CStore Decisions November 2020 by WTWH Media LLC

CStoreDecisions

Solutions for Convenience Retailers

Parker’s Honored

as 2020 Chain of the Year The Savannah, Ga., chain is the 31st winner of the most prestigious award in the industry for convenience retailing.

INSIDE Growing Zelmo’s Zip In

Finding Opportunity in Lunch

Preparing for Post-Pandemic Headwinds 92

November 2020

•

CStoreDecisions.com

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CONTENTS November 2020

•

Number 11

•

Volume 31

CStoreDecisions

EDITOR’S MEMO

10 Recognizing Employees During a Pandemic FRONT END

12 Growing Zelmo’s Zip In 20 Quick Bites: Tracking Customer Sentiment 24 FDA Marketing Application Deadline Passes: What Happens Now? 28 Frank Beard Joins the CStore Decisions Group 30 Kent Kwik Makes Strategic Moves CATEGORY MANAGEMENT

46 Tracking Beverage Trends 52 Meaty Sales for Jerky 58 Cigar Lovers Light Up to Ease Locking Down 64 How Are Customers Using CBD During COVID-19?

32 COVER STORY

FOODSERVICE

68 Finding Opportunity in Lunch 76 Fresh Food Purchasing Patterns Evolve

32 Parker’s Honored as

2020 Chain of the Year

TECHNOLOGY

78 Arm Yourself With Forecourt Marketing Tools 84 Foundations of Innovation

The Savannah, Ga., chain is the 31st winner of the most prestigious award in the industry for convenience retailing.

OPERATIONS

88 Best In Class Restroom Awards 92 Preparing for Post-Pandemic Headwinds 96 Flipping Over Family Partnerships

68 4

CSTORE DECISIONS •

November 2020

BACK END 100 Product Showcase 105 Ad Index 106 Industry Perspective: Why Do I Have to Praise Someone for Doing Their Job?

cstoredecisions.com

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EDITORIAL VICE PRESIDENT, EDITOR-IN-CHIEF John Lofstock jlofstock@wtwhmedia.com EXECUTIVE EDITOR Erin Del Conte edelconte@wtwhmedia.com SENIOR EDITOR Thomas Mulloy tmulloy@wtwhmedia.com ASSOCIATE EDITOR Isabelle Gustafson igustafson@wtwhmedia.com ASSOCIATE EDITOR Marilyn Odesser-Torpey CONTRIBUTING EDITOR Mark Battersby COLUMNISTS Frank Beard Tom Briant Brandon Lawrence Pat Raycroft Liz Uram

ADVERTISING VICE PRESIDENT, GROUP PUBLISHER Tom McIntyre tmcintyre@wtwhmedia.com

(216) 533-9186

PUBLISHER John Petersen jpetersen@wtwhmedia.com

(216) 346-8790

VICE PRESIDENT, SALES Tony Bolla tbolla@wtwhmedia.com

(773) 859-1107

REGIONAL SALES MANAGER Ashley Burk aburk@wtwhmedia.com

(737) 615-8452

REGIONAL SALES MANAGER Patrick McIntyre pmcintyre@wtwhmedia.com (216) 372-8112 REGIONAL SALES MANAGER Jake Bechtel jbechtel@wtwhmedia.com (216) 299-2281

SAFE SHOP AND SPECIAL PROJECTS

Chain of the Year Award

Leading Through Innovation

FINANCE CONTROLLER Brian Korsberg bkorsberg@wtwhmedia.com

DIRECTOR OF SAFE SHOP/DIRECTOR OF SPECIAL PROJECTS Frank Beard fbeard@wtwhmedia.com

ACCOUNTS RECEIVABLE SPECIALIST Jamila Milton jmilton@wtwhmedia.com

CREATIVE SERVICES

DIGITAL MEDIA/ WEB DEVELOPMENT

VICE PRESIDENT, CREATIVE SERVICES Mark Rook mrook@wtwhmedia.com

EDITORIAL ADVISORY BOARD

VICE PRESIDENT, DIGITAL MARKETING Virginia Goulding vgoulding@wtwhmedia.com

CREATIVE DIRECTOR Erin Canetta ecanetta@wtwhmedia.com

DIGITAL MARKETING COORDINATOR Josh Breuler jbreuler@wtwhmedia.com

ART DIRECTOR Matthew Claney mclaney@wtwhmedia.com

DIGITAL MARKETING INTERN Shannon Pipik spipik@wtwhmedia.com

DIRECTOR, AUDIENCE DEVELOPMENT Bruce Sprague bsprague@wtwhmedia.com

SENIOR MANAGER WEBINARS/VIRTUAL EVENTS IN MARKETING Lisa Rosen lrosen@wtwhmedia.com

CUSTOMER SERVICE CUSTOMER SERVICE MANAGER Stephanie Hulett shulett@wtwhmedia.com

DEVELOPMENT MANAGER Dave Miyares dmiyares@wtwhmedia.com

CUSTOMER SERVICE REPRESENTATIVE Jane Cooper jcooper@wtwhmedia.com

SR. DIGITAL MEDIA MANAGER Pat Curran pcurran@wtwhmedia.com

EVENTS

DIGITAL PRODUCTION MANAGER Reggie Hall rhall@wtwhmedia.com

EVENTS MANAGER Jen Osborne josborne@wtwhmedia.com

DIGITAL PRODUCTION SPECIALIST Nicole Lender nlender@wtwhmedia.com

EVENTS MARKETING SPECIALIST Olivia Zemanek ozemanek@wtwhmedia.com

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

VIDEO SERVICES

DIGITAL PRODUCTION/ MARKETING DESIGNER Samantha King sking@wtwhmedia.com

VIDEOGRAPHER Bradley Voyten bvoyten@wtwhmedia.com

SOFTWARE ENGINEER DJ Bozentka dbozentka@wtwhmedia.com

VIDEOGRAPHER Derek Little dlittle@wtwhmedia.com

WEBINAR COORDINATOR Halle Kirsh hkirsh@wtwhmedia.com WEBINAR COORDINATOR Kim Dorsey kdorsey@wtwhmedia.com

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 Jeremie Myhren, Board Chairman Road Ranger • Rockford, Ill. Garet Bishop, Chief Financial Ofﬁcer BFS Cos. • Morgantown, W.Va.

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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, Director of Merchandise Gate Petroleum Co. • Jacksonville, Fla.

Kalen Frese, Food Service Director Warrenton Oil Inc. • Warrenton, Mo.

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.

Alex Garoutte, Director of Marketing The Kent Cos. Inc. • Midland, Texas Sharif Jamal, Corporate Brand Manager Chestnut Petroleum Inc. • New Paltz, N.Y.

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 •

November 2020

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Editor’s Memo

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

Recognizing Employees

During a Pandemic The convenience store industry will always be a people business. For many years that meant putting the customer first — rightfully so, it seemed, since they were the people spending the money. But gradually, over the past decade, the top-quartile convenience store chains realized the value they had in their people and that began a fundamental shift to a strict employee-first focus. This transition in priorities has been extremely effective in retaining top employees, creating a winning corporate culture and transforming leading c-store chains into an employer of choice. When employees feel valued, they’ll create a better experience for your customers and, in turn, drive business up along with your company’s reputation. This process has never been more true or more important than now, as businesses across the country deal with the COVID-19 pandemic. Dedicated employees are on the front lines every day serving customers, providing a memorable shopping experience and just being a friendly face in difficult times. We should all be proud of the work frontline employees are doing in these challenging times. But as business owners, you need to be more than proud. You need to be proactive and take the necessary steps to recognize your employees’ hard work and put programs in place to ensure these dedicated team members are satisfied and not ready to jump at the next opportunity that comes along. Your people are helping you navigate a rocky road. Reward them for their contributions to your brand. A joint study by the Disney Institute and McKinsey & Co. found that creating a memorable customer experience was “not magic, but method.” The study revealed that when you take an active role in making your employees feel needed, they become more engaged with your organization and more committed to your service goals. It recommended companies adopt four habits to accomplish this. Hire for attitude. If you want friendly service, hire friendly people. Think about companies like Southwest Airlines, Disney or any company known for its culture. They aren’t trying to change people to fit what they are doing. They are hiring individuals whose attitudes fit what they do, and then training them on the necessary job skills. The end result is quite noticeable, especially during a pandemic. 10

CSTORE DECISIONS •

November 2020

Listen to employees. If you want your employees to take care of your customers, start by taking care of your employees. But go a step further and get personally involved in their needs. Then take action. Communicate what you are doing to take care of them and involve the employees themselves in a retention strategy. Give people purpose, not rules. Frontline employees participating in infinitely varied customer interactions won’t always find the answers in manuals. The best companies supply team members with a common purpose. When people are trusted to do their job and given clear expectations rather than an instruction manual, they feel more valued and empowered. Tap into the creativity of your staff. Giving frontline employees responsibility creates a sense of ownership that inspires them to do everything they can to improve the customer experience. I was speaking with a corporate human resources (HR) manager recently who was clearly frustrated with high turnover and blamed it on the younger generation’s work ethic. This seemed to me the easy way out. If staffing is your problem, take the time to look in the mirror and identify the root cause of your frustration. It will be the first step down the path to better days. HR Consultant Mel Kleiman, founder of Humetrics, tells me all the time, “The reason companies don’t have great employees is because they are not willing to put in the time and effort to get them and then keep them.” Don’t be afraid to do the hard work. Give your hiring practices, retention strategy and corporate culture an honest assessment so when we are faced with the next great challenge, you’ll know you have the right people in place to get you through it with minimal losses.

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FRONT END Profile

Growing Zelmo’s Zip In

Family-owned Whatley Oil Co. is refreshing existing c-stores and building new-to-industry locations — including its first unbranded site. Erin Del Conte • Executive Editor

Whatley Oil Co., a family business spanning three generations, recently broke ground on its 12th Zelmo’s Zip In convenience store — its first site with unbranded gas that will tout the Zelmo’s brand from the forecourt to the c-store. The Columbus, Ga.-based chain is remodeling its fleet of company-owned stores in Georgia and Alabama and is set to build a new headquarters and bulk wholesale plant in 2021. 12

CSTORE DECISIONS •

November 2020

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Listen to the recent CStore Decisions Live podcast where CStore Decisions Executive Editor Erin Del Conte speaks with Slaton Whatley (pictured right), director of operations for Whatley Oil Co. cstoredecisions.com/2020/10/19/podcast-whatley-oil-co-grows-zelmos-zip-in/

Having been in the wholesale fuel business since its founding in 1955, Whatley Oil Co. also partners with around 90 dealer locations in Georgia, Alabama and northern Florida, to which it either supplies fuel and/or leases property. At its companyoperated sites, it partners with gas brands Citgo, Chevron and Liberty.

THREE GENERATIONS Whatley Oil was founded in January of 1955 by Bruce and Sara Whatley. “My dad (Steve Whatley) was one year old when they founded the company,” said Slaton Whatley, director of operations for Whatley Oil Co., and the third generation to join the family business. Whatley’s dad, Steve, officially joined the company in 1976, upon his graduation from the University of Georgia. “His joke was that he graduated at noon and was working by 2 p.m. that day in the business. … My uncle, who’s the older of the two brothers, joined in 1993 after 20 years as an army helicopter pilot,” he said. 14

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Today, Steve Whatley helms the company as the president and CEO, while Greg Whatley is a co-owner in the business. Their mother, Sara Whatley, continued working in the family business five days a week until about a year ago, when she turned 92. “She’s 93 now and has finally, I think, retired,” Whatley said. Slaton Whatley is the first member of the third generation to join the family business. He brings a retail, tourism and software background to the company. “There was nothing direct about my path to convenience stores,” he said, noting that like many next-generation c-store executives, he didn’t expect to join the family business. “I turned 30 and realized that I wanted to move home and be closer to my family. And I didn’t want to miss out on the opportunity to learn from my dad.” Now, three years later, he’s immersed in daily operations. He trained under industry veteran Ralph Byrne, who was the former director of operations

cstoredecisions.com

FRONT END Profile Whatley Oil Co. recently broke ground on its 12th Zelmo’s Zip In convenience store, a ground-up build that will be its first unbranded location.

for Whatley Oil Co. When Byrne passed away suddenly, Whatley stepped up to the role. The Whatley family forayed into the convenience store business back in 1999, acquiring their first site in Leesburg, Ga., a location they still operate today. “It’s a very unique-looking store, and it turns out the gentlemen that we bought it from was a home builder initially who had started dabbling in convenience stores, so it has more of a ranch-style house look to it,” Whatley said. While the Zelmo’s Zip In name existed on paper from the beginning, back in 1999, most customers still associated c-stores with the gas brand on the canopy. Six years ago, the Whatley Family began putting more emphasis on the Zelmo’s Zip In brand. A local art teacher created a logo for the company — based on a beloved family pet — which features a dog driving a car. The name Zelmo was originally a high school nickname belonging to Whatley’s father, Steve, before it became the moniker for the chain. “It’s turned into a whole other character,” Whatley said. “It’s taken on a life of its own at this point.” The logo is popular with customers and featured on merchandise sold in the store as well as on cups and on employee shirts and hats. By the early 2000s, Zelmo’s Zip In had grown to three company-owned sites. When Chevron began to divest its retail locations around that time, the Whatleys purchased four of the sites in Columbus, Ga. “That was our first foray into Columbus, Ga., which is a much bigger city than any place that we had ever operated,” Whatley said. Then, in 2012, with nine acquisitions under its belt, Zelmo’s built its first new-to-industry store. Today, it’s under construction on its third new build, set to open in early Q1 of 2021. “To me, the most exciting part of this store is we’re going all Zelmo’s,” Whatley said. “We’re not going to be partnering with a major fuel brand.” The move meant creating a new Zelmo’s-branded canopy design. The new site is expected to measure 4,200 square feet, plus an Arby’s quick-service restaurant, and is situated in a large, mixed-use development site on the northern end of the city 16

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November 2020

that features residences, shops and restaurants. An outdoor bandstand in eyeshot of the store offers the potential to draw customers attending local concerts. The move to unbranded gas made sense for the chain. “It seems to be the way things are going,” Whatley said. “If you’re partnering with a major fuel brand, it can be a little more challenging to compete with your fuel prices. If you’re selling a top-tier fuel and the store next to you is selling whatever they can get for the cheapest that day, it makes competition a little bit more challenging. And so those are some of the reasons we’ve decided to go that route for this particular build.” Whatley hopes the new Zelmo’s will springboard the chain into introducing a number of similar unbranded sites over the next five years. As the chain looks to grow, it’s not losing sight of its existing locations, which range in size from a kiosk store to nearly 4,000 square feet. Whatley Oil is remodeling its oldest stores to bring them up to date with a modern, industrial makeover. Three remodels are currently underway, including at the chain’s first two sites. The redesign features exposed ductwork, metal and stone materials and large front windows, new countertops and cabinets and an overall lightening of the stores’ color scheme. The deli, fountain and coffee bars, as well as the checkout counter and restrooms, all receive updates.

FOOD & TECHNOLOGY The chain’s three oldest sites already feature extensive delis. “It was a little bit of luck. Twenty years ago, I don’t think anyone necessarily understood how big of a part deli was going to be of your inside sales,” Whatley said. “So we were fortunate that these stores were built to accommodate the equipment we needed.”

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R E N W O I O P INNOV T

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FRONT END Profile

Since the pandemic began, inside sales have seen an uptick, likely due to the chain’s increased advertising across social media and television to ensure customers know it offers grocery essentials.

