Providing Leadership in Challenging Times

Derek Gaskins, chief marketing officer for CStore Decisions’ 2021 Convenience Store Chain of the Year, Yesway, discusses the value of team members and connecting with consumers in the post-pandemic market.

John Lofstock • Editor-in-Chief Derek Gaskins, chief marketing officer, Yesway

Yesway burst onto the convenience store scene in 2015, capitalizing on the real estate expertise of its founding firm Brookwood Financial Partners. The private equity investment firm launched the company with the acquisition of Country Stores, a 10-store portfolio in western Iowa, in December 2015. From there, it never looked back.

In 2016, Yesway established its regional headquarters in western Des Moines, Iowa, and immediately acquired 21 stores from Kum & Go. In the months that followed, Yesway expanded its store count to 38 locations in Iowa and Kansas with the acquisitions of the Wes-T-Go and Chillerz chains in Texas and Oklahoma, bringing its store total to 73.

In 2019, the chain bolstered its portfolio with the acquisition of 304 stores from New Mexicobased Allsup’s. Today, the chain is up to 402 stores and continues to drive innovation through its loyalty program, proprietary foodservice, private-label snacks and beverages, and rollout of the Allsup’s Market concept store. Over the next 18 months, Yesway plans to raze and rebuild 27 locations, resulting in 5,500-square-foot prototype stores in Texas, New Mexico and Oklahoma, all of which will have expanded fuel and diesel platforms.

In addition to the raze-and-rebuild program, Yesway has commenced the remodeling of approximately 100 additional stores in Texas and New Mexico.

The extensive improvements include exterior upgrades to storefronts, parking lots and signage, the addition of LED lighting under the canopy and inside the stores, and upgrades to store interiors, fountain and beverage areas, and bathrooms. These improvements are being made to better serve its customers by providing

an expanded selection of merchandise and growing the Allsup’s food and dairy lines.

While much of the company’s top-line growth will be fueled by expansion within the existing portfolio, the company is still actively looking at expanding its portfolio within its current geographic footprint.

What’s worth noting is that the capital improvements and expansion would be complicated during normal times. For Yesway, this impressive growth endured during the COVID-19 pandemic. Like many in the retail industry, convenience stores were challenged during COVID to provide outstanding leadership in order to keep the doors open, the shelves stocked and employees safe. All companies serve their customers, but in the convenience store industry, leaders must first serve their employees, who are the ones in a position to make a real difference on the front lines. This is a challenge Derek Gaskins and the Yesway leadership team took personally.

Gaskins, the chief marketing officer for Fort Worth, Texas-based Yesway, said the company learned a lot during the pandemic and will emerge smarter, focused and ready to serve its thousands of team members spread across nine states. “As we look forward, we see brighter days ahead,” he said. “Our chain and the industry in general learned a lot, and it will benefit all of us in the long run.”

For its exceptional work, Yesway has been recognized as the CStore Decisions 2021 Chain of the Year (see page 22). Gaskins, who is also a member of the National Advisory Group (NAG) board of directors, sat down with CStore Decisions to discuss this past year and Yesway’s vision for the future.

CStore Decisions (CSD): How has Yesway and the industry overall changed since COVID-19?

Derek Gaskins (DG): Yesway and the industry experienced tremendous change navigating through COVID-19. We focused on our people on the front lines and conducted our business in a purpose-driven manner. Protecting our people, customers and communities while maintaining operations was a true challenge. The key for us was to be flexible and agile as change accelerated, and we had to be nimble to proactively stay relevant. The leadership of Yesway also Yesway CEO Tom Trkla empowered and supported our people in ways that changed how we operate. Our CEO Tom Trkla and the entire leadership team put our people first in word, action and deed. Yesway launched a Hospitality Heroes program to positively reinforce the desired behaviors we wanted from our team members in the stores and delivered financial relief to team members caught in the act doing things “the right way.” This helped drive culture change and reduced the stress and tension in many stores from the pandemic.

CSD: What have you learned about your people and the convenience industry since COVID-19?

DG: I learned that our people and this industry are truly amazing. Collectively, we never wavered in the face of fear — and being declared essential businesses allowed us to provide service to many communities that were under the same stress and strain of the pandemic. Our stores have always been beacons of the communities we serve. When it comes to how we operate in times of crisis, recessions, natural disasters and this recent pandemic, convenience stores in general, and Yesway specifically, have demonstrated directly the vital role we fulfill. We are proud to be a source of fuel, fresh food, groceries, beverages and essential supplies that our society needs.

CSD: You excel in the area of marketing and connecting with consumers. What have you learned about customers during this past year that surprised you?

