CStore Decisions April 2021 by WTWH Media LLC

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Labor Management in the Age of COVID-19 The 13th annual CSD/Humetrics HR Benchmarking Survey showcases how c-store retailers are navigating human resources challenges during the COVID-19 pandemic.

INSIDE The HR Awards 18 GPM Rolls Out $360 Million Remodel Initiative 30 Daypart Focus Brings Foodservice Success 36 April 2021

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Local, State and Federal tobacco taxes and restrictions on the sale of tobacco products can hurt your business. Governments often pass new laws quickly, so you need to stay informed about what is happening in your area. You and your business matter and making your voice heard is crucial to our success in fighting for fair tobacco policies.

Take this survey to learn more about how you can get involved

TAKE SURVEY CLICK HERE

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Robert Buhler, President and CEO Open Pantry Food Marts • Pleasant Prairie, Wis. Lisa Dell’Alba, President and CEO Square One Markets • Bethlehem, Pa. Raymond Huff, President HJB Convenience Corp. • Lakewood, Colo. Bill Kent, President and CEO The Kent Cos. Inc. • Midland, Texas Patrick Lewis, Managing Partner Oasis Stop ‘N Go • Twin Falls, Idaho Reilly Robinson Musser, VP, Marketing & Merchandising Robinson Oil Corp. • Santa Clara, Calif. Bill Weigel, CEO Weigel’s Inc. • Knoxville, Tenn.

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CStore Decisions (ISSN 1054-7797) is published monthly by WTWH Media, LLC., 1111 Superior Ave., Suite 2600, Cleveland, OH 44114, for petroleum company and convenience store operators, owners, managers. Qualified U.S. subscribers receive CStore 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. Periodicals postage paid at Cleveland, OH, and additional mailing offices. POSTMASTER: Send address changes to CStore Decisions, 1111 Superior Avenue, 26th Floor, Cleveland, OH 44114. GST #R126431964, Canadian Publication Sales Agreement No: #40026880.

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CSTORE DECISIONS •

April 2021

cstoredecisions.com

CONTENTS april 2021

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Number 4

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Volume 32

CStoreDecisions

EDITOR’S MEMO

8 A Return to Normalcy FRONT END

10 Quick Bites: Prioritizing Restroom Cleanliness & Sanitation 14 Tobacco Update: What Is the Cigarette Corrective Statements Litigation? 18 HR Awards: MAPCO’s Davis Puts People First 22 HR Awards: Deel Drives Business at Thorntons 26 High’s Pursues Safe Shop Assured Certification 30 GPM Rolls Out $360 Million Remodel Initiative FOODSERVICE

56 Daypart Focus Brings Foodservice Success CATEGORY MANAGEMENT

62 Positioning Smokeless Tobacco 66 Fountain Beverage Sales Heat Up

COVER STORY

TECHNOLOGY

44 Labor Management

70 Pumping Profits: Payment Tech Pulls It Together 72 Tech Approach to Labor Management

in the Age of COVID-19

The 13th annual CSD/Humetrics HR Benchmarking Survey showcases how c-store retailers are navigating human resources challenges during the COVID-19 pandemic.

OPERATIONS

74 Column: C for Cannabis-Store?

*Front cover photo courtesy of Thorntons

BACK END

56 cstoredecisions.com

76 Product Showcase 81 Ad Index 82 Industry Perspective: Recruiting Best Practices for an Unprecedented Era

April 2021 •

CSTORE DECISIONS

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Editor’s Memo

For any questions about this issue or suggestions for future issues, please contact me at jlofstock@wtwhmedia.com.

A Return to Normalcy Just one year ago, I sat down at my desk in my office to write the April 2020 Editor’s Memo and tried to wrap my head around the impact of COVID-19. There were still naysayers that predicted the virus was nothing more than a bad flu, while others spouted doomsday scenarios. Through it all, the convenience store industry, as it has during every challenge we have collectively faced, kept its head down, its lights on, doors open and shelves stocked as much as possible. Last April I wrote, “It is safe to say these past weeks have been among the most difficult and emotional that any of us can remember in our lifetimes. The impact of the coronavirus outbreak has been felt by individuals and families, companies and communities, across the country and around the world.” A year later, the same can be said. It’s hard to imagine the hard work you have done to keep business running smoothly and employees motivated to provide the outstanding service your customers expect. As always, the industry has handled these challenges with skilled expertise and, honestly, I expected nothing less. HARD WORK & SERVICE

As most of you who know me realize, I’ve been in this industry in some capacity since the day I was born. My father operated a fuel business in New York from 1959 to 1987. After joining the military, I went to work as a merchandiser for Dairy Mart and ultimately moved over to the editorial side in 1996, where I have essentially spent my whole career. As a child, I remember checking oil and washing windows. I remember my father dealing with the fuel supply disruptions in the 1970s, and I remember the challenges he faced running a small business. And I also remember how, even back then, he always talked about service. Some 45 years ago, he told me every chance he could that hard work and service were the keys to success.

CSTORE DECISIONS •

April 2021

I think about this a lot throughout these unique and difficult times, especially as I talk to retailers across the country. They often tell me about their experiences, what they are doing to overcome challenges and where they are struggling. The stories are all uplifting because I love to hear the fight you guys have in you. Even during a pandemic, finding success in this madness is personal. You have often heard that there is no magic wand when it comes to success in retail. But I’m not sure I believe that anymore. I honestly think my father, in his own quiet way, handed me the magic wand when he taught me how to work hard and provide great service. That has proved to be a winning formula. More importantly, it’s timeless and can be handed down from generation to generation. As a child, I took that message as gospel and carried it throughout my career, both in the military and after, and it’s a message I instill in my children almost every day. Honestly, if my kids hear me say, “Hard work is its own reward” one more time, they may revolt. But they are athletes and competitive, and I know there are times where they want to take it easy or even quit, but they hear my voice in their heads quoting former professional baseball player Derek Jeter: “There may be people that have more talent than you, but there’s no excuse for anyone to work harder than you do.” So, a year into this pandemic, with much hope on the horizon, I hope you can take a minute to appreciate all you have accomplished in your role of getting our country through a really difficult period in history. A year ago, we were desperate for a magical solution to end the pandemic, but once again we found out that hard work, staying focused, sticking together and a service culture got us through dark times. As the light begins to shine on the amazing work you have done the past year, be proud of all that you have accomplished.

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quickBites PRIORITIZING RESTROOM CLEANLINESS & SANITATION The COVID-19 pandemic has put the spotlight on store sanitation. Customers are seeking out c-stores with sanitation practices in place from the checkout to the restrooms.

TOP-RATED C-STORE RESTROOMS GasBuddy analyzed more than 9 million consumer visits and 1 million ratings and reviews in its consumer app between July and September 2020. Buc-ee’s Kwik Trip Rutter’s Weigel’s

HAND-WASHING FATIGUE

Americans are washing hands less often than early in the pandemic. 0-5 hand washes per day

6-15 hand washes per day

January 2021

43%

57%

April 2020

22%

78%

Pre-COVID

64%

37%

Source: Healthy Handwashing Survey from Bradley Corp.: 1,050 American adults queried Jan. 11-13, 2021, about their handwashing habits, concerns about the coronavirus and ﬂu and their use of public restrooms

LITTLE PLACES, BIG

Sheetz

Source: GasBuddy Consumer Ratings and Foot Trafﬁc Report, Q3 2020

The places with the most germs in public restrooms are small areas given cursory attention or easily overlooked in cleaning routines.

Germiest areas in public restrooms include: • toilet ﬂush handles • door handles, latches, panels and edges • faucet handles • soap dispenser levers • baby changing table Source: AeroWest, “Best Practices for Cleaning Public Restrooms,” May 2020

USE DISINFECTANTS SAFELY

LETTING EMPLOYEES

• • • • • •

• Allow workers to leave their work locations to use a restroom when needed. • Provide an adequate number of restrooms for the size of the workforce to prevent long lines. • Avoid imposing unreasonable restrictions on restroom use. • Ensure restrictions, such as locking doors or requiring workers to sign out a key, do not cause extended delays.

The Centers for Disease Control and Prevention urges safety when using disinfectants in cleaning restrooms and other public areas, especially in the midst of the pandemic. Below are tips for keeping your cleaning safe.

Wear gloves and consider glasses or goggles for potential splash hazards to eyes Ensure adequate ventilation Use only the amount recommended on the label Use water at room temperature for dilution (unless stated otherwise on the label) Label diluted cleaning solutions Do not mix products or chemicals

Source: Centers for Disease Control and Prevention, “Guidance for Cleaning and Disinfecting Public Spaces, Workplaces, Businesses, Schools, and Homes,” March 2021

CSTORE DECISIONS •

April 2021

‘GO’

While customer convenience is top of mind for most retailers, don’t overlook employees when they need a restroom break. The U.S. Occupational Safety and Health Administration requires employers to:

Source: Occupational Safety and Health Administration, U.S. Dept. of Labor, March 2021

cstoredecisions.com

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FRONT END Tobacco Update

What Is the

Cigarette Corrective Statements Litigation? Proposed legislation looks to require that 25% of each tobacco manufacturer’s cigarette display at the point of sale be covered by ‘corrective message’ signs. Thomas Briant • NATO

A newly proposed rule by the U.S. Department of Justice (DOJ) would require corrective statements about cigarettes to be posted by manufacturers at the point of sale (POS) in stores where cigarettes are sold. BACKGROUND In 1999, the U.S. government sued the major cigarette manufacturers, asserting claims under several federal statutes for conduct by the companies dating back to the 1950s. Then, in 2006, as a part of the ongoing litigation, the federal district court approved a remedial order that, among other things, required Altria, Philip Morris USA, Lorillard Tobacco Co. and R.J. Reynolds Tobacco Co. to publish “corrective statements” and disseminate them through several distribution channels to the public. Over the past few years, these messages were published in newspapers, on TV, on the manufacturer websites and on cigarette packages. This remedial order also included a requirement for each of the manufacturers to display a sign with the corrective statements in retail stores that have promotional contracts with the companies. A federal appeals court struck down the retail sign requirement and instructed the lower federal court to either abandon the signage remedy or adopt a remedy that protected innocent retailers’ rights. Note that retailers were never a party to this litigation, nor did the retailers make 14

CSTORE DECISIONS • April 2021

the statements that the U.S. government sought to have manufacturers correct.

CURRENT PROPOSAL Now, the DOJ has proposed a new POS sign remedy to the federal District Court that the manufacturers be required to display — for at least two years — 18 different POS message signs in stores that are under contract with one or more of the manufacturers. Specifically, 25% of the area of POS cigarette displays for each manufacturer would need to be covered by the POS message signs. Moreover, 25% of any other point-of-purchase material that advertises or promotes the manufacturers’ cigarette brands must also be covered by the POS messages, whether or not a retailer has a contract with the manufacturers. There are five main corrective statement topics, with each topic including either three or four specific proposed corrective messages (which add up to the 18 messages that the DOJ proposes to be displayed in retail stores). The five main topic areas are incorporated into a preamble and then followed by the specific messages under each main topic as outlined on the following page.

cstoredecisions.com

FRONT END Tobacco Update Preamble: A federal court has ordered Altria, R.J. Reynolds Tobacco, Lorillard and Philip Morris USA to make this statement about the health effects of smoking. • S moking kills, on average, 1,200 Americans. Every day. • More people die every year from smoking than from murder, AIDS, suicide, drugs, car crashes and alcohol, combined. • S moking causes heart disease, emphysema, acute myeloid leukemia and cancer of the mouth, esophagus, larynx, lung, stomach, kidney, bladder and pancreas. • Smoking also causes reduced fertility, low birth weight in newborns and cancer of the cervix. Preamble: A federal court has ordered Altria, R.J. Reynolds Tobacco, Lorillard and Philip Morris USA to make this statement about the addictiveness of smoking and nicotine. • Smoking is highly addictive. Nicotine is the addictive drug in tobacco. • Cigarette companies intentionally designed cigarettes with enough nicotine to create and sustain addiction. • It’s not easy to quit. • When you smoke, the nicotine actually changes the brain — that’s why quitting is so hard. Preamble: A federal court has ordered Altria, R.J. Reynolds Tobacco, Lorillard and Philip Morris USA to make this statement about low tar and light cigarettes being as harmful as regular cigarettes. • Many smokers switch to low tar and light cigarettes rather than quitting because they think low tar and light cigarettes are less harmful. They are not. • “ Low tar” and “light” cigarette smokers inhale essentially the same amount of tar and nicotine as they would from regular cigarettes. • All cigarettes cause cancer, lung disease, heart attacks and premature death — lights, low tar, ultra lights and naturals. There is no safe cigarette. Preamble: A federal court has ordered Altria, R.J. Reynolds Tobacco, Lorillard and Philip Morris USA to make this statement about designing cigarettes to enhance the delivery of nicotine. • Altria, R.J. Reynolds Tobacco, Lorillard and Philip Morris USA intentionally designed cigarettes to make them more addictive. • Cigarette companies control the impact and delivery of nicotine in many ways, including designing filters and selecting cigarette paper 16