Two of the stores offer substantial kitchens allowing the chain to operate a proprietary Southern food program complete with fried chicken and macand-cheese, all cooked in-house. “And another one that I’m particularly excited about is a small rural store,” Whatley said, referring to a store in a town of 1,000 people adjacent to the town where he grew up. “We are learning that any (food) we put in there seems to do fairly well but because there aren’t many options.” That store’s Taco Tuesday and Barbecue Ribs Friday have been big hits with local customers. “We’ve had a lot of fun trying out fixed menus and plate options for our customers out of a relatively small kitchen space and have seen a lot of success there. That’s a unique store because there isn’t much around it,” Whatley said. These three stores also feature Hunt Brothers Pizza programs. “That is really what kickstarted our deli program,” he said. “It’s been pretty amazing to see what we have been able to do working with Hunt Brothers and for a relatively small investment with one single piece of equipment — their pizza oven. Hunt Brothers has been a really good partner for us in the Southern stores.” In Zelmo’s other locations, it has gone the cobranding route, finding it more practical to bring in expert brands to handle foodservice in its larger, city-based stores. On the tech front, the chain recently began working with a company called ZenPut to improve operational efficiency. The app-based technology helps it track tasks in need of attention at the stores. Employees submit photos of maintenance issues, allowing for a speedy response. Each morning, Whatley combs through hundreds of images, 18

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November 2020

solving big and small issues from empty soap dispensers to broken credit card readers. At present, the chain is hitting the pause button on other technology rollouts as it focuses on operational consistency across its stores. “We want to make sure that we’ve got the traditional way of business down to a science before we start branching out into delivery or being able to order your products through a mobile app or ordering online,” Whatley said. Despite the global pandemic, business is going well in 2020. While, like most c-stores, Whatley saw fuel sales suffer during the peak of COVID-19, inside sales have seen an uptick, which Whatley attributes to increased advertising across social media and television to ensure customers know it offers grocery essentials like toilet paper, eggs and milk.

LOOKING TO 2021 In 2021, Whatley Oil is set to break ground on a new headquarters and wholesale bulk plant. “We’re looking to open a newer, larger version essentially of what we have now to help support our wholesale side and hopefully provide space for us to grow our leadership team and administrative team on the convenience store side as well,” Whatley said. Whatley sees the ongoing consolidation in the cstore industry today as motivation to “stay competitive, sharp and innovative.” “We’re one of the few family-owned, privatelyheld chains in this part of the state right now,” Whatley said. “It’s something we’re proud of, and we’re trying to make sure that folks know we’re a local company. We are still a scrappy, lean, small company.”

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Chain of the Year Award

CONGRATULATIONS

McLane extends its sincerest congratulations to Parker’s for receiving the prestigious Chain of the Year award for 2020. We thank you for your invaluable commitment and innovative contributions to our industry. Your exceptional leadership is an inspiration to us all.

quickBites TRACKING CUSTOMER SENTIMENT SHOPPERS NOTE STRONG CUSTOMER SERVICE AT C-STORES

GasBuddy found more than half of respondents leaving reviews in the GasBuddy app had positive sentiments toward customer service and food at convenience stores in Q3. As with ratings, most written reviews on GasBuddy express positive sentiment. An analysis of reviews from July to September 2020 reveal that certain topics generate strong passion during COVID-19. Customer Service

62.6%

CivicScience noted the number of customers “very concerned” about being in public spaces during COVID-19 ticked upward in the week ending Oct. 4, 2020 — the most recent date available — to 45% from 38% the previous week.

4.9%

Food

61.4%

3.8%

Amenities

40.7%

7.2%

Rewards

CUSTOMERS’ CONCERNS GROW AROUND PUBLIC SPACE SAFETY

45.7%

9.4%

Source: Gas Buddy, Consumer Ratings and Foot Trafﬁc Report, October 2020

WORKERS GOTTA GO, TOO 9 OUT OF 10 AMERICANS … think employers who deep clean their workplace restrooms regularly care more about the health and wellness of their employees than employers who don’t. … believe employers who pay consistent attention to their workplace restroom cleanliness care more about their employees than those who do not. 81% of Americans think employees are more likely to value their job when employers supply high-quality, “luxury” restroom products such as colorful dispensers, no-touch dispensers, air fresheners, restroom cleaning services, restroom mats and scented hand soaps. Source: Cintas Corp. by The Harris Poll survey conducted online within the U.S. from Jan. 6-8, 2020, among 2,007 U.S. adults ages 18 and older

VALUE IS CALLING

36% of Americans plan to reduce the cost of their cell phone due to the COVID-19 pandemic.

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AMERICANS WANT PRICE REDUCTIONS: Almost 75% of people think that Apple should charge less for the iPhone due to COVID-19.

ALMOST 73%

About 73% more people think that the new iPhone is worth going into debt for compared to last year.

Source: WalletHub 2020 iPhone Survey, October 2020

CSTORE DECISIONS •

November 2020

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FRONT END Tobacco Update

FDA Marketing Application Deadline Passes:

What Happens Now?

Once a manufacturer files a substantial equivalence application or pre-market tobacco application with the FDA, the agency follows a five-step process to evaluate the product. Thomas Briant • National Association of Tobacco Outlets

The Food and Drug Administration (FDA) set Sept. 9, 2020, as the deadline for manufacturers to submit a substantial equivalence application (SE) or a pre-market tobacco application (PMTA) for “deemed” tobacco products introduced into the marketplace between Feb. 15, 2007, and Aug. 8, 2016. Tobacco products subject to the PMTA requirements include cigars (except “premium cigars” as noted below), pipe tobacco, electronic cigarettes, nicotine vapor products, hookah tobacco, alternative nicotine products and heated nicotine products. Many brands of domestic cigars, pipe tobacco and hookah tobacco products were already on the market as of Feb. 15, 2007; therefore, they qualify for grandfather status and do not need a SE or PMTA to remain on the market. For those domestic cigars, pipe tobacco and hookah tobacco products, which are not grandfathered, manufacturers must have filed either a SE or PMTA application with the FDA by Sept. 9. Because there were no electronic cigarette, vapor, or alternative nicotine products on the market as of Feb. 15, 24

CSTORE DECISIONS • November 2020

2007, they will not be grandfathered, and there is generally no substantially similar product to rely on to file a SE application. For these products, manufacturers were required to file PMTAs with the FDA by Sept. 9, or their products could no longer be sold to the public. As for “premium cigars,” a federal court ruling issued in August of this year deferred enforcement of the FDA’s Sept. 9 application filing deadline, preventing the administration from enforcing the application requirement against premium cigars until the agency creates a streamlined SE application process for them. “Premium cigar” is defined as a cigar that: (1) is wrapped in whole tobacco leaf; (2) contains a 100% leaf tobacco binder; (3) contains at least 50% (of the filler by weight) long filler tobacco (i.e.,

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FRONT END Tobacco Update

whole tobacco leaves that run the length of the cigar); (4) is handmade or hand-rolled (i.e., no machinery was used apart from simple tools, such as scissors to cut the tobacco prior to rolling); (5) has no filter, nontobacco tip, or nontobacco mouthpiece; (6) does not have a characterizing flavor other than tobacco; (7) contains only tobacco, water and vegetable gum with no other ingredients or additives; and (8) weighs more than six pounds per 1,000 units.

FIVE-STEP PROCESS Once a manufacturer files a SE or PMTA with the FDA, the agency follows a five-step process. First, the FDA conducts a preliminary review of an application to see if everything is complete. If so, the FDA issues a letter accepting the application. Second, the agency files the application if all of the scientific studies, evidence and other data are complete. Third, the FDA undertakes its substantive review of the application and supporting documentation and studies, which can take up to one year. Fourth, the FDA issues an order either approving or not approving the application. In order to approve an application, the FDA needs to determine that the product “is appropriate for the protection of the public health.” This is the standard set down by Congress to determine whether a tobacco product is approved for marketing in the U.S. Lastly, the FDA publicizes the approval order or non-approval order. In late August, the FDA issued a statement that it plans to make publicly available a list of the deemed tobacco products subject to the Sept. 9, 2020, deadline, that were on the market as of Aug. 8, 2016, and for which a SE or PMTA application was submitted to the agency by Sept. 9, 2020. 26

CSTORE DECISIONS • November 2020

However, because the agency needs time to review and accept or decline SE and PMTA applications as they are filed and ensure the SE and PMTA application information to be published complies with federal disclosure laws, that list of products for which a SE or PMTA application has been filed may not be published for some time. In the meantime, the FDA encourages retailers to contact manufacturers directly to obtain information and confirmation about whether SE or PMTA applications have been filed with the FDA. The agency also stated it will take compliance and enforcement action against tobacco products for which a SE or PMTA application was required to be filed by the Sept. 9 deadline, but which the manufacturer did not file. Enforcement action is allowed against those products as they would now be considered “misbranded and adulterated” by the FDA and illegally on the market. According to the agency, the initial focus of FDA enforcement actions will be electronic nicotine products for which a PMTA was not submitted. Thomas Briant is the executive director for the National Association of Tobacco Outlets (NATO).

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FRONT END News

Frank Beard Joins the

CStore Decisions Group Industry innovator takes over the newly created position of director of special projects to accommodate the brand’s rapid growth and focus on retailer needs. CStore Decision Staff

The CStore Decisions Group is proud to announce that Frank Beard has joined the team as director of special projects. In this role, Beard will develop original research content and digital initiatives while assisting in the growth of CStore Decisions’ National Advisory Group (NAG) and Young Executives Organization (YEO). Additionally, Beard will serve as director of the new Safe Shop initiative — a joint venture between CStore Decisions and Paragon Solutions. Beard is a Des Moines, Iowabased retail consultant, speaker and writer. He travels frequently to exceptional stores both across the U.S. and internationally. “Customer experience is a passion of mine, and it’s been a core aspect of my work over the last few years,” Beard said. “Today’s consumers have more choices than ever, and nobody has to settle for the dirty or dangerous. Meeting their expectations for cleanliness, safety and hospitality are not only table stakes, but they are the necessary foundation required for higher-order strategies. I look forward to working together with a variety of stakeholders on Safe Shop to create momentum in this essential area.” 28

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November 2020

Prior to joining CStore Decisions, a division of WTWH Media, Beard served as GasBuddy’s analyst/evangelist for convenience store and retail trends. In this position, he took a leading role in product marketing, strategic public relations, research, client education and the publication of GasBuddy’s quarterly retailer rankings. Beard has spoken at many events, including the National Association of Convenience Stores (NACS) Show, National Restaurant Association Show, Summer Fancy Food Show, NACS CEO Summit DACH, AACS Convenience Leaders Summit and more. His analyses and insights have been featured in NPR, Bloomberg, Grocery Dive, The Washington Post, Atlas Obscura and others. He’s a frequent podcast guest and currently co-hosts his own show, the In-Convenience Podcast. “We have had the pleasure of being affiliated with Frank through a variety of industry connections, so when the opportunity presented itself to add Frank to our team, we jumped at it,” said John Petersen, publisher of CStore Decisions. “The challenges faced by the industry this year

are real, but in every challenge is an opportunity to improve and strengthen your team. CStore Decisions is having a strong year, and adding Frank will only make us stronger moving forward.” Passionate about foodservice, Beard once spent an entire month eating at convenience stores and lived to tell the tale. He’s also an active cyclist and enjoys participating in RAGBRAI (Register’s Annual Great Bicycle Ride Across Iowa) — the world’s oldest, longest and largest organized bike ride. “We are extremely fortunate to bring Frank’s knowledge and passion for the convenience store industry into the CSD family,” said John Lofstock, editor-in-chief of CStore Decisions and executive director of NAG. “Anyone who has been around the industry understands Frank’s commitment to c-store retailers and his ongoing mission to help retailers improve their operations. He is a perfect fit for our brand.”

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31ST ANNUAL

Congratulations to Parkerâ&#x20AC;&#x2122;s on being the difference between having to stop and wanting to stop. Parkerâ&#x20AC;&#x2122;s has earned the prestigious award of Convenience Store Chain of the Year by consistently raising the bar with cutting-edge technology, first-class customer service, charitable giving and uncompromising quality. Gilbarco shares your vision for excellence and your commitment to a premium customer experience, and we look forward to partnering with you for years to come.

FRONT END News

Kent Kwik Makes Strategic Moves The Texas-based chain recently divested 14 of its Kent Lubrication Centers to Valvoline before entering Tennessee with the acquisition of Parsons Oil Co. CStore Decision Staff

Midland, Texas-based The Kent Cos., the parent company of Kent Kwik convenience stores, recently announced its acquisition of Parsons Oil Co. Inc. of Fayetteville, Tenn. The acquisition marks the chain’s entrance into the Tennessee market. Founded in 1927, Parsons Oil Co. has served south-central Tennessee for more than 93 years. The acquisition included five company-operated Shellbranded Buy Fast convenience stores, a book of branded and unbranded dealer supply accounts, a commercial lubes and fuel distribution business, the bulk plant, office and other related assets. The Kent Cos. said the move provides an important strategic foothold to support its growth plans in central Tennessee, northern Alabama and beyond. The newly acquired sites will be rebranded to Chevron, and the stores to Kent Kwik. “Our acquisition team is always looking for unique opportunities to extend our retail formula of success to high growth areas of the country. Acquiring 30

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November 2020

Parsons Oil and the Buy Fast stores allow us to do that,” said Bill Kent, chairman and CEO of the Kent Cos, in a statement. “After conducting our initial visit, we recognized the close proximity that Fayetteville has to rapidly growing Huntsville, Ala. In fact, Fayetteville being a bedroom community to Huntsville really aligned the deal with our growth plans. In addition to the Buy Fast c-stores, we also acquired the Big Chicken truck stop, the first truck stop on the Tennessee side of the state line. We are looking forward to enhancing the success of this unique site by incorporating the Kent Kwik brand and our proven operational formula.” Founded in 1957, the Kent family of companies has grown to include the Kent Distributors Inc., Kent Kwik convenience stores, Kent Lubrication Centers, Kent Tire Co. and other related entities.

DIVESTING KENT LUBRICATION CENTERS In September, it was announced that The Kent Cos. planned to divest 14 of its lubri-

cation centers. The centers will be rebranded as Valvoline Instant Oil Change (VIOC) service centers in an effort to expand Valvoline Inc.’s company-owned service center network in Texas. The acquisition is expected to close in the company’s first quarter of fiscal 2021. Financial terms of the acquisition were not disclosed. “As an owner, it was a bittersweet decision to sell,” Kent said in a statement. “After getting to know the excellent management team at Valvoline, I realized I could not have found a better company to provide my loyal Avis Lube team members with the continued career and growth opportunities they deserve. The Valvoline Instant Oil Change quick-lube team shares our same commitment to trusted service. I want to thank my team for their hard work and commitment to making Avis Lube a premier quick-lube chain over the last 44 years. I am confident our team members and guests will find Valvoline an excellent new owner in the communities that Avis Lube has had the honor to serve.”

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Chain of the Year

Parker’s H as 2020 Chain o The Savannah, Ga., chain is the 31st winner of the most prestigious award in the industry for convenience retailing.

John Lofstock • Editor-in-Chief

CSTORE DECISIONS •

February 2020

cstoredecisions.com

s Honored n of the Year The Parkerâ&#x20AC;&#x2122;s team accepts the 2020 Convenience Store Chain of the Year Award. CStore Decisions annually honors a convenience store or petroleum chain that has established itself as a superior retailer and innovator in its markets of operation.

