CStore Decisions August 2020 by WTWH Media LLC

CStoreDecisions

Solutions for Convenience Retailers

C-Stores

Navigate Uncertain Economic Landscape Amid a pandemic that’s shifting norms and shopping habits, retailers nationwide must grapple with an economy in flux.

INSIDE Navigating Foodservice in 2020

Tobacco Turns a Corner

Sizing Up Supply Chain Opportunities

August 2020

•

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CONTENTS August 2020

•

Number 8

•

Volume 31

CStoreDecisions

EDITOR’S MEMO

8 Honing Leadership Skills FRONT END

10 Profile: Tang Mart Unleashes Dragon Design 18 Quick Bites: Consumers’ Economic Sentiment FOODSERVICE

36 C-Stores Pivot to Recapture Food Sales 40 Seven Strategies to Grow Food Sales 44 Chef’s Corner: Navigating Foodservice in 2020 CATEGORY MANAGEMENT

48 Secrets of the Cold Vault 52 Tobacco Turns a Corner TECHNOLOGY

58 Providing Financial Services Gives C-Stores an Edge 62 How to Retain Newly Acquired Digital Consumers OPERATIONS

64 Sizing Up Supply Chain Opportunities

COVER STORY 22 C-Stores Navigate Uncertain Economic Landscape

Amid a pandemic that’s shifting norms and shopping habits, retailers nationwide must grapple with an economy in flux.

BACK END 68 Product Showcase 73 Ad Index 74 Industry Perspective: Beyond CBD 4

CSTORE DECISIONS •

August 2020

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the CSD Group www.cstoredecisions.com

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Leading Through Innovation EDITORIAL

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

EDITORIAL ADVISORY BOARD 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.

NATIONAL ADVISORY GROUP (NAG) BOARD Doug Galli, Board Chairman Reid Stores Inc./Crosby’s • Brockport, N.Y. Mary Banmiller, Director of Retail Operations Warrenton Oil Inc. • Truesdale, Mo. Greg Ehrlich, President Beck Suppliers Inc. • Fremont, Ohio Derek Gaskins, Senior VP, Merchandising/Procurement Yesway • Des Moines, Iowa Joe Hamza, Chief Operating Ofﬁcer Nouria Energy Corp. • Worcester, Mass. Brent Mouton, President and CEO Hit-N-Run Food Stores • Lafayette, La. Peter Tamburro, General Manager Clifford Fuel Co. • Marcy, N.Y. Vernon Young, President and CEO Young Oil Co. • Piedmont, Ala.

YOUNG EXECUTIVES ORGANIZATION (YEO) BOARD WTWH MEDIA, LLC 1111 Superior Ave., 26th Floor, Cleveland, OH 44114 • Ph: (888) 543-2447 EDITORIAL AND NAG 1420 Queen Anne Rd., Suite 4, Teaneck, NJ 07666 • Ph: (201) 321-5642

Jeremie Myhren, Board Chairman Road Ranger • Rockford, Ill. 2011 - 2019

SUBSCRIPTION INQUIRIES To enter, change or cancel a subscription, please go to: http://d3data.net/csd/indexnew.htm or email requests to: bsprague@wtwhmedia.com

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. CSTORE DECISIONS does not endorse any products, programs or services of advertisers or editorial contributors. Copyright© 2020 by WTWH Media, LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, or by recording, or by any information storage or retrieval system, without written permission from the publisher. Circulation audited by Business Publications Audit of Circulation, Inc.

CSTORE DECISIONS •

Ryan Faville, Director of Purchasing Stewart’s Shops Corp. • Saratoga Springs, N.Y. Caroline Filchak, Director, Wholesale Operations Clipper Petroleum • Flowery Branch, Ga. Cole Fountain, Category Manager Gate Petroleum Co. • Jacksonville, Fla.

Garet Bishop, Chief Financial Ofﬁcer BFS Cos. • Morgantown, W.Va.

August 2020

Kalen Frese, Food Service Director Warrenton Oil Inc. • Warrenton, Mo. Alex Garoutte, Director of Marketing The Kent Cos. Inc. • Midland, Texas Sharif Jamal, Corporate Brand Manager Chestnut Petroleum Inc. • New Paltz, N.Y.

cstoredecisions.com

Editor’s Memo

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

Honing Leadership Skills The business world gets more competitive every day. To stay in demand in this tough retail environment, young leaders must perform at a higher level than ever before. You have to get better results (and get them quickly), instantly recover from missteps and garner the confidence to thrive in times of uncertainty. To do this, you need a modern-day skill set that gives you the edge over your competitors and helps you efficiently reach your career goals. This timely topic is an essential part of the National Advisory Group (NAG)/Young Executives Organization (YEO) virtual conference series. Today’s convenience store chains face a unique challenge. Despite recognizing the value of improving their leadership pipelines and making investments in leadership development, nearly 30% of them still describe their candidate pool as “weak” or “very weak.” The NAG/YEO series will feature a webinar on Aug. 12 titled, “Effective Leadership: The Best Ways to Manage People.” This keynote session will examine the characteristics of great leadership and what young professionals can do to get ahead in their careers. The webinar is being produced exclusively for the convenience store industry’s next-generation leaders and will feature two of the most prominent leadership figures in the convenience store industry: David Caruso, director for Saratoga Springs, N.Y.-based Stewart’s Shops; and Linda McKenna, principal, Employee Performance Strategies Inc. Developing a solid foundation for young executives is one of the cornerstones of YEO. YEO’s mission is to cultivate young talent in the convenience store and petroleum industry. NAG’s YEO is extremely focused on bringing great young talent together from across the country and giving them a platform to discuss the successes and struggles facing next-generation leaders throughout the industry. This is not an easy industry for young professionals. In addition to learning the business, they are faced with other daunting challenges such as learning to negotiate with vendors, managing employees and, perhaps most importantly, making connections with experienced professionals who can help them navigate the rocky terrain. This is where YEO can help. It provides young executives a platform to demonstrate their leadership abilities 8

CSTORE DECISIONS •

August 2020

and vision for the future while gaining valuable feedback from experienced NAG members. Leadership expert Paul Krasnow, author of “The Success Code: A Guide for Achieving Your Personal Best in Business and Life,” shared with me three qualities that can boost the careers and conﬁdence of young leaders. Fine-tune your focus. Today’s employees have greater responsibility and less time to complete their work. This forces them to multitask, yet most people are terrible at multitasking. Plus, they are constantly interrupted by email, smartphones and social media. Krasnow said success often comes down to your ability to tune out this noise and get focused. Get some grit. From time to time, you will inevitably fail, lose or experience some kind of a professional or personal setback. When this happens, you’ve got to deal with the loss and move on. There’s no beneﬁt in wallowing or succumbing to fear or anger. “If you are resilient, you can bounce back from anything,” Krasnow said. “Take responsibility for where you are today and resolve to address any behaviors that need to be changed. Then get back to your normal routine, and do it better than ever.” Work smarter, not harder. Krasnow recommended doing an audit of how you currently spend your work time. Identify your most important recurring tasks, determine how long they take and identify tasks that could be completed more quickly. Then, learn to prioritize your daily goals. Create a to-do list and divide your tasks into three categories: critical, high-priority and low-priority. Tackle each task in order of priority. To register for the NAG/YEO webinar or to see the entire lineup in the virtual conference series, visit www.nagconvenience.com. If you have questions on leadership or are interested in the YEO mentorship program for your future leaders, please contact me at jlofstock@wtwhmedia.com.

k c o t s f o L n h Jo

cstoredecisions.com

FRONT END Profile

Tang Mart

Unleashes Dragon Design

Tang Mart reimages sites as it looks to grow its food and footprint. Erin Del Conte • Executive Editor

Tang Mart is standing out in Alabama. The four-store chain, based in Gadsden, Ala., is reimaging its locations to incorporate its playful Tang Mart brand design. It recently launched a new bean-to-cup coffee program, and it’s strategizing to expand its foodservice program and double its store count in the next ﬁve years.

Jonathan Tang 10

RELEASING THE DRAGON Jonathan Tang founded Tang Mart in 2013. Tang was working with his fatherin-law Ira Phillips’ company IRA Phillips Inc., a Chevron and Texaco wholesale fuel supplier and Paciﬁc Pride franchisee, which has been servicing northeastern Alabama since 1938. IRA Phillips Inc. owns convenience store properties and tanks, but leases the stores to c-store operators. When one of the convenience stores became available in 2013, Tang jumped at the chance to build his own c-store brand. “Tang Mart is a stand-alone company that is an operator of IRA Phillips Inc.,” Tang explained.

CSTORE DECISIONS •

August 2020

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FRONT END Profile Tang Mart’s design features a lovable, green, cartoon dragon icon that is carried across the store design from the logo to the “Thirsty Dragon” messaging above the fountain section to the “Awaken the Dragon” tagline on its “Black Dragon” coffee. Its Yummy Yeti frozen drink program also features an animated yeti character.

Tang didn’t have a background in retail, but he was familiar with the top-quartile chains in the industry and felt confident he could create not only a safe and clean shopping experience, but an environment that offered a fun place to both work and shop. In 2015, he partnered with design firm Paragon Solutions to develop an original design and logo for the chain that incorporated a sense of playfulness to create an approachable, friendly and contemporary vibe throughout the locations. “My last name is Tang — my father’s Chinese, and my mother is Caucasian —and so I wanted to pay a little homage to my Asian heritage,” Tang said. But it was important to Tang that the design wasn’t cheesy or traditional. “I wanted to do something fun,” he said. Paragon Solutions’ designers suggested adding a playful, animated dragon character to the logo, along the lines of Yoshi from Nintendo’s Mario video game franchise, and Tang loved the idea. Today, the design features a lovable, green, cartoon dragon icon that is carried across the store design from the logo to the “Thirsty Dragon” messaging above the fountain section to the “Awaken the Dragon” tagline on its “Black Dragon” coffee to its outdoor pet relief-and-play area — adding personality throughout the store. Keeping with the spirit of fun, Tang Mart also incorporates other whimsical sections, like its Himalayan Beer Cave and its Yummy Yeti frozen drink program, which features an animated yeti character. “We’ve got this fun yeti, holding up a frozen drink,” Tang said. “We’ve taken some of those subtle branding elements and Asian heritage and carried them throughout the stores. It’s been well received. I think a lot of people enjoy that fun, playful dragon.” 12

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August 2020

Next up, Tang Mart is set to grow its foodservice program and plans to incorporate the dragon icon into that branding as well. “We want to involve him in that, maybe holding a pizza or something,” Tang said. Today, Tang Mart operates four sites in Alabama that range from 2,000 square feet to 3,500 square feet and offer Chevron- and Texaco-branded gas. One location has already been fully redesigned, with three more to follow this fall. “The other three have certain elements but aren’t 100% branded Tang Mart,” he explained. “The plan is to have all remaining three sites converted from the Chevron/Texaco Food Mart image to Tang Mart building image by the end of the year.”

