Quick Bites: Customer Purchase Behavior Shifts

GROWING GILLIGAN’S

The second-generation family business eyes expansion beyond its Montana and Arizona roots through acquisitions and new builds as it updates stores and elevates its foodservice offering.

Erin Del Conte • Executive Editor

Gilligan’s Retail, a second-generation family business, has been busy elevating its proprietary foodservice offering, rolling out new equipment including bean-to-cup coffee machines and remodeling stores.

The eight-year-old company owns and operates 10 Gilligan’s sites in Arizona and two stores in Montana under the banner ‘The Welcome Stop.’

Now, the Scottsdale, Ariz.-based chain is set to design its first new-to-industry store, as it looks to grow into new market areas through acquisitions and new builds. As it expands, Gilligan’s prides itself on bringing a country-store environment to its customer base.

FIRST STEPS

Gilligan’s Retail can trace its roots to 2014. An oil boom sent a large influx of people looking to work in the oil field to Montana and North Dakota. A housing shortage followed, and John Gilligan Sr., a developer, moved to Montana to build apartment complexes. When a convenience store went up for sale in a small town called Banville, Mont., on the northeastern side of the state, he bought it.

The Gilligan family: (from left) John Gilligan Jr., director of operations; Kathy Gilligan, compliance officer; John Gilligan Sr., president and founder; and Mike Gillian, vice president.

“We still have that store today,” explained Mike Gilligan, vice president of Gilligan’s Retail, and John Sr.’s son. “The first store he bought was called The Welcome Stop. We just left the name. Everyone knew the store, so we didn’t want to change it.”

Mike Gilligan and his older brother, John Gilligan Jr., soon followed their father to Montana to work in the oil field.

In 2017, John Sr. purchased a second c-store in Plentywood, Mont., near the Canadian border. He also named it The Welcome Stop. Around the same time, Mike left the oil business and joined his father’s c-store business at the age of 24.

“We’re all originally from Scottsdale, Ariz. In 2018, as our family started to grow — my brother and I started to have some kids — we decided to move back to our home state of Arizona, and so we started looking for stores down here,” Gilligan said.

The Gilligan family bought two stores, one in Chandler, Ariz., and one in Phoenix, and started Gilligan’s Retail, naming the stores Gilligan’s. Soon after, John Jr. also quit the oil field and moved his family back to Arizona to join the family business.

Over the next four years, the family grew the business via acquisitions, expanding by two to three stores per year.

The Gilligan family worked to bring the community country-store mentality from its Montana locations to its Arizona stores.

Gilligan’s stores measure 2,000 to 3,000 square feet and feature a maroon, tan and yellow color scheme.

NAVIGATING A FAMILY BUSINESS

Today, John Sr. helms Gilligan’s Retail as the president of the company. His wife, Kathy Gilligan, acts as compliance offi cer, managing state licensing and insurance. John Jr. is vice president of operations.

As a vice president, Mike oversees the offi ce, including the accounting staff, fi nances and accounts payable, as well as vendor relations, promotions and contracts. “I negotiate a lot of our pricing for all of our chain,” he said.

While both Mike and John Jr. manage the dayto-day operations, John Jr. manages the store look, design, products and employees. “He really focuses on what the stores look like, what products are they carrying and placement of the products. He graduated with a marketing degree from college, so he focuses on that,” Gilligan noted.

As many retailers well know, managing the intricacies of a family business comes with both rewards and unique issues.

“If you like your family, it’s fun to work with them. We’re super fortunate. We all get along really well. We have a great family dynamic,” Gilligan said.

In some ways, it’s not so different from any other corporate role. Even if you’re reporting to a family member, Gilligan pointed out, it’s important to still be accountable for actions and decisions the same as in any other business.

But there are challenges unique to being the second generation in a family business as well. In a corporate job, for example, there are awards and accolades for a job well done. Whereas in a family business, perhaps because of the comfort level, family members are often quick to point out mistakes.

“With the family business, it’s important to be able to separate, at the end of the day, the family from the business,” he advised. “Sometimes you have to focus on the business, and then still be able at the end of the day to sit down and go to dinner with your family.”