Chain of the Year

It’s 10 a.m. on a Wednesday, and after 44 years in the industry, no one would blink if Parker’s Founder and CEO Greg Parker took some time off to enjoy a beautiful fall day in Savannah, Ga. But on this warm October morning, Parker is already an hour into training on how to use the company’s new foodservice fryers to ensure sure they are easy and safe to operate. “It’s important to me to know our team has the best equipment available so they can do their jobs as effectively and as efficiently as possible,” Parker told me. “I’d never want our people to use equipment that I haven’t already tested and feel comfortable using.” This kind of leadership is precisely why Parker’s has been one of the most successful chains in the industry for more than two decades. The industry’s leading chains all share the same winning characteristics: exceptional leadership, great stores and unsurpassed customer service. Parker’s embodies all of these hallmarks and so much more. Following these guiding principles, CStore Decisions is proud to honor Parker’s as the 2020 Convenience Store Chain of the Year. The Chain of the Year Award showcases the best of the best in convenience retailing, and Parker’s is certainly deserving of its place in this rich tradition. As many industry marketers are struggling to reinvent themselves and to identify a strategy that will lead them into the future, Parker’s continues to blaze its own trail. The Georgia-based company operates 66 stores in Georgia and South Carolina and has aggressive plans to build 60 new-toindustry stores in 60 months. This aggressive growth would be impressive during normal times, but it’s even more impressive amid a global pandemic. 34

CSTORE DECISIONS •

November 2020

About the Chain of the Year Award CStore Decisions’ Chain of the Year award annually honors a convenience store or petroleum chain that has established itself as a superior retailer and innovator in its markets of operation. CSD’s first Chain of the Year award was given to Wawa Inc. in 1990. Parker’s follows 2019 Chain of the Year winner Weigel’s. Other winners of this prestigious award include Sheetz, Maverik, RaceTrac, Krause Gentle Corp., Alimentation Couche-Tard, QuikTrip, Rutter’s and Family Express.

Past Chain of the Year Winners • 1990 – Wawa Inc. • 1991 – SuperAmerica • 1992 – QuikTrip Corp. • 1993 – Casey’s General Stores Inc. • 1994 – Sheetz Inc. • 1995 – Diamond Shamrock Corp. • 1996 – MAPCO Express • 1997 – Speedway Inc. • 1998 – Krause Gentle Corp. • 1999 – Dairy Mart Inc. • 2000 – Amerada Hess Corp. • 2001 – Huck’s Food & Fuel • 2002 – Petro-Canada • 2003 – Exxon Mobil Corp. • 2004 – Kwik Trip Inc. • 2005 – 7-Eleven Inc.

• 2006 – Valero Inc. • 2007 – Alimentation Couche-Tard • 2008 – Chevron Inc. • 2009 – Nice N Easy Grocery Shoppes • 2010 – Rutter’s Farm Stores • 2011 – Thorntons Inc. • 2012 – Tedeschi Food Shops • 2013 – Maverik Inc. • 2014 – RaceTrac Petroleum Inc. • 2015 – Family Express Corp. • 2016 – QuickChek Corp. • 2017 – Sheetz Inc. • 2018 – Kwik Trip Inc. • 2019 – Weigel’s Inc. * 2020 – Parker’s

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2020 CSD Chain of the Year

Success is earned not given. Congratulations on being named CSD’s Chain of the Year.

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Chain of the Year

The Parker’s team poses with CStore Decisions Editor-in-Chief John Lofstock (front right) in Savannah, Ga. Since 1976, Parker’s has been focused on delivering the ultimate customer experience. In recent years, the family-owned c-store chain strategically expanded its commitment to high-quality foodservice, cutting-edge technology, charitable giving and customer loyalty.

Over the past two years, Parker, who still leads the daily operations of the family business that bears his name, has pushed the needle forward with a host of projects that have made the chain a force in the Southern market. He has expanded retail operations into the metro Charleston, S.C., market with eight new stores and plans to build 32 more units in the area over the next four years. Under Parker’s leadership, the company has significantly enhanced its focus on foodservice, operating 42 Parker’s Kitchen locations serving Southerninspired food prepared fresh on-site daily. “Being named the 2020 CStore Decisions Chain of the Year is an incredible honor that validates our team’s hard work and ongoing commitment to serving Parker’s customers and giving back to every community where we operate stores,” Parker said. “Since our founding in 1976, we’ve been focused on delivering the ultimate customer experience. In recent years, we’ve strategically expanded our commitment to high-quality foodservice, cutting-edge technology, charitable giving and customer loyalty. We deeply appreciate this

CSTORE DECISIONS •

November 2020

recognition and will continue to set the bar even higher in the future.” Parker’s has implemented cutting-edge technology to enhance the customer experience and digitize operations. Upgrades include food-ordering kiosks, self-checkout lanes, a new Parker’s Rewards app and investing in internal “smart applications” to increase efficiencies. The company’s goal is to have at least 40% of all transactions completed through the Parker’s Rewards program, Parker said. As the chain moves toward establishing itself as a billion-dollar business, it will remain keenly focused on foodservice, technology and providing a better experience for customers. Technology is one specific area that is driving change. Parker’s is currently using predictive analytics and machine learning to determine the most seamless, frictionless and time-efficient ways to complete more than 125,000 daily transactions and to prepare the freshest possible food to meet customer demand. For example, the Parker’s Smart Kitchen technology was developed internally and

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Congratulations on being selected as the 2020 Convenience Store Chain of the Year Coca-Cola Bottling Company United and Coca-Cola Consolidated raises a glass to thank you for serving your community and providing partnership excellence. Cheers to you!

ÂŠ2020 Coca-Cola Bottling Company United

Greg Parker opened his first store in Midway, Ga., in late 1976, when he was just 21, and he has been a student of the industry ever since.

PARKER’S BY THE NUMBERS: Founded in 1976 and headquartered in Savannah, Ga., Parker’s was recently named the CStore Decisions 2020 Convenience Store Chain of the Year, earning the convenience store industry’s top award. The company operates 66 stores in coastal Georgia and South Carolina and has plans to build 60 new retail locations in 60 months. The chain’s 42 Parker’s Kitchen locations demonstrate a focus on foodservice that reflects its region’s flavor through a Southern-inspired menu prepared fresh and on-site every day. “Fast, Fresh, Friendly is more than just a slogan at Parker’s. It’s a promise we make to every customer we serve every day,” said Greg Parker, company founder and CEO. “’Good enough’ is never good enough for Parker’s,” he said, adding that the company is about “people, process and technology.” He cited as ingredients to Parker’s success its dedicated technology department that’s focused on innovation. Parker is also proud of the company’s philanthropy efforts in the areas of healthcare and education, as well as underscoring the work of the chain’s executives on down to team members working in its store locations. • Number of stores: 66, including 42 Parker’s Kitchen locations • Total donations to local schools through the Parker’s Fueling the Community charitable giving initiative: more than $7 million • Number of Parker’s Rewards members: 150,000 • Amount saved by Parker’s Rewards Members: $15 million • Number of gallons of gas sold annually: 165 million • Number of transactions per year: 55 million (125,000 per day) • Number of employees: nearly 1,200 • Number of chicken tenders sold annually: 3 million • Number of fountain drinks sold annually: 6.5 million • Website: Parkerskitchen.com • Social Media: Facebook.com/parkersav, Twitter.com/parkerspumppal, Instagram.com/parkersav

The Parker’s Leadership Team:

• • • • • • • • •

Greg Parker, Founder and CEO Jeff Bush, President Amy Lane, Senior Vice President of Special Projects Brandon Hofmann, Chief Operating Officer Brian Prevatt, Chief Financial Officer Eric Jones, Chief Innovation Officer Powell Jones, Chief Information Officer Blake Greco, General Counsel Kate Smith, Chief of Staff

CSTORE DECISIONS •

November 2020

allows foodservice managers to predict food demand down to the minute based on complex analysis of a wide range of data, from local traffic patterns to area weather forecasts. “Not only can we predict foodservice sales in real time, we can forecast sales out to 2021 or 2022,” Parker said. “We can tell you with 94% accuracy how many chicken tenders are going to sell at any store from 11 a.m. to 11:30 a.m. on March 21, 2021. It’s that impressive.” HUMBLE BEGINNINGS

To understand how impressive Parker’s growth is, you have to understand how it all began. Parker opened his first store in Midway, Ga., in late 1976, when he was just 21, and he has been a student of the industry ever since. “I wish I could tell you that I had some master branding and growth plan when I opened that first store, but I learned everything I know about this industry by being involved and developing metrics to improve every day,” he said. Parker grew up in the industry. His father, Jack Parker, was an Amoco jobber along Interstate 95 in Georgia. As the state was developing new corridors and suburban neighborhoods, Parker saw an opportunity to serve these growing areas. He partnered with a local dairy farmer to acquire the land for his first store and a local bank to finance construction, and he has never looked back.

cstoredecisions.com

Chain of the Year

Parker’s has significantly enhanced its focus on foodservice, operating 42 Parker’s Kitchen locations serving Southern-inspired food prepared fresh daily.

“I was very involved in the designing and building of that first store,” Parker said. “I learned a lot by being there every day. Then, when the store opened, I was the only employee. I opened the store, closed the store, figured out how to do the books, make bank deposits, kept inventory; I mean everything. Back then, there was no playbook to guide you, nor were there study groups to learn from. You had to figure it all out by doing and asking questions.” And doing he did. Parker worked at the store for three and a half years before taking a day off. “I pumped gas, washed windshields and checked the oil. In between servicing cars, if a customer wanted food, I’d run in the back, wash my hands and cook the food,” he said. “It used to be a full-service business in those days, so you really had to work hard to be successful; but I loved it, so I was curious, and I was hands-on.” For all his hard work, he paid himself just $75 per week. By contrast, Parker’s today employs nearly 1,200 team members in two states, sells more than 165 million gallons of fuel annually and has more than 150,000 Parker’s Rewards members. To grow the business in the mid-1970s, Parker explored many different avenues, even investing in a tow truck to rescue stranded vehicles for the local sheriff’s office. “Whenever I got a break between customers, I’d lock the doors to the store, hop in the wrecker and drive out to the interstate to tow a car that had broken down. I didn’t have experience with any of this stuff, but I was good at taking care of 40

CSTORE DECISIONS •

November 2020

people,” he said. “I was good at figuring things out. When I wanted to learn how to do the books, I took a class. Then, when I wanted to learn about inventory or marketing or operations, I asked a ton of questions until I knew it as well as anybody. After a few years, you can learn a lot in this industry.” It is not an easy industry to learn, and it’s even harder to succeed, so a good work ethic has become the foundation of Parker’s success. “The odds were against me,” he said. “I understood that I needed to be good at operating the store because if I couldn’t make the business profitable, I would fail. Then I would have felt like I was letting my family down, so it was important for me to be smart and work harder than everyone else.” It wasn’t until 1979 that Parker opened his second store in Richmond Hill, Ga. As it stands today, he is planning to open an average of one store a month through 2024, almost entirely with cash reserves. “I wish I could tell you that I had our long-term business strategy figured out, or that I saw the bright light at the end of the tunnel, or that I realized that this industry was going to be able to withstand hurricanes, pandemics and economic recessions, but the truth is, I didn’t realize any of that 44 years ago,” Parker said. “What I did realize was that if you exceeded the customer’s expectations, that you can engender loyalty. And with that loyalty, I saw opportunities. So I just kept my head down and worked really hard. I sacrificed vacations and family time and other personal opportunities to grow a successful business.”

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Well Done. Well Earned. Congratulations to Parkerâ&#x20AC;&#x2122;s Kitchen for being named CSDâ&#x20AC;&#x2122;s Chain of the Year.

Power Mart

Parker’s has expanded retail operations into the metro Charleston, S.C., market with eight new stores and plans to build 32 more units in the area over the next four years.

LEADERSHIP CULTURE

to be committed to hard work to be successful. So while we have achieved a level of success, I still very much envision myself as a blue collar guy who’s in a white collar position.” The one common trait Parker sees in all young leaders that he recognizes in himself is curiosity. “I’m sure anybody who knows me would tell you how curious I am. If I don’t know something, I’ll ask a million questions until I understand it,” Parker said. “This goes for cutting-edge technology or simply brewing a cup of coffee. I learned by doing, asking questions and avoiding mistakes. Great young leaders share this curiosity.” Parker met one of these aspiring young leaders, Jeff Bush, in 2012. Bush was handpicked to become the chain’s director of fuel operations after impressing Parker, who served as guest speaker in an eco-

This is a timeless lesson that Parker continues to teach the next generation of business leaders. Parker teaches college business classes at Georgia Southern University as well as a proprietary Parker’s leadership class for store managers-in-training. “When I’m teaching, I like to explain the history of our company. I appreciate that young leaders are eager to work, but I will remind them that they will never clean as many toilets as I have. They will never sweep as many parking lots or pump as much gas or clean as many windshields as I have. They probably won’t even cook as many things as I’ve cooked because I’ve been doing it for nearly 45 years. You have

Parker’s Donates KN95 Masks to Healthcare Providers Throughout the pandemic, healthcare providers at hospitals and facilities in coastal Georgia and South Carolina can continue to protect their staff and care for their patients and community, thanks to the generosity of Savannah, Ga.-based Parker’s, which operates 66 stores throughout coastal Georgia and South Carolina. Parker’s recently donated more than 7,000 KN95 masks to frontline healthcare providers at hospitals and healthcare facilities throughout coastal Georgia and South Carolina. “We’re deeply grateful to all the doctors, nurses, clinicians and staff who are providing exceptional healthcare to area residents throughout the coronavirus pandemic,” said Parker’s Founder and CEO Greg Parker. “We know there have been mask shortages throughout the region and want to make sure area healthcare workers have the

CSTORE DECISIONS •

November 2020

personal protective equipment they need to stay safe while caring for patients.” Parker’s has donated 2,000 masks to Memorial Health University Medical Center in Savannah, Ga.; 800 masks to St. Joseph’s/Candler in Savannah, Ga.; 600 masks to Liberty Regional Hospital in Hinesville, Ga; 600 masks to East Georgia Regional Hospital in Statesboro, Ga.; 600 masks to Effingham Hospital in Springfield, Ga; 400 masks to Candler County Hospital in Metter, Ga.; 300 masks to Hospice Savannah; 80 masks to Allcare Healthcare in Lyons, Ga; and 50 masks to Savannah OBGYN in Savannah, Ga. In South Carolina, the company has donated 800 masks to Beaufort Memorial Hospital in Beaufort, S.C.; 700 masks to Roper St. Francis Healthcare in Charleston, S.C.; and 180 masks to Pruitt Health in Moncks Corner, S.C.

cstoredecisions.com

Chain of the Year

Parker’s is currently using predictive analytics and machine learning to determine the most seamless, frictionless and time-efﬁcient ways to complete more than 125,000 daily transactions and prepare the freshest possible food to meet customer demand.

GIVING BACK

In addition to operations upgrades, the chain increased its commitment to the Fueling the Community charitable program, giving back to every community where Parker’s operates stores. The company’s policy is to generously support education, healthcare and other important initiatives that touch communities within its corporate footprint. Through the Fueling the Community Program, which donates a portion of the proﬁt of every gallon 44

CSTORE DECISIONS •

November 2020

“

Being named the 2020 CStore Decisions Chain of the Year is an incredible honor that validates our team’s hard work and

“

nomics class at Armstrong State University in Savannah, with his thoughtful questions. He rose through the ranks and was named president of the company in 2019. For many years, the entire team at Parker’s has been recognized as one of the hardest-working groups in the industry. The team’s dedication to detail, outstanding customer service programs and constant evolution as a convenience retailer make them the perfect choice to join the elite list of Chain of the Year honorees. Parker is effusive in his praise of his team. “Personally, this award means so much to me because of our humble beginnings, but what this award represents is the hard work of what I think is the most talented leadership team in the industry,” he said. “They truly are the key to our success at Parker’s.”

ongoing commitment to serving Parker’s customers and giving back to every

community where we operate stores. — Greg Parker, founder and CEO, Parker’s

of gas sold on the ﬁrst Wednesday of the month to area schools, Parker’s has donated more than $7 million to educational initiatives. The company endows the Parker College of Business at Georgia Southern University and the Parker’s Emergency and Trauma Center at Memorial Hospital in Savannah, and spearheads a successful anti-litter campaign in Savannah. “At Parker’s, we’re committed to meeting the changing needs of our customers and to raising the bar for the convenience store industry,” Parker said. “We work hard, we believe in what we do, we take care of our people, and we give back to the communities we serve. It’s a wonderful feeling to have the team recognized for the hard work they do. I look forward to going to work with them every day.” CSD

cstoredecisions.com

Congratulates Parker's on being selected 2020 Chain of the Year!