CSTORE DECISIONS • April 2021

to maximize the ingestion of nicotine, adding ammonia to make the cigarette taste less harsh and controlling the physical and chemical makeup of the tobacco blend. • When you smoke, the nicotine actually changes the brain — that’s why quitting is so hard. Preamble: A federal court has ordered Altria, R.J. Reynolds Tobacco, Lorillard and Philip Morris USA to make this statement about the health effects of secondhand smoke. • Secondhand smoke kills over 38,000 Americans each year. • Secondhand smoke causes lung cancer and coronary heart disease in adults who do not smoke. • Children exposed to secondhand smoke are at an increased risk for sudden infant death syndrome (SIDS), acute respiratory infections, ear problems, severe asthma and reduced lung function. • There is no safe level of exposure to secondhand smoke. The DOJ proposal includes a multi-color design for each sign, which consists of a magenta and aquablue stylized asterisk, the message in white text on a black background, and the preamble in black text on an aqua-blue background. Below is an example of one of the proposed DOJ POS signs:

An evidentiary hearing on the DOJ proposal is scheduled before the federal district court for this July. The cigarette manufacturers, the National Association of Tobacco Outlets (NATO) and the National Association of Convenience Stores (NACS) are opposing the DOJ POS remedy. Note: The proposed DOJ POS messages are separate and different from the Food and Drug Administration’s new graphic cigarette health warnings, which are to be printed on cigarette packages, cigarette cartons and in cigarette advertisements. Thomas Briant is the executive director for the National Association of Tobacco Outlets (NATO).

cstoredecisions.com

Front End | HR Awards

MAPCO’s Davis

Puts People First

During the pandemic, MAPCO has doubled down

on its people-first mentality, from emergency pay for testing and recovery to paid time off to get vaccines. Isabelle Gustafson • Associate Editor

As vice president of people and culture for Franklin, Tenn.-based MAPCO, which operates close to 340 company-owned stores throughout the Southeastern region of the U.S., Amanda Davis plays a key role in transforming the company culture and elevating its talent, while positioning MAPCO for growth in a post-pandemic world. CStore Decisions is recognizing Davis as part of our human resources (HR) awards for her commitment to attracting top talent, improving the customer experience and creating a people-first culture beyond the standard benefits offer. Prior to joining MAPCO, Davis worked for Starbucks, Apple, Target and, most recently, Dollar General, all of which she credits for preparing her to build MAPCO’s HR function after its acquisition by Chile-based retail company COPEC. “MAPCO is an incredible place to work — it’s honestly difficult to put into words,” Davis said. “COPEC is extremely people-focused and values-driven. Being privately owned and extremely aligned on vision with our board allows us to focus on what matters most, invest for the long term and make an impact in the lives of our team and our guests.” 18

CSTORE DECISIONS •

April 2021

In her role, Davis oversees MAPCO’s Total Rewards program, employee relations, training and organizational development, payroll, talent acquisition, field HR business partners and internal communications — all of which help to propel the company into what Davis calls its “desired state.” “It’s challenging, as we haven’t reached our fullest potential,” she said, “but that creates an energy and a momentum that can be felt throughout the organization.” JUST GETTING STARTED

Davis cites competitive benefits as a key area of MAPCO’s employee value proposition. “Beyond traditional medical/dental/ vision/ancillary plans for which we benchmark higher than industry, we offer an attractive 6% match on 401k, flexible scheduling, same-day pay options and

cstoredecisions.com

Front End | HR Awards

In February, MAPCO announced it would provide its 3,200-plus employees with paid time off to get the COVID-19 vaccines.

more,” Davis said. “We also have an attractive parttime benefits package, which allows us to meet the needs of our team members.” Outside of the standard benefits, she said, MAPCO is always looking for ways to “meet our team in the moments that matter,” whether that’s housing and food when affected by natural disasters, emergency pay when testing for COVID, or helping grieving families. “A people-first culture doesn’t stop at the standard benefits offer,” she said. “That’s really us just getting started.” Like all retailers, the COVID-19 pandemic challenged MAPCO to work and think differently. Its first priority surrounded keeping its team safe while continuing to serve its communities. “I’m proud to say that MAPCO has never laid off a single team member due to the pandemic, nor did we decrease store hours,” Davis said. “This seems simple, but at a time when customer traffic was down, we were laser-focused on keeping our team members safe and whole.” From there, she said, MAPCO had to determine how best to take care of team members who were personally affected by COVID-19, which included emergency pay for testing and recovery, as well as daily check-ins, care packages and more. MAPCO also created a phase-out plan to test and ultimately take its support center teams remote and find creative ways to drive engagement virtually. 20

CSTORE DECISIONS •

April 2021

And in February, MAPCO announced that it would provide its 3,200-plus employees with paid time off to get the COVID-19 vaccines. Upon completion of their vaccination schedule, hourly team members will receive eight hours of pay, and salaried team members will receive eight hours added to their paid time off allotment. For MAPCO, Davis said, it comes down to caring about employees’ well-being and equipping them with awareness, information and accessibility to make the best decisions for themselves and their families. “For us, 2021 will mean being there for our guests as they begin to return to more normal activities of life and work while ensuring we’re still following protocols to keep our team safe,” Davis said. “It is about understanding our customers’ behaviors in a post-pandemic world — what trends will revert and which are here to stay. It means redeﬁning the future of work for our support center team.” Beyond that, she said, she’s excited to continue to differentiate MAPCO in its core markets, attract top talent and create an unparalleled guest experience. “My ultimate goal is for MAPCO to emerge as an employer of choice differentiated by our incredible culture, career opportunities, beneﬁts and so much more,” Davis said. “To help others see the intrinsic reward of building this dream in partnership with COPEC and to attract the best talent to do so — that’s what I’m most looking forward to.” cstoredecisions.com

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Front End | HR Awards

Deel Drives Business

at Thorntons

Sandy Deel works to better Thorntons and set team members up for success in their current roles and beyond. Isabelle Gustafson • Associate Editor

As director of human resources (HR) services and benefits for Louisville, Ky.-based Thorntons, with more than 200 stores in six states, Sandy Deel helps to drive business by finding efficiencies and helping employees succeed through management training programs, engagement surveys and more. CStore Decisions is recognizing Deel as part of our HR awards for her results-driven mentality and her dedication to the success of her team and Thorntons. “Sometimes I hear of companies where nobody wants to call HR,” she said. “But I think in our company, they call HR if they need help, if they need something or if they need advice.” Deel has held a number of roles in her 31 years at Thorntons. Prior to joining the HR department, she spent several years in project management; one of her projects was to assess HR. “I went in for a few weeks, talked to people, came back and said, ‘Here are all the things that we need. We need efficiencies here, and we need technology.’ They were doing everything in pencil and paper,” she said. “After my analysis, I was asked, ‘Hey, do you want to go do that?’ Eighteen years later, here I am, still taking on all the different initiatives as they’ve come along.” 22

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April 2021

cstoredecisions.com

LONG-LASTING PROTECTION

Front End | HR Awards

She cited her former boss, Mike Woerner, as a longtime mentor, as well as Brenda Stackhouse, Thorntons’ former executive vice president, who hired Deel when she was just 18 and played a part in her transition to HR. “She obviously saw something in me long before I knew there was something there,” Deel said. PANDEMIC AND BEYOND

Deel’s current role involves As a company, Thorntons values learning and talent development, said Sandy Deel, director much of the business side of human resources services and benefits for the Louisville, Ky.-based c-store chain. of HR, including health and retirement benefits, compensation, leaves and recruitment, as well as team member relations on the corporate side. “The company put in some seed money to begin But the past year has really revolved around the with, but the majority is funded by our own team pandemic, she said. In the beginning especially, members,” she said. “If a team member, for example, the HR team worked around the clock to ensure has a death of a family member, they can come and team members felt safe. apply for a Champ Cares grant. If someone has medi“We opened a hotline on March 13 of last year, cal issues and they have medical bills, or if they’re and it’s still going strong,” she said. “We did that behind on their mortgage, they can apply and get to help our team members because we knew they some assistance from the program.” were going to have questions; they were going to Other ongoing initiatives include a talent developbe scared.” ment program for management, which involves a work Thorntons remained open for its employees and session once a month for seven months, along with communities and was even able to bring on some pre-work and homework. Thorntons has a culture of additional team members from the retail and learning, Deel said, and it’s big on hiring from within restaurant industries who had lost their jobs due the company. to the pandemic. “We want to make sure the team members who Ultimately, Deel said, she’s proud of her team are up for promotion are truly ready,” she said, “so and of the company as a whole for its pandemic we give them all of the skills they need to be able to response. move forward.” “Our company has handled it very well and conThe company also conducted an engagement survey tinues to,” she said. “It’s because of our culture, last summer, which was met with 83% participation. because we care about our team members.” “We were very proud of that,” Deel said. “Now Another example of this is Thorntons’ 401(c)3 we’re working on the results. What did the team charity fund, Champ Cares, which it started 11 members like, what do they need? What do they need years ago to help employees in their times of to be successful and to be engaged at work? That’s need. Deel was one of the first members of the a huge, huge deal for us. Because without people, grant committee. you’d have nothing.” 24

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April 2021

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Front End | Safe Shop News

HIGH’S PURSUES

SAFE SHOP ASSURED CERTIFICATION The Maryland-based convenience retailer is the latest to be recognized for its commitment to a best-in-class customer experience. CStore Decisions Staff

Today’s consumers have many choices when seeking convenient solutions for food and fuel. In order to stand out and cultivate loyalty, retailers must meet high expectations for cleanliness and safety. But it takes more than consistent execution. Much of the hard work happens behind the scenes, and retailers must communicate their commitment in ways that resonate with consumers. High’s is in the process of being awarded Safe Shop Assured certification. Implementation of Safe Shop branding was completed at each of its 54 locations in March. Safe Shop is an industry-driven initiative to recognize operators who raise the bar for excellence. In order to earn Safe Shop Assured certification, retailers must satisfy a 10-point checklist of essential safety standards as identified by a panel of retailers, suppliers and industry experts. Ongoing reviews ensure compliance and program integrity. “High’s is exactly the type of retailer we had in mind when we launched Safe Shop,” said Frank Beard, director of Safe Shop. “This is a company with deep roots in their communities that go back nearly 100 years. They’ve always been focused on being the best and doing right by their customers. Cleanliness and safety are just one aspect of that; but it’s a story worth telling, and we’re excited to help them tell it.” Founded in 1928, High’s traces its history to humble beginnings as an ice cream store. Growing rapidly, High’s at one point was the world’s largest ice cream retailer with more than 500 locations across the Mid-Atlantic. In 2012, Carroll Independent Fuel acquired the company and leveraged its 26

CSTORE DECISIONS •

April 2021

rich heritage for a community-focused approach to convenience retailing. Today, each of the 54 convenience stores serve their communities with a fresh food offer, low environmental impact and a safe, welcoming and inviting atmosphere for both employees and customers. “High’s is an important part of the communities we serve,” said Michele Truelove, vice president of operations at High’s. “For more than 90 years, we have been there when our communities needed us — and there is nothing we care about more than the safety of our customers and employees.” RAISING THE BAR

“Partnering with Safe Shop was an easy decision, as we pride ourselves on delighting our customers every day with clean, safe and inviting locations,” Truelove said. “These are unprecedented times, and High’s takes its responsibility to the communities in which we operate seriously. We will continue being there when our customers need us the most.” Once its Safe Shop Assured certification is completed, High’s will showcase its commitment to safety and cleanliness by deploying branded decals at highvisibility touchpoints. The certification will also be highlighted in upcoming digital marketing campaigns. “As retail norms change, customers want to know that the stores they shop in are safe,” said John Lofstock, executive director of the National Advisory Group (NAG) and vice president of The Convenience Store Decisions Group. “By achieving Safe Shop certification, High’s is sending a powerful message to its customers that it cares about their safety and well-being and that it is taking the necessary steps to provide a superior shopping experience.” For more information on Safe Shop, visit Safeshopassured.com.

