........................33

800-367-8325 X529 / www.RollerBites.com

Inline Plastics .................................36

866.481.4604 / www.nynab.com www.nrfprotect.com

800.338.5122 / www.pcbakery.com

R.J. Reynolds ..................................67

www.EngageTradePartners.com

Ruby Bay Seafood ...............................13

718.383.8585 / www.rubybayseafood.com

Ruiz Foods ......................................41

800.826.5567 / www.inlineplastics.com

www.ruizfoods.com

Kretek ...........................................5

Southwest Fuel & Convenience Expo ...54

877.210.2575 / www.chefscutrealjerky.com

www.djarumcigar.com

Convenience Distribution Business Exchange .........................................57

www.ktngusa.com

203.877.4281 / www.subway.com

Little Debbie ...................................27

Swisher International ..........................68

Mason Ways ...................................65

Tillamook Country Smoker ...............53

703.208.1649 / www.cdaweb.net

Crown Imports .............................15,29 www.crownimportsllc.com

Del Monte Fresh ........................39

800.950.3683 / www.freshdelmonte.com

E-Alternative Solutions .......................51 800.628.4675 / www.cuevapor.com/business

KT&G .................................19,21

800.615.6208 / www.LittleDebbieCStore.com 800.837.2881 / www.masonways.com

ClassifiedAds

ADVERTISER INDEX

www.sw-expo.com

Subway .......................................12

800.874.9720 / www.swishersweets.com 800.325.2220 / www.tcsjerky.com

McLane Company .............................7 www.mclaneco.com/goto/link

www.masonways.com 800-837-2881

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INDUSTRYPERSPECTIVES

Too Many Chiefs When upgrading foodservice, creating a budgeting and bonus program that encourages and rewards cooperation is a must. By Fran Duskiewicz

ANY COMPANIES WHO ATTEMPT to incorpo- people were also the best equipped to create the team rate an upgraded foodservice operation into atmosphere necessary to make the foodservice operation existing store operations often overlook the work properly and to partner with the foodservice mancomplexities and possible counterproductive ager for the good of the location and of all the associates. While foodservice managers did have their own specific managerial head-butting that can occur. Rearranging the store level organizational chart so that monthly goals and budgets, mystery shop visits, monthly current retail managers are in charge of everything, no mat- report cards and quarterly bonuses, a store directors’ perter what, is short-sighted and probably unfair to all involved. formance was judged upon everything within the store, And while evolution might help solve the issue over foodservice included, and their bonuses were accordingly time, no one has time for evolution as a problem solver. So, larger. The key for both managers became productivity, or what can you to make sure your newly-minted foodser- our favorite metric, gross margin dollars per labor hour. Management teams knew if they shared resources vice endeavor doesn’t create store level confusion and and helped maximize the store’s overall labor producan internal tug of war? Well, having a strong, team-oriented, customer- tivity performance, that would work to their benefit and focused culture is a must, but even that will only go so increase their bonuses. far. I think that creating a budgeting and bonus program that encourages and rewards cooperation is a JUST REWARDS I believe that if our balanced scorecard and bonus must. Categorizing stores by size, volume and operational complexity will also help, because then you can create system didn’t actively acknowledge and reward this type a managerial career ladder within your own company, of managerial cooperation, the incredible success we experienced in the new Easy Street Eateries and large complete with a new set of job titles. store concept would not have been possible. Managers worked together to reduce internal theft, some of which CREATING VALUE At Nice N Easy, we envisioned Easy Street Eatery as a was resulting in poor food margins, and a bad mystery company within a company—sort of a foodservice oper- shop in the Easy Street was dealt with as harshly as it ation that we franchised to ourselves. We knew that we would have been at the checkout. Earlier, I mentioned evolution as helping this integraneeded to hire foodservice professionals to manage these units, so we recruited experienced fast food man- tion process and that certainly happened at Nice N agers and chefs to ramp up our expertise as quickly Easy. By creating the store director position, and makas possible. While that might seem like a reach, it really ing it aspirational, we began to see our most successful wasn’t, because we were offering a more normal work foodservice managers apply for the positions when they schedule for these people—mostly weekdays, when they became available. By having these experienced profeswere used to nights and weekends. We offered them a sionals step up to oversee the entire operation, we had the best of all worlds. This person could supervise every better quality of life. However, to ensure these new managers qualified as employee and process within the store. The new foodserexempt, we needed to be very specific about their direct vice manager looked up to them and listened, because managerial responsibilities, such as hiring and sched- of their success in that area. These people were also more likely to delegate bookuling, and they needed to be given a labor budget separate from the store’s.This could be problematic, right? work and other back-office functions, focusing time and To minimize that risk, we created the job title “store direc- attention up front, which is exactly where we wanted them. It wasn’t easy, and it took great care, attention and lots tor” for high volume retail/food stores and for the new state-of-the-art mega-stores that were coming online. This of time to change our business model. To assume it will allowed us to “promote” our best store managers to the happen overnight, or on its own, is a mistake. Don’t make most challenging positions within the company. These the mistake of having too many chefs, or chiefs. 66 Convenience Store Decisions

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