Category Management | Packaged Beverage

fast facts: • Hard seltzers and beers continue to see sales gains at c-stores. • Retailers report ready-to-drink coffee sales are buzzing. • Sports drinks were up 6.4% for the 52 weeks ending Oct. 4, 2020, according to IRI. 46

CSTORE DECISIONS •

November 2020

cstoredecisions.com

Tracking

Beverage Trends With restaurants and bars closed for months due to the pandemic and recently opened with diminished capacity, more consumers are quenching their thirsts by purchasing ready-to-drink alcoholic and non-alcoholic beverages at retail outlets, including convenience stores. Marilyn Odesser-Torpey â&#x20AC;˘ Associate Editor

From hard seltzer and craft beer to kombucha and ready-to-drink (RTD) cold-brew coffee, the c-store packaged beverage category has seen some stellar sales lifts in 2020. The RTD cappuccino and iced coffee segment was up 3.5% at convenience stores for the 52 weeks ending Oct. 4, 2020, according to Market Advantage TSV; IRI Liquid Data. For the same period, refrigerated juices were up 3.5%. Bottled water fell 4.1%, while energy drinks were up 2.6%, and sports drinks rose 6.4%. cstoredecisions.com

November 2020 â&#x20AC;˘ CSTORE DECISIONS

Category Management | Packaged Beverages

“

Flavored malt beverages — which includes hard seltzers and beers — have continued to grow impressively, with the largest issue facing the segment being out-of-stock issues. — Carolyn Lemoine, director of alcohol research for the Beverage Marketing Corp.

ALCOHOLIC BEVERAGES

In alcoholic beverages, hard seltzer — such as Truly, White Claw and Corona — is the major up-and-comer at Cubby’s and Fast Break convenience stores. Hard seltzers are taking up more space in the beer cave, and sales are increasing exponentially, according to De Lone Wilson, president of Cubby’s, which has 36 stores in Nebraska, Iowa and South Dakota. Oliver Herting, beverage category manager for Fast Break, a chain of 31 stores in rural Oregon and northern California, noted that hard seltzer is his fastest-growing item and one he projects will have year-round appeal. Herting noted that the challenge is keeping up with consumer demand for hard seltzers without taking up too much display space. “Flavored malt beverages — which includes hard seltzers and beers — have continued to grow impressively, with the largest issue facing the segment being out-of-stock issues,” said Carolyn Lemoine, director of alcohol research for the Beverage Marketing Corp., a New York-based industry consulting, research and advisory services ﬁrm. “Perhaps because of these issues or perhaps due to cooling weather, growth has slowed recently from triple digits to double digits, but they are still a driving force in the malt category.” While total beer dollar sales are down overall because of the restrictions of on-premise (restaurants, bars and craft tasting rooms) sales, they have spiked at off-premise locations like c-stores. Year-to-date off-premise dollar sales have increased 12.5%, Lemoine quoted. When it comes to beer, craft varieties continue to be “hot sellers” in urban markets for Cubby’s, while “in the middle of corn country” the preference is still Busch Light. At Fast Break, many customers have transitioned to major brands’ big packs to stock up at home. Hispanic-label beers such as Corona, Modelo, Paciﬁco and Tecate are usually big sellers for Fast Break, but the segment has faced out-of-stock issues given the pandemic, Herting said. Value and domestic brands like Bud, Coors, Hurricane and Steel Reserve are still the best-selling labels in the beer cave and “have (seen) a big spike during this pandemic,” he said. “Fast Break’s entire beer category is up above industry, so we’re super happy about that,” he added. With the coming of colder weather, Herting expects to see customers moving from domestic lighter beers to more craft beers with more alcohol by volume. 48

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Category Management | Packaged Beverages

Beverages By The Numbers

Sports drinks, refrigerated juices/drinks, cappuccino/iced coffee and energy drinks saw sales gains for the 52 weeks ending Oct. 4, 2020, according to convenience store data from IRI. DOLLAR SALES

PRODUCT

UNIT SALES

Current

1-Year % Change

Current

1-Year % Change

$3.38 B

-1.8%

1.60 B

-6.0%

CAPPUCCINO/ICED COFFEE

$1.81 B

3.5%

598 M

0.7%

CANNED AND BOTTLED TEA

$1.57 B

-7.2%

998 M

-9.7%

$216 M

-2.3%

108 M

-6.0%

RFG TEAS

$211 M

-1.9%

106 M

-5.9%

RFG READY-TO-DRINK COFFEE

$5.38 M

-15.9%

1.58 M

-13.9%

BOTTLED JUICES - SS

$1.52 B

-1.5%

845 M

-4.2%

JUICES/DRINKS - RFG

$599 M

3.5%

245 M

3.4%

CARBONATED BEVERAGES

$8.67 B

0.0%

4.41 B

-4.8%

BOTTLED WATER

$4.42 B

-4.1%

2.35 B

-9.5%

ENERGY DRINKS

$9.92 B

2.6%

3.72 B

1.4%

SPORTS DRINKS

$3.29 B

6.4%

1.66 B

2.2%

TEA/COFFEE - READY-TO-DRINK

TEA/COFFEE - RFG

Source: Market Advantage TSV; IRI Liquid Data for the 52 weeks ending Oct. 4, 2020

“

At the five convenience stores at Iowa State University, various types of sweetened and unsweetened ready-to-drink (RTD) coffee have earned numerous SKUs in the cold vaults, said Kristi Patel, assistant director for retail operations. In addition to several flavors of sweetened coffee drinks, the c-stores offer their own RTD unsweetened cold brew and nitro coffees. “The flavored coffee drinks appeal to the students who like sweet drinks,” Patel explained. “Over the last couple years, cold brew has also been gaining in popularity.” IRI numbers show that for the 52 weeks ending Oct. 4, 2020, customers are reaching for RTD iced coffee and cappuccino over regular RTD coffee. Refrigerated RTD coffee sales dipped 15.9% to $5.38 million in dollar

CSTORE DECISIONS •

November 2020

The ﬂavored coffee drinks appeal to the students who like sweet drinks. Over the last couple years, cold brew has also been gaining in popularity.

“

NON-ALCOHOLIC DRINKS

— Kristi Patel, Iowa State assistant director, retail operations

sales, while at the same time iced/coffee and cappuccino rose 3.5% to $1.81 billion in dollar sales. Cold brew and sweetened coffee drinks have also been experiencing “substantial growth” at Cubby’s stores, Wilson said. The Beverage Marketing Corp. projects that RTD coffee sales will rise in volume this year 12.1% gallons (205.6 million to 230.5 million) and 8.7% ($4.5 million to close to $4.9 million) in dollar sales over last year. A niche product that has gained a loyal following in some stores is the RTD fermented tea beverage kombucha. Iowa State University features between two and three SKUs of the beverages that Patel describes as “on trend” in its c-stores. Wilson of Cubby’s ﬁnds kombucha sells in some of its metro markets. CSD cstoredecisions.com

Category Management | Meat Snacks

Meaty Sales for Jerky After early spring sales dips due to COVID-19, meat snack sales are back on track and rising. Retailers anticipate the fall season will further increase demand. Erin Del Conte • Executive Editor

Meat snack sales continue to trend upward heading into fall, and c-store retailers expect the category to close out the year with beefy fourth-quarter sales. Marketing research ﬁrm Nielsen found meat snack dollar sales at convenience stores totaled $1.56 billion, up 8% for the 52 weeks ending Sept. 26, 2020. Jerky sales totaled $564 million for the same 52-week period, up 9.4%. Dried meat snack sales grew to $1.8 billion, up 4.4% for the 52 weeks ending Oct. 4, 2020, according to Market Advantage TSV/IRI C-Store Liquid data, with jerky seeing dollar sales of $771 million, up 2.2%. RAPID REBOUND

When the COVID-19 pandemic started in March, sales saw “a bit of a light decrease for a minute there,” said Devon Nitta, category manager for Holiday Oil, which operates more than 60 Holiday convenience stores in Utah. But since then, meat snack sales have been soaring. June sales were up 20%. July saw sales up 40%, and August sales showed 30-40% growth. In non-pandemic times, Holiday offers a unique approach to selling meat snacks. 52

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November 2020

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fast facts: • Meat snack sales totaled $1.8 billion for the 52 weeks ending Oct. 4, 2020, according to IRI. • Retailers are keeping an eye on supply disruptions as they anticipate a strong Q4 for the category.

“We sell the major big bags, which are your typical 10-ounce size, and then the 3.25-ounce bags, sticks, etc. But in addition to that, a large portion of our business is bulk,” Nitta said. “We sell bulk bags, two-pound bags of slab jerky, retailing for $29.99.” In addition to selling large, pre-packaged bulk bags, the chain also sells the same jerky sticks, slabs and so on in self-serve bins, so customers can select their jerky with a pair of tongs and fill their own bag. Unfortunately, the pandemic required Holiday to close its self-serve meat snack bins. “I would say, for us, the major shift was definitely from bulk to just normal, everyday packaged jerky,” Nitta said. But the shift hasn’t slowed sales. “Overall, jerky itself has seen 20-40% increases for us year over year,” Nitta said. The chain continues to see huge demand for meat snack items. Nitta suspects one factor is a fear of scarcity, with customers stocking up amid news that meat plant manufacturers are running at reduced capacity given the pandemic. Over in the Midwest, Newcomb Oil Co. LLC, which operates 85 Five Star convenience stores in Kentucky, Tennessee and Indiana, also saw the effects of the pandemic on category sales earlier in the year. “We have seen impacts to the category on both the retail and vendor side,” said Tim Young, category manager for Five Star. “In March, we saw foot traffic and transactions decline for the entire store, not just meat snacks. We did start to see that turnaround in late April/early May, and we have been showing positive numbers since then.” Overall for 2020, meat snack sales are looking solid, and heading into fall, Five Star’s core meat snack business continues to trend upward. Supply disruptions have been an issue in the category, Young pointed out, but haven’t slowed demand.

“

Overall, jerky itself has seen 20-40% increases for us year over year.

— Devon Nitta, category manager, Holiday Oil. cstoredecisions.com

November 2020 • CSTORE DECISIONS

Category Management | Meat Snacks

Meat snacks appeal to customers seeking high-protein snack options that satisfy without too much sugar content. Original, teriyaki and peppered are tried-and-true flavor favorites, while new flavors and forms inspire impulse basket rings. “There were several meat snack vendors who saw disruptions to their supply chain when some plants had some downtime, which impacts the pipeline,” Young said. “Miraculously, we have had a really good year overall,” he added. Five Star offers a large section dedicated to the category and includes larger bags — 10 ounces and above in the merchandising set. The larger packages continue to perform well, and the chain is looking to add new flavors. NOW TRENDING

Low-sugar meat snack options are seeing a big sales uptick at Holiday stores. “We carry a pretty good assortment of the Tillamook jerky,” Nitta said, adding the company was a pioneer in developing a zero-sugar, simple-ingredient meat snack segment. Zero-sugar offerings, specifically, have seen a lot of sales growth in the category, he said. “People are looking for that higher-protein snack option that will satiate them and not be pure sugar,” Nitta added. “That’s our focus.” Specialty jerky is also trending at the stores. “There’s a local manufacturer here that produces jerky — imagine you take a steak and just ‘jerkified’ it,“ he said. “It’s a really unique experience.” Nitta is always on the hunt for unique items. While customers gravitate toward old-fashioned, peppered and

teriyaki jerkies — Nitta likes to spice up category sets with some interesting items that inspire impulse purchases and help grow the overall basket ring. Q4 OUTLOOK

Nitta’s only concern heading into fall is whether manufacturers can keep pace with demand as hunting season gets underway. Hunting is a popular activity for Holiday customers and spurs snack purchases. “It’s a very outdoorsy area, and jerky is a perfect tie-in and on, quite frankly, people’s lists when they go out for that experience,” Nitta said. “Supply will be definitely an issue, I think, but hopefully (manufacturers) can keep up. Especially as we go into this November timeframe when the demand is even higher,

Meat Snack Sales Hold Steady at C-Stores

Meat snack sales were up 4.4% overall, with jerky up 2.2% and other dried meat snacks up 6% for the 52 weeks ending Oct. 4, 2020, according to IRI. Jerky saw unit sales declines of 5%, while other dried meat snacks were up 3%. DOLLAR SALES

PRODUCT

UNIT SALES

Current

1-Year % Change

Current

1-Year % Change

$1.80 B

4.4%

594 M

1.4%

ALL OTHER DRIED MEAT SNACKS

$1.03 B

6.0%

480 M

3.0%

JERKY

$771 M

2.2%

115 M

-5.0%

DRIED MEAT SNACKS

Source: Market Advantage TSV; IRI Liquid Data for convenience stores for the latest 52 weeks ending Oct. 4, 2020

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Category Management | Meat Snacks

“

Fall is a great time of year in our market for those guests that enjoy hunting or really just like being outside, especially after we all feel like we’ve been grounded for the past six months, and we have become a destination for the meat snack category.

“

— Tim Young, category manager, Newcomb Oil Co.

paired with the scarcity that there is, we’ll have to navigate it,” he said. “But it’s something we’re trying to anticipate and hopefully mitigate.” Nonetheless, Nitta expects rising sales through Q4, “based on the current trend for the last two, three months,” he said. “Dollar for dollar meat snacks is one of those categories we have a big focus on because dollar per square foot or per linear foot — however you want to look at it — it generates more dollars for us than any other center-store category, maybe with the exception of candy,” Nitta said. Five Star is also anticipating sales gains during the fall hunting season. “Fall is a great time of year in our market for those guests that enjoy hunting or really just like being outside, especially after we all feel like we’ve been grounded for the past six months, and we have become a destination for the meat snack category,” Young said. Young is also expecting continued sales growth in Q4, as the holiday season approaches, because meat snacks make ideal stocking stuffers. “We do a ‘12 Days Until Christmas’ promotion that typically has several vendors participate, which creates excitement around the category,” he said. Currently, Five Star is ﬁnalizing its planograms for the meat snack set in 2021, Young said. “Then you get the chance to sit back and see how some of the innovation is received by our guests.” CSD 56

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Category Management | Cigars

CIGAR LOVERS Light Up to Ease

Locking Down Homebound aficionados have driven cigar demand during the pandemic, while retailers fear even more local and state regulation, especially on flavors. Thomas Mulloy â&#x20AC;˘ Senior Editor

CSTORE DECISIONS â&#x20AC;˘

November 2020

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While the COVID-19 pandemic has increased cigar demand by homebound consumers, production across Central America and the Caribbean has withered due to health concerns and government-mandated lockdowns. Those things add up to supply chain shortages. That has retailers like Brent Mouton, president of the 11-store Hit-n-Run chain in Louisiana, working to keep product on his shelves and keep his loyal tobacco customers happy. Mouton said that he sympathizes with his suppliers — they’re doing everything they can to get product to retailers like Hit-n-Run. “They’re just out of stock. There’s nothing they can do,” Mouton said. “We’ve talked to our supplier. … And if they can’t get them, they can’t get them to us. You know?” He added that manufacturers have been responsive in filling in any specific product shortfalls with alternative stock to keep sales moving, as well as working to address the effects of plant closures due to COVID-19. Cigar factories in Honduras, Nicaragua, the Dominican Republic, Cuba and elsewhere were either operating at reduced capacity or closed altogether in recent months. As those factories have returned to production, they’ve encountered shipping difficulties that have also been affected by the pandemic. U.S. cigar factories have been affected, too. Worldwide, the pandemic is expected to suppress sales for combustible tobacco products in the near term, with a rebound beginning in 2021. According to “Cigarettes, Cigars and Cigarillos Global Market Report 2020-30: COVID-19 Impact and Recovery,” published in April by global market analysts The Business Research Co., the market is expected to decline slightly from $243.4 billion in 2019 to $241.2 billion in 2020, losing nearly a percent in its compound annual growth rate (CAGR). Yet, the report predicts the market to bounce back at a CAGR of 4% starting next year and reaching a value of $266.9 billion by 2023. Mouton’s optimistic, too, that stock will bounce back fairly soon. “We’re told that should be in the next month or two that they should have things ramped back up where we can start getting product on a regular weekly basis,” he said.

fast facts: • Cigar sales in the U.S. c-store channel have risen 12% during the pandemic. • Local restrictions continue to muddy the market. • After a slight 2020 dip, the global cigar market is expected bounce back at a compound annual growth rate of 4%.

