NACS Magazine December 2021

convenience.org | DECEMBER 2021

PEOPLE FIRST How leading retailers cultivate an inclusive workplace.

LABOR:

Keys to Hiring Right Now

THIRD-PARTY DELIVERY: Attracting Customers— at a Cost

Local, State and Federal tobacco taxes and restrictions on the sale of tobacco products can hurt your business.

Governments often pass new laws quickly, so you need to stay informed about what is happening in your area. You and your business matter and making your voice heard is crucial to our success in fighting for fair tobacco policies.

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

TAKE SURVEY CLICK HERE

Provided on behalf of Philip Morris USA, U.S. Smokeless Tobacco Co., John Middleton, and Helix Innovations. ©2021 Altria Group Distribution Company | For Trade Purposes Only

DECEMBER 2021

32

I t’s About the Journey The NACS IDEA Conference brought honest discussion around inclusion, diversity, equity and awareness.

40 Delivering Convenience

Third-party providers bring new consumers to c-stores but at a cost.

48

Understanding

Your Local Labor Landscape

How retailers can find and hire employees in a postpandemic economy.

Cover Art by Beyond Definition STAY CONNECTED WITH NACS

 @nacsonline  facebook.com/nacsonline  instragram.com/nacs_online  linkedin.com/company/nacs Subscribe to NACS Daily—an indispensable "quick read" of industry headlines and legislative and regulatory news from Washington, along with knowledge and resources from NACS, delivered to your inbox every weekday morning. Subscribe at www.convenience.org/NACSdaily.

CONVENIENCE.ORG

DECEMBER 2021 |

1

DECEMBER 2021

Cigarette sales and profit increases from 2019 to 2020 were largely attributed to increased consumption throughout lockdown and work from home.

P.66

IDEAS 2 GO, P. 28

06 Convenience.org 08 From the Editor 12 NACS News 20 Good Work 22 Inside Washington

U.S. policymakers explore ways to ease the supply chain crunch and truck driver shortage; look no further than the major payment card brands for anti-competitive behavior.

58 Gas Station Gourmet

Eureka Eatery in Monroe, Michigan, causes a stir with spicy chicken sandwiches.

62 Global Trends

Berlin’s entrepreneurial drive sets the bar for next-gen “foodvenience.”

66 Category Close-Up

A slower return to normalcy may benefit the tobacco category.

72 Back Page

28 Ideas 2 Go

Foodsmart convenience stores are built around health-conscious treats and snacks.

54 Cool New Products 2

| DECEMBER 2021

PLEASE RECYCLE THIS MAGAZINE The presence of an article in our magazine should not be permitted to constitute an expression of the association’s view.

CONVENIENCE.ORG

iStock.com/Grafissimo

Shoppers want their values and aspirations reflected in the products they buy.

Happy

From our Family to yours.

IVE YOUR CUSTOMERS THE IIT OO EASE MORE THAN 37,000 LOCATIONS AVAILABLE NATIONWIDE.

Contact Us: 1.800.776.8834 l www.cdlatm.com l sales@cdlatm.com

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DECEMBER 2021

convenience.org/hrforum convenience.org/hrforum when registration opens

EDITORIAL Kim Stewart Editor-in-Chief (703) 518-4279 kstewart@convenience.org Lisa King Managing Editor (703) 518-4281 lking@convenience.org Lauren Brooks Digital Content Manager (703) 518-4283 lbrooks@convenience.org CONTRIBUTING WRITERS Terri Allan, Sara Counihan, Sarah Hamaker, Al Hebert, Melissa Vonder Haar DESIGN Beyond Definition www.beyond-definition.com

Sign up to be notified when registration opens Sign up to be notified HR Professionals, join us at the NACS HR HR Professionals, Forum where you’ll join us at the NACS HR network with peers Forum where you’ll facing similar challenges network with peers and learn how others facing similar challenges have developed practical and learn how others solutions to overcome have developed practical challenges. solutions to overcome challenges.