NEW INITIATIVES Tang Mart is at the beginning of its foodservice initiative today, with plans to expand. Currently, it features a proprietary pizza program via its grocery supplier. “We use their pizza product, and we brand it as our own, similar to our coffee program, which offers our distributor’s coffee, but we brand it Black Dragon coffee,” Tang said. “That’s been a (helpful) thing for me in growing my branding element. When (customers) want a Black Dragon Coffee, the only place they can come get a Black Dragon Coffee is at Tang Mart.” Tang Mart also features grab-and-go breakfast biscuits in sausage, steak and chicken varieties. Tang is eager to implement an expanded breakfast program, as well as additional lunch offerings beyond pizza. Some items being considered based on current trends include empanadas and barbecue sandwiches. Tang hopes a robust, well-executed food offering will drive traffic to the stores. “Once I get the customer in the store, I feel like I win,” he said. “Because I try to operate and run a store that is better than my competition. … When they come in and see all the different branded elements and items we have, it differentiates us from our competition.”

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FRONT END Profile Tang Mart’s design looks to offer an approachable, friendly and contemporary vibe throughout the locations, from its Himalayan-themed beer cave to its pet relief-and-play area.

On the tech front, Tang is using geotargeting to entice potential customers with advertisements sent to their cell phones when they are within range of the store. “We can identify target areas and target groups of people that we want to show ads to, which obviously drives store traffic,” he said. Tang Mart is also eyeing the possibility of a loyalty program or a mobile app in the near future. But it’s the small touches that make Tang Mart a destination for customers. Its designated pet relief-and-play area at one of its locations right off the interstate, for example, appeals to travelers with pet passengers. “We know that people are traveling. It’s just another way to show, ‘Hey, we’re convenient for you,’” Tang said. “We carry the dragon icon into the pet area on our signage that says, ‘It’s your duty to pick up the doody.’” The interstate store also features outdoor picnic tables so customers can enjoy their pizza outside.

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August 2020

Tang Mart stores also offer free air for tires. “That’s just some goodwill we can give to the community and our customers,” he said. It also helps drive business as customers fuel up or visit the store while they’re there. “Especially here in Alabama, there’s not a lot of major chains … so people have gotten in the rut of going to the standard issue gas station, and we’re trying to break that mold,” Tang said. But above all, it’s Tang Mart’s employees and superior customers service that help the chain stand out.

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Committed to keep employees safe and supply chain operational through this challenging time.

We are all in this together.

FRONT END Profile

Introducing Tang Mart is updating all four of its stores to one unified design as it sets its sights on growth in the years ahead.

The Ultimate Indulgent Dessert

“We want people, when they come in, to feel like they’re welcomed. … We want to make sure they have a pleasant experience,” Tang said. “That ties into our culture, which is (that) we want it to be a fun place to shop and work, and so that permeates the whole way through — the fun things that we like to do to make our customers feel welcome.”

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CSTORE DECISIONS •

August 2020

ADAPTING TO 2020 In the early days of COVID-19, Tang proactively installed plexiglass guards in the stores and provided masks and gloves to employees. “That’s definitely impacted our way to go to business, interacting with our customers, and our vendors as well,” he said. “We had implemented prior to (the pandemic) a bean-to-cup fresh-brewed coffee program at all our stores,” Tang noted. Removing the open-air coffee pots had the added benefit of minimizing touch points around the coffee program. Customers can be assured the coffee is brewed fresh for them on demand, and not sitting out for possible contamination. Tang Mart is assessing the new normal in light of the COVID-19 pandemic and evaluating curbside pickup options. “There’s some regulations here in the state of Alabama that prevent some of that, especially with alcohol and tobacco items,” he said. “So it’s been a figuring out process of what we can do, what we can’t do and what that looks like in the future.” In the next five years, Tang aims to double his store count to eight locations. “My goal is to grow our store footprint and our store count through right-sizing our network of stores (through IRA Phillips) — maximize the good stores and operate more of those,” Tang said.

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quickBites CONSUMERS’ ECONOMIC SENTIMENT

YOU’RE SO IMPULSIVE When making purchases, the ““impulsive spender” is driven by low prices, value for money and quality, often making impulsive purchases if they believe that they have found a bargain.

ECONOMIC CONFIDENCE A poll compared U.S. citizens’ economic

55% of impulsive spenders like to ﬁnd bargains

Source: Euromonitor International’s Lifestyles Survey, ﬁelded January/February 2020

sentiment in January and June 2020.

Q: How would you rate economic conditions in this country today? Week ending Excellent Good Only Fair Poor

June 4 4% 19% 41% 36%

Jan 15 22% 40% 30% 8%

CAR ECONOMY SPUTTERING? Amid economic uncertainty and fears of job loss, U.S. consumers are holding onto cars longer, according to a Deloitte study.

Source: Gallup Historical Trends, national tracking polling, June 2020

WHO’S BACK TO WORK? 37% are delaying large purchases

47% plan to keep current vehicle longer

25% are delaying regular vehicle maintenance 56% plan to limit use of public transit

Source: Deloitte State of the Consumer Tracker data gathered June 23-27, released July 2020

WalletHub tracked states’ unemployment recovery claims since the start of the COVID-19 crisis. It compared the 50 states and the District of Columbia based on changes in unemployment insurance claims across various time frames (the week of June 29, 2020, compared to last year, and July 1, 2019, compared to the start of 2020). States with unemployment claims that recovered best:

1. Connecticut 2. Oregon

3. New Jersey

4. Vermont

5. Arkansas

States with unemployment claims that have seen the least amount of recovery:

CSTORE DECISIONS •

April 2020 - 5.5 million LOST

May 2020 - 1.4 million REHIRED

1. Georgia 2. Florida

3. New Hampshire

4. Oklahoma 5. Kentucky

Source: WalletHub using data obtained from the U.S. Department of Labor to create rankings — published June 2020

FOODSERVICE JOBS SEE SLOW REFILL

August 2020

Source: Datassential, “The Road to Recovery: Food & Foodservice After COVID-19,” using Bureau of Labor statistics

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C-Stores Navigate Uncertain Economic Landscape Erin Del Conte • Executive Editor

Amid a pandemic that’s shifting norms and shopping habits, retailers nationwide must grapple with an economy in flux.

As early as February, Raymond Huff predicted COVID-19 would impact his Russell’s Convenience Stores business. What he didn’t anticipate was a whopping 85% drop in sales when states locked down. The president of Denver-based HJB Convenience Corp., parent company of Russell’s, Huff has spent his career surmounting impossible challenges, but the economic fallout due to the COVID-19 pandemic and state lockdowns might be the biggest obstacle he’s had to overcome as a retail veteran. He’s not alone. Convenience store chains across the country are adapting to a new normal as well as evolving local health and safety rules, while working to roll out new programs like mobile apps, online ordering, curbside pickup and delivery, and so much more, at a rapid-ﬁre pace to keep business on track. Huff has battled a tough economy before and come out on top. In the aftermath of 9/11, he watched the economy crumble and store sales tank to the tune of 40-60% at Russell’s. At that time, Russell’s was owned by Trans Paciﬁc Stores Ltd. (TPS), which was owned by Quince — a partnership that owned several retail ventures, for which

22 22

CSTORE DECISIONS DECISIONS •• February August 2020 CSTORE 2020

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Economic Landscape Raymond Huff, president of Denver-based HJB Convenience Corp., dba Russell’s, operates c-stores in now vacant office buildings. He’s appealing to local and federal lawmakers for laws assisting small businesses during the pandemic.

Huff was the vice president of operations. When TPS began to divest the c-stores, Huff, a partial owner in TPS, realized he had the assets to purchase the remaining locations. He acquired Russell’s in 2004, at a time when the chain had a loss of $2.6 million in shrinkage and was hemorrhaging in-store sales. Within a few years, Huff reduced shrink to nearly zero, invested in his employees and sent sales skyrocketing. Today, he operates 19 stores in Denver, Los Angeles, San Francisco and Hawaii, including two micromarts. Eighteen of the 19 stores are located in office buildings in previously booming downtown metro areas. But this unique model is presenting an unprecedented challenge in the 2020 climate. Now the cities are quiet and the office buildings vacant as employees work from home. Huff doesn’t expect delivery to work in his situation, as most customers live outside the city limits and order from businesses closer to home. “In March, when they first shut down the economy, I said, ‘I’ve got a payroll to pay. I expected to be able to pay out of sales that were to be coming in today, tomorrow and the next day. Guess what? Those sales are not there anymore,’” Huff explained. Russell’s was approved for a Paycheck Protection Program (PPP) loan in March, but it took time for the funds to arrive. “I sent a note to every one of my employees who were still working because most of my stores were still open. I said, ‘I can’t afford to pay you. However, I’ve been approved for a PPP loan. It hasn’t been funded. When it does get funded, I will pay you, and then I’ll pay going forward.’ I expected 50% of my employees to quit,” Huff said. He sent a similar letter to his vendors. “All of my employees stayed, and every one of my major vendors stayed, aside from the big boys. That’s how we were able to operate with no money coming in,” he explained. Luckily, the PPP loan arrived, allowing Huff to make good on all payments. If there’s one thing Huff has 24

CSTORE DECISIONS •

August 2020

learned in the course of his career, it’s that building relationships and treating people right is the only way to succeed long-term. The fact that his employees and vendors stuck with him in the spring, he said, is a testament to that. Then, just when Huff got his head above water, new challenges arose. June brought protests following the killing of George Floyd by Minneapolis police. “All my stores are downtown,” Huff said. “The protesters are downtown. There’s no office worker that wants to go near that.” As of early July, the buildings where Russell’s operates were still boarded up. “Not because protesters broke the windows, but because (the city of Denver) thought they were going to break the windows.” Stores remain open because they are essential businesses, but some are bringing in only $25 a day in sales. “I open a store, and I take care of the one or two customers that we have. We close the store at 1 p.m. It’s ridiculous,” he said. He has subsequently closed four underperforming stores temporarily until tenants return to the buildings. And now, the PPP money is running out, but Huff isn’t going down without a fight. He’s been working with lawmakers at the local and federal levels. At press time, he saw the Reviving the Economy Sustainably Towards a

Russell’s convenience stores are facing trying business conditions as they operate in office buildings that are vacant due to the pandemic and boarded up as a precaution amid ongoing civil rights protests. Four stores have closed temporarily until tenants return to the buildings.

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Contact orvisit visit Contactyour yourdistributor distributor or SmuckerAwayFromHome.com. SmuckerAwayFromHome.com. Sources: CSP – Grocery Sales Rise C-Stores, NACs Survey APR 3, 3, 2020, Sources: CSP – Grocery SalesinRise in C-Stores, NACs Survey APR 2020, https://www.cspdailynews.com/general-merchandise/grocery-sales-rise-c-stores-nacs-survey-shows https://www.cspdailynews.com/general-merchandise/grocery-sales-rise-c-stores-nacs-survey-shows IRI Total C-Store Sales,$L12 Weeks Ending 6.14.20 IRI Total $ C-Store Sales, L12 Weeks Ending 6.14.20

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Recovery in Twenty-twenty (RESTART) Act, as his best shot at recovery. U.S. Sens. Michael Bennet, D-Colo., and Todd Young, R-Ind., introduced RESTART to support the small- and mid-sized businesses affected by the COVID-19 crisis. It would give business owners who took out PPP loans the flexibility to use the PPP effectively, extend the program for the remainder of 2020 and provide loan forgiveness. At press time, Huff was also monitoring the progress of the federal bill HR6506, which would amend the Small Business Act (SBA), extending PPP and loan deferments and expanding loan forgiveness. “I trust Congressmen Ed Perlmutter, D-Colo., U.S. Sen. Cory Gardner, R-Colo., and U.S. Sen. Michael Bennet, D-Colo., because it’s not just me, it’s every businessperson like me,” Huff said. “Everybody is hurting. They have got to do something.” “Unfortunately, these may pass too late to save my company,” he added. “Without help, I will be out of business. I’ll take a huge loss.” He’s seen several businesses in various industries fail recently because, even with PPP loans, there’s no business as rising unemployment affects demand. The U.S. Bureau of Labor Statistics reported July 2 that in April and March combined, employment fell by a total of 22.2 million. June looked better compared to the spring with unemployment recovering by 2.2 percentage points to 11.1%, with the number of unemployed persons declining to 17.8 million. While employment recovered a bit in June, since February, the jobless rate has increased by 7.6 percentage points.