Category Management | Cigars

C-Store cigar sales Rebound

While cigar sales dipped slightly for the calendar year 2019, sales bounced back for the 52 weeks ending Sept. 26, 2020, thanks to a hefty gain for the 30 weeks roughly paralleling COVID-19 pandemic restrictions. PERCENTAGE CHANGE IN DOLLAR SALES VS. PREVIOUS YEAR

DOLLAR SALES DESCRIPTION

CIGARS

Calendar year 2019: 52-week period ending 12/28/19

52-week period ending 9/26/20

30-week period ending 9/26/20

Calendar year 2019: 52-week period ending 12/28/19

52-week period ending 9/26/20

30-week period ending 9/26/20

$3.15 B

$3.38 B

$2.06 B

-1.41%

7.36%

12.02%

Source: Nielsen, Cigar Sales, Total US Convenience

DEMAND HOLDING UP

On the bright side, Mouton said that demand for cigar products has stayed strong throughout the pandemic. For many retailers, demand has risen. “The pandemic has had some major effects on the cigarillo category,” said Elaine Annis, retail operations coordinator at Richmond Masters Distributors, which owns 55 Low Bob’s tobacco stores in Indiana. “The demand for this product has increased significantly.” Likewise for Mouton’s Hit-n-Run stores. “We do good with cigarillos,” he said. “We do good with Game. We do good with Black & Mild. Those are probably our best sellers right there.”

Despite local and state flavor bans, retailers say demand for cigarillos continues to drive cigar segment sales. 60

CSTORE DECISIONS •

November 2020

Both Annis and Mouton said that prices have remained steady, too, but also observed that there haven’t been any recent manufacturer promotions or new products. “There were a few things in the pipeline,” Mouton said, “but it seems like right now, they’re just trying to get us the main sellers, as opposed to focusing on rolling out new stuff.” Data from market analyst Nielsen supports what those retailers are seeing. Total U.S. convenience channel sales are up 7.4% for the 52 weeks ending Sept. 26, to total sales of $3.38 billion. For the 30-week period ending Sept. 26 — roughly paralleling the pandemic — total dollar sales are up 12% compared to the same period last year, totaling $2.06 billion. Pandemic-driven obstacles aren’t the only issues retailers are having to navigate. More regulatory hurdles are always in the offing, whether state or local. “The biggest concern I see happening, which we are seeing in some parts of the country already, is a flavor ban,” Annis observed. So far, Mouton has been lucky. He’s seen little as far as local bans in the state of Louisiana. He said he reads about the local ordinances in other parts of the country, letting small municipalities levy their own laws as they go, making it “extremely tough to do business.” But his hunch is that those restrictions will eventually reach his stores. “You’ve got to figure that, at some point, they’re going to go after cigars and all the flavors and all that stuff,” he said. “I mean, the handwriting’s on the wall on that one.” CSD

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SWISHER’S BOLD NEW FUTURE EMPOWERS CONVENIENCE RETAILERS With more than 200 million adult consumers in the U.S., there is no doubt that this segment is the largest and most important for today’s convenience John J. Miller retailer. It should President be no surprise that business growth is intrinsically tied to how a company pivots and evolves along with (and ahead of) the changing preferences of those adult consumers. While Swisher has always been centered on relationships with valued trade partners, particularly in the C-store space, today Swisher is more focused than ever on being the source those partners turn to for the insights and products that create direct connections with adult consumers. Innovative products are one important way to build the future, but they have to be matched with adult consumer insights, superior customer relationships and action to truly achieve the goal of becoming a leading adult consumer lifestyle brand.

SUCCESS SIMPLIFIED: A SERVICE MODEL BUILT AROUND YOU An important component of Swisher’s evolution is – Success Simplified – a platform that makes success easier and more profitable for trade partners. The platform is based on the tenets of

innovation, insights, action, reliability and shared success. These are delivered through a one-stop-shop offering of products, creative packaging, advanced manufacturing technologies, product guarantees and shared performance programs. This is just one example of how Swisher makes doing business easier. Ultimately, the Success Simplified approach is a win for Swisher’s valued partners.

INNOVATION

leader. Expertise, product knowledge and growth opportunities are delivered in one relationship through the recent alignment of the company’s offerings

“ The business partnerships that trade customers have formed with Swisher’s knowledgeable sales team will only be amplified further by this expanded effort.”

INSIGHTS ACTION RELIABILITY SHARED SUCCESS

BRANDS YOU TRUST, BACKED BY CATEGORY FOCUS & EXPERTISE Since 1861, Swisher has always been driven by an entrepreneurial spirit and a passion to create. Throughout the decades, strategic acquisitions, technology improvements and product innovations have enabled Swisher to maintain its position as an industry

into five focused strategic businesses: Swisher Sweets Cigar Company (Cigars & Cigarillos); Fat Lip Brands (Smokeless); Drew Estate (Premium Cigars); Hempire (Hemp Products); and Rogue (Modern Oral Nicotine). In each category, trade partners have access to the strategies, product innovations and relationships that drive success.

THE WAYS SWISHER WORKS WITH YOU ARE UNCHANGED The business relationships that trade partners have formed with Swisher’s knowledgeable sales team will only be amplified further by this expanded effort. The evolution will enhance the category expertise, product knowledge and data-driven strategies that benefit customers. A renewed purpose celebrating human connection, fostering creative expression and strengthening community, along with the unwavering commitment to evolve with the tastes of adult consumers, will guide even deeper connections with partners and their customers. Swisher continues to evolve in order to keep you ahead. Learn more at Swisher.com/SuccessSimplified.

UNDERSTANDING HER.

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SUPPORTING YOU.

Listening to your adult consumers and delivering what they want has been our passion for nearly 160 years. As we evolve, that wonâ&#x20AC;&#x2122;t stop. Neither will our Success Simplified approach when helping to drive your business forward. This customer-focused mentality brings you the programs, partnership and profitability you need to keep growing. See all the ways we support you at swisher.com/SuccessSimplified.

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Category Management | CBD

How Are Customers Usin Cannabidiol (CBD) continues to trend as many shoppers turn to CBD products for stress and pain relief. More c-stores are adding CBD products — from tinctures to gummies — to appeal to these shoppers. But how is the pandemic impacting demand?

CBD adoption CivicScience, a customer research intelligence platform, found that since the start of the COVID-19 pandemic, adoption of CBD has increased by about two percentage points. Adoption was measured from Q1 to Oct. 15. At the end of Q3, 24% reported having used CBD, compared to 22% in Q1. Q4 ﬁnal numbers remain to be seen, but already 23% reported using CBD in the ﬁrst two weeks. What’s more, those using or intending to use CBD are reporting more stress than respondents who are unaware or uninterested in CBD as detailed in the following graphics.

Which describes your experience with CBD Products?

CBD and Pandemic Safety Concerns

Those who have used or intend to use CBD are more concerned than their counterparts (those not interested in and unaware of CBD) about being in public spaces during the coronavirus pandemic. As shown below, of those who used or intend to use CBD, 39% are “very concerned” and 31% are “somewhat concerned.”

“Which of the Following Best Describes Your Experience with CBD Products?” Compared with “How Concerned Are You About Being in Public Spaces Right Now?”

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November 2020

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sing CBD During COVID-19? Source: Data for this infographic provided by CivicScience, October 2020

CBD & Stress

CBD users are also a good deal more likely to have experienced strong amounts of stress in recent weeks. A whopping 72% of those who used or intend to use CBD reported being “very/somewhat strongly” stressed.

“Which of the Following Best Describes Your Experience with CBD Products?” Compared with “How Strongly Have You Felt Stressed Over the Past Week of So?”

CBD & Work Hours

In terms of how the coronavirus has impacted jobs, crossed with CBD usage, those who intend to use CBD are more likely to be working reduced hours and pay more than any other group, as shown in the chart below.

“Which of the Following Best Describes Your Experience with CBD Products?” Compared with “Has Your Job Been Impacted by the Recent COVID-19 Pandemic?”

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Foodservice | Lunchtime Solutions

fast facts: • C-store retailers are looking to innovate with easy-to-execute menu additions. • Adding sauces is an easy way to provide new ﬂavor options for familiar menu items. • Comfort foods are trending amid the COVID-19 pandemic.

Finding

Opportunity in

LUNCH

Despite dips in morning traffic, c-stores are seeing promise in the lunch daypart, working to innovate and differentiate with fresh and healthy options, comfort foods, limited-time offers and new flavors. Isabelle Gustafson • Associate Editor

Even amid a global pandemic, c-stores are adding stores, kitchens, new technology and foodservice items, innovating to stay ahead of trends and avoid menu fatigue. Thorntons Vice President Fresh Food Operations Brian Scantland said the Louisville, Ky.-based chain, with more than 200 locations in six states, is rapidly expanding its made-to-order foodservice operations. While all of its stores have some form of foodservice, fewer than half have a kitchen. “We have 95 stores with a kitchen, and before the start of next summer, that number will grow to 155,” Scantland said. “When I joined the company three and a half years ago, there were 51.” Thorntons is known for its burritos. In fact, Scantland said the top ﬁve or six best-selling items at its stores with kitchens are burritos. Last month, Thorntons rolled out a line of three BurgerRitos — a hamburger-burrito fusion. Options include the Cheesy Breakfast, the Classic Bacon and the Spicy 3 Pepper.

Foodservice | Lunchtime Solutions

“My team was in the lab, and they were hungry, but they couldn’t leave the office to go get food. One of my guys wanted a hamburger, but there were no buns. So he said, ‘I’m going to put it in a burrito,’ and everyone laughed,” Scantland said. “But he identified a ‘need-state’ for our guests. Now those three are among our top-five-selling items in the chain.” Scantland believes it’s important to innovate on the menu. He comes from a quick-serve restaurant (QSR) background, where innovation is common, even as visits are spread out. In a typical QSR, he said, you might see a frequent customer once every 20 days. At McDonald’s, maybe once every 12. But Thorntons’ frequent guests visit four or five times per week. “If you’re not constantly bringing in new items, the assortment can get pretty tired to those folks,” he said. THE HOLY GRAIL

But there are, of course, operational challenges with constant innovation. And COVID-19 has only complicated things further. “What we’ve really focused on is innovation that makes sense for the operator,” Scantland said. “The holy grail is when it’s new to the guest, it’s easily executed for operations, and it makes sense to our supply partners. That’s what happened with the BurgerRito. We introduced no new hand motions, no new ingredients, the supply chain was unaffected, and we were able to move very, very quickly.” Fremont, Ohio-based FriendShip Stores is also working to innovate within its foodservice offering in a way that makes the most sense. FriendShip is known for its fresh fried chicken, and Vice President of Foodservice and Marketing Kirk Matthews said the chain is looking for ways to add chicken to other menu items — for example, limited-

time offers (LTOs) like the Tanqueray Chicken Wrap or the Barbecue Chicken Wrap. FriendShip is also working with a local company to launch a proprietary line of sauces for its chicken, which is a relatively easy way to differentiate from other retailers, introduce new flavors and enable increased customization while still focusing on the core offer. “There are all kinds of blends out there,” Matthews said. “We still see quite a bit of hot sauce and things like that. There are also a couple of enhanced sweet-and-sour sauces out there that we’re looking at, a Caribbean jerk. But barbecue sauce and honey mustard sauce are still what 70% of people ask for. So we’re trying to have some different variations on those, too.” Charlottesville, Va.-based Tiger Fuel Co.’s nine Market locations also offer a dipping sauce prepared in-house, the Tiger Sauce, which includes spicy chipotle mayo and sour cream.

Following the success of its burritos, Thorntons introduced a line of “BugerRitos,” a hamburger-burrito fusion, as a way to innovate on the menu while minimizing operational challenges.

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November 2020

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Foodservice | Lunchtime Solutions

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CSTORE DECISIONS •

November 2020

“

— Thorntons Vice President Fresh Food Operations Brian Scantland

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In addition to its fried chicken, The Market is known for its sandwiches, which include Boar’s Head meats, premium cheeses and local breads. Marketing Director Sarah Whitney said one of the most popular sandwich options is the Jefferson, which is made with maple turkey, cheddar, lettuce, cranberry relish and herb mayonnaise on French bread. CHANGING DAYPARTS

The morning daypart has been most affected by the pandemic for many c-stores, with fewer people commuting to work each day. But at The Market, lunch has seen a notable dip in sales, in part due to COVID-19 restrictions at the University of Virginia (UVA). Before the pandemic, the chain did a lot of catering, particularly on campus. “The university was a huge opportunity for us,” Whitney said, “but also just a lot of local businesses in this area that would cater their entire team for a lunch or dinner event.” Fortunately, it’s still able to cater small events. The Market also launched ordering and curbside pickup through its Market Rewards app and website in March. Now, it’s working to streamline and integrate the process. “(We are) currently working with a third party and would like to see this fully integrated through our loyalty platform with Paytronix,” Whitney said. FriendShip still does “a huge lunch business,” Matthews said, which remains a big opportunity to make up for lost breakfast sales. “We’re really going to focus on that afternoon business now,” he cstoredecisions.com

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November 2020

said. “That drive time, that late afternoon, still snackable time — we think we can capitalize on some of that.” Down the line, FriendShip is looking at adding a few healthier options, in addition to its salads and wraps. But as a whole, Matthews has seen a shift toward comfort foods since the pandemic started. In difficult times, he said, “people kind of resonate with what they’re used to and what they like and what they remember. We’ll be looking at rolling out chicken pot pies, chicken biscuits, maybe even chicken chili.” Scantland noted that the definition of “comfort foods” or “craveable foods,” as Thorntons calls its offers, will be different for different customers. “A good part of my career I spent at KFC, so I know quite a bit about comfort food,” he said. While the shift toward foods like fried chicken has certainly been a phenomenon amid other crises, Scantland said that what he’s noticed lately is an uptick in overall spending. “What we are seeing is that guests, when they’re out, tend to want to splurge a bit more than they would have previously,” he said. “That, to me, is very reminiscent of 2009 through 2012 when maybe you can’t take a trip or a vacation, or you can’t buy a new car, but when you do go out, maybe you’re going to add one more thing to your basket to treat yourself.” And that what c-stores are here for. CSD

cstoredecisions.com

Foodservice | Fresh Food

Fresh Food Purchasing Patterns Evolve

Customers have changed how they consider, shop for, prepare and acquire fresh foods since the COVID-19 pandemic arrived. Consulting firm Deloitte’s recent “Future of Fresh” consumer study surveyed 2,000 U.S. consumers ages 18 to 70 and looked at how customer behavior is transforming. Its report, “The Future of Fresh: Patterns From the Pandemic,” details the results. Here are some of the findings: Given the pandemic, safety joins price as a primary driver in fresh food purchase decisions — both rate as 85% or higher in importance to customers.