GILLIGAN’S RETAIL DESIGN

When Gilligan’s Retail opened its Gilligan’s stores in Arizona, it kept the same color scheme as The Welcome Stop — maroon, tan and yellow. Because Gilligan’s has grown through acquisitions, it’s limited as far as architecture, but it uses signage and color scheme to tie the stores together. The buildings are light tan with red trim and usually measure between 2,000 to 3,000 square feet. The chain includes one 8,000 square-foot store that features a large grocery section, fresh meat market and a café.

Gilligan’s partners with fi ve gas brands in its various forecourts, including Chevron (its biggest partner), 76, ARCO and Shell. It also operates Gilligan’s branded stations.

Gilligan’s is now looking to build its fi rst new-toindustry location.

“We do have some land on the outside of Phoenix that we’re looking to start building on,” said Gilligan. “We’re pretty excited about that. That would be our fi rst store we’re going to build from the ground up.”

The chain is currently remodeling its Conoco-

Gilligan’s is remodeling its Chevron sites, refreshing the paint, updating countertops and fl ooring, revamping the bathrooms and adding new equipment. It’s also rearranging stores to assist with the fl ow of traffi c.

Phillips 76 and Chevron-branded stations. Anytime a fuel supplier offers a refresh program, Gilligan’s takes advantage of the opportunity.

“They usually allow us some sort of price match, so we try to use that for our big remodel,” he said.

The Chevron sites are receiving new paint, updated countertops and fl ooring, remodeled bathrooms and new equipment, while the 76 sites are now boasting bright new digital gas signs and trim for the canopies.

“As we update, we’re taking out some of our shelving,” Gilligan said. “We’re putting in more islands to expand our coffee program and our beverage and hot food.”

Gilligan’s stores are also being rearranged to assist the fl ow of traffi c. “At the end of the day, we’re trying to make it more appealing to the customer’s eyes, and help the customer get in and get out and have an easy experience,” he said.

In Q1, Gilligan’s remodeled its two The Welcome Stop sites in Montana, including all new lighting inside and out, fresh paint and equipment updates.

Earlier this year, Gilligan’s tested bean-to-cup coffee at a pilot location. The program worked well and cut down on waste. It also provided the fresh aroma of coffee beans for customers as they walked in the door.

“Once the customer’s inside, you really want to target their senses,” he said.

Now Gilligan’s is switching out its coffee equipment at all stores and replacing it with bean-to-cup coffee machines.

The fountain section is also getting a facelift. In Arizona the temperature can soar to 120 degrees in the summer, so the chain offers a large fountain drink and cold beverage area. To meet demand, it’s adding a new ice slushy program at all its locations and increasing its iced coffee selection, which is a big hit in its stores.

PROPRIETARY FOODSERVICE

Like many c-stores, Gilligan’s saw foodservice demand escalate during the pandemic.

“Foodservice was huge,” said Gilligan. “It didn’t used to be like that for convenience stores, but now it’s a must have.”

All stores feature a hot box with grab-and-go options that include breakfast sandwiches, burritos and chicken, depending on the location.

Six of Gilligan’s stores feature full kitchens.

“Most of them we inherited,” Gilligan explained. “When we bought the stores, they already had kitchens in them. But we kept them going. We expanded our menus.”

Stores with kitchens also feature Gilligan’s proprietary, fresh-prepared, made-to-order food, including sandwiches, burgers and pizza, as well as specialty dishes at various locations.

“We really focus on being like a little café. That kind of came from our fi rst store in Montana. Being in a small town, there’s not a lot of options, there’s not a lot of businesses,” Gilligan said. The fi rst The Welcome Stop was not only a c-store with gas and grocery items, but it was also the only place to eat in town.

Gilligan’s Retail continued to apply that one-stop shop mentality as it grew its stores in Arizona as well.

Six Gilligan’s stores feature kitchens with made-to-order proprietary foodservice. Menus include items such as sandwiches, burgers and pizza as well as specialty meals at various locations.

“We really look at the community we’re in and see what their need is, and then tailor our food offering to that community,” he said.