DG: The humanity, patience and compassion of our customers is remarkable. Everyone focuses on the negative exceptions, but this past year, through millions of transactions, our customers showed true gratitude. The unsolicited positive feedback and encouragement that customers expressed to thank our teams for keeping stores open inspired me. When the world closed around our customers, they

Last year, Yesway launched its Hospitality Heroes program, which provided financial relief to team members who were caught in the act doing things “the right way,” said Yesway Chief Marketing Officer Derek Gaskins. The intiative helped drive a culture change and reduce pandemic-driven stress.

Over the next 18 months, Yesway plans to raze and rebuild 27 locations across three states, all of which will have expanded fuel and diesel platforms.

recognized that our stores did not, and they were appreciative to get a hot meal, fill-in essential or necessary supply item. Customers largely showed grace in the face of fear, and that was critical to maintaining operations.

I also learned the importance of listening as part of marketing. Listening to our team members in the stores, silencing consumer-facing promotions and focusing on what we were doing to help the situation became marketing tenets that will resonate with me long after the pandemic is over.

CSD: The industry has moved toward mobile ordering, curbside pickup and even delivery. Does this surprise you or do you think we were already headed in this direction?

DG: I think the pandemic accelerated trends that were already under way. I jokingly refer to it as the “acceleration age” because initiatives that were on most roadmaps moved forward to launch quickly. While technology helps drive improved customer engagement, we also saw the importance of traditional retailing to consumers. Convenience is about making it easier for customers to do business with you, so anything that leverages technology, speed of service or traditional methods to simplify consumers’ lives will help drive business. The convenience industry is all about this, so it is no surprise many retailers are seeing success with technology that enables ease and simplicity of service.

CSD: Do you think the changes in retail are here to stay? And what do you expect over the next 12 months?

DG: Many changes will stick and change how we operate. Customers and our industry are resilient and resourceful. As they say, the only constant is change, and I expect to see continued change in retail over the next 12 months. More importantly, I expect to see the industry drive changes that will resonate and strengthen our role as pillars of the communities we serve.

Leading Together:

A conversation between CStore Decisions and Reynolds American Inc. Redesigning the Back Bar

John Lofstock

CStore Decisions Editor-in-Chief

Mike Wilson

Reynolds American Inc. Vice President Consumer and Customer Activation

Consumers have shown interest in a wide variety of nicotine delivery systems. How is the tobacco category evolving and changing?

The tobacco category has been evolving throughout the 21st century at varying rates of speed. Capsule technology, originally launched with Camel Crush; and snus were the most exciting evolutions to hit tobacco in the USA in more than a decade. Next came electronic (e-cigarettes) with disposable, rechargeable and liquid formats launched by established tobacco companies as well as smaller startup companies. This category has evolved to mostly rechargeable devices with cartridge refills and consumers of traditional tobacco products are considering and switching to these products, and as a result, these products have landed in permanent positions on the back bar. The modern oral nicotine category has accelerated in the past 12 months and has achieved space on the back bar as well. New innovations, within and beyond the established categories, are likely to continue to emerge over the coming years.

How should convenience store retailers adapt to these changes? I.e., do they need to consider how they market tobacco? Do they need to invest in new racks or redesign the back bar to market and promote new tobacco categories?

For the most part, the physical linear space on the back bar has been realized. The linear space and category allocation of that space for the back bar of the past will need to evolve to accelerate emerging higher margin/penny profit categories. Looking beyond the traditional space, digital technologies and assets will complement the transition. How much of the linear and total space is dedicated to new categories today? What is preventing you from making the change? Programs that dictate the minimum linear size of a particular category do not support transformation. Piloting programs will require collaboration through joint business planning between retailers and manufacturers.

Will traditional cigarettes continue to drive tobacco sales in c-stores or do you see another nicotine delivery system making strong gains?

Yes. However, implementing product assortment procedures with vendor partners will be critical to maximize space and profit for traditional categories and new nicotine products. High-quality, easy-to-use products with an acceptable entry price point have proven to be successful among adult nicotine consumers.

The FDA continues to regulate tobacco products in all forms. How do you see the tobacco category shaping up over the next year? Over the next five years?

We should anticipate lots of noise regarding regulation with action pending in the future. Local and state restrictions will amplify. Potential restrictions on where tobacco products may or may not be purchased (pharmacy, etc.) will likely continue to gain momentum. FDA approvals and denials on PMTA products will fill the newswire. Traditional categories will fight to maintain space but will remain a sizable contributor to instore profits and foot traffic in the store.

How can c-stores work with associations and tobacco companies to make their voices heard?

Reynolds continues to inform, align, and put our trade partners in a strong position to get engaged and voice their concerns when threats come their way. Working directly with customers and alongside various state and national trade associations and other stakeholders, we are able to stay in front of most issues, be it local, state, or federal legislation. Another great resource we’ve launched is Own It Voice It Trade Partners, our digital grassroots platform that aims to help our trade partners when it comes to corresponding with elected officials, testimony, leveraging media, etc.