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FRONT END Profile

GPM Rolls Out $360 Million Remodel Initiative GPM Investments is unifying its c-store brands with a fresh design, while doubling down on its acquisition strategy and growing its customer-centric strategy. Erin Del Conte • Executive Editor

After aggressive acquisition growth over the past decade, ARKO Corp., through its wholly owned subsidiary GPM Investments LLC, is embarking on a major remodel initiative, with plans to invest approximately $360 million over three to five years to bring 360 of its nearly 1,330 company-operated convenience stores across the U.S. under one unified design, while maintaining the individual banners known and loved in their local communities. 30

CSTORE DECISIONS •

April 2021

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FRONT END Profile

GPM’s new interior design will tie its various brands together under a united appearance, while also offering a more open layout.

Meanwhile, the Richmond, Va.-based chain is continuing its focus on growth through acquisitions. Arko Holdings Ltd., under the leadership of Chairman, President and CEO Arie Kotler, purchased control of GPM in 2011, when it directly operated and supplied fuel to 320 stores and had revenues of approximately $1.2 billion. “Arie’s strategy was to continue to acquire companies, brand after brand after brand,” said Michael Bloom, EVP, chief merchandising and marketing ofﬁcer for GPM. “It’s been his strategy for the last decade, and it’s been an incredible strategy.” Over the past eight years, GPM has acquired its way to becoming the seventh-largest c-store chain in the U.S. Today, it operates or supplies stores in 33 states and the

CSTORE DECISIONS •

April 2021

District of Columbia, including both its company-operated stores and approximately 1,600 dealer sites. But Kotler and GPM are just getting started. In the past six months alone, the chain has made several strategic moves. In December, GPM’s majority owner Arko Holdings Ltd., along with the remaining minority owners, merged with Haymaker Acquisition Corp. II, which resulted in ARKO Corp., a publicly traded company on the Nasdaq Stock Market, owning 100% of GPM. The move positions GPM to continue its expansion plans while also ramping up its store remodel plans.

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The first remodeled location opened its doors in February 2021, in Collinsville, Va., and 10 locations are currently scheduled for remodel, with the second site opening in June.

In October 2020, GPM acquired Empire Petroleum Partners’ fuel distribution business and c-stores, adding 1,453 sites to GPM’s fuel distribution network as well as 84 company-operated stores. And just last month, GPM announced a deal to acquire 61 ExpressStop c-stores in Michigan and Ohio, which is anticipated to close in the first half of 2021. “Our model of growing through acquisition while keeping the local banners in place has delivered significant value for all of ARKO’s stakeholders,” said Kotler in a statement. Today, ARKO Corp.’s family of community brands includes fas mart, shore stop, Scotchman, BreadBox, Young’s, Li’l Cricket, Next Door Store, Village Pantry, Apple Market, Jiffi Stop, Admiral Petroleum, Roadrunner Markets, Jiffy Stop Food Marts, E-Z Mart, 1-Stop, Town Star, Jetz, R Store and fastmarket. “We operate them as one company, and everything’s centralized,” noted Bloom, who joined the company in 2019 after a long career at CVS Pharmacy, which also grew via acquisitions.

UNIFIED DESIGN Now, GPM is turning its attention to an extensive store remodel initiative. The chain anticipates investing roughly $1 million per store for a total of $360 million over the 360 locations, Bloom said. 34

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April 2021

“We believe this remodel program will generate over $70+ million of incremental EBITDA over the next three to five years,” noted Kolter in a statement. GPM typically acquires what Bloom calls “regional, usually family-owned, c-store chains that range in size. At the time of acquisition, the stores are often operating at a competitive disadvantage.” “We’re at a level of scale,” Bloom said. “It’s time to go back and reinvest in these stores and turn on what I would call the true potential of sales and profitability in these stores.” Bloom calls the new design,“evolutionary, not revolutionary.” It will begin in the forecourt, with upgraded curb appeal — fresh blacktop in the parking lot and driveway, new sidewalks and revamped fuel canopies. The exterior of each store will get an upgrade, as well. “The only difference is going to be how we treat the brand itself,” Bloom explained. “So whether it’s fas mart, E-Z Mart or Scotchman — when you drive by these stores, they will look identical with the exception of the brand.” The exterior refresh includes large windows and a stone or brick façade — depending on the rules of each municipality — that extends halfway up the building. “It could be stone in one market and brick in another, but the colors will appear similar,” Bloom said.

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FRONT END Profile

The fountain area will include a minimum of 16 beverage options per fountain in each revamped store. Each store will also feature at least two bean-to-cup coffee dispensers.

Because GPM grew via acquisitions, the stores feature various footprints, so the redesign was created to fit the existing store footprints, which range on average from approximately 1,800 to 2,800 square feet. The interior design will also tie the brands together under a united appearance. “When you walk inside one of our stores — no matter what the brand is — you will not know that you’re in a different store,” Bloom said.

Inside, each store will feature an open format. Where possible, the ceilings are being opened up to reveal exposed beams and to help the stores feel more spacious. “We’re being much more efficient with space,” Bloom said. Where stores used to have six to 10 cooler doors, they will now feature a minimum of 14 doors and a beer cave where space allows. All stores are also receiving freezers for a frozen food section. Due to the pandemic, customers are seeking quick, easy and convenient food, which includes stocking up on frozen selections. “You will clearly see a food-dominant area of the store and a non-food-dominant area of the store,” Bloom said.

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About 150 of the sites include full kitchens, but regardless, all upgraded stores will include an expanded grab-and-go area — that will include pre-made sandwiches, salads, fruit cups, parfaits and more — as well as a prepared food offering where space allows, including fried chicken, pizza and breakfast sandwiches. The fountain area will include a minimum of 16 beverage options per fountain. In addition to a broad assortment of carbonated and non-carbonated fountain drinks and chewy ice, stores will feature iced coffee and include a minimum of two bean-to-cup coffee dispensers per store. Each location will also feature a bakery program and at least two roller grills. Originally, GPM was scheduled to launch its remodels in the first half of 2020, when COVID-19 halted plans, giving the chain an opportunity to rethink its strategy in light of how the pandemic has changed customer needs. “We thought, ‘What if we remodeled 50 stores, and the pandemic changes the way people shop?’ And, guess what? As you know, it has clearly changed the way people shop,” Bloom said. “The foodservice that we’re focusing on is the pre-made, ready-to-go, grab-andgo service. That’s what customers are migrating to now (due to COVID-19), and we believe for the foreseeable future.” With more emphasis on contactless transactions today, GPM is also working on a way for customers to order their bean-to-cup coffee via the GPM app on their phone, as well as expanding delivery services through DoorDash from 20 stores to more than 600 sites this year. Each remodeled store will feature a new checkout experience, with a more spacious customer area offering new impulse shopping opportunities and an open merchandising concept. This includes a more visible backbar for tobacco and e-vape, allowing customers to better see each brand. Customers will also have the opportunity for mobile checkout via Apple Pay. Each newly remodeled store will showcase a community wall welcoming customers and spotlighting things for which the town is known. 38

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April 2021

“The reason that we’re not going to consolidate our brands is because we believe it’s a point of differentiation for us. We believe that the local brand that’s been there for 50 years has meaning to the community (vs. a national brand). Now it’s our responsibility to make sure that we hold up the expectations,” Bloom said. The first remodeled location recently opened its doors in February 2021 in Collinsville, Va., and 10 locations are currently scheduled for remodel, with the second site opening in June. After the first 10 locations are redesigned, GPM plans to evaluate all aspects of the design in action, making tweaks where necessary before scaling the design.

“We are completely agnostic to geography,” Bloom explained. “It does not matter where we go to remodel the store; it matters whether the convenience store is right and will generate the appropriate return on investment. So that will likely cross over just about every brand we have.” The first 360 sites are expected to take about three to five years to complete. Eventually, most stores are expected to convert to the new design.

REWARDING CUSTOMERS Last year, GPM partnered with Paytronix to relaunch its fas REWARDS loyalty program, which debuted on Nov. 4, 2020. Historically, fas REWARDS was a cigarette discount program used to provide data to cigarette companies and offer tobacco discounts to customers.

cstoredecisions.com

FRONT END Profile

Through the relaunched fas REWARDS program, customers earn up to 4% in loyalty points, and ongoing communication and relationship building is a key strategy. “Our focus right now is 100% on getting people to enroll in the program, getting them to download the app or go online,” Bloom said. Since the November launch, GPM has signed up more than 50,000 new loyalty members, Bloom noted. As enrollment grows, GPM is nurturing its customers. “Customers will receive various offers to entice them to visit the store, spend more and increase their frequency. “We know that our customers who have signed up visit us significantly more times during the month than those that don’t,” he said. “And that’s because we’re changing their behavior.” GPM is analyzing what customers buy in order to offer deals on items that might go with the products they’re already buying. “It’s a complex algorithm that helps change customers’ behavior by increasing their trips, by giving them offers and getting them in the store more often. We’re willing to invest and spend money on these offers because we know that loyal customers are much more valuable than non-loyal customers,” Bloom said. The loyalty program is now available at most GPM locations, and the fas REWARDS logo and brand will

Over the past eight years, GPM has grown to become the seventhlargest c-store chain in the U.S., thanks to its acquisition strategy, which the chain plans to continue in 2021 and beyond. 40

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April 2021

be visible on the interior and exterior of all redesigned convenience stores. “I don’t think anybody puts their loyalty brand on the outside of their stores. So that’s going to be recognizable because we’re going deep in loyalty and customer relationship marketing,” he said.

GROWING FORWARD Today, ARKO Corp. is working to become a more customer-centric company from the marketing department to the visual merchandising department, which will help attract and retain c-store customers. “That is our strategy today. It will be our strategy in the future,” Bloom said. “When you put the customer at the center of every decision you make, you always will land in the right spot.” “For example, when you do planograms, if you find you’re missing the No. 1 item in the category, why don’t you have the No. 1 item in the category? Because you weren’t customer centric. If you were customer centric, you wouldn’t miss those things,” Bloom explained. Heading into 2021 and beyond, GPM intends to continue growing its fleet of stores via more mergers and acquisitions (M&A). “M&A is in our blood. We expect to continue to acquire stores and to be part of the consolidation of the industry,” he said. “It’s our model. We’re good at it. And we want to continue doing that.” While M&A is what Bloom call’s GPM’s “core competency and a core strategy,” the company hasn’t ruled out new builds in the correct situation. For example, GPM recently broke ground on a new truck stop in Rock Hill, S.C. GPM will also be testing drive-throughs at its convenience stores. The chain operates 73 quick-service restaurant (QSR) franchises at its convenience stores. During COVID-19, customers began gravitating toward using drive-through service. “Our QSRs that had drive-throughs didn’t miss a beat when COVID hit,” Bloom said. The expectation is that many of the habits customers have adopted during the pandemic, such as using a drive-through, will be ingrained in their behavior postpandemic. “If I had a crystal ball,” Bloom said, “I would say the convenience store industry in 25 years will be where the drug store industry is today — vastly consolidated, updated stores (with) technology and services, and entry into the game is going to be a drive-through.”

cstoredecisions.com

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Driving Profits, Reducing Operating Costs iVertical Payment Network (iVPN) payment platform offers 0% processing fees for merchant branded general merchandise digital gifts and mobile debit payments acceptance for state lottery products. A CSD Special Report

We are asking c-Store operators two questions: 1. Would you be interested in a mobile app that enables you to have your brand as a digital gift program for general merchandise with no transaction fees or app development cost? 2. If you could move beyond cash and have debit payment for lottery products with no payment processing cost, would you?