The Consumer Economic Sentiment Roller Coaster The HPS-CivicScience Economic Sentiment Index (ESI) “living” index measures U.S. consumers’ economic outlook. At last reading on July 7, 2020, optimism hadEconomic declined points SIDEBAR: The Consumer Sentiment1.6 Roller Coaster over the previous week to 46.2. The four-week dip followed a The HPS-CivicScience Economic Sentiment Index (ESI) “living” index measures U.S. consumers economic outlook. At lastconfidence reading on July 7, 2020, optimism had declined 1.6 pointsas overthe the big spike in at the start of June previous week to 46.2. The four-week dip followed a big spike in confidence at the start of June aseconomy the economy began to reopen.to reopen. began

Source: CivicScience, 2020; https://civicscience.com/economic-sentimentSource: CivicScience, 2020; https://civicscience.com/economic-sentiment-continues-to-tumblecontinues-to-tumble-as-the-virus-spreads-and-states-reimpose-restrictions/ as-the-virus-spreads-and-states-reimpose-restrictions/

DOUBLING DOWN ON FOOD

Huff faces a particularly challenging situation given that his stores operate in now empty office buildings. For many c-stores, including The Hub, based in North Dakota, the outlook is sunnier, but retailers are still pivoting to recoup lost sales. “We have faced a double headwind in the past few months. First, the COVID-19 shutdown caused a drop in our business of about 35%,”said Jared Scheeler, CEO of The Hub Convenience Stores Inc., with six sites in North Dakota. Then came the economic downturn in the oil drilling and production industry due to the pandemic. “Whereas most of the rest of the world likes lower retail prices at the pump, fuel retailers in North Dakota do not,” Scheeler said. “With so many oil field workers in the area, lower barrel prices mean layoffs and shutdowns. So, amid the coronavirus pandemic, we also have been dealing with a pause in new oil drilling. The layoffs and furloughs have been massive in western North Dakota.”

For many c-stores, like Russell’s, pictured left, not only is the pandemic reducing customer visits, but rising unemployment is impacting demand. But some stores active in the SNAP program are less concerned about unemployment impacting sales. 26

CSTORE DECISIONS •

August 2020

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McIntosh Energy, which operates four Mac Food Mart stores in Fort Wayne, Ind., fared well overall this quarter. While inside sales dipped and fuel volumes dropped as COVID-19 arrived, the chain had rebounded by July. Now, President Ray McIntosh is preparing for what’s ahead.

The rise in unemployment in the area has impacted business. “We made a strategic decision early that we were going to try to maintain existing payroll as much as possible, so our team members would be less affected,” Scheeler said. “We did see historically high fuel margins for three to four weeks that helped offset the loss in business, but the margins in our area settled down much faster than the rest of the country. In fact, our margins right now are below average.” Early on in the shutdown, The Hub added delivery service to boost sales. “We handled all of the delivery internally and offered delivery on any basket of $20 or more,” he said. By mid-June, the company had recouped 2019 numbers. “North Dakota is a sparsely populated area, and while we are by no means averse to COVID-19, it hasn’t been as big of an issue for us as in other areas of the country,” he said. Still, The Hub’s morning bakery business was hit hard by the shutdown. “We packaged all of our fresh product; however, we found that extremely restrictive to sales,” Scheeler said. “At the end of June, we reverted back to our standard bakery merchandising practices, and that business is finally coming back.” The Hub is now enhancing its foodservice offerings to solidify its spot as a food destination. “We’ve made our mark as a foodservice operator, and we believe the way to stay ahead of economic headwinds is to double down in that arena,” Scheeler said. Scheeler is cautiously optimistic about the future. “However, if we see a fall resurgence with the virus, we may be facing permanent reinvention of our industry,” he said. “As a forward-thinking operator, I’m preparing for all of the above.” 28

CSTORE DECISIONS •

August 2020

SUMMER REBOUNDS OUT EAST

Meanwhile on the East Coast, “April and May were a struggle,” said Doug Galli, vice president and general manager for Reid Stores and Crosby’s, which operate 82 c-stores in western New York and Pennsylvania. Instore sales were down 30-40% with gallons dropping 50% compared to the prior year. The chain adjusted store hours and reduced employee hours where needed to adapt to dwindling morning traffic. But by the third week of May, sales began to improve. “We’re still not to last year’s gallons, but we are below single digits now,” Galli said. “We had an incredible June.” The first week of July brought an all-time in-store sales record for Crosby’s as customers flocked outside after lockdowns expired.

After a tough spring in New York and Pennsylvania, Crosby’s saw an all-time in-store sales record in July as customers emerged from lockdowns. Like many c-stores, Crosby’s has been proactive about safety precautions to keep employees safe amid the pandemic.

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Economic Landscape

At press time, New York was in “phase four” of its reopening response, with many employees still working from home, and the chain hadn’t yet reclaimed 100% of its morning business or returned to normal hours. To adapt, Crosby’s has been testing curbside pickup and is now rolling out a loyalty program that had originally been planned for April. It’s also adding a new online ordering option for foodservice and select store items to adapt to changing shopping patterns during the pandemic. At select stores, third-party deliveries will also be available. The chain’s biggest challenge has been finding employees to fill open positions, which Galli attributes to the extra unemployment benefits available. “We’re struggling to keep stores staffed right now, which in the midst of this increased volume has been a bit of a challenge,” he said. High unemployment doesn’t tend to negatively impact Crosby’s stores. In fact, stores are seeing a huge increase in EBT (Electronic Benefit Transfer) transactions compared to last year. “The government has flooded the market a bit more with people on the Supplemental Nutrition Assistance Program (SNAP), and we’re seeing a huge increase there,” Galli said. Galli expects summer sales to be strong. “We feel pretty good about how we came out of this,” he said. “There were some gasoline margins there that helped us, and we came out of it, for a company of our size, in good shape. For the rest of our fiscal year, which ends the end of October, we’re comfortable with where we’re going to be. If this virus rears its ugly head again in the fall and winter months, it’s a whole new ballgame again. Although we’ll be prepared on how to handle it because we’ve already put everything in place.” RESTRUCTURING FOR SUCCESS

Meanwhile, at the height of spring lockdowns in April, TravelCenters of America (TA) furloughed 2,900 field employees and 122 corporate employees as it was forced to close its full-service restaurants due to COVID-19. TA, Petro Stopping Centers and TA Express travel centers remained open. Since that time, TA has been able to bring back some of those employees at sites around the country as well as at the corporate headquarters in Westlake, Ohio, as regions reopened and demand increased, according to Jon Pertchik, CEO of TravelCenters of America, which operates 260 locations in 44 states and Canada. “Our moves are based on demand and remain fluid as a result,” he said. 30

CSTORE DECISIONS •

August 2020

Taken at the start of the pandemic, this image shows Crosby’s employees donning face shields provided by the company to keep them safe.

“We are exploring with NATSO (the National Association of Truck Stop Owners) the possibility of future SBA paycheck protection program opportunities for our closed restaurants,” Pertchik added. “We also support legislative protection from liability.” To help position itself for success amid the tough business climate, in May, TA began a companywide reorganization, which included leadership changes such as the addition of Senior Vice President of Hospitality Kevin Kelly, who will oversee a hospitality department under which restaurants, gaming and convenience stores will be consolidated. “I believe there are symbiotic opportunities in coordinating between the c-stores and all restaurants as compared to our historically siloed approach,” Pertchik said. “The new structure ensures coordination and collaboration among the business units to better serve and meet the customer’s needs as one organization.” The chain is also focused on improving its availability to use data and analytics to drive merchandising decisions about SKU rationalization and space allocation, Pertchik said. “Historically, we haven’t focused on data to drive our decision-making, and that will change under the new leadership,” Pertchik said. The move should help the chain optimize efficiency during a challenging economic landscape. LOOKING FORWARD

In the Midwest, fuel sales were picking up in the Chicagoland area in July, after the city reopened following lockdowns that began in March. “We are still significantly down from previous years, but not as vast as a few months ago when we lost over 50% of our fuel sales when stay at home orders were put into effect,” said Mario Spina, owner and CEO of Warrenville, Ill.-based The PRIDE Stores, which operates 15 stores in the Chicagoland area. The chain is set to open its 16th location in Dyer, Ind., which will mark its first location outside of Illinois.

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In Chicagoland, The PRIDE Stores turned to takeout and delivery to keep food sales afloat during COVID-19. At press time the chain was again allowed to offer limited indoor seating, but CEO Mario Spina has his eye on fall headwinds.

“Our main focus through this epidemic was to take advantage of this time to concentrate on our operations, specifically back-of-house, to ensure we are running our business as efficiently as possible,” Spina said. The PRIDE Stores has been analyzing every aspect of its offering, while putting more weight behind marketing and advertising. When the pandemic hit and restaurant seating closed, PRIDE used social media to heavily promote its takeout and delivery options via Uber Eats. “We might not be able to control the current environment around us, but we can control how well we operate our stores,” Spina said. The effort paid off and allowed the chain’s Urban Counter and Taco Urbano restaurants to remain open for takeout and delivery. Food sales, he added, are increasing, but not to pre-pandemic levels. Still, PRIDE’s inside sales have been flat with last year despite the lockdown. “Certain categories are down, but others are up, significantly up, like beer, wine and spirits,” Spina said.

In Florida, Tom Thumb Food Stores is selling masks and other pandemic necessities, which has offset lost sales in other areas. 32

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August 2020

Its outdoor seating proved a major benefit, and at press time, stores were allowed to offer limited indoor seating and the taproom of its 93 Octane brewery had reopened as Illinois’ lockdown entered “phase 4.” Looking to the fall, “One concern is a shutdown of the economy again,” Spina said. “Another concern we have is competition being too aggressive to see fuel volume return to normal levels, flipping fuel margins into the negative.” Spina is also concerned about how customers’ economic situations will impact their spending power. “The less disposable income people have, the less funds they have available to make purchases. We are hopeful the economy will come back strong once business are allowed to fully open again.” In Indiana, Ray McIntosh, president of McIntosh Energy, which operates four Mac Food Mart stores in Fort Wayne, Ind., made it through the spring unscathed, but he’s got his eye on the fall. “Overall, our chain has fared well,” McIntosh said. Nonetheless, Mac Food Mart saw inside sales decline and fuel volumes drop amid the pandemic. “But we had margin gains and higher volume of diesel fuel, which offset the decrease in gasoline gallon sales,” he said. And by July, those inside sales and fuel volumes were rebounding nicely. “I would say we are close to 95% back to pre-COVID business activity.” McIntosh is taking the time now to reinvest in the stores to keep them as fresh and modern as possible, while upgrading technology. “We use backroom software for our day-to-day accounting functions, but now we are using another software firm that provides us with our dollars and units sold by day, week and month to date compared to last year’s sales,” he said. McIntosh plans to use the data to increase units sold and margins with goaldirected results to incentivize employees.