65% of consumers were unable, since onset of the pandemic, to buy fresh food they wanted because it was out of stock, turning to alternative fresh items (40%) or frozen/ processed (28%).

9 out of 10 respondents say fresh food literally makes them happy. A majority of consumers (70%) still value drivers like sustainability and locally sourced foods, but those priorities are less urgent compared to last year.

Customer Profiles Deloitte’s advanced analysis based on shopping frequency, amount of fresh food purchased, perceptions on price, channel usage, stress while shopping and experience with stockouts discovered two distinct consumer profiles: 1. Conventional (60% of those surveyed) consumers who have a traditional approach to their fresh shopping at the grocery store 2. Contemporary (40% of those surveyed) consumers who are driving innovation in the fresh food category in a variety of ways

In the last year, the numbers of respondents who shopped for fresh food multiple times a week dropped by half (30% in 2019 vs. 15% in 2020). However, consumers who shop at least once a week comprise 80% of fresh food sales.

54% of customers surveyed feel stressed by in-store shopping. As a result, there are fewer visits to stores.

Comparing Contemporary and Conventional Customers ACTION

CONTEMPORARY CUSTOMER

CONVENTIONAL CUSTOMER

Bought fresh food online

68%

Willing to pay a premium for fresh food

75%

62%

Increased fresh purchases in the last four months

50%

27%

Satisfied with replacement items when top brand choice not available

64%

36%

Interested in subscription boxes

64%

36%

Source: Deloitte’s “The Future of Fresh: Patterns From the Pandemic,” report. Access the full report here: www2.deloitte.com/us/en/insights/industry/retail-distribution/future-of-fresh-food-sales/pandemic-consumer-behavior-grocery-shopping.html

CSTORE DECISIONS •

November 2020

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Technology | Forecourt Marketing

Arm Yourself With

FORECOURT

Marketing Tools

In any digital marketing strategy, retailers must first provide value to customers. No matter the tactic, engagement is key. Isabelle Gustafson â&#x20AC;˘ Associate Editor

Bringing the customers to the forecourt and then into the store is more important than ever, and location-based marketing offers retailers another avenue to make this happen. Geolocating, geotargeting and beacons enable retailers to reach customers, build loyalty and increase engagement by speciﬁcally targeting the audiences they want to reach. Patrick Raycroft of W. Capra Consulting Group noted that location-based tools can refer to basics like making sure a site’s information is accurate on Google Maps. Beyond that, promotions or messaging can come by way of in-app notiﬁcations, as well as email or SMS.

Technology | Forecourt Marketing

Yesway Chief Marketing Officer Derek Gaskins has found location-based marketing to be a useful tool, but he warned that it has the potential to be overused.

These strategies are really common among quick-serve restaurants (QSRs) and other verticals, he said. A famous example is Burger King, which launched customers in and around its stores, via its app as a campaign in 2018 called “Whopper Detour” to well as third-party companies, noted Chris Hartpromote its relaunched app with order-ahead funcman, director of fuels, forecourt and advertising for tionality. For a limited time, when customers were Rutter’s, which operates 78 stores in Pennsylvania, within 600 feet of a McDonald’s, they’d be prompted West Virginia and Maryland. to order a Whopper for one cent. Before implementation, Hartman advised retailThe campaign worked by geofencing McDoners determine the problem they’re trying to solve: “Are you wanting to reward customers who are on ald’s locations across the country. If a customer your lot for a long period of time? Track dwell time? was inside one of these geofenced areas and had Message customers nearby?” the new Burger King app on their phone, the app After that comes execution: either through your would unlock the promotion. own app or digital programs, or through a third York, Pa.-based c-store chain Rutter’s has also party. The final step, he said, is to determine who used location-based marketing to advertise to you’re targeting — men, women, millennials, Bubba? Customers inside the store, on the lot or within a certain distance? And determine the end goal — increased fuel sales, food sales or inside sales? “Once you can answer those questions, you’ll be in position to budget for and execute a successful geotargeting strategy for your business,” Hartman said. This glossary offers definitions for some trending marketing practices.

GEO-WHAT?! —

A Quick Guide to Marketing Terms

THOUGHTFUL EXECUTION

Location-based marketing: offers brands the chance to reach local consumers, avoid potentially expensive national campaigns and create loyalty with promotions, offers and information specifically relevant to the audiences they reach Geolocation: the use of location technologies such as GPS or IP addresses to identify and track the whereabouts of connected electronic devices Geotargeting: the practice of delivering content to a user based on their geographic location Geofencing: generally targets a broader population, serving ads or promotions to anyone that enters a certain ‘fenced-off’ area

CSTORE DECISIONS •

November 2020

Yesway has used location-based marketing as well, through its app, targeting nearby customers with offers or prompts. It’s been an effective marketing tool, said Derek Gaskins, chief marketing officer for Yesway, which operates more than 400 stores in nine states, including the Allsup’s chain. But, Gaskins added one caveat: “It has the potential to be overused if you aren’t delivering compelling value that consumers will embrace,” he said. “We are convenient at our core, so any offers that notify a consumer on devices, wearables, etc. must be relevant, meaningful and welcomed or you run the risk of alienating more customers than you engage.” Today’s consumers are so over-stimulated and overwhelmed with marketing that these types of programs can essentially backfire, W. Capra’s Raycroft said, if not executed thoughtfully. It’s also

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Technology | Forecourt Marketing

Pilot Co. surveys drivers regularly about its loyalty programs in order to learn what they love as well as what opportunities the company should consider for the future.

important to be conscious of data-privacy rules and regulations as well as the consumer sentiment toward geotargeting. That said, some c-stores may find success with simpler strategies. While Yesway employs a variety of forecourt marketing tactics, like music and messaging at the pump, as well as video and animated graphics on the screens, Gaskins said signage remains the most effective. DIGITAL STRATEGY

The key for retailers, Raycroft said, is to keep in mind that location-based marketing should be part of an overall digital engagement strategy. H&S Energy Marketing and Sales Coordinator Araby Hassan said the Orange, Calif.-based company plans to introduce geofencing as soon as its new app is released. For now, it’s had success with geo-tagging on its social media posts. “We posted a single car wash ad on our Instagram, which was redeemed 46 times within a few days,” he said. “We also receive thousands of impressions on our social media posts, which often translate to more customers walking into our stores, as some customers notify our cashiers that they saw 82

CSTORE DECISIONS •

November 2020

us on social media platforms.” Tyler Tanaka, vice president of digital and loyalty at Pilot Co., said the best way to engage and connect with its customers is to “simply listen to them.” “We survey drivers about our loyalty programs frequently,” Tanaka said, “because we want to know what they love about it and what opportunities there are for us to consider for the future.” In April, the company launched its Push4Points program as a way to help professional drivers save money through the app. Professional drivers were able to redeem their myRewards points at Pilot and Flying J travel centers to save on food, drinks, supplies, reserved parking and showers. In October, the program was extended. As a whole, Tanaka said, the Pilot Flying J app is a huge touchpoint for the company with its customers, especially professional drivers. “We strive to provide our guests with app features that offer convenience and utility to make their in-store experience faster, easier and more rewarding,” Tanaka said, “including touchless transactions for checkout (i.e. Apple and Google Pay), digital coupon offers, loyalty programs and, for professional drivers, the ability to reserve showers, parking and mobile fuel.” CSD

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Technology

Technology Column | POS

FOUNDATIONS

OF INNOVATION Consumer expectations are shifting toward new,

innovative experiences. Leading c-stores are maintaining ownership of their consumer data and collecting, mining and modeling data with clear goals in mind. Patrick Raycroft • W. Capra Consulting Group

As consumer demand for touchless and frictionless experiences has risen rapidly during the COVID-19 pandemic, convenience retailers — on the average — are encountering greater challenges in meeting these needs than retailers in other verticals. These outsized challenges facing cstores are in large part due to technology debt that the convenience vertical still bears and that other verticals have previously tackled: 1. Outdoor EMV upgrades continue to burn substantial resources (people and capital). 2. Many technology changes still require physical site visits (as opposed to remote deployments). 3. Many core technology services leverage proprietary interfaces and data standards, increasing efforts to introduce new services. 84

CSTORE DECISIONS •

November 2020

For many convenience retailers, these barriers have limited their innovation efforts to small “proofs-of-value” tests — initiatives that, while novel, cannot be deployed at scale across tens, hundreds or thousands of locations. On the other hand, leading convenience retailers have worked to minimize (or remove) these tech debt barriers, allowing them to deploy “proofs-of-concept” tests, which these retailers can then scale across hundreds and thousands of convenience stores. So, what sets leading retailers apart, and what lessons can retailers struggling with innovation glean from them?

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Although some tactics are the byproduct of unique competitive advantages, there are commonalities across many leading convenience retailers: 1) Build vs. buy decisions driven by strategy instead of tactical forces. New integration, data and infrastructure platforms have empowered retailers to internally develop and operate technology solutions previously left solely to third parties. Leaders, however, exercise this capability judiciously: investing in areas that foster competitive advantage (supply, consumer messaging, personalization, offers, etc.) and sourcing in areas commoditized through scale (payment processing, site integrations, and so on). This approach enables leading retailers to optimize their capital investments and ensure implementations are completed successfully at scale. 2) Source standards-based solutions from flexible, open solution providers. Both internally and externally, leaders are demanding that current and potential technology solutions adhere to industry standards (i.e. Conexxus and International Forecourt Standards Forum), as standards reduce implementation barriers and improve interchangeability of solutions. This interchangeability reinforces innovation, as third parties must continually deliver improved functionality and operations to remain competitive. Along with standards, it is equally important that commercial agreements with third parties (vendors and partners) are structured to enable this interchangeability. 3) Select partners with mutually beneficial interests. As with many retailers, leading retailers often opt not to “go it alone” when venturing into new domains. The leaders differentiate themselves, however, by selecting partners that have strategic objectives aligned to their own. While partnering with companies with large digital consumer bases may deliver short-term wins, the leaders recognize that these types of partners can threaten their brand and ownership of the consumer experience. 86

CSTORE DECISIONS •

November 2020

DATA-DRIVEN MINDSET

Leaders evaluate and select their partners carefully, most notably making sure to keep their eyes on the other “oil,” i.e. the data. However, leaders realize this trend reaches beyond big data. Leading retailers focus on maintaining ownership of consumer data and collecting, mining and modeling data purposefully. Positive outcomes from machine learningbased insights are built upon sound data engineering decisions and the operationalization of model outputs — both of which are driven by clear, measurable data objectives across the enterprise. Those organizations that are successful in delivering differentiating consumer and store experiences begin by defining clear strategic objectives for data. Although these ways of operating may not seem accomplishable in the short-term, it is important that convenience store and petroleum retailers recognize that competitors both within and outside of the vertical are taking these important steps and are shifting consumer expectations toward new, innovative experiences. By taking these steps themselves, convenience retailers can deliver new experiences that consumers will continue to demand while ensuring the stability of their technology and operations at scale. 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.

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Operations | Restroom Awards

Best in Class Restroom Awards:

Weigel’s and Maverik

Keep Germs Untouchable Touchless fixtures, hourly spot checks and multiple deep cleans with full staff sense of duty keep restrooms clean and customers safe. Thomas Mulloy • Senior Editor

CStore Decisions (CSD) is recognizing two chains for their Best in Class Restrooms: Weigel’s and Maverik. Both have demonstrated superior efforts not only in keeping restrooms clean and sanitized, but also in investing in equipment to keep customers and germs apart. Let’s face it — it’s tough to keep c-store restrooms clean at peak sales times. For some, that’s most of the day. For others, that can vary depending on location, store size and hours of operation — keeping a washroom up to snuff at a 24-hour location can be especially challenging. But few efforts go as far in bolstering customer confidence in your operation. A 2020 survey of more than 2,000 U.S. adults conducted for Cintas by The Harris Poll found that over three in five Americans (62%) reported frequent disinfection and sanitization of restrooms in public facilities would make them feel more self-assured. And it’s even more important during a pandemic. Customers are more concerned than ever with public spaces that are clean and safe. The Cintas survey also revealed that 61% of Americans said they would feel more confident if the facility has implemented additional cleaning and disinfecting protocols, which includes professional application of a disinfectant or sanitizer. Both of CSD’s Restroom Award winners are doing just that, following not only guidelines set by makers of their cleaning products, but going even further and adhering to guidelines set forth by the Centers for Disease Control and Prevention (CDC) to keep customers healthy. 88

CSTORE DECISIONS •

November 2020

Gas Buddy’s October 2020 “Q3 2020 Gas Station Ratings and Foot Traffic Report” found that station cleanliness drives visits. During Q3 2020, stations with above-average cleanliness ratings drove 21% more visits than their below-average competitors, up five percentage points compared to Q2. For the awards, CSD looked at four factors of cleanliness and procedures in maintaining properly sanitized restrooms: 1.) Frequency of Cleaning — How often does a chain spot-clean its public restrooms, and are they completely cleaned more often than once per day? 2.) Modern Technology — Has the chain invested in measures beyond the most common sanitary equipment and furnishings, i.e. touchless hand dryers and towel dispensers, touchless toilet fixtures, doorless entry/exit or touchless doors, non-porous countertops, etc.? 3.) CDC Guidance During COVID-19 — Does the chain follow CDC guidelines in cleaning and maintenance of restroom facilities? 4.) Employee Buy-In — Has the chain made the effort to help staff and employees understand the importance of restroom cleanliness, not only to store appearance but customer health, as well? cstoredecisions.com

WINNER:

Weigel’s, Powell, T ennessee Store Count: 64 stores in Tennessee

Weigel’s doesn’t fool around with COVID-19, wisely following the CDC’s recommendations at its c-stores. “To combat the spread of the COVID-19 virus, the CDC advises to clean and disinfect hightouch surfaces frequently,” said Weigel’s CEO Ken McMullen. That includes door handles, soap dispensers, sinks/faucets, bathroom stall doors, tops of urinals and toilet paper holders, he added. “Bathroom are checked by staff multiple times a day,” explained McMullen, “with a full cleaning every two hours — and a DEEP clean two to three times a day depending on if it is a 24-hour store or not.” That deep clean is often a far cry from what used to be the norm back in the “Cokes and smokes” days of managing convenience retail. Weigel’s understands that it’s especially important in meeting today’s customer expectations that are even further heightened by the current health emergency. McMullen also stressed the chain’s belief cstoredecisions.com

in employing touchless technology to keep patrons and germs separated. “We have touchless hand dryers, auto flushing urinals/toilets, touchless sinks and restrooms with touchless entryways,” McMullen explained. But Weigel’s also goes far beyond the basics to convey a sense of sanitation. “We have solid-surface vanity tops, stainlesssteel wash basins, and we use quat (quaternary ammonium compound) sanitizer to disinfect our store,” McMullen said. Most quat sanitizers are certified by the Environmental Protection Agency (EPA) to kill human coronavirus. Weigel’s also operates on the premise that a clean store environment is everyone’s job. McMullen stressed that restroom cleanliness isn’t simply the job of a janitor or cleaning team. “Set procedures and best practices that are trained to ALL team members,” he said. “We set very high standards on the cleanliness of our stores and restrooms.” November 2020 • CSTORE DECISIONS

Operations | Restroom Awards

WINNER:

Maverik, Salt Lake City,

Utah

Store Count: 342 across

11 Western U.S. states

“Maverik has always put significant emphasis on ‘clean,’” said Danielle Matiussi, vice president of retail operations for Maverik. “The COVID-19 pandemic has absolutely influenced our approach and how we think about cleaning and sanitizing.” With the onset of the COVID-19 pandemic, Maverik answered the call and upped the ante. “Now we focus on ‘cleaning and sanitizing,’” Matiussi said. She called it a “granular difference,” but added it makes a big impact in the minds of employees, particularly as it relates to CDC guidance on the lifespan of a virus on surfaces.