IVPN is introducing NO COST PAYMENT PROCESSING for merchant branded digital gifts for general merchandise items and mobile debit payment acceptance for in-store lottery purchases. HOW IT WORKS

iVPN charges consumers 50 cents for a merchant branded digital mobile gift and 30 cents per transaction for BuyLottoNow, its branded cashless mobile payment for lottery products. To use the service, a consumer goes to the merchant's website, or the app offered by iVPN. When inside the store, they share the phone’s screen, which displays a bar code, for the merchant to scan to complete the payment. IVPN is utilizing the Connexus Standards to seamlessly integrate into Merchants’ POS systems — speciﬁcally Verifone Commander, Gilbarco Passport and Radiant terminals. iVPN is utilizing payment technology that has been deployed in over 25,000 c-stores over the last 15 years. 42

CSTORE DECISIONS •

April 2021

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iVPN provides the retailer their own branded app for the gift program in the Apple and Google stores AT NO COST. Utilizing this technology, iVPN allows for little to no operating costs, no gift card stock costs and ZERO transaction fees. iVPN headed by Joe Randazza, whose National Payment Card Association morphed into ZIPLINE, pioneered merchant branded debit cards and mobile payment with processing fees below what the federal government mandated through the Dodd-Frank Act, and is now back in the market to drive c-store industry proﬁtability. "If a merchant looks at what their annual cost is, they can see how we can save them hundreds of thousands if not millions of dollars to their bottom line," Randazza said. Further, Randazza said, the iDigital Gifts and BuyLottoNow platform captures the gift giver's and gift recipient's name, email address, and cell number, which avails the retailer to a treasure trove of loyalty program information that they can use for promotional activity to drive in-store trafﬁc. cstoredecisions.com

On top of iVPN, Randazza is also rolling out BuyLottoNow, a cashless mobile payment app for purchasing lottery products. Randazza said that Lottery as a sector in c-stores are faced with an enormous loss of in-store traffic by states and private companies operating online iLottery in direct competition to merchants. Operating independent of state lotteries or their vendors, consumers can make a cashless payment to purchase lottery products with their mobile phone. Further, to drive in-store traffic, a consumer can send a friend or family member the low-cost gift of lottery for birthdays, holidays, or any occasion with a digital gift of $10, $20 or $30 wishing them a WINNING Day. Through its BuyLottoNow acceptance brand, iVPN is making Lottery a winning loyalty program with no cost email engagement to drive traffic back to the store. "If you operate 20 stores, this partnership can increase your profitability a couple hundred thousand dollars a year," Randazza said. "Plus it will enable you to stop state governments from taking core lottery customers

out of your stores. When those customers start making lottery purchases on apps controlled by state governments, they are not coming into your stores, which also means you are losing opportunities to sell them foodservice, tobacco and beverages. They become lost customers, so now your state government, which is taxing you to death on fuel and tobacco, and raising the minimum wage to increase your operating cost, is now also one of your competitors with little to no overhead. We can't let them take sales out of the channel and out of your stores." To begin a conversation on how to become a participating iVPN merchant call Bill Deichler at (870) 665-9856 or email him at bdeichler@buylottonow.com.

April 2021 •

CSTORE DECISIONS

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2021 Human Resources Report

LABOR MANAGEMENT IN THE AGE OF COVID-19 The 13th annual CSD/Humetrics HR Benchmarking Survey showcases how c-store retailers are navigating human resources challenges during the COVID-19 pandemic. Mel Kleiman, Humetrics and Erin Del Conte • Executive Editor

CStore Decisions and Humetrics, for the 13th consecutive year, have collaborated on the annual Human Resources (HR) Benchmarking Survey, which polled c-store retailers between Jan. 4 and March 1, 2021, about HR practices, labor challenges and headwinds. Given the rise of the COVID-19 pandemic in March 2020, the past 12 months have brought unprecedented operational and staffing hurdles — with recruiting topping the list of concerns for retailers — leaving c-store operators to test new best practices and employee incentives. If we were to bestow a Crystal Ball Award for best predictions, it would go to the respondent who submitted this comment when asked about challenges early last year — well before we understood what we were in for in 2020: “Disruption due to the Coronavirus; not just from a customer or employee perspective; but we have concerns about our various supply chain partners — food, ingredients, etc. — who may be impacted.” As the pandemic and lockdowns began last spring, some c-store retailers implemented hazard pay for employees to the tune of $2-$3 an hour while, as the following summary results will show, most instituted safety precautions like masks, gloves, plexiglass shields and social distancing decals to keep employees and customers safe. Some, like Altoona, Pa.-based Sheetz, with 600 stores in six states, offered additional paid time off (PTO) for employees who contracted the virus. 44

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cstoredecisions.com

2021 Human Resources Report

As the pandemic continued, staffing challenges escalated industrywide. Now in 2021, with vaccines rolling out nationwide, retailers are looking forward to how they can best position their workforce solutions as we emerge from the pandemic. A few chains have begun incentivizing employees to get COVID-19 vaccines. Convenience store chain MAPCO, with close to 340 stores throughout the Southeastern U.S., announced in February that it is offering PTO for team members to get vaccinated. Hourly team members who opt to get vaccinated will be rewarded with eight hours of pay, while salaried team members will get eight hours added to their available PTO hours. (For more on MAPCO’s HR initiatives, see the HR Awards on p. 18). Meanwhile, Love’s Travel Stops is offering its Oklahoma-based employees the option to receive the vaccination for free at its Oklahoma City corporate offices. The company also announced in January that its more than 29,000 team members in 41 states will receive a $75 incentive to voluntarily get the vaccination. Wawa, which operates 900 locations in five states and Washington, D.C., is also offering a $75 incentive for associates who receive the vaccine. C-stores are also positioning themselves to compete for quality recruits in a tight labor market. For example, Sheetz is investing $28.5 million in employee wage increases, effective Feb. 12, for the majority of the chain’s 18,000 employees. Sheetz has also updated its parental leave policy to offer 12 weeks of paid leave for new mothers and two weeks of PTO for partners. As companies look to the future, a number of them, including Wawa and Love’s, have announced major hiring initiatives in the last month; Wawa is looking to fill 5,000 new positions, and Love’s is looking to fill 2,000. SUMMARY RESULTS

The summary of the results of the 13th annual HR Benchmarking Survey is based on respondents’ recent experiences and expectations through March 1, 2021. This year’s survey asked 36 questions — several about the pandemic, general business conditions and demographics, while the majority focused on human resources issues. Respondents’ organizations ranged in size from 25 or fewer employees (19%) with less than $1 million in annual revenues (11%) to more than 100 employees (57%) and more than $100 million in annual revenues (18%). When examining respondents by job title, about 46

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April 2021

30% were corporate HR personnel; another 20% were general, regional or operations management; and store owners accounted for another 18%. The results provide industrywide insight as well as a number of useful benchmarks. As seen in the chart below, the most concerning industrywide challenge continues to be staffing issues, just as it has been every year for over a decade — pandemic or no pandemic.

biggest Industry challenges

In response to the question, “How is the pandemic affecting employment at your store(s)?” there were several comments to this effect: “Providing people with monetary incentives to stay home and NOT work does not get this country working again.” And, as would be expected, nearly all respondents had to deal with the significant impact on labor costs, recruiting and retention challenges, as well as not being able to cover shifts due to employee illness. Most respondents had taken every measure listed and then some to incentivize employees during the pandemic: “Safety measures (plexiglass, floor decals, masks, disinfectant), new or more sick leave, COVID-19 testing, hazard pay, etc.” A representative comment reads: “We have implemented a lot of the above measures during 2020 — safety measures, new sick leave policies, free testing for support center team members, hazard pay for store team members, work-from-home options for support center team members, and our training has gone more electronic than ever before to limit class sizes and close interactions as much as possible.” Many plan to eliminate special initiatives and incentives once vaccines are widely available, even though over 50% of respondents reported that it’s still a struggle, as always, to recruit suitable applicants.

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Unlike last year, reported employee turnover rates did not exceed 300% for any of this year’s respondents. Still, about 41% reported a turnover rate of somewhere between 90-300%.

2020 Employee Turnover Percentage

STAFFING CHALLENGES

As for the specifics of the most challenging staffing issues, 57% cited recruiting as the most pressing concern, followed by selection (47%) and retention (45%). Last year, the reverse was true when selection and retention tied at 67%, and recruiting came in third at 54%. “Increasing the national minimum wage will ease the number of people the federal government continues to provide assistance to. We have to abolish the term ‘working poor,’” one respondent noted. When asked, “Approximately what percentage of 2020 new hires quit within the first 30 days?“ 59% noted they lost up to 25%, and another 44% lost somewhere between 26-75% of new hires in one month.

Top Staffing Challenges

In response to our question about organizational effectiveness regarding recruiting, selection and retention, most gave themselves average-to-excellent scores for selection, fair-to-average for recruiting and poor-to-average marks for retention. EMPLOYEE RECRUITING

This appears to be the area most adversely affected by the pandemic because, when it comes to effective recruiting tools, this year’s results were a real mashup. For instance, 26% of respondents reported Craigslist as their most effective tool, while another 26% said it was the least effective. Here’s a snapshot of how perceptions about these tools’ effectiveness have changed over four years:

most effective recruiting tools 1. 2. 3. 4. 5.

CSTORE DECISIONS •

April 2021

2018

2019

2020

2021

In-store ads/ outdoor signage

Internet job boards

Employee referrals

Internet job boards

Social media

In-store ads/ outdoor signage

Craigslist

Employee referrals

Social media

Rehiring former employees

Social media

In-store ads/ outdoor signage

Rehiring former employees

Social media

Company website & rehiring former employees

Company website

Internet job boards

In-store ads/ outdoor signage

cstoredecisions.com

2021 Human Resource Report

It’s interesting to note that internet job boards fell from No. 1 in 2019 to No. 5 in 2020 and is 10th this year. The chart below shows the percentage of respondents recruiting from often-overlooked populations.

are you actively recruiting from any of the following populations?

EMPLOYEE SCREENING & SELECTION

Even though attitude is reported to be the “most important” attribute employers look for in an applicant and is proven to be the most reliable predictor of success on the job, fewer than 30% of these respondents use attitude testing as a screening tool.

Pre-employment screening tools in use

Sixty-seven percent of those responding reported all those conducting interviews have been trained in best-practice interview techniques, and 71% use a standardized interview question set (about the same results as last year). EMPLOYEE RETENTION

Comments in response to this question included: • “Actively recruiting any dependable people that are drug-free and no criminal record.” • “We recruit and hire all of the above.” • “Three-quarters of my staff are over 42.” Fifty-seven percent make use of an hourly employee recruiting bonus incentive or referral reward program and generally find that, when it works, it works exceedingly well. On the whole, though, respondents find their programs satisfactory at best. Respondents noted: • “The referrals that do stay working are great, but we don’t get that many.” • “Quite effective when employees take advantage of it.” 50

CSTORE DECISIONS •

April 2021

About 72% of our survey-takers offer starting wages anywhere from $1 to $5 more than the required minimum wage, and 70% raised base pay in 2020 or early 2021.

starting wages for hourly employees

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2021 Human Resources Report

When it comes to training budgets for 2021, this group was evenly split. Fifty percent will spend more, and 50% will maintain current investment levels. As for training methods, the tried and true, handson, in-store approach is most favored: Telephone apps

4.17%

Webinars

14.58%

Live classes led by a professional trainer

37.50%

Online e-learning

58.33%

Hands-on, in-store training

89.58%

with personality conflicts to work together; solicit more employee input.” • “Better initial onboarding so new employees feel prepared to do their jobs. Promote from within/train/mentor internal employees to grow with our company — avoid long shifts/burnout/ overscheduling employees.” • “Call them in the first 60 days to check in on them.” When it comes to what organizations are doing to cope with the pressure to increase hourly wages in addition to paying more to meet competition or government requirements, respondents listed increasing margins, watching carefully, increasing prices while reducing hours, implementing a set wage schedule, paying above minimum wage for experience and enhanced skills, motivating employees and reviewing labor efficiency. Some other comments included: • “No one doing anything.” • “We have been doing ‘what if’ scenarios to see how and what we will need to do IF minimum wage is raised.” • “Continually building business to support labor cost.” • “Have not had a lot of pressure to raise wages.” • “We are staying up with it, and our payroll expenses are increasing on per hour worked and as a percentage of sales.” • “We will give hours to most productive employees. Raise prices strategically.” • “Budgeting for it each year, through 2024.” • “Finding it very difficult. When any other business in the area pays much higher, all of our staff expects the same for them.” • “(New York) We have not had a choice. Minimum wage increased to $12.50 per hour in our area of the state — along with state mandated paid sick