One store it acquired in Phoenix was long known for its carne asada burritos.

“When we bought it, we kept that going. We brought in our own cook. And we really encourage all our cooks to explore, and if they have a good recipe, we encourage them to try it,” Gilligan said. “It gives each of our stores that homemade, homecooked meal.”

A store in Spring Valley, Ariz., is situated near a high school. “We do a huge pizza business there. We’ll do pizzas for school teams, for just the town too,” he said.

Its largest store with the grocery section has more of a country-market vibe and features a full seating area. In addition to burgers, sandwiches and pizza, it offers dinners such as chicken-fried steak and mashed potatoes. “There’s been a lot of times where customers have said, ‘I love this food. I can’t fi nd it anywhere.’ And if our cook knows the recipe, we’ll whip it up for them,” he said.

While none of Gilligan’s current stores feature a drive-through, the chain has plans to add drive-throughs to any new builds, including the one set to open next year in Phoenix.

“All future stores that we build will defi nitely have a drive-through, and if we can on the existing stores — if we can get permitted and if there’s room — we would defi nitely add a drive-through,” Gilligan said. “One thing we learned that came out of the pandemic is that drive-through is huge, and it adds to the

convenience for the customer too.” For now, customers can take advantage of Gilligan’s to-go menu and call for order ahead. “We do a lot of order ahead, so people call, we make it, and they come pick it up,” he said. Gilligan’s kitchen stores also offer food delivery through third-party delivery apps including Uber Eats, Grubhub and DoorDash. As it works to be the local community store, Gilligan’s takes community support seriously and pours money and personal involvement back into the communities it serves through support for local fundraisers, hospitals, schools, churches and civic organizations. Its largest store with the grocery section has more GROWTH ON THE HORIZON Gilligan’s is now looking toward expansion, starting with larger acquisitions. “We’re currently looking at a 10-store deal, and we’re not just looking at Arizona,” “There’s been a lot of times where customers have While none of Gilligan’s current stores “All future stores that we build will ing with larger acquisitions. “We’re currently looking at a 10-store deal, and we’re not just looking at Arizona,”

said Gilligan. “We’re trying to expand it in different states.”

In the next fi ve to 10 years, the chain aspires to push its store count into the triple digits, mainly through acquisitions, while simultaneously building new-toindustry sites when the opportunity is right.

Gilligan’s is currently working with an architect as it begins the permitting process for its fi rst ground-up build that is expected to open in 2023. Harkening back to its Montana roots, Gilligan’s plans to incorporate an inviting country-store look and feel as a central element of the design, while continuing to feature the current color scheme of maroon, yellow and tan.

The new build is expected to measure about 5,500 square feet to fi t a kitchen and a grocery area, as the site is in a food desert.

Additional new builds are also a part of Gilligan’s growth plan.

“We love the opportunity to design on our own, start fresh and put all of our personality into each store. So, yeah, absolutely, if there’s an opportunity to build, we would defi nitely jump on it,” Gilligan said.

As it expands, the chain is also looking at developing its internal programs.

“We don’t do a lot of technology,” he said. “That’s probably one of our biggest goals in the future is to get more into technology.”

“What we’re currently working on is our loyalty program,” he added. “We’re very community oriented, but we do like to have a uniformity in each store with our promotions.”

A loyalty program would allow customers to travel to different Gilligan’s stores and redeem points for purchases. For now, he is working with the chain’s coffee vendor on a punch-card coffee program as it rolls out the bean-to-cup machines.

NEXT-GENERATION PERSPECTIVE

As family businesses like Gilligan’s look to grow, next-generation leaders can bring important viewpoints to the company.

“There’s defi nitely a perspective with each generation that is a little different,” Gilligan said.

Young executives bring an awareness of how their generation thinks, acts and shops.

“Older generations, at times, may not be so fl exible to change and to adapt, and I think a lot of times you get the response that it’s always been done, it works this way, let’s keep on doing it this way,” Gilligan said. “Maybe it’s the way we grew up or the experiences that we’ve had over the last 20 to 30 years, but I think our generation is very good at being able to adapt. We change a lot. And change is not a bad thing.”