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Choice Market

In Florida, Tom Thumb Food Stores, like many c-stores, has been proactive in keeping customers and employees safe during the pandemic with masks, plexiglass, floor decals to encourage six-foot spacing and hand santizer.

Going forward, he’s evaluating ways to maintain and grow sales volume and see better margins in-store and at the pump, even with a potential drop in in-store visits. “So far there has been nothing coming from the state or local government (to assist) our type of retailing,” McIntosh said. “I am optimistic going forward, depending on how things turn out during the election this fall. That could change my overall view of our business potential.” RIDING THE SURGE

When the pandemic began, the Florida Keys — where seven of Tom Thumb Food Stores’ 14 Floridabased sites reside — shut down, causing a drop in sales for the c-store chain. Since the area reopened on June 1, business is rebounding. “It’s not great and it’s not terrible,” said Richard Klyczek, chief strategy officer for Tom Thumb. “Our inside store sales are actually doing well, versus prior year, but our gallons are still lagging behind prior year.” The harsher restrictions on other industries like bars and restaurants are benefiting c-stores. “There’s no place for people to be out socially, drinking and smoking, so people are doing that from home,” he said. “So our beer category is performing really well. Cigarettes have been trending well.” At press time, COVID-19 cases had skyrocketed in Florida to more than 325,000 cases. Tom Thumb operates in one of the hardest hit areas — Miami-Dade. It also operates stores in Broward and Monroe counties. The situation is different in each location. “Monroe has been a little more flexible,” Klyczek said. “They’ve allowed us to get back to self-service 34

CSTORE DECISIONS •

August 2020

food and beverage. We still are unable to do that in Miami-Dade and in Broward, which is presenting a challenge. Our prepared foods, roller grill, dispensed beverage and coffee are still lagging behind prior year, which is challenging.” Tom Thumb is selling high-demand items like hand sanitizer and N95 and surgical masks, which has made up for lost sales in other areas. “In-store merchandise sales are actually trending in the right direction versus last year,” he said. Tom Thumb, like many retailers, worked to keep employees and customers safe with masks, hand sanitizer, plexiglass shields, gloves, face shields and social distancing decals. “We took an aggressive stance to protect our employees, and those measures are still in place,” Klyczek said. “We anticipate masks, gloves and all the things we have in place today will continue at least until the end of the year, unless something significantly changes.” Looking forward, Klyczek is concerned about the significant increase in COVID-19 cases in Florida. “One of our concerns is that we take a step backward and get back into home confinement,” he said. “If that were the case, I would expect that that will continue to have a devastating impact on our ability to remain profitable.” “Now, if I look further out, if unemployment continues on the same path, of course we’re concerned it will eventually have a detrimental impact,” he said. “I think we’ll start getting into those concerns, where customers are economically maybe more impacted, in the next few months.” CSD

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Foodservice | Dayparts

C-STORES PIVOT

to Recapture

Food Sales Despite the pandemic, convenience stores are in a good position to flex their foodservice muscles to keep customers well served and well fed. Marilyn Odesser-Torpey • Associate Editor

At a time when it seems that every day brings new guidelines and restrictions on restaurants due to the COVID-19 pandemic, savvy convenience store operators are positioning their foodservice as a safe and reliable source of fresh, delicious and convenient meals for breakfast, lunch and dinner. “While some guests will gravitate toward grab and go, our freshly prepared hot food is especially popular for professional drivers who are on the road for long periods of time and look forward to a warm meal while away from home,” said Brian Ferguson, vice president and chief merchant for Pilot Co., which has 950 retail and fueling locations and 680 restaurants in 44 states and six Canadian provinces. Ferguson explained that Pilot Flying J stores added back self-service options such as roller grills and soup bars in June, offering single-use disposable paper sleeves for guests to use when handling tongs and ladles. Details like this emphasize the company’s focus on “keeping health and safety top priorities,” Ferguson said. 36

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August 2020

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fast facts: • Nouria found success moving self-service foodservice items like pizza and hot dogs to prepackaged or full-service amid the pandemic. • Staying well stocked with the basics and providing delivery helped Kwik Trip’s foodservice sales climb during the early days of COVID-19. • Many c-stores are now returning to self-service food options.

Foodservice | Dayparts

Kwik Trip’s and Kwik Star’s more than 700 stores have resumed offering fresh, single-serve bakery items, along with the return of self-serve condiment bars and dispensed beverages.

To encourage food purchases, Pilot Flying J is promoting availability of daypart-spanning selections with daily, weekly and monthly deals, which are communicated via digital coupons through its app, special prices through its loyalty programs and seasonal limited-time offers (LTOs). Among the promotions are ‘Thungry’ (buy one snack get one free with purchase of beverage) and the professional driver-oriented ‘Hungry Driver’ (savings on freshly prepared meal bundles including fivepiece wings or tenders meal with beverage purchase). “Last year, we led the industry with the launch of a delivery partnership with Uber Eats at select locations,” he added. During the four-week period beginning in mid-June, food sales “exploded” for Kwik Trip and Kwik Star, which operate 700 stores in Wisconsin, Minnsota and Iowa, according to Paul Servais, the company’s retail food service

Grab-and-go items along with most other foodservice sales roared back in June at Kwik Trip and Kwik Star stores. 38

CSTORE DECISIONS •

August 2020

director. Sales from that period were ahead of those during the same time the year before. Throughout the pandemic, new customers were pleasantly surprised to find that the stores’ shelves were always well stocked with basics such as milk, butter and eggs from their own dairy, commissary and bakery, he noted. This, Servais explained, helped customers overcome their initial impulse to panic buy and come in more often. “In many cases, we were the only game in town,” he said. “We also offer home delivery in some areas by partnering with two third-party services.” The stores have resumed normal foodservice operations including self-service condiment bars, dispensed beverages and single-serve bakery. In the works are promotions through the company’s loyalty program and the development of take-home family meal offerings. SHIFTING GEARS

Switching popular self-service foodservice items such as pizza and hot dogs to prepackaged or full-service helped Nouria avoid skipping a beat during the shutdown and early reopening periods, said Joshua Clark, category manager for fresh foods at Nouria, which operates 125 stores — 26 with made-to-order foodservice — in Maine, New Hampshire, Massachusetts, Rhode Island and Connecticut. Pizza slices and, in some locations, hot dogs on buns are prepackaged in bags. At some stores, roller grills were moved to the back for service by associates. Clark described breakfast as “the canary in the coal mine.” “With more people staying at home, morning coffee sales dropped, taking our breakfast business with it,” he said. “Now that the stay-at-home restrictions are easing, each week we’re getting better than the week before.” To promote Nouria’s daypart-spanning foodservice offerings, the company is promoting its products on social media and offering online ordering. The stores are also featuring favorite summertime food items such as the iconic New England lobster roll. CSD

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Foodservice Column | Food Sales Strategies

Seven Strategies to

Grow Food Sales Keeping food sales strong depends on mastering the basics and building on tried-and-true best practices. John Schaninger • Contributing Editor

Picture this: Foodservice sales at your convenience stores were moving along nicely at the start of the year, but over the last few weeks, or even months, food sales began to fall flat or perhaps even behind last year. When food sales decline, getting back to basics and ensuring best practices are in place can send sales soaring once again. Here are seven strategies for turning your food sales around. 1. MONITOR YOUR COMPETITION

Are you riding around and surveying your trade area, not only convenience, but fast food? Before you can tweak or improve your food offer (if needed), you’ll want to know the competition’s products, quality, pricing and promotions. What are they doing that may be siphoning off your customers? Are there opportunities to sell a food item that they are not providing or that you can improve on and do better? 2. KNOW YOUR OWN PRODUCT

Is your quality commensurate with your pricing and comparable or better than the market? In your grab-and-go section, whether it’s proprietary or branded, be sure to test your holding times to ensure your offer is top quality up until you remove it from 40

CSTORE DECISIONS •

August 2020

sale. How long is that doughnut fresh or that sausage biscuit hot? You first want to sell a great product, and secondarily achieve a longer shelf life. It’s an important balance. 3. SET ACCEPTABLE EVERYDAY PRICING, WITH STRONG PRICE PROMOTIONS

Depending on the item, do a ‘two-for’ as much as possible rather than reduce your single price. This allows you to sell two, instead of one, offering value to the customer, while reducing spoils and reaching more consumers if your buyer shares the second item. Think about bundling with multiple categories. For example, not everyone drinks coffee. How about a breakfast sandwich with either coffee or fountain for a hot price; or a slice of pizza with customers’ choice of coffee, fountain or water? If possible, check your sales information to see what sells most with each food item and suggest it.

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Foodservice Column | Food Sales Strategies

Your entire team must know what the products, pricing and promotions are, when they are available and how to provide them. (Photo taken pre-pandemic before mask rules were in effect at most c-stores.)

4. SET CONCRETE GOALS

Determine how many of each item you are selling, and your net gross profits. Then set goals for sales, movement and gross profits. If you are selling ‘x’ of an item and putting it on sale, how many must you now sell to achieve the same profitability? Measure your profit in pennies and dollars, rather than just percentages. 5. REMEMBER, EMPLOYEE COMMUNICATION AND TRAINING ARE KEY

6. IMPROVE COMMUNICATION WITH CUSTOMERS

Your entire team must know what the products, pricing and promotions are, when they are available and how to provide them. Run contests and rewards within your stores to drive food sales. Encourage employees to talk up your products and promotions.

Food offers should be specific and meaningful, with the same singular message at pump, entrance and high-traffic areas of the store, such as the food area, fountain, coffee and coolers. Signage at the checkout and employees wearing buttons alert customers and give

Food offers should be specific and meaningful, with the same singular message at the pump, entrance and high-traffic areas of the store. (Photo taken pre-pandemic). 42

CSTORE DECISIONS •

August 2020

your team members help suggest ing and selling. Be aggressive on your social media platforms. 7. SAMPLE. SAMPLE. SAMPLE

Sampling is the absolute best way to promote your product, get it into the mouths of customers and drive sales. When done correctly, there is no better strategy than sampling. But how can c-stores sample food products during the COVID-19 pandemic? Follow all of your county guidelines and, if allowed, cut your product into pieces, wrap the sample and suggest it to customers. If it is a time-sensitive item, for example, a hot breakfast sandwich, be sure to time the product and monitor so that you are not selling cold, unappetizing items. There are many specifics in each of these items to expand on to drive food sales and profitability at your convenience store. Review them with your team and develop your own plan to take your foodservice sales to the next level. CSD

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Foodservice | Chef’s Corner

Navigating Foodservice in 2020

Managing foodservice successfully in 2020 means adapting to changing protocols and supply fluctuations during a pandemic, plus staying on top of evolving trends, all while executing food flawlessly in a small space. Erin Del Conte • Executive Editor

Carlos Acevedo

CStore Decisions caught up with Carlos Acevedo, director of foodservice for Temple, Texas-based CEFCO Convenience Stores, which operates 205 c-stores, to gain insights on managing foodservice during a pandemic, food trends to watch and the must-have equipment pieces for c-store kitchens. 44

CSTORE DECISIONS •

August 2020

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“WHEN YOUR DRIVERS ARE NO-SHOWS, I GRAB MY KEYS.” RANDALL RHODES MARKET LEAD DRIVER

You can’t sell produce you don’t have. These days, retailers either have too many trailers or too few drivers, delaying perishables from delivery. So when a retailer had 10 truckloads of fresh produce and no drivers, Randall and his team quickly subbed in for their drivers, letting the retailer avoid delays and empty shelves. The produce was all delivered, ripe and on time.