There appears to be a lot of focus on improving retention right now because, while many questions in this survey invited comments, the next two garnered the most responses. In addition to the most often mentioned “more/better training” and “wage hikes,” the strategies these employers are using to improve hourly employee retention include more employee recognition/recognition programs, training and incentives. Here are a few example comments from respondents: • “Edited our structured interview questions as to try and get more information, their expectations and what they are looking for in our company.” • “Added shift differential pay (50 cents per hour more for closers) and implemented an employee reward program (lapel pins awarded for five to six categories throughout the year).” • “Added a ‘30-day’ review — How’s it going, where do you feel you need more attention, etc.” • “Build culture — we are an ESOP (employee stock ownership plan) — educate about the program, schedule three weeks out, have a trainer/recruiter in each region to assist with best practices in regards to management and recruiting tools hiring.” • “Great benefits for hourly employees: health insurance, etc.” • “Stay interviews, exit interviews, retention plans.” • “Develop our managers into leaders.” • “Hire older, not needing a job really. We have those going to college and older.” • “Scheduling two or more days off in a row for all employees; shift preferences; allowing employees to request specific days off for any reason; avoid scheduling employees 52

CSTORE DECISIONS •

April 2021

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2021 Human Resources Report

time for all employees beginning in 2021.” • “We do consistent pay structure review annually or biannually.” • “We are trying to maintain transparency and open communication with our staff, as well as maintain a good culture and working environment.” • “Lucrative monthly bonus.” • “We have created skills road maps for employees to complete with their managers. Each skill is worth zero, two or four cents per hour based upon their overall performance. A four-cent increase in a specific area will result in a pay increase of more than $78 annually.” When it comes to retention tools, pre-shift huddles and retention interviews (aka “stay interviews”) are

other tools or technology to minimize human contact, reduce labor costs or increase efficiency?” When asked, “How are you using technology when it comes to scheduling and shift changes?” respondents listed text messaging, manual scheduling, software scheduling, app-based scheduling/shift changing, labor scheduler, google calendar, HRIS system. One respondent noted their company was “looking at sales per hour to increase productivity with lessqualified applicants.” PROGNOSIS FOR THE YEAR AHEAD

When asked, “How was business overall in 2020, and how do you think 2021 will compare in each of the three categories listed below?”a surprising onethird reported better-than-expected results for their own organizations Why Do Great Employees Want to Work For Your Organization? in 2020, but even more thought the industry and the U.S. economy results were worse. When asked to check their crystal balls about prospects for this year, things seem a bit brighter, tempered somewhat by thoughts like these: • “Our company was lucky to continue to thrive despite initial setbacks due to COVID. It is unclear what 2021 holds, but if it is anything like 2020, we can expect to see rapid changes as everyone tries to stay ahead of it.” • “If we can come together as a country and an industry to protect gaining favor. Two other retention tools we asked and help everyone, we will rebound three times as fast about were benefits and corporate culture. Thirtyas we will by sowing misinformation and punishing one percent of this group expects to increase people who are trying to get the correct information hourly employee benefits this year, while 65% to the traveling public.” expect remain “as is,” and when asked to describe Thanks to those who participated in our survey. CSD their organization’s culture, the most frequent responses were: “Family2020 friendly, respect/fairness, flexible/ Much Better The Worse Much Don’t better adaptable.” same worse know When asked: “Why should a great Our company 17.7% 43.0% 29.1% 7.0% 0% 1.2% employee want to work for your Our industry 12.6% 46.8% 30.3% 6.3% 1.2% 2.5% organization?” it’s interesting to note U.S. economy 23.1% 34.6% 28.2% 14.1% 0% 0% “best pay” comes in second to last.

2021

TECHNOLOGY

This year, despite the pandemic, only 25% responded “yes” to the question, “Have you or do you plan to add robotics, self-checkout, or any 54

CSTORE DECISIONS •

April 2021

Our company

16.7%

39.6%

25.0%

16.7%

2.1%

Our industry

14.9%

42.6%

19.2%

12.8%

4.3%

6.4%

U.S. economy

6.4%

27.7%

23.4%

12.8%

2.1%

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Foodservice | Daypart

Daypart Focus Brings

Foodservice Success C-stores look to regain breakfast sales and capture the elusive dinner daypart with comfort foods and menu innovations. Isabelle Gustafson • Associate Editor

Vaccines are rolling out, but the pandemic and its effects are far from over. Across all dayparts, c-stores continue to adjust their foodservice offers to reﬂect evolving consumer habits and set themselves up for success on the other side. The breakfast daypart in particular took a hit at the start of the pandemic for many retailers along with the dip in morning commuters. Last fall, Parent Petroleum’s Urban Counter restaurants, all but one of which are attached to its The PRIDE Stores c-stores in Illinois and Indiana, began offering all-day breakfast in part because of the popularity of its breakfast burrito — its top-selling menu item. 56

CSTORE DECISIONS •

April 2021

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Foodservice | Daypart

The PRIDE Stores’ Urban Counter added two new menu items to its St. Charles, Ill., location: a cheese curd burger (pictured) and fried cookie dough.

Despite some initial operational challenges, it’s been a win-win, said Owner and CEO Mario Spina. And breakfast sales have mostly recovered by now. “We’re still not at the level that we were prior to the pandemic,” he said, “but we’re getting close. … (Dinner’s) the segment we want to start focusing on and see if we can grow a little bit more.” The c-store chain offers delivery through Uber Eats and recently added Grubhub, as well, with most delivery orders coming in during the lunch daypart. Sandersville, Ga.-based Jet Food Stores, which operates 54 stores in the state, offers a number of Southern comfort foods, from pork chops to country fried steak, grits, macaroni, home-cooked greens and more, along with daily specials. But take-home whole pizza sales from Hunt Broth-

CSTORE DECISIONS •

April 2021

ers Pizza, in particular, have grown “tremendously,” said Director of Food Operations Matthew Turner, along with bulk chicken orders. While all dayparts are up, Turner noted, “the majority of our increase is on pizza, and during the evening daypart, it’s those take-home pizzas. … Whole pizzas are very big. We have stores that do two, three, four pizzas at a time for groups of people.”

cstoredecisions.com

Foodservice | Daypart

Chicago-based Foxtrot recently entered the Washington, D.C., market after a $42 million funding round. Pictured is its newest location in D.C.’s Mount Vernon Triangle neighborhood.

Pizza’s fared well during the pandemic; it’s a takeout-friendly comfort food that can be customized and easily updated with new toppings and limited-time offers. According to a September 2020 Mintel study, “Pizza Restaurants: Incl Impact of COVID-19 US,” 72%

of Americans say, “I enjoy things that remind me of my past (e.g., childhood),” and almost half of pizza restaurant consumers (45%) prefer pizza over other restaurant foods during the pandemic. The study also found that the majority of young consumers, particularly Gen Zers and millennials, agree restaurants should offer new pizza options during the pandemic to keep the menu exciting. MENU INNOVATION

Chicago-based Foxtrot Market offers a number of meal options in addition to its cafe menu, from ramen and Thai curry bowls to mac and cheese and avocado toast. Justin Schaub, director of culinary operations for Foxtrot, said the goal is always to provide the freshest daily products for a wide variety of preferences and dietary restrictions, with a focus on local items in order to support the communities in which Foxtrot operates. The 12-store chain, which recently entered the Washington, D.C., market after a $42 million funding round, promises “under-an-hour delivery” via its proprietary app and website. “We’ve seen a lot of success through delivery,” Schaub said, “and in our ability to curate and do some of the decision-making for our customers.” Close to half of Foxtrot’s menu consists of a core, evergreen offer, and the rest is updated seasonally. “We try to remain ﬂexible according to what’s available to us within each market, as far as seasonal items go,” he said. Latest additions include a mapo tofu bowl and pork and chili tacos, created for the D.C. stores by local chef Erik Bruner Yang, as well as a farro salmon bowl — roasted salmon with fresh, locally sourced vegetables in a brown butter vinaigrette. 60

CSTORE DECISIONS •

April 2021

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Foxtrot Market updates its menus seasonally. New items include a mapo tofu bowl, pork and chili tacos and a farro salmon bowl (pictured).

The PRIDE Stores’ Urban Counter added two new menu items in March: the Fried Bacon Dog — a hot dog wrapped in thick-cut bacon, deep fried and topped with caramelized onion, jalapeño spread, ketchup, mustard and mayo — and the Southwest Black Bean Burger — made with black beans, Southwest dressing, avocado, pico de gallo, provolone and bib lettuce on a brioche bun. Spina said the goal was to create something “more exceptional” than the standard veggie burger that will appeal to vegetarians and meat-eaters alike. It’s also testing a few items at its St. Charles, Ill., location: a cheese curd burger and fried cookie dough. “Everyone’s very health-conscious these days, and we have those items as well,” Spina said, “but, every once in a while, if you want to have a fried hot dog, you can have a fried hot dog, you know?” Parent Petroleum also self-distributes its graband-go items from its commissary in Warrenville, Ill., and it operates a Mexican food concept called Taco Urbano, which it plans to expand further. Ultimately, it’s been a long, arduous year for all, but retailers’ efforts, in foodservice and otherwise, are poised to pay off post-pandemic. “We’ve tried to make the best of the situation,” Spina said, “to improve our operations and improve our offerings, so that when things do get better, we’ll be in a better position than we were before.” CSD

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April 2021 • CSTORE DECISIONS

Category Management | Smokeless Tobacco

Positioning Smokeless Tobacco From classic dips to tobacco-free nicotine pouches, innovation in form and flavor delivers an array of options for dippers as sales stay solid. Thomas Mulloy • Senior Editor

Smokeless sales, driven by the spitless segment, are trending up at convenience stores with help from ongoing innovation in the segment. Dollar sales in the convenience channel rose 8.9% for the 52 weeks ending Feb. 27, 2021, totaling $7.37 billion, up from $6.77 billion for the previous year, according to data from NielsenIQ. Unit sales for the same period rolled in ﬂat (0.8%), a dip of 0.1% over the previous year. “Moist tobacco cans are still king in our stores,” said Lisa Dell’Alba, president of Square One Markets, operating seven stores in Pennsylvania. “We are seeing steady consumption and slight growth in the category.” While form and ﬂavor options seem popular with smokeless consumers, manufacturers may be wise to not mess with that classic, pocket-perfect tin or its price. “I think it was about a year and a half ago they offered some bigger cans,” said Vince Segura, general manager and retail director for Fuel City’s seven stores in the DallasFort Worth metroplex. But the bigger cans didn’t resonate as well with customers. “They didn’t really move because I think the price point was a little high for the customer,” Segura said. 62

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April 2021

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Leading Together:

SPONSORED EDITORIAL

A conversation between CStore Decisions and Reynolds American Inc. Diversity & Inclusion John Lofstock

CStore Decisions Editor in Chief

Borgia Walker

Reynolds American Inc. Vice President, Talent, Organizational Effectiveness & Inclusion

Why is a diverse workforce better for companies?

What should companies be doing now to make sure their business is future-ready?

Reynolds* is committed to having a diverse workforce and inclusive culture. This is integral to our Environmental, Social and Governance (ESG) efforts, which are essential to delivering A Better Tomorrow. According to FORTUNE’s Great Place to Work – a certification Reynolds has achieved for four consecutive years – research shows many benefits of a diverse and inclusive workplace, including:

Companies of all sizes should be investing in, developing, and diversifying their existing talent; providing mentoring programs; and looking for ways to reach more diverse talent in their recruiting processes. They must be fast and agile, and offer resources and developmental programs to meet their teams’ varying needs. Additionally, companies should continue to look for evolving practices used by other companies that will continue to grow and stretch their D&I programs, throughout their supply chain, how they give back financially to the community, and how they make it easier for employees to give back as well.

• Higher revenue growth • Greater readiness to innovate • Increased ability to recruit a diverse talent pool • 4 times higher employee retention Businesses can only harness the benefits of a diverse workforce if they create an inclusive culture where everyone feels valued, can be their authentic selves, and feels a sense of belonging.

Is diversity and inclusion a continuous process? Yes. D&I has long been and continues to be a vital part of our transformation journey toward A Better Tomorrow. As an organization with adult consumer-focused businesses, our diverse perspectives and skills drive deeper consumer understanding and the ability to provide innovative products that meet adult consumers’ evolving preferences. This is certainly an ongoing journey – we’re proud of our past efforts and continually striving to do even more. For instance, we continue to have progressive policies, programs, and first-in-class benefits, including: • A comprehensive parental leave policy with 16 weeks of paid leave for new parents • Employee resource groups comprising individuals with common interests or backgrounds and their allies • The Women of Transformation initiative, a corporate effort to highlight and celebrate innovative female leadership • Up to 8 months of a reduced work schedule for new mothers and fathers And as we see societal shifts, we’ve more recently made multiple commitments to action, accelerated our agenda to diversify the composition of our management positions and enhanced our support of employee volunteerism for civic causes.