CSTORE DECISIONS •

November 2020

“We are cleaning and sanitizing every 30 minutes versus on the hour, and we have moved to products that have been certified to kill SARS-CoV-2 with adherence to the required contact time.” Maverik’s policy is that restrooms are checked hourly by staff and spot cleaned at that time. They are totally cleaned a minimum of twice per day, Mattiussi said, but always when needed. And this is at a chain that operates a majority of locations 24 hours a day. Not only has Maverik implemented new touchless technology for its restrooms, but it also makes a point to work with local health officials to stay out front of new developments. “Maverik has had a focus on a touchless experience, but we had a mixed bag of touch and touchfree environments in our older vintage stores,” Mattiussi explained. “Over the years, we encountered various health departments that had insisted on doors prior to COVID. It’s been an opportunity to collaborate with health departments; and early pandemic, we removed restroom doors in as many existing stores as possible.” She added that Maverik has come a long way in terms of touchless spigots, hand dryers and toilets — and in most stores, customers will have a completely touch-free experience.

cstoredecisions.com

fast facts: • Make restroom cleanliness every staff member’s job. • Follow CDC guidelines in cleaning AND sanitizing. • Invest in touchless ﬁxtures; touchless means germ-less.

“

The store team has to view the restroom experience as vital to the overall business. When employees believe that clean restrooms translate into happy customers and increased sales, it becomes something to take pride in. If you can make that personal connection from the employee’s actions to the customer experience and embed ‘the why,’ employees will get behind it and ensure it gets done.

“

— Danielle Mattiussi, vice president of retail operations, Maverik

Mattiussi echoed Weigel’s “all-hands-on-deck” approach to clean store environments. “The store team has to view the restroom experience as vital to the overall business,” stressed Mattiussi. “When employees believe that clean restrooms translate into happy customers and increased sales, it becomes something to take pride in. If you can make that personal connection from the employee’s actions to the customer experience and embed ‘the why,’ employees will get behind it and ensure it gets done.” The days of what Mattiussi called “an outdated signature sheet” on the back of a restroom door aren’t good enough. “It only happens with dedicated employees that care about the customer experience,” she said. CStore Decisions congratulates Weigel’s and Maverik for going the extra mile for customers’ health and safety. CSD cstoredecisions.com

November 2020 • CSTORE DECISIONS

Operations Column | Retail Evolution

PREPARING FOR

POST-PANDEMIC The pandemic won’t last forever, but it’s expected to leave major hurdles for retailers in its wake. The changes it’s spurred — from fuel sales declines to product delivery — are only expected to continue. Brandon Lawrence • Fuel Consultant Frank Beard • CStore Decisions’ Director of Special Projects

Discussions of disruption often create a perception of all or nothing. This is of course a false dichotomy as reality is more nuanced. In the near future, the real question facing retailers is ‘Can your business survive if revenue drops by 10-20%?’ Our previous article in the October issue of CStore Decisions introduced the concept of COVID-19 being a dress rehearsal for a future characterized by that level of demand destruction. The concern is that next time, retailers are unlikely to have the advantages of high fuel margins and stock-up behavior. This column takes a closer look at the challenges coming to both the forecourt and inside the store. FORECOURT CHALLENGES

Domestic gasoline demand will be under pressure on numerous fronts in the coming decade. Rather than being hindered by one factor reaching a tipping point, demand will face numerous headwinds. Changing driving habits, internal combustion engine improvements and alternative drivetrains are the primary suspects for fuel retailers to pay attention to as we come out of the COVID-19 malaise. The stagnation in demand over the past decade may well fall into secular decline over the next. 92

CSTORE DECISIONS •

November 2020

cstoredecisions.com

MIC HEADWINDS Working from home disrupted the American commute and normalized remote work arrangements. Even as some offices recall their workers, forecasts suggest between one in five and one in six are likely to remain home. A recent University of Chicago study suggested that 37% of jobs can be performed entirely at home. Add to this the decline in teenage driving habits, the erosion of shopping trips from the right-sizing of America’s over-retailed landscape, and other issues such as the hollowing of America’s middle class, and there exists a negative flywheel working against fuel demand. A recent report from KPMG forecasts that miles traveled will settle at about 90% of pre-pandemic levels in coming years. Unfortunately, miles traveled is only half of the issue that retailers face.

The internal combustion engine is losing its appetite for fuel. Gasoline demand peaked in 2007 and has leveled off, despite population growth and increased SUV sales. Fuel economy improvements are a major driver of this trend. As noted in a recent Fuels Institute report, the U.S. Energy Information Administration (EIA) forecasted a 47% improvement in light-duty fleet economy cstoredecisions.com

by 2040. Diesel is estimated to experience a 30% improvement. Of course, fuel efficiency is only relevant if consumers need liquid fuels in the first place. Adoption scenarios for electric vehicles (EVs) remain subjects of debate, but EVs are set to present another challenge, too, beyond implementation. Simply put: Chargers are not a 1:1 replacement for fuel pumps. Many motorists will charge at home and begin each day with a “full tank.” Others will charge at work. A 2016 survey of drivers in Norway, the world’s most advanced EV market, found that only about 10% of battery electric vehicle (BEV) owners use public chargers on a weekly basis. This may reflect early adopters who have access to home charging, but keep in mind today’s average range of around 200 miles is nearly seven times the daily distance traveled by the American motorist. Retailers will also find dilution of their value proposition as the barrier to entry because charging is much lower than for fuel pumps. Cost, environmental concerns and product supply are non-issues. Movie theaters, restaurants and most other businesses can lure customers away with chargers. It can even be argued that their offers are more compatible with an EV customer’s needs as charging takes longer than fueling. November 2020 • CSTORE DECISIONS

Operations Column | Retail Evolution

Most concerning is that the merchant-backed retailers of the world are likely to be early adopters and offer discounted charging to their membership programs. Retailers along highways may pick up business from travelers, but it’s unlikely that neighborhood convenience stores will ever find strong demand. Going forward, organic fuel growth will only get more expensive as competition heats up for bigger slices of the shrinking pie. EV adoption will further fragment the traditional customer base. This is why it’s essential to win with a differentiated instore offer that’s capable of driving traffic on its own. IN-STORE ISSUES

Although it’s accurate to say the retail apocalypse bypassed convenience retail, the statement is also misleading. Our struggling malls never sold an essential product like gasoline. For many retailers, the convenience they provide is a function of having a captive audience at the forecourt. If fuel demand drops, a decline in in-store transactions will follow. This will happen amid growing competition and channel blurring in retail’s last mile. Delivery removes the need to even visit a c-store. While retailers took a “wait and see” approach in recent years, goPuff expanded across America and met this new demand. A recent fundraising round valued the delivery app at $3.9 billion. Third parties have also gained momentum and are conditioning consumers to make decisions within the confines of their platforms. This is concerning. Continued growth of Atlantabased company 3PD creates a powerful incentive to partner in order to access its audiences, but the costs include high fees, middlemen and a lack of control. There is also the risk that they might follow Amazon’s lead and use partner data to deploy competing solutions. Indeed, DoorDash now competes against its partners with the DashMart brand. Many convenience retailers have leveraged foodservice as a way to drive traffic to their stores. Unfor94

CSTORE DECISIONS •

November 2020

tunately, competition will continue to be stiff from national quick-service restaurant (QSR) chains like McDonald’s. Pre-COVID investments in drive-throughs and off-premises solutions enabled them to thrive while the pandemic devastated their independent and casual dining competitors. Continued development in these areas will only widen the gap. Indeed, it is now possible to order Panera delivery or curbside pickup directly through Google Maps. Dollar stores will also bring continued competition. Not only does the channel thrive during times of economic downturn, but Dollar General in particular is investing in cold storage and self-distribution. This will help transform the average “treasure hunt” experience into something more fresh and relevant. To be fair, convenience retailers have many advantages of their own. All of this is to say that now is the time to be vigilant. In our third and final piece — coming next month — we will examine a few gaps, opportunities for c-stores to respond and potential solutions. CSD Brandon Lawrence is an independent fuel consultant from Atlanta. Follow Brandon on Twitter (@_SSCM_) and Linkedin.com/in/brandonlawrence/. Frank Beard is the director of Safe Shop and the director of special projects at CStore Decisions. Follow Frank on Twitter (@ FrankBeard) and Linkedin.com/in/frankbeard/.

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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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Operations Column | Estate Planning & Taxes

FLIPPING OVER

FAMILY PARTNERSHIPS Consider these best practices and consult an attorney when engaging in family limited partnerships to prevent problems at tax time with the IRS. Mark Battersby • Contributing Editor

Family Limited Partnerships (FLPs) are a common estate planning strategy. However, with the threat of estate taxes minimized in this age of pandemic-impacted c-store businesses, today a FLP’s principal beneﬁt might be income tax bills reduced by spreading income among family members. Although controversial, FLPs create a mechanism by which one generation can transfer wealth to the next without giving up control. Like partnerships, FLPs do not pay federal income tax. Instead, a FLP’s income is “passed through” to its partners, who pay tax at their own rates. 96

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The National Advisory Group (NAG) is an association driven by convenience store retailers for retailers. It is an organization committed to building profits and relationships for all of our members. NAG is aimed at small, mid-sized and family-owned convenience chains and the executives that run them. NAGâ&#x20AC;&#x2122;s role in the industry is unquestioned. NAG remains an organization that is fully committed to its members, promotes relationships, networking, intimacy and, most importantly, executable ideas and takeaways.

For additional information, contact John Lofstock at jlofstock@wtwhmedia.com or info@nagconvenience.com.

Operations Column | Estate Planning & Taxes

On the downside, the Internal Revenue Service (IRS) makes no secret it dislikes FLPs for their ability to transfer wealth within a family and minimize transfer taxes in the process. However, as the courts continue to point out, when properly executed, FLPs are a perfectly legitimate multiple-tax-reducing strategy. FLPs pool together a family’s assets into one single-family-owned business partnership with family members owning shares. A FLP differs from a trust, as family members actually own a share in the convenience store business. Shares can be gifted to family members over a period of years, thus taking advantage of the gift tax exemption each year. Typically, a partnership is formed by the older generation, usually the parents, who contribute assets to the partnership in return for both general partnership units and limited partnership units. The parents can then embark on a plan of giving partnership units to their children and grandchildren, while retaining the general partnership units that actually control the partnership. AVOIDING IRS SCRUTINY

As FLPs have grown more popular, the IRS has been increasingly attacking their tax benefits. The IRS frequently argued that creation of a FLP involved a “gift” of the limited-partnership interest. Because a FLP can potentially save income tax by spreading income among the family, it is in the area of estate and gift taxes where most of the controversy exists. It is also with those estate taxes that FLPs have long been particularly effective. A major benefit to FLPs is that they can be designed so ownership interests of the children can be discounted for valuation purposes. This is important, even with a 98

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convenience store business’s value impacted by the coronavirus pandemic, in minimizing — hopefully avoiding — gift and estate taxes. There is also the generation-skipping tax (GST) that can arise when parents attempt to minimize transfer taxes by skipping a generation, transferring assets to the grandkids. And remember, gift/estate taxes are a unified system. Lifetime gifts may use some of the transfer tax exemption that would ordinarily be available at death. The transfer tax system in 2020 exempts $11.6 million for each spouse. A couple is basically sheltered from gift or estate tax if the sum of lifetime and deathtime transfers total $23.2 million or less. That exemption may increase modestly each year through 2025, when the transfer tax exemptions are scheduled to be cut in half. Among the strategies for avoiding — or combating — IRS scrutiny: • Observe the business formalities set out in the basic partnership agreement; • Don’t commingle business and personal assets; • Steer clear of transfers of so-called personal-use items, such as residences or vacation homes, to the FLP; • Retain sufficient assets outside the FLP to meet personal obligations; and • Avoid distributions that are not in proportion to members’ interests. Because of its significant tax — and non-tax — advantages, the FLP remains a popular entity, one that every convenience store owner should consider. Naturally, the advice of a competent attorney, financial adviser and tax professional should be sought, if only to avoid doing battle with the IRS. CSD

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As the convenience store and petroleum industry continue to evolve, training the leaders of tomorrow is more important than ever before. To help young executives have a group that is solely focused on exchanging personal experiences with peers in their age group, the National Advisory Group (NAG) is proud to be growing its Young Executives Organization (YEO). YEO members are industry leaders who are approximately 40 years of age or younger. Members are entrepreneurs, leading top businesses and actively pursuing a higher level of professionalism in the convenience store and petroleum marketing industry.

For additional information, contact John Lofstock at jlofstock@wtwhmedia.com or Board Chairman Jeremie Myhren at jeremie@roadrangerusa.com.

PRODUCTShowcase

Individually Wrapped Doughnut Line Baker Boy has launched The Donut Hole Individually Wrapped Donut line in response to the high consumer demand for touchpoint-free convenience store bakery case doughnuts. These seven unique doughnuts arrive fully ﬁnished and ready to thaw and serve and are wrapped in perforated plastic for a three-day ambient temperature shelf life.

Outdoor Signs

Baker Boy

(800) 437-2008 thedonuthole@bakerboy.com

MasonWays carries a variety of signs available for use outdoors or indoors. They provide instant curb appeal and help drive sales in-store. Signs inform customers to social distance, wear masks or request curbside pickup. The Super Sign stands nearly seven feet tall and includes two-sided graphics with a weighted base. Parking Lot Signs can be used to identify parking areas for curbside pickup. The Double Sided AFrame Sign can be used either indoors or outside. Help prevent the spread of COVID-19 with informative sign solutions from MasonWays.

www.thedonuthole.com

Ready-to-Drink Lattes Made with premium 100% Arabica coffee and 40% less sugar, Black Stag Lattes are the solution to consumers seeking an authentic, coffee-forward taste with just the right amount of sweetness. These ready-to-drink iced lattes come in four ﬂavors: Mocha, Vanilla, Caramel and Original. Black Stag Lattes with less sugar are made with craft quality in Wisconsin and offered to customers nationwide. The beverages will be sold in 100% recyclable glass bottles that come in 13.7-ounce single-serve bottles and 12-pack cases.

MasonWays Indestructible Plastics (800) 837-2881

www.masonways.com

Horseshoe Beverage Co.

www.horseshoebeverage.com

Sugar-Free Hazelnut Creamer New Nestlé Coffee mate Sugar Free Hazelnut Flavor Liquid Creamer Singles offer a rich sugar-free creamer with nutty hazelnut notes and 55% fewer calories than the classic hazelnut creamer singles. These shelf-stable creamer tubs are Coffee mate’s most popular format. They don’t require refrigeration and have a nine-month ambient shelf life, with packaging that is speciﬁcally designed to deliver a quality product with food safety in mind. They’re also lactose-free, cholesterol-free, gluten-free and kosher dairy to appeal to a wide range of customers. Right now, qualiﬁed operators can request a free sample at CMFeeltheLove.com.

Coffee mate

www.cmfeelthelove.com

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PRODUCTShowcase

Zero-Sugar Hydration ShineWater reimagined what a hydration beverage should be — with zero compromises. The company created superior beverages that promote optimum health using the power of natural ingredients, zero sugar and Vitamin D. ShineWater provides the vitamins, electrolytes and minerals you need without the addition of sugar or artificial ingredients. Each nutrient is carefully chosen based on nutrition science and delivered in amounts that matter. As a missiondriven company, ShineWater impacts people beyond its distribution footprint. A portion of sales are donated to its social partner, OneWorld Health.