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Foodservice | Chef’s Corner

CStore Decisions (CSD): How have you seen the pandemic impact foodservice/food best practices? Carlos Acevedo (CA): The surprise headline is that, despite the pandemic, foodservice sales at CEFCO are strong; we are still serving fresh food, and customers are still buying it. Because convenience stores are deemed essential businesses and were never required to close shop, we found ourselves in a unique position to fill a sudden yet protracted foodservice gap in the economy. By doubling down on sanitation practices, especially around critical control points, we were able to reassure customers early on and maintain their trust. Behind the scenes, the coronavirusinduced supply chain disruption is an everyday challenge. Product substitutions are an ongoing reality, as are occasional ‘outs.’ Meanwhile, constant cost fluctuations of commodities mean that our margins bounce around from week to week. One silver lining is that CEFCO is blessed with excellent distribution and vending partners who keep fighting to propel us ahead of the game as much as can be expected under the circumstances. CSD: What new protocols are you using, and/or how are you changing offerings to fit the new normal? CA: More than ever, CEFCO is committed to providing a safe retail environment for our customers and staff. This means complying rigorously with all safety protocols mandated by local and state governments: Hand sanitizer, social distancing, face masks, register shields and constant sanitation of surfaces are now standard operating procedure. With so many barriers between the customer and us, we are also working hard to engage and make them feel welcome. 46

CSTORE DECISIONS •

CSD: As a director of foodservice for CEFCO, what are some must-have pieces of equipment to make cstore foodservice successful in your opinion, and why? CA: My three aces are the fryer, convection oven and warmer. Not every location in CEFCO’s portfolio can support a fryer, but nothing beats the crispy crunchy deliciousness of fresh fried snacks. The oven is a close second. A basic commercial convection oven is the kitchen’s workhorse, up to almost any task: heating proteins, toasting biscuits, cooking bacon. You can run a strong multi-daypart foodservice program with hot sandwiches, pizzas and oven-able snacks using just an oven. The final piece of the puzzle is a humidified “show-and-sell” display warmer that will keep your food hot and fresh for hours. CSD: Any new foodservice offerings at CEFCO you want to tell us about? CA: My first assignment as director of foodservice was to design our new CEFCO Kitchen experience, and I put a made-to-order burrito bar center stage. Together with a dream team of colleagues, we finalized the program in a record two months, launching in May at our first new Gen 3 location in Temple, Texas, and then again at the second Gen 3 location just a quick month later. The results exceeded expectations: Customers flock to these stores for tasty burritos made on the spot

August 2020

just the way they like. In the first six weeks, we sold 5,000 burritos! CSD: What trends are you seeing currently in foodservice? CA: It’s snacks, snacks, snacks! Our top five sellers are fried snacks. Specifically, the trend I’m tracking is snacks as a de facto alternative for breakfast, lunch and/or dinner. To capitalize on this, I offer bundling opportunities with snacks that make them a meal. Another trend growing more relevant every day is increased customer patience — if it means they can get fresh, made-to-order food. We are in the dawn of a new era: ‘the c-store-aurant.’ Our new burrito concept is a testimony to this shift in c-store consumer behavior. CSD: What’s your favorite thing about your current role? CA: Creating programs and menus that help stores reach their full profit potential. There is a foodservice solution for every size, shape and staffing level of store out there. It’s all about optimization.

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Category Management | Beverages

Secrets OF THE

COLD VAULT As beverage innovation grows, retailers must make tough decisions when filling limited cold vault space. Consider these three keys to maintaining a profitable cooler. Thomas Mulloy • Senior Editor

When stocking the cold vault, it’s no secret that retailers need to start with a basic planogram featuring big sellers. Operators must then make sense of the wide array of variables that can sway cold vault success or failure. Add to that the current inﬂux of innovation in the category, and decisions can be difﬁcult. Mike Nelson, senior category manager with Beaverton-Ore.-based Plaid Pantry, operating 110 stores in Oregon and Washington, relies on his own knowledge and a list to guide him, as well as insights from supplier partners. “We assign a category captain each year, so they kind of guide us as independently as they can,” he said. But once the solid, proven performers are slotted, the real work of choosing what additional beverage products to include, and how much of them to stock, begins — and it’s usually a gamble. Savvy beverage category managers use a number of methods to help them make tough decisions. Here are three tips of the trade when balancing the cooler set. 1. INDULGE RISKS, BUT KNOW WHEN TO SAY WHEN

“Don’t be afraid to maybe steal a little space here and there for taking a chance,” Nelson said, adding that the Paciﬁc Northwest may be a bit more innovation friendly than other regions of the U.S. “We’re lucky out here,” he said. “We kind of like more oddball stuff.” “Don’t ignore the little guys,” Nelson cautioned. Smaller brands are often the drink makers whose products set future trends. The large manufacturers keep a close eye on what these small houses are doing, too, and factor that into their plans. 48

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August 2020

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Category Management | Beverages

Plaid Pantry’s cold vault features a bevy of innovative choices, with a craft soda set as well as a functional set that features kombuchas, yerba mates and other ‘good-for-you’ beverages.

If a larger distributor requires so much space it crowds smaller brands out of your cooler set, though, Lafayette, La.-based Hit-n-Run Food Stores’ President Brent Mouton said to hold ﬁrm. He tells them, “We’re going to move more product at the end of the day, if we do this right, which means we’re going to move more of your product, as well.” But how does a retailer know if a gamble on a new product is going to eventually pay off in sales? For Mouton, who operates 11 stores throughout Louisiana, most products reveal pretty quickly whether they’re going to take off. Hit-n-Run will leave a new product in the cooler for about two months, and if it

CSTORE DECISIONS •

August 2020

doesn’t pick up some steam, then it’s swapped with another trial product. Resist the temptation to give it just a little more time, Mouton advised. “We only have so many doors,” he said. “We only have so many shelves. We only have so many slots. That’s all we have, and we can’t afford to have (beverage products) that aren’t moving.” 2. LISTEN TO CUSTOMERS, TALK TO RETAILERS

Minimize risk by doing your homework to stay updated on what’s happening in the industry, Nelson advised. Nelson is a big fan of product expos as a source of information. “I think those are just absolutely fantastic,” he said. While many trade shows aren’t convenience driven, Plaid Pantry has “found some decent nuggets,” Nelson said. “Even if you don’t specifically find the brand you’re looking for, you learn so much of what’s out there and what a lot of people are buying.” But with many events on hold due to the pandemic, retailers need to be proactive in finding other ways to gain information, as well, including talking with other retailers and customers. Listening to regular customers’ preferences is key, and a savvy retailer knows not to take consumer intel for granted. “Keep them happy,” Mouton said. “If that one loyal customer,” he said, “if they’re going to be in my store every day, and they want a certain type of energy drink, one that maybe we didn’t get a lot of traction on when we first had it in … we’ll bring that back, gladly.” Why? Because the customer who stops for that daily, goto beverage is also filling her basket with snacks, sandwiches, candy and probably putting fuel in the tank, too. cstoredecisions.com

3. TRENDS CAN BECOME STAPLES

With so much innovation in the beverage category these days, trends come and go — sometimes quickly. But trends can also settle comfortably into the routines of consumers — and into a slot in the cold vault. Take cold-brew coffee, for instance. It has earned its place by attracting steady followers, Nelson said. “Coffee is still good. Coffee is still very powerful,” he said. While he observed that a lot of consumers are looking for different energy sources, cold-brew coffee seems to have withstood the onslaught of energy drinks and their associated trends, pushing back to maintain its own share of the market. The previous year’s sales data supports that expectation. According to sales data from Beverage Marketing Corp., dollar sales of ready-to-drink (RTD) coffee in the convenience channel roughly tripled from 2015 to 2017, going from $76.9 million to $249 million, and sales continued to grow with marks of $369 million and $538 million for 2018 and 2019, respectively. It’s no secret that numbers like that across the cold vault are sure to keep innovation booming. CSD

fast facts: • Set time limits for new beverages to succeed in the cold vault. • Don’t ignore smaller manufacturers when planning your beverage set. • Ready-to-drink coffee has carved out a cold vault niche.

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August 2020 • CSTORE DECISIONS

Category Management | Cigars & E-Cigs

TOBACCO TURNS A CORNER While c-stores face a global pandemic along with flavor bans and other regulations, tobacco products like e-cigarettes and cigars see strong sales. Isabelle Gustafson • Associate Editor

When COVID-19 first hit the U.S. in March and April, customers began stocking up on essentials and favorite items, including tobacco products like e-cigarettes and cigars — a likely combination of a few factors including decreased shopping trips as well as increased stress. Cigars in particular saw a spike in sales in the short-term along with steady growth year over year. According to Chicago-based market research firm IRI’s total U.S. convenience data for the 52 weeks ending June 14, 2020, cigars were up 5.7% in dollar sales and 4.2% in unit sales. And for the latest four weeks ending June 14, 2020, cigars saw a massive dollar sales increase of 22.9% and a unit sales increase of 17.1%. 52

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cstoredecisions.com

Category Management | Cigars & E-Cigs

According to IRI total U.S. convenience data, cigars were up 22.9% in dollar sales and 17.1% in unit sales for the latest four weeks ending June 14, 2020.

Ashland, Ky. -based Clark’s Pump-N-Shop, with 67 stores in Kentucky, Ohio, West Virginia and Florida, has seen growth for both cigars and e-cigarettes, said Category Manager Mark McCarty. “In reference to cigars, I’m seeing a 12.4% increase in volume in same-store (sales) through the end of June. For e-cigs, I’m seeing year-to-date volume growth of 18.1%,” he said. “February and March were the two big driving months for this increase with the ﬂavor ban and the start of shutdowns due to COVID-19.” When the pandemic began, Powell,Tenn.based Weigel’s also saw big increases in cigars — 18.5% year to date in April, according to Weigel’s Pricebook Manager Jessica Starnes, who added that the chain was up over 100% on e-cigarettes because it added JUUL products this year.

“

My hope is that the city, state and federal governments will slow their pursuit of additional regulations on these categories and put their focus on rebuilding what we have lost through this pandemic.