Orlando, FL

March 21-23, 2022 Orlando, FL

ADVERTISING

March 21-23, 2022

Stacey Dodge Advertising Director/Southeast (703) 518-4211 sdodge@convenience.org Jennifer Nichols Leidich National Advertising Manager/ Northeast (703) 518-4276 jleidich@convenience.org

March 21-23, 2022 Orlando, FL

March 21-23, 2022 HR Professionals, Orlando, FL join us 21-23, at the 2022 NACS HR March Forum you’ll Orlando,where FL HR Professionals, network with peers join us similar at the NACS HR facing challenges HR Professionals, Forum where and learn howyou’ll others join us at the NACS HR network with peers have developed practical Forum where you’ll facing similar challenges solutions to overcome network with peers and learn how others challenges. facing similar challenges have developed practical and learn how others solutions to overcome have developed practical challenges. solutions to overcome Sign up to be notified challenges. when registration opens convenience.org/hrforum

Sign up to be notified when registration opens Sign up to be notified convenience.org/hrforum when registration opens

Ted Asprooth National Sales Manager/ Midwest, West (703) 518-4277 tasprooth@convenience.org

PUBLISHING Erin Pressley Publisher and Vice President, Education & Media (703) 518-4208 epressley@convenience.org Rose Johnson Audience Development and Production Manager (703) 518-4218 rjohnson@convenience.org

NACS BOARD OF DIRECTORS CHAIR: Jared Scheeler, The Hub Convenience Stores Inc. OFFICERS: Lisa Dell’Alba, Square One Markets Inc.; Brian Hannasch, Alimentation Couche-Tard Inc.; Andy Jones, Sprint Food Stores Inc.; Chuck Maggelet, Maverik Inc.; Ken Parent, Pilot Flying J LLC; Victor Paterno, Philippine Seven Corp. dba 7-Eleven Convenience Store; Don Rhoads, The Convenience Group LLC PAST CHAIRMEN: Julie Jackowski, Casey’s General Stores Inc.; Kevin Smartt, TXB MEMBERS: Chris Bambury, Bambury Inc.; Frederick Chaveyriat, MAPCO Express Inc.; Andrew Clyde, Murphy USA; Chris Coborn, Coborn’s Inc. Little Dukes; George Fournier, EG America LLC; Terry Gallagher, Gasamat Oil/Smoker Friendly; Anne Gauthier, St. Romain Oil Company LLC; Varish Goyal,

Loop Neighborhood Markets; Douglas S. Haugh, Parkland Fuel Corp.; Raymond M. Huff, HJB Convenience Corp. dba Russell’s Convenience; Ina (Missy) Matthews, Childers Oil Co.; Charles McIlvaine, Coen Markets Inc.; Lonnie McQuirter, 36 Lyn Refuel Station; Jigar Patel, Hari 1 LLC, dba Fish River Food Mart; Glenn M. Plumby, 7-Eleven Inc.; Robert Razowsky, Rmarts LLC; Richard Wood III, Wawa Inc. SUPPLIER BOARD REPRESENTATIVES: Brent Cotten, The Hershey Company; Kevin Farley, GSP STAFF LIAISON: Henry Armour, NACS GENERAL COUNSEL: Doug Kantor, NACS

NACS SUPPLIER BOARD CHAIRMAN: Brent Cotten, The Hershey Company CHAIRMAN-ELECT: Kevin Farley, GSP VICE CHAIRMEN: David Charles, Cash Depot; George Ubing, E&J Gallo Winery PAST CHAIRMEN: Rick Brindle, Mondelēz International; Drew Mize, PDI MEMBERS: Tony Battaglia, Juul Labs; Alicia Cleary, Anheuser-Busch InBev; Matt Domingo, Reynolds; Mike Gilroy, Mars Wrigley; Josh Halpern, FIFCO USA; Danielle Holloway, Altria Group Distribution Company; Jim Hughes, Molson Coors Beverage Company; David Jeffco, Krispy Krunchy Foods LLC; Kevin

M. LeMoyne, Coca-Cola Company; TJ Lynch, Hospeco Brands Group; Bryan Morrow, PepsiCo Inc.; Lesley D. Saitta, Impact 21; John Thomas, iSEE Store Innovations LLC; Sarah Vilim, Keurig Dr Pepper; Dean Zurliene, Monster Energy Company RETAIL BOARD REPRESENTATIVES: Steve Loehr, Kwik Trip Inc.; Chuck Maggelet, Maverik Inc. STAFF LIAISON: Bob Hughes, NACS SUPPLIER BOARD NOMINATING CHAIRMAN: Brad McGuinness, PDI

NACS Magazine (ISSN 1939-4780) is published monthly by the National Association of Convenience Stores (NACS), Alexandria, Virginia, USA. Subscriptions are included in the dues paid by NACS member companies. Subscriptions are also available to qualified recipients. The publisher reserves the right to limit the number of free subscriptions and to set related qualifications criteria.