*Reynolds American Inc. and its operating companies (collectively referred to here as “Reynolds”)

How do you foster an open, communicative environment for your employees? Reynolds fosters an open, communicative environment in many ways. This includes having several executive-sponsored employee resource groups (ERGs) comprising members of various demographics and their allies. Our ERGs not only support one another, but actively lead company-wide education, awareness and engagement efforts around issues that matter most to them. Through listening sessions, a recently launched diversity and inclusion internal website, and sites for each ERG (African American, LGBTQ+, LatinX, Veterans, Women, Asian-American and New Hires), we facilitate multi-way, D&I-focused communication both on- and off-line.

How do you know if employees are benefiting from your diversity efforts? As mentioned earlier, we have been certified by FORTUNE as a Great Place to Work four consecutive years. This is a direct result of employee feedback provided anonymously to Great Place to Work. Additionally, for the second consecutive year, we scored 100% on the Human Rights Campaign Foundation’s 2021 Corporate Equality Index (CEI), the nation’s foremost benchmarking survey and report measuring corporate policies and practices related to LGBTQ workplace equality. By scoring 100%, Reynolds was again designated by the Human Rights Campaign Foundation as one of the Best Places to Work for LGBTQ Equality. Beyond third-party recognition, we have communicated openly about our ambitions. We’re tracking progress and sharing results quarterly. We continue having listening events and keeping a pulse through our ERGs to ensure we’re driving an inclusive culture.

Category Management | Smokeless Tobacco

“

Moist tobacco cans are still king in our stores. We are seeing steady consumption and slight growth in the category. – Lisa Dell’Alba, president of Square One Markets

But that doesn’t mean consumers aren’t looking for options in form and flavor. Innovation is alive with the rising popularity of tobacco-free pouches and some highly creative flavor options like dragon fruit, citrus burst, coffee, bourbon, peach and others. Some products will see a lull from time to time. For Fuel City, snus sales have cooled a bit. “Snus is slow,” Segura observed. “I don’t know if it’s just the market’s not there or (something else). A lot of our convenience stores, I don’t see very much movement in snus at all.” Still, that may be a temporary dip. Spitless tobacco products at c-stores roared through 2020 with a 66.9% dollar sales increase for the calendar year ending Dec. 27, 2020, according to IRI liquid data. Whether that’s a reflection of consumers seeking a more discreet oral tobacco product during pandemic lockdown or a shift toward tobacco-free nicotine products, demand remains strong.

He also noted that nicotine-free options do well, too. “We did Grinds,” said Segura. Grinds nicotinefree coffee pouches are a chewing-tobacco alternative. “Those actually did pretty well in our Fort Worth c-stores because I think a lot of people that were looking for an alternative to quitting altogether were really buying those.” And manufacturers are helping with promotions, too. “R.J. Reynolds has been very helpful,” Segura noted. “Swedish Match — we just signed a chain contract with them, and they’ve helped us out quite a bit.” He added that Fuel City is getting a lot of help with rebates and signage. Twice Daily’s Staley said that R.J. Reynolds has been more aggressive with promotions, too, as well as with retailer help resetting the store. Friendly price points, though, are the most helpful. “The two-for promotions,” said Staley about what really revs up sales. “Buy two and save!”

NICOTINE POUCH POPULARITY CLIMBS

REGULATION RADAR

“I am seeing more of a switch to nicotine pouches from tobacco users,” said Rick Staley, merchandising manager for Nashville, Tenn.-based Tri Star Energy’s 144 Twice Daily, High Tail and Sudden Service convenience stores in Tennessee, Kentucky, Alabama and Georgia. Segura backed that up for his stores as well, seeing the same switch for some customers while others stay loyal to more traditional moist tobacco. Location, he’s found, is a factor. “We’ve seen some good results with the ZYN coming in,” Segura said. “It depends on the store, too. For us, our Dallas stores, our inner-city stores aren’t big sellers on your moist snuff, but our stores in Fort Worth are big on that — Copenhagen, Grizzly, all those — they do really well out there.”

First and foremost, retailers need to stay diligent about checking IDs. “Most (c-store) consumers are above legal age, making the prevention of underage (tobacco) sales a little easier to navigate,” Dell’Alba explained. And while the inconsistency of local tobacco regulation has been a headache for many retailers, they learn to adapt and keep on top of them. Segura said that he feels pretty safe in Texas as far as state and local regulation of smokeless products. But he’s keeping his ear to the ground because flavor restrictions are always possible. “There was a law in California that was recently passed about not being able to sell menthol cigarettes,” he said. “And that law, that legislation was kind of being talked about here in Texas.” Tri Star’s stores are also in tobacco-friendly states, Staley said, so he’s not worried about state or local restrictions anytime soon. At press time, there were nearly 50 measures to curtail, restrict, tax or ban tobacco, smoking and vape products in state legislatures across the nation, according to the National Association of Tobacco Outlets (NATO) online legislative monitor. Most of those, though, have been focused on vape flavors, menthol cigarettes and age restrictions. For now, smokeless seems to be flying under the radar as it soars to new heights in form and flavor for consumers. CSD

fast facts: • Spitless tobacco sales rose 66.9% during 2020. • Tobacco-free nicotine pouches are gaining popularity. • Pouches or dip, ﬂavor innovation is vibrant.

CSTORE DECISIONS •

April 2021

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Category Management | Dispensed Beverages

Fountain Beverage Sales Heat Up

Whether or not retailers’ cold and frozen dispensed beverage areas were shut down at the onset of the pandemic, many are expecting sales to increase as warmer weather rolls in.

Marilyn Odesser-Torpey • Associate Editor

Around this time last year, as the COVID-19 pandemic arrived, c-store retailers found themselves scrambling to implement changes to keep dispensed beverage sales flowing, despite local lockdown orders. Now, many locations are again making adjustments as rules and regulations ease.

CSTORE DECISIONS •

April 2021

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Category Management | Dispensed Beverages

Pilot Flying J stores temporarily Despite the temporary closing “The new equipment helps ensure modified their self-serve stations into of the cold and frozen dispensed product freshness, provides touchless crew-served ones to satisfy state and beverage areas according to COdispensing for our guests and has county guidelines, and reduce cusVID-19 guidelines in its Alabama easy-to-clean spouts for our crew,” tomer touchpoints, reported Jamie stores, Southwest Georgia Oil Co.’s Weckstein said. “Customers love it, King, Pilot Co.’s senior director of SunStop Markets posted a yearand we plan to roll out the units to all food and beverage. over-year 29% increase in category our stores in early April.” As county, city and state regulasales as of February, said Director To support the introduction of a tions have relaxed, the stores, with of Food Service Michelle Weckstein. new loyalty card, the stores will be more than 750 locations spanning 44 The Bainbridge, Ga.-based company running several promotions starting states and five Canadian provinces, operates 80 locations in Georgia, in May. The first is an Icee Club and have transitioned back to the selfFlorida and Alabama. Fountain Club offer of a free beverserve model. For the past year and a half, the age with the purchase of nine. All “Our cold and frozen dispensed company has been working with customers can participate in a “one beverage sales are recovering,” King a graphic design firm to create a for now, one for later” promotion said. “With the warmer weather and more spacious and user-friendly that pairs a fountain beverage with a travel season approaching and as area for its self-serve beverages. As packaged beverage at a special price. more research emerges from respect- part of this reimaging, it is also purRaceWay, which operates 205 ed health sources about low transchasing more fountain and nugget locations in 11 states, has had mission rates through surfaces, we ice machines. impressive results with the addition anticipate greater use of self-serve Three months ago, the company of a Coca-Cola Freestyle machine equipment, especially with increased began testing a new iced tea brewer to its cold and dispensed beverage sanitation protocols in place.” that uses IoT (Internet of Things) offerings, said Jourdan Clements, To encourage sales in this cattechnology in Florida. The equipment RaceWay’s director of operations. The egory over the next few months, the makes data about usage, inventory stores use the countertop model, company’s offering incentives such and when cleaning or maintenance undergoing a phased rollout, which as free drink offers for those who are required accessible anytime. gives consumers the choice of download the Pilot Flying J app and customizing their beverage from a are among the rotation of daily deals selection of 60-plus carbonated and for existing app users. The stores will non-carbonated selections. also recognize customers with special Clements called the Freestyle mapromotions such as Driver Appreciachine “a great driver of traffic.” tion Month in September with a suite “It is a comprehensive and turnkey of offers, including free drinks. program for our franchisees and Not having to close down their delivers a consistent product from self-serve areas during the pandemic store to store,” he added. “A single allowed cold and frozen dispensed fountainhead instead of the usual beverage sales to remain relatively multiple heads also makes the consistent at Cubby’s convenience machine much easier to clean and stores’ 37 locations in Nebraska, Iowa flavor cartridges instead of bags-inand South Dakota, according to De boxes take up less space in inventory.” Lone Wilson, the company’s president. Data from a poll by market Anticipating more growth in the research firm CivicScience revealed a category as temperatures rise and “negligible change” in the percentage more vaccines are distributed, Wilson of consumers who reported plans to expand the fountain’s prespurchasing cold or frozen dispensed ence in some of his stores by adding beverages from convenience stores/ more heads and variety. A Memorial gas stations between Jan. 24, 2020, Day through Labor Day discount on a and March 16, 2021. Age data for 32-ounce drink has been a sales-buildboth kinds of beverages showed the er for Cubby’s for the past five years greatest favorability among 35- to and is on tap to run again this summer. 54-year-olds. CSD 68

CSTORE DECISIONS •

April 2021

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Visit nagconvenience.com to register!

SCHEDULE OF EVENTS: During these challenging times, extraordinary leadership and informed decisions are more important than ever, especially when it comes to convenience retailing. With this in mind, plan to join the NATIONAL ADVISORY GROUP (NAG) and the YOUNG EXECUTIVES ORGANIZATION (YEO) for the NAG/YEO Spring Leadership Series. This fivepart series will focus on key areas that will help c-store retailers boost sales and profits.

MAY 19 /

Exclusive Research from partner CivicScience. Topic: How Consumer Behavior has Changed During Covid.

MAY 26 /

The Impact of Delivery and Online Sales: How do we reach new food customers?

JUNE 2 /

The Future of Tobacco: Reshaping the back bar amidst legislative threats and PMTA.

JUNE 9 /

How to Create a Next-Generation Store. Everything from EMV compliance to foodservice is forcing retailers to innovate and future-proof their stores to maximize revenue streams.

JUNE 16 / Fuel Disruption: How a new administration will impact the fuel market by mandating electric vehicles and flex fuels.