“

– Mark McCarty, Category Manager at Clark’s Pump-N-Shop

CSTORE DECISIONS •

August 2020

But now that states are reopening, Weigel’s is seeing a decrease in “panic buying” and large, one-time transactions at its more than 65 locations in east Tennessee. “We are seeing more visits and less oncea-week purchases,” Starnes said. LOOKING AHEAD

Market research firm Mintel’s “March 2020 Convenience Stores Report” speculates that, while tobacco products and alternatives are likely to remain a core category for c-stores, operators may not be able to count on them for growth in sales or trips due to regulations like the Food and Drug Administration’s (FDA) flavor ban and the recent Tobacco-21 rule. IRI data supports this. Despite dollar sales growth for the 52 weeks ending June 14, 2020, (20.3%), e-cigarettes dollar sales have been down in the short-term (-8.3% for the latest four weeks ending June 14, 2020). Anna Bettencourt, senior category manager for VERC Enterprises, with more than 30 locations throughout eastern Massachusetts and New Hampshire, said that Massachusetts’ June 1 tobacco flavor ban was cstoredecisions.com

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Category Management | Cigars & E-Cigs

fast facts:

a big turning point, and the chain has struggled with manufacturer out-of-stocks. “Prior to June 1, we saw tremendous increases. People were stocking up,” she said. “Since June 1, in Massachusetts, (tobacco) business is considerably down — double digits. But in New Hampshire, I have a store that’s just over the border, and it’s up over 100% from the previous year. We have two • States reopening has led to other sites in New Hampshire, and they’re doing increased commuter traffic, very well.” States reopening, including in Massachusetts, has more customer visits. also led to increased commuter traffic and more customer visits, she said, but it’ll be a slow return to • Cigars saw a spike in sales ‘normal.’ “It’s still dramatically down from the previous year,” in the short-term along with she said. “But there’s a big difference between May, steady growth year over year. where we were in May, and then Phase 2, in the middle of June. And now at Phase 3, we can see business picking up.” • For the period ending June 14, In the coming months, Bettencourt sees a few dif2020, e-cig dollar sales were ferent tobacco trends prevailing, including natural leaf up 20.3% over the latest 52 cigars and cigarillos. “Even with the flavor ban, the thing that’s still consistent weeks but down 8.3% over the is natural leaf,” she said. “That’s always latest four weeks. been a big trend.” She also sees vape as a growing category for Massachusetts in particular, as well as nicotine pouches in both Massachusetts and New Hampshire. Overall, Clark’s McCarty believes there’s potential for continued growth for e-cigarettes and cigars. “My hope is that the city, state and federal governments will slow their pursuit of additional regulations on these categories and put their focus on re-building what we have lost through this pandemic,” he said. “Time will tell.” CSD

CSTORE DECISIONS •

August 2020

cstoredecisions.com

EVERY WEDNESDAY THROUGH

SEPTEMBER 16

THE 2020 NAG/YEO CONFERENCE IS GOING

VIRTUAL

Make plans to join the National Advisory Group (NAG) and the Young Executives Organization (YEO) as the conference moves to an online format.

2020 NAG/YEO CONFERENCE AGENDA INCLUDES: •

Burning Issue Sessions

• • • • • •

Executing a Safer Retail and Foodservice Program Data Privacy Requirements: What Convenience Stores Need to Know Effective Leadership: The Best Ways to Manage People Employee Recruiting and Retention Strategies Emerging Trends in Foodservice What is Blockchain, and How Will It Affect You?

•

Virtual Store Tours

•

Virtual Info Exchanges

• • • • • •

Fuels Technology/Loyalty Programs Local Lobbying and the Legislative Process Foodservice Human Resources Leadership for Young Executives (YEO)

Technology | Financial Services

PROVIDING FINANCIAL SERVICES

GIVES C-STORES AN EDGE Cryptocurrency access is taking the lead among an array of new functions on the digital financial horizon, offering enhanced security and ease of use. Thomas Mulloy • Senior Editor

For decades, “cokes and smokes” ruled convenience stores’ operating model. Then foodservice and scanning brought a new age for retailers. Today, digital disruption is again transforming the way c-stores operate, pushing them to take giant leaps into new areas of operation like financial services to help customers manage money. Much of these financial services revolve around the automated teller machine (ATM). No longer simply the “bank in a box,” as many nicknamed it at its birth — the same year as the first moon landing — the ATM’s utility is about to expand exponentially. Bruce Renard, president of the Jacksonville, Fla.-based National ATM Council, outlined some of the most basic functions on the horizon. For example, to date, most companies sending out rebates, refunds or rewards use checks or prepaid cards. But now, new systems can “allow you instead to easily send a code or a text message or an email to someone’s phone (that they can use to) securely locate an ATM and get cash for that payment,” he explained. Integrating consumers’ handheld devices as a method of identification will also call for more stringent security measures, which the ATM industry is busy finalizing. Part of that security will involve bringing in biometric authentication, explained Renard. “We’ve been working for quite some time, and we have a standard in the works right now.” That framework is in the hands of the Institute of Electrical and Electronics Engineers, whose members do the number crunching and deep dives into the operations and security of such systems. Because of the more secure authentication and app-based platform, Renard foresees unlimited uses that could become routine for ATM users. 58

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August 2020

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Technology | Financial Services

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Joe Patel, who owns the Speed Mart chain in Crossville, Tenn., already sees the value of expanded functionality. “We do have a phone card machine, which (provides) phone cards, gift cards and prepaid minutes; and then we have an ATM,” he said. Now, he’s ready to grow into more ﬁnancial services. “I am looking into a kiosk that is stand-alone, which is going to offer all of that — bill pay, gift cards and all that together.” Today, new ATM functionality frequently includes Bitcoin transactions. Advocates of the cryptocurrency cite its digital security via one-to-one transactions that exclude intermediaries, greatly minimizing opportunities for fraudulent uses. When Mario Spina, owner and CEO of The PRIDE Stores, with 16 locations throughout Chicagoland, switched to a new ATM provider, he wanted the machines to offer the Bitcoin option. “You hope that people realize that they have some Bitcoin functionality in our locations, that they’ll come in and check out the stores and hopefully purchase other items,” Spina explained. “Or check out our location for the ﬁrst time and then come back again.” Some c-store retailers offer both standard ATMs as well as stand-alone Bitcoin machines. Spina installed the Bitcoin-only terminals in three of his PRIDE Stores. Speed Mart’s Patel said the Bitcoin kiosks in all seven of his locations have brought in new business. “We have noticed all the customers that come and use bitcoin, they are brand new faces to the store,” said Patel. “And whenever they’re using bitcoin, they’re obviously shopping for fuel or gas or any groceries or cigarettes with it, so that’s increasing the volume there, too.” Patel initially saw the kiosks at a large trade show, mistaking it for an ATM. But after doing some research, he

“

We have noticed all the customers that come and use bitcoin, they are brand new faces to the store. And whenever they’re using bitcoin, they’re obviously shopping for fuel or gas or any groceries or cigarettes with it, so that’s increasing the volume there, too.

“

– Joe Patel, owner of Speed Mart

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August 2020

fast facts: • Bitcoin kiosks and ATMs are cropping up in more c-stores. • Biometrics will greatly enhance digital ﬁnancial transaction security. • Physical gift cards may disappear, stored on handheld devices.

realized the advantage they could bring in added transaction revenue. Some Bitcoin kiosk providers offer a ﬂat, nominal monthly payment and maintenance in exchange for the store’s location. Others, though, offer a percentage of each transaction – the main reason Patel chose provider DigitalMint. Those are uncapped payments, by the way. “Before we chose DigitalMint, we saw another two or three companies. … They were only offering a $100 or $200 (monthly) or something close,” Patel said. “And this company offered partnership.” PRIDE’s Spina said he prefers not to own the machines, leaving the maintenance headaches to the industry professionals. “With technology changing so often, as well, it’s better, we feel, just leave it in (ATM provider’s) hands for the time being,” he said. SAME GIFT, LESS CARD

The added functionality of ATMs and kiosks may soon streamline another digital-enabled product that c-stores are now offering — the branded gift card. “We sell gift cards at our locations,” Spina said. “Amazon gift cards, Apple gift cards, all those items. We sell the fuel gift card of whatever brand of fuel we sell at that location. … And we also have our own PRIDE Stores gift card that we carry.” Ideally, Spina would like to tie all of those things together with one handheld device application. The PRIDE Stores is developing an app to allow customers to link their PRIDE gift cards and their credit/debit cards as a form of payment, as well as link their loyalty account to the app. When choosing a partner to create an app, Spina’s advice to other retailers is to be clear about expectations and don’t be afraid to ask questions. “Ask for a list of people that they do business with,” Spina advised. In addition, talk to other retailers and research companies online for independent reviews on the provider’s services. After all, ﬁnancial services offer a huge growth opportunity for c-stores. Identifying the right partner to help you navigate this new terrain is key to success. CSD cstoredecisions.com

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Technology Column | Data Analysis

HOW TO RETAIN N

DIGITAL C

The pandemic has shifted many customers to digital commerce experiences, but to reap the benefits of new digital data, c-stores must optimize their approach to data analysis while engaging and retaining these shoppers. Patrick Raycroft • W. Capra Consulting Group

The COVID-19 pandemic has made customers hyperaware of physical touch points while shopping, so it comes as no surprise that retailers across verticals have seen substantially more customers opting to use their digital commerce experience (DCXs). For many c-stores offering a digital experience today, their DCX consists of an online ordering interface, SMS or email marketing program, or mobile app featuring order ahead and/or a loyalty program. This growth in usage has rewarded retailers with a swell of newly acquired and activated digital consumers; however, user retention rates have lagged behind other verticals, which means convenience and fuel retailers must now pivot to focus on more critical phases of the consumer 62

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August 2020

lifecycle: engagement and retention. Unlike most physical counterparts, DCXs provide retailers the opportunity to track intermediate user interactions. This provides data on consumer outcomes (registration, purchase, etc.) — which, if captured and analyzed properly, can provide the retailer with meaningful insights into what is positively and negatively influencing these outcomes. Optimizing the consumer experience through DCXs is where the opportunity now lies for convenience and fuel retailers.

cstoredecisions.com

N NEWLY ACQUIRED

L CONSUMERS GAINING BEHAVIORAL DATA

Before developing data models and insights, however, DCX optimization requires breadth and depth of consumer data. It is imperative that retailers first focus on the “oil” that makes the optimization engine possible: behavioral data. While basic user demographic and identifier data is essential to facilitating DCX purchases and operating rewards programs, best-in-class retailers go well beyond these data sets and enrich their consumer profiles with triggers and associated behavioral data. Examples of triggers include: • Messages (push notification, SMS, email, etc.) • Offers • Suggestive selling (i.e. after items placed in the user’s cart) Proper tagging and event tracking within all DCXs (mobile apps, web apps, etc.) allow retailers to measure outcomes, for example: • Install-to-register conversion rate and time • Install-to-purchase conversion rate and time • 30-, 60- and 90-day retention rates • Message open and conversion rate, by communication channel (email, in-app, SMS, push) By wrangling these types of data points and associating the data with outcomes (such as installed, registered, payment loaded, activated, super user, abandoned purchase, redeemed promo, etc.), best-inclass retailers structure their funnel analyses to not only determine conversion rates for each outcome, but also to identify points of friction that lead to sub-optimal conversion rates. For example: • If the install-to-register rate is below industry average, how can friction at the point of data collection be reduced? cstoredecisions.com