Subscription requests: nacsmagazine@convenience.org and at www.convenience.org/Media/NACSMagazine/SubscriptionForm POSTMASTER: Send address changes to NACS Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA. Contents © 2021 by the National Association of Convenience Stores. Periodicals postage paid at Alexandria VA and additional mailing offices.

convenience.org/hrforum

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1600 Duke Street, Alexandria, VA, 22314-2792

CONVENIENCE.ORG

Premier Manufacturing: Brands Built on Integrity Owned by a cooperative of proud American farmers using the best U.S.-grown tobacco blends among their competitors, Premier provides high-quality, value-priced cigarette brands for the adult consumer.

C-stores across the country are buying in.

Commitment to Quality Premier Manufacturing, Inc. is the consumer products division of U.S. Tobacco Cooperative Inc. (USTC), an American grower-owned marketing cooperative based in Raleigh, NC.

500+ member farmers throughout the Southeast

Members maintain GAP Connections Trackable process includes all aspects of manufacturing under one roof Certification Standards Ensures sustainable, ethical agricultural practices Tobacco processing & stemmery Primary blending / Cigarette finishing

All products made in USA & 100% guaranteed

Robust Partnerships

A Cut Above the Rest

Premier’s support staff prides itself on meeting customer goals with seamless execution in achieving the highest regulatory standards.

Premier products use only top-end tobacco blends.

• Provides sales/service support across the U.S. • Develops POS materials for high visibility • Creates custom sales & merchandising programs • Maintains strong relationships with top distributors

• Partners with top national and regional retail chains

The finest flue-cured tobacco in the world • All U.S. grown • Environmentally sustainable • Compliant with every regulation The best blend among competitors • Highest concentration of flue-cured tobacco • Vibrant color • Blends provide exceptional aroma and flavor experience Manufactured on industry-leading equipment • Laser perforation • Inked code dating • Latest high-tech advancements

Your Trusted Premier Brands Choose the brand that suits your loyal consumers. Each brand features a variety of styles to satisfy every taste.

Contact PremierManufacturing today! www.gopremier.com/contact

CONVENIENCE.ORG

WHAT’S ONLINE | DECEMBER 2021

Apply Here In today’s tight job market, retailers are searching for effective recruitment and employee retention strategies that go beyond posting job openings.

NACS has conducted extensive research on what people want in jobs to help retailers communicate the context of jobs by showcasing how they tie into what applicants care about most and what they treasure from previous jobs.

The following resources are available to retailers to help recruit and retain quality employees.

What Job Applicants Look For: All job applicants agree that wages and benefits are very important. What else do they care about, and what could that mean for how convenience retailers frame their job offers? NACS surveyed potential job applicants asking them to rank a series of 20 job attributes using a method called maximum differential scaling.

Insights From C-Store Employees: NACS uncovered insights and impressions from interviews with 35 successful people who at one time in their career worked in a convenience store.

Messages Applicants Want to Hear: NACS tested 20 messages that describe the benefits of working at a convenience store and which types of messages can help retailers attract top talent.

What Consumers Say About C-Store Jobs: NACS consumer surveys consistently show that people believe convenience stores provide valuable experiences and are a great training ground for developing lifelong skills.

Check out these resources and more at www.convenience.org/topics/ humanresources.

COME TOGETHER. DO MORE. Join us at conveniencecares.org

Give back to your community this holiday season by partnering with Feeding America. Feeding America works with retailers—small and large—to safely rescue unsold food for hungry Americans in the communities they serve. Feeding America has made it easy for retailers to donate prepared food and packaged items.

The MealConnect program makes it easy for food donors and food banks to work together to prevent waste and feed their communities. When donors such as c-stores post food to donate on mealconnect.org or using the free app, an algorithm determines the best suited agency to distribute the donation. The affiliated Feeding America member food bank is instantly notified and supervises the donation process. Matched agencies can arrange the pickup, or the food bank can solicit, vet and train on-call volunteer drivers to make the delivery.

Learn about how you can work with Feeding America at www.convenience.org/ feedingamerica.

CONVENIENCE.ORG

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FROM THE EDITOR

An IDEA Within Reach

A Kim Stewart Editor-In-Chief

Achieving inclusivity in any organization is a journey.

8

| DECEMBER 2021

t NACS, we often say with pride that half of America—about 165 million people—walks into convenience stores each day. Our customers are as diverse as our nation, and one of the things I find remarkable about this industry is that we have a welcoming, come-as-you-are spirit that puts people at ease. Being accepting and inclusive is not only good business but also a good practice. And sometimes that practice, day after day, is hard.