Technology | P O S

Pumping Profits:

Payment Tech Pulls It Together As point-of-sale and fuel pump technology leap forward, easing transactions for customers and tempting costly upgrades by retailers, age-old principles apply — do your homework, and crunch the numbers. Thomas Mulloy • Senior Editor

As technology continues to sprint ahead, it will surely make doing business easier for both customers and retailers. Yet, for c-stores serving up everything from food to fuel, investing in that shiny, new payment technology remains an intimidating — and costly — proposition. Pandemic or not, using a credit or debit card is the preferred way for fuel customers to pay. Data from payments consultant Mercator Advisory Group for 2020 found that 32% use a credit or charge card, and 25% prefer a debit card. Alternative electronic methods of payment — online service, mobile wallet, mobile app, store credit cards or general gift cards — totaled 18%. Just one in four customers preferred cash. Electronic payments will become more common. That means point-of-sale (POS) 70

CSTORE DECISIONS •

April 2021

systems that integrate the latest technology with pump purchases will be essential to preventing fraud and improving ease of use for both team members and customers. Ali Husain is president of Atlanta Petroleum Equipment Co., which owns seven Royal Food Stores in the Atlanta area. Tech is Husain’s forte. He upgraded his Royal stores to the Verifone POS system with fuel pumps on the Anthem system, a product of Dover Fueling Solutions (DFS). Like most new integrations, the system is automated

cstoredecisions.com

The newest pumps and POS units are also self-diagnosing. Wi-Fi enables the systems to notify the servicer before the retailer knows there’s a glitch. That eases troubleshooting and gets the fix started much more quickly — which means that pump is returned to its normal state sooner and delivering fuel to customers. FUTURE-PROOF POS

through the POS terminal and flows from the register system directly to the dispensers. “We moved from the traditional dispensers, the oldfashioned fuel pumps, to touchscreen, 27-inch marketing machines,” said Husain. “So it’s a little bit of a training curve … but less for the employees, more for the customer because these are all self-service units.” Husain estimated that about 80% of customers got up to speed quickly. “The other 20%, a little bit older crowd, we had to train them,” he joked. Many retailers worry about installation of new pumps and technology infrastructure disrupting business. For some of the systems, installation can be done in a day, depending on how many pump islands are in a location’s forecourt. Beware any lengthy installation window that can severely curtail your operating time. The newer, large-screen dispensers are quite versatile, according to Husain. Half of the screen runs video motion graphics, and the other half hosts still graphics. “So it’s promoting products, it’s promoting price of products, it’s promoting service of the store itself … upselling of fuel, and also promoting the local municipalities and government and police department and whatnot,” Husain explained. But that visual component also has the ability to carry advertising for local businesses. Paid advertising. That’s extra revenue for your bottom line. cstoredecisions.com

Be sure to find a system that can be upgraded as future technology improves. Compare your POS system to a bare smartphone — retailers can add whatever functionality to it that works for them. When new and better functions are developed, they can be added to the existing system. In the not-so-distant future, pumps will feature things like an email receipt option and even facial recognition. There will surely be functions to be developed that retailers didn’t know they needed. Retailers can expect to pay monthly fees for some of the software services; the more functionality, the higher the fees. Compare that to the revenue generated by a location’s fuel pumps, the value of the data mined from transactions and how much it will increase your receipts. “I think that merchants need to talk with others that they know in their business network and get recommendations on who’s reliable in terms of the types of agents or organizations that are handling their payments,” advised Raymond Pucci, director, Merchant Services Practice with Mercator Advisory Group. While selecting a vendor, Pucci said, retailers should take the time to develop some questions. Know how well the new system will integrate with existing back-office software and hardware — and existing loyalty programs. Clearly understand all of the fees involved — annually, monthly and per transaction. Are you buying or leasing the new hardware? Make sure that all of that data gleaned through a POS channel will belong to you — that’s valuable information you can harness for inventory, ordering, pricing, promotions and other uses. Do the math. All of this tech wizardry can be a bit daunting, but retailers shouldn’t be afraid to brainstorm questions — and be sure to ask them. If they do their homework, retailers — and increased profits — won’t get left behind. CSD

fast facts: • Fuel customers prefer electronic payments over cash 3:1. • Larger fuel pump displays can promote store items and generate local ad revenue. •N ew point-of-sale systems feature automated diagnostics and alert service providers.

April 2021 • CSTORE DECISIONS

Technology | Labor Management

A Tech Approach to

Labor

Management Weigel’s has found success using technology to power its human resources practices, from offering direct deposit to mobile communications with team members. Erin Del Conte • Executive Editor

Technology is changing the way convenience stores approach labor management, offering an automated way to onboard new employees, communicate with team members and track schedules and benefits. CStore Decisions sat down with Melament and outreach to help retain employees. nie Wilson, human resources (HR) director “We recently added their learning manageat Weigel’s, to learn more about how the ment system (LMS) where we can create any Powell, Tenn-based c-store chain is using kind of training we want to use. It’s pretty technology as part of its labor management dynamic. We can add video feeds to it. We practices today. can add links. We can build out the training,” A year into the COVID-19 pandemic, Wilson said. Weigel’s, like most c-store chains today, lists For example, Wilson is able to create a staffing as the top HR challenge and priority training series on the topic of her choice and across its 68 locations. include PowerPoint slides and a video and “Within our industry, about 70% of our work- include links to various policies, all of which force are women, and a lot of those folks had can be sent to specific groups of employees. to go home to care for kids attending virtual “We are building out training within the LMS school and so on, so staffing has been very by groups of individuals and tailoring the challenging,” Wilson said. specific training toward them,” she said. In 2012, Weigel’s partnered with PaylocEmployees find the automation easy to ity, which provides cloud-based payroll and use and helpful. “With this generation, they human capital management solutions. Today, are so familiar with micro-bite pieces of trainit’s continuing to leverage new automated ing and learning, and instant gratification capabilities through the platform for recruiton the backend of that, given their experiing and onboarding as well as for engageence using TikTok, Facebook, Snapchat and 72

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April 2021

cstoredecisions.com

so on,” she said. “This is the closest also access the LMS to do training thing we can use that captures the right on their phone, as well as view way that they’re used to digesting schedules, and managers can see live information.” changes made to the schedule. Currently, the chain is testing the Most recently, Weigel’s added system’s onboarding capabilities at Paylocity Community, which can also specific locations. be accessed via mobile phone. “Everything is already built out, and “It allowed us to stay connected you can add to that,” Wilson said. “So with our teams through COVID-19 as an example, you add the I-9 docuwith real-time communications in ments, your e-verification, and there an environment where things were are standard items Paylocity requires changing almost daily,” Wilson said. employees to add during the on“It also allowed us to stay engaged boarding process.” with our employees and have some The onboarding process can also fun in the process.” be personalized to a company’s Wilson described the Community specifications. feature as being similar to a Face“We can add things for our culture, book feed, where employees can like a welcome video from the CEO, communicate, allowing Weigel’s to or in our case from Training and reach out to all locations and emRecruiting Director Kurt Weigel,” she ployees with information in real time. said. “I love that because I believe Employees get an alert when somethat marketing and branding is not thing has been posted. just about the product, but also Weigel’s also uses the platform to about showcasing the company and build employee engagement, includthe culture.” ing through contests. And that in turn can lead to better “Employees can post pictures on recruiting results for the HR department. there. They can give peer-to-peer Weigel’s also tracks paid time off, awards to other employees. Store benefit details and timecards, offers managers can give their employees direct deposit through the system awards. They can take pictures, and and works to steer employees to the they can post all of that on the comdirect deposit option. When recent munity feed. That’s live to all employice storms hit the area, those takees,” she explained. ing advantage of the direct deposit But the platform was especially option received their payment in real valuable in keeping team members time, despite mail delays that disupdated on the changing requirerupted the arrival of paper checks. ments during the height of the “Today’s workforce engages with pandemic, including evolving mask technology and wants and needs real- mandates in different areas, updated time communication and feedback,” training modules and more. Wilson said. Weigel’s has increased mobile capabilities each year, which STREAMLINING WITH AUTOMATION has made it easier to relay information quickly to employees. “This is One of the biggest benefits to especially helpful in keeping conautomating the labor management sistent communication throughout process has been the ability to offer multiple locations,” she said. a ‘one-stop shop’ for HR-related When Wilson started at Weigel’s tasks from onboarding, training and three years ago, employees had employee assessments to payroll and access to view their pay cards on team communications. their mobile phone. Today, they can “They have one ID, one password,

and they know where to go for all of the information,” Wilson said. Digitizing the labor management process also allows Weigel’s to track data to support company goals. For example, when using the recruiting tool, Wilson can see what platforms prospective employees are applying through. If 3,000 people viewed the chain’s employee recruitment ads, Wilson can see whether they’re coming from Indeed, Snagajob, Google, Facebook, LinkedIn, etc. “It shows me the percentage of candidates that actually viewed and applied to the positions through those different job boards,” she said. “We can see what’s working and what’s not working.” The data helps Wilson determine which job boards and ads are resonating with prospective employees. For convenience stores that aren’t yet automating their labor management system, she said finding a system that works for your chain can make a big difference. “Having one human resource information system (HRIS) that works for your company is a very cost-effective way of doing business, especially when you look at what you’re trying to accomplish overall,” Wilson said. “I think you get a lot of buy-in and a lot of engagement from your employees out of it, which is huge in today’s climate.” CSD

cstoredecisions.com

April 2021 • CSTORE DECISIONS

Melanie Wilson, human resources director at Weigel’s

Operations Column | C B D & C a n n a b i s

C for Cannabis-Store? As customer acceptance of both CBD and cannabis products grow, c-stores have an opportunity to capitalize on this emerging market. Samantha Des Jardins • Datassential

In the year since the COVID-19 pandemic began and as the staggering number of deaths across the globe has increased, so have rates of depression, anxiety and other mental health challenges related to the pandemic’s many impacts on survivors. The pandemic’s toll on mental health and the growing legalization of cannabis products in the U.S. led our team at Datassential to examine how the current global crisis is impacting the sale of cannabidiol (CBD) and cannabis products, how they are being consumed, and what most motivates sales. The 2018 Farm Bill legalized CBD at the federal level when it removed hemp from the definition of marijuana in the Controlled Substances Act. CBD doesn’t produce psychoactive effects, but it’s often used for stress and pain management. State rules vary. Meanwhile, cannabis is still illegal at the federal level and contains THC (tetrahydrocannabinol), which produces psychoactive effects that make people feel “high.” A number of states have legalized cannabis for recreational and/or medicinal use. C-STORE OPPORTUNITY

Datassential’s latest consumer survey on cannabis purchase habits and intentions found 57% of customers reported they have used cannabis or CBD oil to reduce stress or anxiety, while 52% have used them to unwind or for relaxation. Many consumers look to c-stores to get the latest CBD products. And 70% said they would be at least 74

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April 2021

somewhat likely to purchase cannabis products at a c-store too, according to the survey. The market for CBD and cannabis products has already been strong in areas where they are legal. But public acceptance of these products is growing and pushing the possibility that c-stores, in states that don’t currently allow the legal sale of these products, could soon join the ranks. The public overwhelmingly supports the legalization and decriminalization trend that’s been occurring in the U.S. for years. Almost two-thirds of respondents supported legalization of cannabis for both medicinal and recreational use. Half of men have tried cannabis products in a recreational or social setting, according to the survey, along with 37% of women. And 40% of respondents overall said they had tried cannabis in a recreational or social setting, compared to 35% who said they have tried CBD oil or extract either by itself or in a food or beverage. When it comes to food and beverage items infused with CBD or cannabis, consumers are most interested in trying infused gummies or candies, at 46% of respondents. But just under that, 45% of consumers said they’d be interested

in foods infused with THC, such as baked goods, chocolate bars and related treats. The figures are lower but still encouraging in the beverage segment, where 35% said they’d be interested in THC-infused nonalcoholic beverages, and 32% expressed interest in THC-infused alcoholic beverages. Interestingly though, nearly as many consumers (30%) said that the consumption of cannabis products would have no impact on their alcohol consumption. For c-store operators to capitalize on CBD and/or cannabis, prominent displays of infused candies and gummies will be key, since that is the segment consumers are most attracted to. But so will allowing options for customers to sample in other forms, such as infused sweets like candy bars or bakery items, which are close to the top in terms of consumer preference. Infused beverages, both alcoholic and not, are a small but growing segment not to be ignored. Looking ahead, it’s vital for c-store operators to stay informed in the cannabis space as more states legalize cannabis products. The most successful operators will stay on top of trends as more consumers choose to experiment and tastes may evolve rapidly. Samantha Des Jardins is a copywriter at Datassential, a market research agency helping food & beverage companies of all sizes and segments innovate, sell and plan for the future, backed by the best data in the industry. She can be reached at samanthad@datassential.com.

cstoredecisions.com

THE MOST AWAITED C-STORE EVENT OF THE YEAR!

Save the date for the LIVE event!

September 12-15

LA JOLLA CALIFORNIA

For additional information, contact NAG Executive Director John Lofstock at jlofstock@wtwhmedia.com.

PRODUCTShowcase

Hard Seltzer With Real Fruit Juice New Belgium Brewing Co. — the craft brewer behind beloved beers Fat Tire and Voodoo Ranger — is launching a fresh alternative to shake up the booming hard seltzer category. Fruit Smash stands for ingredient transparency with real fruit juice; bold, natural ﬂavors; and no artiﬁcial preservatives — and a playful brand personality that encourages having fun (responsibly) while at home. Fruit Smash hard seltzers are 100 calories each and 4.7% ABV. They come in a variety 12-pack for $14.99 to $15.99.