• If the install-to-purchase time is above industry average, what steps can be optimized and/or removed in the buying process? • If the 90-day retention rate is below program targets, how can messaging and offers be tweaked to drive continued usage? Retailers who prioritize behavioral data collection and optimization of the consumer experience in this way will thrive in the digital world and excel over competitors who churn new customers and retain few. And if the consumer trends driven by COVID-19 transition into permanent trends, consumers will continue to reward these DCX-focused retailers with their loyalties. CSD Patrick Raycroft is the Convenience and Energy vertical lead at W. Capra Consulting Group, helping clients across retail and fuel identify and implement technology solutions that minimize risk exposure, enhance consumer experiences and improve operations. He can be reached at ptraycroft@wcapra.com or visit www.capraplus.com. August 2020

•

CSTORE DECISIONS

Operations | Supply Chain

SIZING UP SUPPLY CHAIN OPPORTUNITIES From shifting consumer demand to increased safety procedures and swift technology adoption, the COVID-19 pandemic has significantly impacted the convenience industry and beyond. Isabelle Gustafson • Associate Editor

From the start of the COVID-19 pandemic, as regulations changed, shopping trends evolved with them, affecting supply chains and c-stores’ overall operations. “There were a lot of limitations on purchases that consumers could make,” said Keith Daniels, partner at Carl Marks Advisors, which provides financial and operational advisory services. “That was being felt in convenience stores, as well.” He pointed to the recent meat shortage as an example. “What caused a lot of supply chain issues was just consumer demand,” said Daniels. “It was a combination of consumer demand on certain products that escalated, but also the plants for the vendors shutting down. That caused the supply chain disruptions, and to be able to find drivers that deliver a product, as well, was a bit of a challenge there.” Ryan Arnold, vice president of marketing for Rockford, Ill.-based Road Ranger, which 64

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August 2020

cstoredecisions.com

operates 40 locations across the Midwest and Texas, said the chain felt some of these effects. “Tightness in distribution and complete inability to secure product are certainly topics that have come up much more often the past four months than ever before,” he said. But there have been bright spots, as well, with many suppliers quick to bring solutions for their c-store partners and customers. “Certain partners have been unable to meet needs, and other emerging partners have risen to the occasion with creativity and ingenuity, helping us to ﬁll gaps and securing a seat at the table they otherwise wouldn’t have had longer-term,” he said. He credited Road Ranger’s category managers for ﬁnding nontraditional suppliers to meet new demands like cleaning cstoredecisions.com

fast facts: • The COVID-19 pandemic has led to supply chain disruptions and demand for products like cleaning supplies, alcohol, meat, frozen foods and more. • C-stores and other retailers have found ways to adapt, from offering more ‘grocery’ items to adopting new technology. • The convenience industry is growing and remains well-positioned for the future.

August 2020 • CSTORE DECISIONS

Operations | Supply Chain

Rockford, Ill.-based Road Ranger has worked to offset sales losses during the pandemic by ﬁnding non-traditional suppliers to meet new demands. The chain recently opened its 40th location.

and sanitation products, which helped the chain offset other sales losses. Road Ranger CEO Marko Zaro noted that indemand products may vary by store location; it’s not a one-size-ﬁts all approach, especially for a company that crosses state lines. “We cover a wide geography, near the most northern borders of our country down to the most southern,” he said. “Broadly, patterns and trends have been witnessed everywhere; however, different communities’ differing positions in the cycle of the pandemic have caused us to have to continue to think locally and really operate each store on a store-by-store basis.” In some cases, Road Ranger has worked to fulﬁll the ‘grocery store’ need, Zaro said, especially when it had products in-stock that grocery stores didn’t. “Of course, we’re selling more of the types of things people need when at home,” he said. Meanwhile, Cerria Humphrey, supply chain analyst for Temple, Texas-based CEFCO Convenience Stores, which operates more than 200 locations in six states, said the chain has seen minimal disruption. “Over the course of the past few months, we have seen very little disruptions within our supply chain,” she said. “We have been fortunate to have continued growth in partnerships as we expand.”

Temple, Texas-based CEFCO has expanded in 2020, including a ground-up build in Nolanville, Texas, with other stores in the works. 66

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August 2020

The chain recently opened a new store in Nolanville, Texas, — its second ground-up build in 2020 — with several more in the works. NEW OPPORTUNITIES

Overall, Humphrey said CEFCO’s biggest focus has been on the safety of its customers and employees. “Our largest opportunity right now is to practice the recommendations: wearing PPE, social distancing and being aware of the symptoms,” she said. Humphrey also recognizes an opportunity for the c-store industry to “come together, learn and develop with the changes in retail.” “As with all areas of retail, I do believe there are changes that have begun and more to come, speciﬁcally in cleaning processes, food handling and packaging,” she said. COVID-19 has also proved a catalyst for technology adoption, from app-based payment and ordering to third-party delivery. “The consumer is becoming much more receptive to that technology and utilizing it,” said Daniels. And c-stores have been quick to adapt, including Road Ranger. Zaro said he sees third-party delivery as “a new, relevant sales channel” for the chain. While he expects to see long-term, even permanent effects on the industry, from increased cleaning to tech usage and beyond, Daniels believes we’re past the peak of supply chain disruption. “The worst of it is behind us — with the caveat that, should the COVID-19 spread continue to increase and force us to shut down again, that would put us back behind the curve again,” he said. “But for the most part, so many things continued to remain open, and things should be getting back in stock. I don’t see a reason why that would not continue.” Going forward, Zaro hopes customers will remember the essential role that Road Ranger and the convenience industry have played during the pandemic. “Our customers look to us for more than they did before,” he said. “We are working exhaustingly not to let them down, and it is our hope and objective they recognize that and keep looking to us in these ways permanently.” CSD 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.

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PRODUCTShowcase

Front-of-Store Fixtures MasonWays Indoor/Outdoor Stair Step display ﬁxtures are impervious to weather and require no assembly. Available in three- and four-foot size options with two- or three-step risers. Manufactured with an advanced “no-seam” technology, the bases are durable, increase safety and are economically priced.

CBD Isolate Gummies These great-tasting CBD isolate gummies are packed with ﬂavor and can provide the boost customers need. The Iso Gummy is a great alternative to other methods of taking CBD products. Solari Iso Gummies are low-carb, gluten free, non-GMO, come in delicious fruit ﬂavors and packed with Solari Iso CBD formula. Gummies contain 10 milligrams of CBD extract oil per gummy and are packaged in a 30-count jar. The suggested retail price (SRP) is $33.99.

MasonWays (800) 837-2881

www.masonways.com

Sparkling Yerba Mate

Solari Hemp

www.solarihemp.com

CLEAN Cause is an Austin-based beverage company with a giveback program that gives 50% of proﬁts to support individuals in recovery from alcohol and drug addiction via “CLEAN Kickstarts” sober-living scholarships. CLEAN “Gives Where You Swig” and allocates scholarships across the country where you drink CLEAN. To date, CLEAN has granted more than 1,300 scholarships with a value of more than $650,000. CLEAN Cause beverages are a sparkling, organic, Yerba Mate available in low- and no-sugar options, each containing 160 milligrams of “better caffeine.”

CLEAN Cause

hello@cleancause.com

www.cleancause.com

Cola-Flavored Caffeinated Sparkling Water New Phocus Cola will join the current roster of Phocus offerings, including Peach, Grapefruit, Blood Orange, Yuzu & Lime, Cucumber and Natural, and will be available nationwide. Phocus Cola blends extracts of cinnamon, citrus and vanilla, with notes of caramel to create the traditional cola sensation Americans have loved for decades. Like all other Phocus offerings, Phocus Cola contains no sugars, sweeteners, sodium or calories. Instead, Phocus contains 75 milligrams of natural caffeine from tea in each can, combined with the addition of the naturally occurring amino acid L-Theanine, for a smooth-release of energy.

Clear/Cut Phocus (Phocus)

www.drinkphocus.com 68

CSTORE DECISIONS •

August 2020

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PRODUCTShowcase

Jalapeño Chili Snack General Mills Convenience announces that Chex Mix MAX’D is now available in three unique ﬂavors with the addition of Jalapeno Chili. The salty snack includes the Chex Mix texture variety that consumers know and love along with heavily coated Chex pieces for intense ﬂavor. Jalapeno Chili includes chili lime Chex pieces with a spicy mix of pretzels, mini breadsticks and crispy crackers. Eight units per carton, 4.25-ounce bags, with a suggested retail price (SRP) of $2.89.

General Mills Convenience & Foodservice

www.generalmillscf.com

In-Queue Merchandising Fixtures

Beer Multipack Heineken’s new 15-count multipack includes 12 cans of Heineken Original Lager plus three extra cans of Heineken 0.0 at no extra charge. Heineken 0.0 is an alcohol-free lager brewed with a unique recipe for balanced taste, containing only 69 calories per serving. To support the launch of the new pack through its “Summer of Cans” promotion at participating retailers, Heineken is offering a two-forone upsell program where shoppers who purchase a 12-ounce Heineken Original Lager can will be prompted via LIFT screens at checkout to add an additional can at no extra charge.

Heineken

www.heineken.com

Resealable, Recyclable Nuts Container Refuel and enjoy snack time anytime and anywhere with PLANTERS Pop & Pour nuts, complete with a resealable snap-top lid that helps to lock in freshness. The new PLANTERS Pop & Pour nuts personal snack containers ﬁt in convenient spots like cup holders and backpacks so you can easily snack wherever you are. Five varieties of PLANTERS nuts in the new Pop & Pour containers include Dry Roasted Peanuts, Honey Roasted Peanuts, Dry Roasted Sunﬂower Seed Kernels, Whole Cashews and Dry Roasted Almonds. PLANTERS Pop & Pour nuts are available in recyclable single pop jars and multipacks nationwide.

Queue Guard In-Queue Merchandising Fixtures protect customers by providing a physical germ barrier between adjacent checkout queue rows. Especially effective in tight spaces. Seamlessly integrates with Lavi Industries’ Nextrac Merchandising System and Beltrac Queuing Stanchions to create a safe — and profitable — waiting line in any-sized space. Also available as a retrofit to existing NeXtrac Slatwall and Gondola fixtures.

Lavi Industries

(888) 285-8605 sales@lavi.com

www.lavi.com/store-ﬁxtures

The Kraft Heinz Company www.kraftheinzcompany.com

cstoredecisions.com

August 2020 • CSTORE DECISIONS

PRODUCTShowcase

Watermelon Bloom Kombucha Rowdy Mermaid Kombucha has announced a new addition to its lineup of low-sugar, low-acid, alcohol-controlled kombucha — Watermelon Bloom, which arrived on store shelves in June. The all-new decaffeinated Watermelon Bloom is an invigorating elixir packed with the mystical superfruit known as soursop, complemented with hibiscus and rose. Based in Boulder, Colo., Rowdy Mermaid Kombucha is the ﬁrst kombucha company to fully transition to 100% recyclable cans as part of a commitment to cleaner supply chains and more sustainable packaging.