ShineWater LLC

www.shinewater.com

Hard Seltzer Collaboration Molson Coors Beverage Co. has entered into an exclusive agreement with The Coca-Cola Co. to manufacture, market and distribute Topo Chico Hard Seltzer in the U.S. Topo Chico Hard Seltzer blends purified sparkling water, a gluten-free alcohol base and natural flavors, with minerals added for taste, and is inspired by Topo Chico sparkling mineral water, a 125-year-old brand with a rich history that has been popular with consumers across the U.S., including many mixologists. Topo Chico Hard Seltzer will be developed in four flavors: Tangy Lemon Lime, Exotic Pineapple, Strawberry Guava and Tropical Mango, available in four-flavor, 12pack Variety Pack (slim can).

Molson Coors Beverage Co.

www.molsoncoors.com

Mocha Chocolate Combo KIT KAT DUOS MOCHA + CHOCOLATE is that delicious combo of mocha coffee flavor and chocolate layering the KIT KAT wafer everyone knows and loves. It will be available at stores nationwide beginning this month in standard-size bars (1.5-ounce), with a suggested retail price (SRP) of $1.11, and king-size (three-ounce) bars, SRP $1.66.

The Hershey Co. www.hersheys.com

Customizable Waste Management Center Commercial Zone Products has launched the EarthCraft Series, an advanced and customizable waste management center designed to deliver style, function and durability — built with UV-resistant recycled plastic material, manufactured in the U.S. Customization options include a choice of waste or recyclers, colors, roof styles and opening shapes. The EarthCraft Series is available in either single- or dual-stream units and with or without decorative design on the doors and sides. In addition, the eco-friendly material helps customers meet their LEED and sustainability goals.

Commercial Zone 800-782-7273 cpservice@commercialzone.com

www.commercialzone.com

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PRODUCTShowcase

Individually Wrapped Mochi Ice Cream Bubbies’ new in-store Self-Serve Freezers will debut throughout the fall with varieties such as Mango, Green Tea, Strawberry, Passion Fruit, Triple Chocolate, Pistachio, Blood Orange and Vanilla as well as Vegan Strawberry and Chocolate. Additional ﬂavors from the brand’s portfolio will follow in early 2021. Like all Bubbies products, individually wrapped varieties are made with only real, non-GMO ingredients, including all-natural ingredients, real fruit puree and kosher dairy, and are always gluten free. Each individually wrapped mochi will carry a suggested retail price between $1.49-$2 per piece.

Bubbies Ice Cream

www.bubbiesicecream.com

Jalapeño and Lime Tortilla Chips Late July Restaurant Style Jalapeño & Lime tortilla chips is the newest addition to the Restaurant Style portfolio, bringing the perfect amount of heat to the party. A customer favorite and best-seller, Late July Restaurant Style Organic tortilla chips are toasted, then crisped for a delicate, melt-in-your-mouth chip. Late July Restaurant Style chips are USDA certifiedorganic, Non-GMO Project Verified, gluten free, vegan and kosher pareve, made with no artificial flavors, colors or preservatives. Available at a suggested retail price of $4.49.

Dough Bites

Late July Snacks

Enlightened snackable keto cookie dough and brownie dough bites are coming to shake up a freezer aisle near you. Enlightened did the digging for you and bagged up the delicious bites of cookie and brownie dough found in their ice cream with just two grams of net carbs per serving. These edible Dough Bites are gluten free, 90-110 calories per serving, free of added sugar and require no baking. Dough Bites come in ﬁve ﬂavors: Chocolate Chip, Birthday Cake, Fudge, Peanut Butter and Snickerdoodle. Dough Bites have a suggested retail price of $4.49.

www.latejuly.com

Enlightened

www.eatenlightened.com

LTO Green Camo Pouches Swisher Sweets Green cigarillos have a new camo look on pouches for a limited time. These distinct pouches will be sure to catch the eye of customers with a design bound to make a statement. The in-demand blend, featuring a distinctive green wrapper, has a new look for fall that is right on-trend and a mellow taste that will keep adult consumers coming back all season. Swisher Sweets Green camo pouches are available in a variety of market-driven price points, but only while supplies last.

Swisher Sweets Cigar Co.

(800) 874-9720 • www.swisher.com

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PRODUCTShowcase

Plant-Based Protein Keto Beverages Made with coconut milk and pea protein, Bolthouse Farms Plant-Based Protein Keto Beverages are vegan, non-dairy, non-GMO, gluten and soy free, and contain no artificial flavors, preservatives, colors or sweeteners. Available in three flavors — Mocha Truffle Latte, Cinnamon Horchata and Hazelnut Fudge — the drinks contain 12 grams of vegan protein, one gram of sugar, two to three grams of net carbs and MCTs from coconut. Low in net carbs with no added sugar, the entire lineup appeals to consumers who are trying to limit or avoid added sugar.

Bolthouse Farms

www.bolthouse.com

Nashville Hot Chicken RollerBites Some ﬂavors are just too hot to keep away for long. Nashville Hot Chicken RollerBites are back — to bring some serious heat to your grill or hot case, satisfying your customers’ spicy cravings.

Home Market Foods Inc.

www.hmffoodservice.com/contact

Single POS Platform Looking to simplify your c-store tech stack, reduce technical debt and bolster your automation capabilities? CATAPULT by ECRS is the retail point-of-sale (POS) platform that works for you, not the other way around. No more blame-shifting from third-party vendors and “unified” POS systems that underperform. With CATAPULT’s c-store solution, you get ECRS’ Open Fuel Server for fuel sales, an intuitive cashier interface, speedy transactions, real-time data and inventory management tools, age verification technology and back-office reporting and management tools. Make the switch today.

ECRS

Candy Mashup Tic Tac is expanding its Adventure Line with the debut of Big Berry Adventure. The brand’s newest fruit innovation features a mashup of raspberry and blueberry flavors that come together with a shake. Created to inspire fun and adventurous moments for consumers, Big Berry Adventure is beginning to roll out on shelves nationwide. The Tic Tac brand’s Adventure Line also includes Fruit Adventure, which recently became the brand’s bestselling flavor. Orange recently took the second most popular spot, underscoring today’s consumer demand for more fruit-forward flavors. Tic Tac Big Berry Adventure will be available for purchase in one-ounce and 3.4-ounce packs.

Ferrero

www.ferrerousa.com

(800) 211-1172 • www.ecrs.com/c-store cstoredecisions.com

November 2020 • CSTORE DECISIONS

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Classifieds/Ad Index 5-Hour Energy

The Hershey Company

Abbott

Home Market Foods, Inc.

ADD Systems

85 35

5hourenergy.com Linnea Solbrook 214-843–7012 800.922.0972 / www.addsys.com

Altria Group Distribution Company Anchor Packaging www.anchorpac.com

22-23

BIC

www.BICLighter.com

CB Distributors

6-7

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

NRS

P&G Convenience

Hunt Brother's Pizza

Perfetti Van Melle

J&J Snack Foods Corp.

Prairie City Bakery, Inc.

JUUL

Premier Manufacturing, Inc.

Kellogg's

Red Bull

Reynolds

Safe Shop Assured

www.hersheys.com

800.367.8325 / www.HMFfoodservice.com

800.453.3675 / www.huntbrotherspizza.com/csd 800.989.9534 x6140 www.jjsnackfoodservice.com www.juul.com www.kelloggsawayfromhome.com

Krispy Krunchy

The Coca-Cola Company

800.290.6097 / www.krispykrunchy.com

ConvenienceWorks by Hussmann

www.loomis.us/SafePoint

E&J Gallo

www.mars.com

800-241-COKE / www.coca-colacompany.com 800.592.2060 / www.hussman.com www.barefootwine.com

Einstein Bros. Bagels

Gilbarco Veeder-Root

720.458.9735 petrolicensing@coffeeandbagels.com www.gilbarco.com

GSK C-Store

Scott.F.Breisinger@gsk.com

Gulfcoast

Helix Innovations LLC

727.449.2296 / www.gulfcoast.com

66-67

Loomis Armored US, LLC

Mars Wrigley

888-260-0112 / www.nrspetro.com www.pgconvenience.com 800.283.5988

www.pcbakery.com

www.gopremier.com www.redbull.com

www.reynoldsamerican.com www.safeshopassured.com

Smucker's

www.SmuckerAwayFromHome.com

107

Swedish Match 105

800.367.3677 www.zyn.com www.swedishmatch.com

McLane

Swisher International

9 75 1, 61-63, 108

Naughty Chili

Trion Industries, Inc.

Nestle Waters

UTZ Brands

MasonWays Indestructible Plastics, LLC

800.837.2881 / www.masonways.com cvpproducts.com/info www.trespicosos.com www.nestle-waters.com

North American Bancard

866.481.4604 / www.nynab.com

104

800.874.9720 / www.swisher.com

800-444-4665 / info@triononline.com TrionOnline.com/ZipTrack

whodovoodoo@utzsnacks.com / www.zapps.com

Statement of Ownership, Management and Circulation of CStore Decisions Publication Title: CStore Decisions Publication Number: 1054-7797 Date of filing: September 29, 2020 Frequency of issue: Monthly Number of Issues Published Annually: 12 Annual Subscription Price: $80 per year Complete Mailing Address of Known Office of Publication: WTWH Media, LLC, 1111 Superior Ave. Suite 2600 Cleveland, Ohio 44114 Contact Person: Bruce Sprague Telephone: (888) 543-2447 Complete Mailing Address of Headquartersor General Business Office of Publisher: WTWH Media, LLC, 1111 Superior Ave. Suite 2600 Cleveland, Ohio 44114 Publisher: John Petersen, WTWH Media, LLC, 1111 Superior Ave. Suite 2600 Cleveland, Ohio 44114 Editor: John Lofstock, WTWH Media, LLC, 1111 Superior Ave. Suite 2600 Cleveland, Ohio 44114 Executive Editor: Erin Del Conte, WTWH Media, LLC, 1111 Superior Ave. Suite 2600 Cleveland, Ohio 44114 Owner: WTWH Media, LLC, 1111 Superior Ave. Suite 2600 Cleveland, Ohio 44114 Scott McCafferty, 1111 Superior Ave. Suite 2600 Cleveland, Ohio 44114 Mike Emich, 1111 Superior Ave. Suite 2600 Cleveland, Ohio 44114 Marshall Matheson, 1111 Superior Ave. Suite 2600 Cleveland, Ohio 44114 Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or More of Total Amount of Bonds, Mortgages, or Other Securities: None Tax Status: Not applicable Publication Title: CStore Decisions Issue Date for Circulation Data: September, 2020 Net press run: Average, 43,478; last issue, 43,707

Outside County Paid/Requested Mail Subscriptions: Average, 37,613; last issue, 37,813 Total Paid and/or Requested Distribution: Average, 37,613, last issue, 37,813 Nonrequested distribution by mail outside county: Average, 4,972; last issue, 4,622 Nonrequested distribution outside the mail: Average 480, last issue, 185 Total Nonrequested Distribution: Average 5,452, last issue, 4,807 Total Distribution: Average, 43,065; last issue, 42,620 Copies not Distributed: Average, 413; last issue, 133 Total: Average, 43,478; last issue, 42,753 Percent Paid and/or Requested Circulation: Average, 87.3%; last issue, 88.7% ELECTRONIC COPY CIRCULATION Requested and Paid Electronic Copies: None Total Requested and Paid Print Copies (15c) + Requested/Paid Electronic copies (16a) 37,613; last issue 37,813 Total Requested Copy distribution (15f) + Requested/Paid Electronic copies (16a) 43,065; last issue 42,620 Percent Paid and/or Requested Circulation (Both print & electronic copies) (16b divided By 16c x100) 87.3%; last issue 88.7% I certify that all information furnished on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fi nes and imprisonment) and/or civil sanctions (including civil penalties). Pat Curran, Digital Media Manager

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

www.masonways.com

800-837-2881

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IndustryPerspective

Why Do I Have to Praise Someone for Doing Their Job? One of the most important communication skills in a leader’s skill kit is the ability to give positive feedback, but this is one of the most underdeveloped skills for many leaders. Liz Uram • Contributing Editor Do you ever feel like there is way too much appreciation going on in your workplace? If you said no, you’re not alone. Your team would probably say the same thing. A recent Gallup survey revealed 65% of employees haven’t received recognition in the last year. This directly correlates to the studies that consistently report that two-thirds of American workers are disengaged. Employees who don’t receive recognition are 51% more likely to look for another job, are less motivated to produce more and better work, and they are less likely to respect you as a leader. But when it comes to giving positive feedback, many leaders don’t know where to start. Here are the five most common questions. 1.) Why should I praise someone for just doing their job? Two words: positive reinforcement. What gets rewarded gets repeated. If you want them to keep doing their job, let them know that their work is appreciated. One study concluded that 81% of employees would produce better work more often if they received personal recognition for their efforts. That seems like a good return on investment for a few sincere words of appreciation. 2.) I don’t need praise, why do they? Everyone has different internal drives that determine what motivates 106

CSTORE DECISIONS •

them. Recognition is one of the top motivators along with challenging work, growth opportunities, job security, being part of a team and compensation. If you happen to be motivated by growth opportunities, you may not understand why someone needs a pat on the back. You might even think they are being needy. That kind of thinking is a barrier to your own growth and could hold you back from achieving your goals. The best leaders understand that everyone is different, and they meet people where they’re at without judgment. 3.) How do I give praise without sounding phony? The secret to meaningful recognition is to make it sincere, specific and timely. If you are specific and timely and you are genuine with your praise, you will come across as sincere. Instead of a generic ‘Good job!’ try saying, ‘Thanks for taking the initiative to help John get that order out. I really appreciate your teamwork.’ The person is more likely to repeat the behavior when they know what the praise is for. Say it as close to the event as possible. If you wait, it loses its impact. 4.) Should I praise in public or in private? Give your praise where the employee is most comfortable. Many leaders are hesitant to give recognition in public. They worry it will create

November 2020

jealousy or resentment. Forget those fears. One benefit of praising in public is it shows lower performers what’s possible. It can be the shot in the arm they need to step up. Looking for opportunities to give shout-outs for positive behaviors, both big and small, in public creates a culture of appreciation. 5.) How often should I offer praise? This is a good question because praising too often can be as bad as not praising often enough. Running around giving high-fives, thumbs up and generic ‘thanks’ is exhausting for you and uninspiring to your team. Provide positive praise to each person on your team once a week. I know what you’re thinking — some people aren’t doing anything worth praising on a weekly basis. Look harder. Did your chronically tardy employee show up to the meeting on time? Let them know you appreciate their effort. What about the people who come in day after day and do their job? Nothing more, nothing less. Let them know you appreciate being able to count on them. The benefits of appreciation are clear: increased retention, motivated team members who work hard, and respect for you as a leader. Liz Uram is a nationally recognized speaker, trainer, consultant and author. Uram’s written four books packed full of strategies leaders can implement to get real results, real fast. Visit Lizuram.com.

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O C R E G R Y BUS R U O Y INE W O SS GR UR GROCERY BUSI O Y NES W O S GR

WITH

#1 BRANDS WITH #1 BRANDS

Grocery sales are up in convenience stores as consumers seek new channels to their — butstores not just any groceries willchannels do. to Grocerystock sales are up pantries in convenience as consumers seek new stock their pantries — but not just any groceries will do.

Iconic brands like Folgers®, Smucker’s®, Jif® and Milk-Bone® are outperforming ®, Smucker’s®, Jif ® and Milk-Bone® are outperforming Iconic like Folgers theirbrands categories. Stock up to capture your fair share of the growth. their categories. Stock up to capture your fair share of the growth.

Contact your distributor or visit Contact your distributor or visit 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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16 oz.

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24 oz.

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Customer favorite Swisher Sweets Green has a new look for fall that is right ontrend. Sales wonâ&#x20AC;&#x2122;t be hard to find with this in-demand blend featuring a distinctive green wrapper and mellow taste inside a limited edition green camo pouch. This hot design is available in a variety of market-driven price points, but only for a limited time. Order today and grab your share of the sales and profits. Please contact your Swisher Representative, call 800.874.9720 or visit swisher.com.