New Belgium Brewing Co.

www.fruitsmashseltzer.com

CBD Sleep and Stress Aids

Jet Flame Lighter Scripto Hybrid Jet Flame, the newest refillable crossover jet flame lighter, is the perfect combination of a multipurpose lighter and pocket lighter. It features a refillable tank, extended nozzle for safer lighting, adult-friendly pushbutton ignition and adjustable flame. Available in five colors — teal, purple, orange, dark blue and berry red — with a suggested retail price of $1.15 per lighter in a 50-count display-a-tray and $1.20 per one-pack open stock.

HempFusion Wellness introduced its new and improved Sleep and Stress products. The products aim to support relaxation for consumers by providing a more restful night’s sleep and easing occasional stress. The products include twice the amount of CBD (300 milligrams per bottle); GABA, an amino acid that supports mental relaxation; ashwagandha, which helps people better deal with daily occasional stress; and a broad array of other cannabinoids, terpenes and more that support the endocannabinoid system. The products are tested to assure they contain virtually no THC (less than 0.01% Delta9THC) and are vegan and gluten-free.

HempFusion

www.hempfusion.com

Custom Coffee and Tea Flavorings Flavor Waves can help you create custom flavorings for your branded fresh-brewed coffee and tea products for no cost on your part. Flavor Waves has over 30 years of specialty coffee and tea experience and is passionate about formulating peak-tasting flavorings to fit your styles of coffees and teas. Flavor Waves also offers marketing trend information.

Flavor Waves Inc.

(888) 968-2783 info@ﬂavorwaves.com

www.ﬂavorwaves.com

Calico Brands Inc.

(800) 544-4837 marketing@calicobrands.com

www.calicobrands.com 76

CSTORE DECISIONS •

April 2021

cstoredecisions.com

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

CStoreDecisions .com Making Connections that Drive Business

We use the latest media technology, delivering content the way you want it: print issues, digital issues, enewsletters, and videos. Use CStoreDecisions.com to help you strengthen your peer network with social engagement through Twitter, LinkedIn, Facebook, YouTube, Pinterest, and Google+. Browse, bookmark, share and interact with the most relevant industry content and people in the market.

Thank you to our Key Partners:

PRODUCTShowcase

Peanut Butter Lovers Cups For the first time ever in its more-than-90-year history, the Reese’s brand is releasing the most extreme, peanut buttery version of its iconic Peanut Butter Cups and removing the chocolate. Stuffed with the same beloved Reese’s peanut butter inside and a 100% peanut butter candy-flavored shell on the outside, Reese’s Ultimate Peanut Butter Lovers Cups turn the flavor meter up to the max. Reese’s Ultimate Peanut Butter Lovers Cups will be rolled out in standard, king size and miniatures at retailers nationwide beginning early this month for a limited time.

The Hershey Co.

www.thehersheycompany.com

Sparkling Water Flavors

No-Shell Pistachio Flavors

AHA is adding two new calorie-, sodium- and sweetener-free flavors — Raspberry + Acai and Mango + Black Tea — driven by extensive research and consumer testing. The team started with more than 300 flavors and tested 42 pairings before optimizing the recipes for two top performers. The tropical taste of mango is complemented by a burst of black tea flavor (and 30 milligrams of caffeine), and the refreshing taste of raspberry is brightened by notes of acai.

New Wonderful Pistachios BBQ and Sea Salt & Vinegar Wonderful Pistachios No Shells ﬂavors are a tasty tribute to healthy snacking done right — with six grams per serving. Savor the taste of summer all year long with BBQ Wonderful Pistachios No Shells. Exploding with hickory-smoked ﬂavor and dashed with garlic, paprika and salt, they’re an irresistible mix of sweet and smoky. Sea Salt & Vinegar Wonderful Pistachios No Shells treat your taste buds to a tart, tangy snack. With just the right amount of sea salt and vinegar, they’re an ideal balance of sour and savory.

The Wonderful Co. www.wonderful.com

The Coca-Cola Co.

www.coca-colacompany.com

Habanero Cream Cheese Tornados Habanero Cream Cheese Tornados are back by popular demand. Spicy, bold flavors resonate with a large portion of convenience store hot-to-go consumers. With habanero cream cheese filling and a fiery seasoned shell, Habanero Cream Cheese Tornados pack every bite with unforgettable flavor. Bundle with an ice-cold fountain drink for a bigger ring. Tornados are perfect from roller grills, ovens or fryers and may be served from a hot case with up to a four-hour hold time.

Ruiz Foods

www.ruizfoodservice.com 78

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April 2021

cstoredecisions.com

PRODUCTShowcase

Limited-Edition Hard Seltzer Variety Pack Bud Light unveiled its new Bud Light Seltzer “Out of Office” limited-edition variety pack, featuring four vacation-inspired flavors — Classic Lime Margarita, Watermelon Mojito, Mango Mai Tai and Strawberry Daiquiri flavors — in 12-ounce slim can variety 12-packs. Just like the original Bud Light Seltzer flavors, the new variety pack is made with cane sugar, natural fruit flavors and no artificial sweeteners using a unique five-step filtration process. Each flavor has the perfect balance of 5% ABV, less than one gram of sugar and 100 calories.

Anheuser-Busch

www.anheuser-busch.com

CBD Topicals Product Line Happy Place is expanding upon its popular CBD gummies line with the launch of an extra-strength topicals product line. The new line includes Hydrating Cream, Healing Balm, Roll-On, and Muscle & Joint Patch, with CBD derived from 100% U.S.-grown hemp. The products have been scientiﬁcally formulated using state-of-the-art technology and rigorous testing procedures to ensure the highest level of safety, performance and consistency.

Happy Place

www.discoverhappyplace.com

New and Improved Smoked Cheddar Sausage The new and improved Bahama Mama Smoked Cheddar Sausage features a smokier, cheesier ﬂavor that consumers crave. It’s made with premium cuts of pork and beef, chunks of real cheese and a new proprietary blend of spices. With more varieties to explore like Jalapeño N’ Cheddar and German Recipe Sausages, Bahama Mama has hot, trending sausages covered for your convenience store.

Home Market Foods

www.homemarketfoods.com

cstoredecisions.com

Four-Pod Packs The Vuse vapor brand announced a national expansion of Vuse Alto Golden Tobacco 5.0% and Alto Menthol 5.0% four-pod packs and the national release of Vuse Alto Golden Tobacco 2.4% and Alto Menthol 2.4% fourpod packs. The availability of four-pod packs gives Vuse the most expansive portfolio of choice for adult vapor consumers with three flavors, in three nicotine strengths across three configuration formats, not to mention the many options for device customization with a range of device colors, wraps and engraving options. The four-pod pack configuration is the most popular among pod-mod vapor products, and four-pod packs enable Vuse Alto to compete on a per-pod price point.

R.J. Reynolds Vapor Co

www.rjrvapor.com

April 2021 • CSTORE DECISIONS

Classifieds/Ad Index 5-Hour Energy

John Middleton Co.

ADD Systems

Kooler Ice Vending Machines

Apter Industries, Inc.

Krispy Krunchy Chicken

www.5hourEnergyRetailer.com 800.922.0972 / www.addsys.com 800.441.7146 / www.apterindustries.com

Buy Lotto Now

42-43

870.665.9856 / bdeichler@buylottonow.com

CB Distributors

6-7

888.824.3256 / www.cbprices.com / www.hempbombs.com / www.naturesscript.com

Click It Inc.

Forth CBD

www.clickitinc.com www.ForthCBD.com/Contact-Us

Premier Manufacturing, Inc.

Proctor & Gamble

Reynolds Safe Shop Assured

877.968.5323

800.858.3025 / www.kookerice.com/fixmyice 800.290.6097 / www.krispykrunchy.com

Liggett Vector Brands 877.415.4100

Mondelēz International Group

877.532.8433 / sales@modernstoreequipment.com modernstoreonline.com/cstore www.mondelezgrowthprogram.com

North American Bancard

Gulfcoast

NRS Petro Solution

Oberto Snacks Inc.

Perfetti Van Melle

Petro Active Services

Prairie City Bakery, Inc.

Home Market Foods, Inc.

800.367.8325 / info@HMFfoodservice.com www.HMFfoodservice.com

Hoshizaki Humentrics

713.771.4401 / info@humetrics.com VISIT US @ humetrics.com

Hunt Brothers Pizza

www.huntbrotherspizza.com/csd

25 53

866.481.4604 / www.nynab.com 888-260-0112 / www.nrspetro.com www.oberto.com 800.283.5988

401.424.1429 / www.petroactive.net www.pcbakery.com

www.masonways.com cstoredecisions.com

28-29

Swedish Match

800.837.2881 / www.masonways.com

Modern Store Equipment

www.safeshopassured.com

MasonWays Indestructible Plastics, LLC 81

727.449.2296 / www.gulfcoast.com

www.PGConvenience.com

GSK C-Store

Scott.F.Breisinger@gsk.com

www.gopremier.com

800.367.3677 www.zyn.com www.gamecigars.com www.whiteowlcigar.com

15 33 51

Swisher International

91, 84

800.874.9720 / www.swisher.com

TAAT

TPE International

Twang

TryTAAT.com www.tobaccoplusexpo.com 800.950.8095 / twang.com

Vitamin Energy

12-13

800.420.3106 / Sales@VitaminEnergyLLC.com

XCalibur International

918.824.0300 / www.xcaliburinternational.com

800-837-2881 April 2021 • CSTORE DECISIONS

IndustryPerspective

Recruiting Best Practices

for an Unprecedented Era C-store retailers are implementing incentives and updated practices to overcome labor challenges during the pandemic. Herb Hargraves • Clark Oil

Wow, what a year 2020 was! My hat’s off to anyone in human resources (HR) or operations working with the staffing challenges we all faced in retail during the height of pandemic and continue to navigate still today. As the vice president of Clark Oil Co. Food Stores, which operates 49 convenience stores across Mississippi and Alabama, my first impulse when the pandemic appeared was to reach out to peers across the industry. That included calling some of my friends at Atlanta-based RaceTrac, Oklahoma City-based Love’s Travel Stops & Country Stores and some of my local competitors to brainstorm ideas and see what they were doing, as “we are all in this together.” Thanks to these conversations, here are some creative practices we implemented at Clark Oil starting in April 2020 to keep our stores open to serve our guests. RECRUITING TOOLKIT

I created a “Friends and Family” recruiting bonus open to all of our associates, managers and district managers that would reward them with up to $250 for every new employee they recruited to come to work for us. This also included a $250 bonus to the new employee after 60 days of employment. We added $3 per hour hazard pay for all associates across the 49-store chain. This came at a cost to us of 82

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April 2021

over $1.5 million. Our owner understood the cost and was happy to pay to be there for our communities. As things grew harder on the Mississippi Gulf Coast moving into the summer months, we added up to a $300-per-week bonus that could be achieved by working over 40 hours per week. This total payout amounted to $600 per pay period for the 176 employees on the Mississippi Gulf Coast. Throughout the pandemic, we also used recruiting services like ZipRecruiter and Indeed to find qualified candidates to work in our stores. ZipRecruiter had some cool tools to make our job postings stand out and let prospective candidates know we were hiring during the pandemic, and that even if they had another job that they were on furlough from, we still wanted them to come to work with us. To better recruit managers and district managers, we implemented sign-on bonuses up to $3,000 for these roles. We also used social media to help recruit employees and encouraged our managers and associates to post on their social media pages about job openings. I personally spoke with many mayors in Mississippi and Alabama to get temporary allowances to place “now hiring” signs on our Clark Oil properties in municipalities where permits or permission were needed from the local government.

This not only helped Clark Oil, but also benefited other retailers around our stores. The local governments were invested in helping us and other retailers like us keep our businesses profitable. They allowed us to place multiple “now hiring” banners in our yards and use smaller “real estate” signs in municipalities that had limitations on signage, in order to follow code enforcement guidelines. ADDED CHALLENGES

As if a global pandemic wasn’t challenge enough, we also experienced two hurricanes on the Mississippi Gulf Coast in 2020, which only made it more difficult to operate as normal. The two hurricanes caused us to shut our doors on the Mississippi Gulf Coast for a total of three to four days, but our people promptly returned, even if they did not have power at their own homes. So, to say the least, I am glad 2020 is behind us. We learned a lot about the resolve of our front-line staff, and I’m grateful that they have remained true to Clark Oil throughout the pandemic. I am proud to be a part of Clark Oil, and I am proud of my leadership team who held it all together. I am also proud the ownership of Clark Oil gave us the financial backing to reward our most valuable asset — our people.

cstoredecisions.com

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