Rowdy Mermaid Kombucha

www.rowdymermaid.com

Sweet and Sour Gummies Available in September, new Jelly Belly gummies will feature Jelly Belly Candy Co.’s famous flavors in two mixes: sweet and sour. Jelly Belly gummies are vegan, contain no animal gelatin, are made with colors from natural sources, and are non-GMO. Bursting with five sweet and refreshing flavors — Berry Blue, green apple, lemon, orange and Very Cherry — new Jelly Belly assorted gummies’ soft texture is simply delicious. Jelly Belly sour gummies are also available in five flavors: sour Berry Blue, sour green apple, sour lemon, sour orange and sour Very Cherry. Both sour and assorted mixes will be available in four-ounce and seven-ounce bags and 3.5-ounce grab-and-go bags.

Jelly Belly Candy Co. (800) 323-9380

www.jellybelly.com

Handmade, Value-Priced Cigars Drew Estate Factory Smokes, a Swisher International brand, is your everyday premium cigar — but far from the status quo. Factory Smokes are manufactured at La Gran Fabrica Drew Estate in Nicaragua, by the same cigar rollers who produce Swisher International's world-recognized cigar brands. Offered in Red Habano and Creamy Smooth Connecticut Shade, these two purposeful blends appeal to cigar lovers from all walks of life. Both cigars come in stay-fresh packaging that does not require a humidor and join Swisher International’s growing offerings of well-known premium cigar brands.

Hand Scanner The PathSpot Hand Scanner by Avery Dennison is a data collection device that uses visible light ﬂuorescence spectroscopy to instantly detect invisible signs of bacteria and viruses that cause foodborne illness. Recognized using biometric IDs, employees wash, dry and then scan their hands to check for indicators of foodborne illness. In just two seconds, employees get a clear result. If contamination is present, they must rewash and rescan their hands. Using the PathSpot data dashboard, managers have 24/7 access to view who is washing, when and how effectively, offering visibility that ensures compliance and supports a positive sanitation culture.

Avery Dennison

www.averydennison.com

Swisher International

(800) 874-9720 • www.swisher.com

CSTORE DECISIONS •

August 2020

cstoredecisions.com

PRODUCTShowcase

CBD-Infused RTD Iced Coffee Elev8 Hemp’s CBD Infused Iced Coffee is a ready-to-drink (RTD), premium iced coffee beverage containing 10 milligrams of the highestquality CBD in each can. This smooth, mild coffee is a perfect quick grab-and-go CBD option. It contains less than one gram of sugar and only 15 calories per can. Infused with an abundance of minerals, vitamins, antioxidants and ﬁber from hemp protein powders that are naturally full of amino acids and Omegas-3, 6, and 9, cans come in packs of 16 with a suggested retail price (SRP) of $68.

Elev8 Hemp

www.elev8hemp.com

Cloud-Based Oven Management System ChefLinc, a cloud-based, remote oven management system, provides foodservice operators complete control of their equipment, menus and business from wherever they are. Operators can utilize ChefLinc to effortlessly execute limited-time offers (LTOs), regional menu variations and daypart menu variety. The ChefLinc dashboard provides real-time connectivity status and the cooking state for each oven, as well as highlighting any service alerts. The ability to access real-time, detailed service diagnostics enables operators to minimize oven downtime. ChefLinc is currently available to use with AltoShaam’s Vector H Series Multi-Cook Ovens and will soon be expanded to other products.

Almond Milk Mix-Ins Yogurt Silk is expanding its line of yogurt alternatives with new Silk Almondmilk Mix-Ins Yogurt Alternatives, an all-in-one, plant-based snacking option. All four vegan flavors are free of dairy, soy, gluten, artificial flavors and high-fructose corn syrup and are Non-GMO Project Verified. The new line comes in four satisfying combinations, all with five to six grams of plant-powered protein: Apple Cinnamon, Coconut Chocolate, Maple Chocolate Banana and Mixed Berry Chia Granola. Silk Almondmilk Mix-Ins Yogurt Alternatives are available now for a suggested retail price (SRP) of $2.29 per 5.3-ounce cup.

Danone North America

www.danonenorthamerica.com

Alto-Shaam Inc.

www.alto-shaam.com/cheﬂinc

Snack Cake Collaborations Mrs. Freshley’s has three brand-new treats in collaboration with Hershey’s, Reese’s and Oreo. Mrs. Freshley’s Deluxe Hershey’s Triple Chocolate Cakes are made with real Hershey’s cocoa. Mrs. Freshley’s Deluxe Reese’s Peanut Butter Flavored Cupcakes are made with peanut butter-ﬂavored icing and Reese’s peanut butter ﬁlling. And Mrs. Freshley’s Deluxe Oreo Mini Brownies are made with real Oreo cookie pieces. All three products are available in six-count family packs, containing individually wrapped packages. The suggested retail price (SRP) for each of the three products is $2.86.

Mrs. Freshley’s

www.mrsfreshleys.com cstoredecisions.com

August 2020 • CSTORE DECISIONS

Classifieds/Ad Index ADD Systems

Growth Energy

Apter Industries

Brakebrush Brothers, Inc. Calico Brands, Inc.

800.922.0972 / www.go.addsys.com 800.441.7146 / www.apterindustries.com 800.933.2121 / www.makeitwithchicken.co 800.544.4837 / www.calicobrands.com

CB Distributors

Modern Store Equipment

Gulfcoast

North American Bancard

Helix Innovations LLC

Johnsonville C-Store

Home Market Foods, Inc.

Prairie City Bakery, Inc.

Hunt Brothers Pizza

Premier Manufacturing, Inc.

Safe Deposit

Smuckers

5, 7

888.824.3256 / www.gcbprices.com www.hempbombs.com / www.naturesscript.com

www.GrowthEnergy.org/retailer 727.449.2296 / www.gulfcoast.com www.onnicotine.com

800.367.8325 / www.HMFfoodservice.com 800.453.3675 www.huntbrotherspizza.com/csd

Click It Inc.

ITG Brands

Core-Mark

JUUL

Danone North America

Krispy Krunchy

Liggett Vector Brands

www.clickitinc.com www.core-mark.com 888.620.9910 www.DanoneAwayFromHome.com

Del Monte

www.CanDoDoneDaily.com

E-Alternative Solutions

877.373.0069 / www.Ealternativesolutions.com

www.itgbrands.com www.juul.com 800.290.6097 / www.krispykrunchy.com 877.415.4100

MasonWays Indestructible Plastics, LLC

800.837.2881 / www.masonways.com

877.532.8433 / modernstoreonline.com/cstore 866.481.4604 / www.nynab.com www.CStore.Johnsonville.com www.pcbakery.com

www.gopremier.com

980.213.0133 / www.SafeDEPOSIT.Company www.smuckerawayfromhome.com

Solari Hemp

888.384.7333 / www.solarihemp.com

Swedish Match

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

9 20-21 55

Swisher International

35, 76

800.874.9720 / www.swisher.com

EVERY WEDNESDAY THROUGH

SEPTEMBER 16

THE 2020 NAG/YEO CONFERENCE IS GOING

VIRTUAL

Make plans to join the National Advisory Group (NAG) and the Young Executives Organization (YEO) as the conference moves to an online format.

Dunnage Racks Available with Anti-Microbial Additives to Control Microbes!

2020 NAG/YEO CONFERENCE AGENDA INCLUDES: •

Burning Issue Sessions

• • • • • •

•

Virtual Info Exchanges

• • • • • •

Fuels Technology/Loyalty Programs Local Lobbying and the Legislative Process Foodservice Human Resources Leadership for Young Executives (YEO)

Virtual Store Tours

www.masonways.com cstoredecisions.com

800-837-2881

August 2020 • CSTORE DECISIONS

IndustryPerspective

Beyond CBD

Innovation in dosage, emerging minor cannabinoids — like CBG and CBN — and functional ingredients can drive CBD product sales. Kay Tamillow • Brightfield Group

Major players in the cannabidiol (CBD) industry are going full speed ahead on innovation despite growing economic uncertainty for consumers. Innovation in dosage and ingredients are helping to keep CBD brands top-ofmind, attract holistic wellness seekers, and offer easier-tounderstand products for a growing consumer base that is turning to CBD to manage stress and promote self-care in difficult times. CBD consumers are increasingly interested in high-dosage products from tinctures (oil/drops) to roll-on topicals. According to Brightfield Group’s quarterly CBD consumer insights survey (June 2020), 47% of respondents indicated they are using a stronger dose of CBD in response to the coronavirus. This trend of higher dosage is likely to continue as many consumers assume more is better when it comes to CBD and that higher doses will be more effective at producing a desired outcome — from joint pain relief to general relaxation and stress relief. Retailers can look to feature brands with high-dose products. However, c-store operators also must continue to consider the price point their shoppers are looking for, which tends to be less than $30. With the prices of many CBD products 74

CSTORE DECISIONS •

coming down thanks to falling raw material prices and manufacturing efficiencies, offering higher-dose products at an accessible price point is an increasing reality.

CBN AND CBG New ingredients that boost functionality of CBD products are also an important source of innovation and opportunity for CBD brands and retailers. CBD formulas with natural functional ingredients or the addition of minor cannabinoids CBN (cannabinol) and CBG (cannabigerol) can help catch a consumer’s eye or help them to better understand how CBD fits into a total wellness routine. As c-stores look for ways to offer new products to health-conscious shoppers, CBD brands are offering new ways to grab interest with ingredients like elderberry, turmeric, apple cider vinegar, L-theanine, vitamins D and C, and echinacea. Consumers still unsure about CBD and its uses may be drawn to these other functional ingredients that help to signal what the product can be used for. With c-store shoppers having little time to browse or discuss options with a store clerk, these types of products can help consumers make quicker grab-and-go purchase decisions and drive incremental sales. Many brands have launched or are developing products with other minor cannabinoids like CBN and CBG. These additions are most likely to appeal to heavy CBD users looking for new ways to boost their CBD regimen and capture all the

August 2020

benefits of the cannabis plant. Of current CBD consumers, only 11% are aware of CBN and CBG, but those who are aware express strong interest in purchasing products with those compounds. New launches with the cannabinoids range from chewing gum to tinctures and gummies. While many of these products remain on the higher end of the price spectrum, smaller pack sizes or trial sizes can help make these products attractive to the c-store shopper. Innovation in dosage will help existing CBD users and those most concerned about efficacy interested in CBD offerings. Emerging minor cannabinoids will also catch the attention of cannabis aficionados looking to up their wellness routine with the full plant experience without psychoactive effects. New functional ingredients can be a helper in bringing new consumers to CBD, especially as natural ingredients complement the many uses of CBD and help consumers better understand how to incorporate these products into their daily or weekly wellness habits. Featuring these products that also offer accessible price points can help drive incremental CBD sales for convenience operators and encourage routine purchases. . Kay Tamillow, research director for Brightfield Group, leads Brightfield Group’s research team, providing in-depth analysis on the CBD and cannabis markets spanning across consumer research, new product developments, market sizes and brand shares.

cstoredecisions.com

*THESE CIGARETTES DO NOT PRESENT A REDUCED RISK OF HARM COMPARED TO OTHER CIGARETTES.

STOCK THE PERFECT MIX WITH THE SWISHER SWEETS FAMILY OF CIGARS. Swisher Sweets has always been more than a product. It’s a way of doing business and a name you and your adult consumers trust. Now, it stands for all the ways you can give them what they want – and all the ways we’ll never stop innovating so your cigar business can thrive.

Please contact your Swisher Representative or call 800.874.9720