Next-generation leaders also tend to be technology driven and help encourage innovation at their family business.

He advised other next-generation leaders entering the family business that it’s important to differentiate between work and family, and to have patience and a thick skin.

“Your parents, they’ve been parenting you your whole life, so they’ll defi nitely come down harder on you than they would maybe someone else,” he said.

“At the end of the day, you hope the business is there forever, and that’s why you go into the family business. You hope it goes on from generation to generation, but at the end of the day, the only thing that truly is going to be forever is family,” he added.

He urged all young executives to stop thinking about being young as a disadvantage. While experience and wisdom are important, he encouraged young workers to bring ideas and back them up with facts.

“Don’t wait 10 or 15 years till you have the age and the experience to start being aggressive in whatever business you’re in, because that’s just a waste of time,” he said. “You need to start while you’re young and really be aggressive with your ideas and learn from your mistakes. Use these young years to really make a place for yourself at the table.” CSD

Gilligan’s is looking to grow beyond Arizona and Montana, and expand its store count into the triple digits in the next fi ve to 10 years through acquisitions and new builds.

WEDNESDAY, SEPTEMBER. 7, 2022

8:00 AM – 4:00 PM: Habitat for Humanity Operation Playhouse Team Building Project. Nouria Headquarters.

https://www.habitatmwgw.org/programs/operation-playhouse

THURSDAY, SEPTEMBER 8, 2022

8:15 AM: Nouria Energy Headquarters Arrivals: 326 Clark St, Worcester, MA 01606. Light Breakfast Will Be Served

9:00 AM: Welcome and Introductions, John Lofstock, Executive Director, National Advisory Group (NAG) and Kalen Frese, Warrenton Oil, YEO Board Chairman

9:15 AM – 9:30 AM: Nouria Energy Overview and Outlook, Joe Hamza, Chief Operating Offi cer, Nouria Energy

9:30 AM – 10:45 AM: YEO Workshop:

Perfecting Your Retail Brand, Ernie Harker, President, Ernburn Brands

10:45 - 11:15 AM: Break

11:15 AM – 12:00 PM: General Session:

Integrating Technology into Labor Management, Jeff Carpenter, Director of Education and Training, Cliff's Local Markets

12:00 PM – 1:00 PM: Lunch Onsite at Nouria

1 PM – 2:15 PM: YEO Workshop:

Building Leadership, Management and Accountability Systems: Tom Bandy, Founder and CEO, BandyWorks

2:15 PM - 3:45 PM: Break

2:45 PM – 4:15 PM: YEO Information Exchanges

* Foodservice: As gas prices stay elevated and tobacco remains under fi re, foodservice remains the industry's biggest in-store attraction. Discuss what you are doing and benchmark your results with others in the industry. Plus, glean new ideas on how to perfect your menu and overcome staffi ng issues by utilizing the proper foodservice equipment. * Technology: From payments systems to loyalty programs to back-offi ce and cryptocurrency, technology is driving big changes in retail. This session will allow retailers to discuss what new technology is working for them and learn what others in the industry are doing in this emerging segment.

* Operations/HR: The labor shortage shows no signs of abating and supply chain issues will persist for the next 12-18 months. In this session, learn what other retailers are doing to attract new employees and overcome staffi ng issues. Plus, discuss how you can avoid out-ofstocks and supply shortages for products on the shelves and the items needed to execute a successful foodservice program.

4:30 PM: Wrap Up/Hotel Check In

6:00 PM – 9:00 PM: Dinner Off Site

FRIDAY, SEPTEMBER 9, 2022

7:45 AM: Shuttles Depart Hotel

8:00 AM: Breakfast at Nouria

8:30 AM – 9:30 AM: YEO Workshop:

General Session: Diversity, Equity and Inclusion in the C-Store Industry. Jayson Council, Principal, Adjaycent Consulting

9:30 AM: Store Tours: A tour of top convenience stores in the Boston market including Nouria Energy, Alltown Fresh, Seasons

1:00 PM: Return and Wrap Up

1:15 PM: Depart