Achieving inclusivity in any organization is a journey—that’s the topic of our cover story featuring the NACS IDEA Conference, which brought together industry stakeholders to discuss inclusion, diversity, equity and awareness ahead of the 2021 NACS Show in October. Frank discussions were had around these weighty topics, and retailers learned from each other about their own journeys toward a diverse, equitable and inclusive workplace.

Still, attracting job applicants with diverse viewpoints, skills and experiences to your company remains challenging. In “Understanding Your Local Labor Landscape,” we share

learnings from a series of NACS webinars designed to help retailers find, hire and retain employees in this ever-changing economy. Admittedly, there are no quick fixes for solving the current labor crisis. It is instructive, though, to hear how retailers like TXB Stores and GPM Investments are approaching these challenges and finding some success.

In “Delivering Convenience,” we talk to Casey’s and other convenience retailers about the benefits and drawbacks of using third-party providers to deliver orders to customers. While delivery can give convenience stores a wider customer base, hefty fees, erratic delivery times and the question of access to customer data are considerable watchouts. As inflation spikes, it remains to be seen if consumers’ pandemic-fueled appetite for on-demand convenience will endure.

As we round out the 60th anniversary year of NACS, I want to wish all of you a peaceful, joyous holiday season.

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invenco.com | sales@invenco.com | +1 877 515 0939

NACS NEWS

Learn to Lead The six days of the on-site program are comprehensive and intense, and it’s just the beginning of the process for participants. In the months following, team members apply what they learned at the program by working on a group project, which will conclude with a presentation and a graduation ceremony at the 2022 NACS Show.

T

he NACS Leadership for Success program provides rising leaders in the industry an invaluable opportunity to discover personal strengths that they can use to grow their career, while creating a more profitable performance-oriented environment within their company.

Developed for district managers, supervisors and other convenience retailers who want to improve their work performance, the program focuses on arming participants with skills they can immediately use on the job to improve their leadership. A generous endowment by The Hershey Company makes the program affordable for retailers of all sizes.

Participants will: • Increase their understanding of how their actions affect their personal effectiveness • Discover how they work with others as well as how others perceive them as a colleague • Explore their self-perception • Define a vision of their ideal leader-self • Gain tools to improve their leadership effectiveness and build better relationships • Chart a course of action to apply what they’ve learned and become the leader they want to be

12

| DECEMBER 2021

•J ustin Allih, operations supervisor, RaceTrac Petroleum Inc. •K elly Putnam, district leader-Crosby’s, Reid Petroleum Corp.

•R yan Royse, manager, EG America LLC •L eigh Buckner, district manager, Tri Star Energy LLC dba Twice Daily •J anie Reese, district manager, Tri Star Energy LLC dba Twice Daily •L inda Lefkowitz, senior district manager, EG America LLC •R oger Messer, district manager, Tri Star Energy LLC dba Twice Daily •L ewis Taylor, district manager, Love’s Travel Stops •C arlos Morales, district manager, Love’s Travel Stops •D allas Heckel, district manager, Love’s Travel Stops •J eff Gamm, district manager, Love’s Travel Stops •C hris Norder, district manager, Love’s Travel Stops •D ebbie Goins, human resources manager, Herdrich Petroleum Corp.

•J erry Warford, director of operations, Herdrich Petroleum Corp.

Learn more at www.convenience.org/education.

Contact Brandi Mauro, education program manager, with questions at bmauro@convenience.org or (703) 518-4223.

CONVENIENCE.ORG

iStock.com/sanjeri/Thaisign

The 2021 Leadership for Success class included:

Technology Roadmap

Technological change happens fast, and for convenience retailers, prioritizing which innovations to seize—and which to bypass—is yet another challenge in the race to stay ahead of the competition, especially as the pandemic forced quick shifts in operations and services to meet customer demands.

What was important before the pandemic, for instance, implementing technology to support loyalty rewards programs, in many cases has been overtaken by newer customer-facing initiatives like omnichannel shopping and enabling contactless payments to speed in-person checkout.

NACS Research surveyed convenience retail technology leaders this past spring to gather feedback on these

NACS Calendar of Events

2022

APRIL

NACS State of the Industry Summit April 12-14 | Rosemont (Chicago), IL

FEBRUARY

NACS Leadership Forum February 09-11 | Miami Beach, FL

MARCH

NACS Day on the Hill March 08-09 | Virtual

MAY

NACS Leadership for Success May 15-20 | Glen Allen (Richmond), VA NACS Convenience Summit Europe May 31-June 02 | Berlin, Germany

challenges and the current landscape of convenience retail technology. The results and recommendations are shared in a white paper, “Building Convenience Retail Success Through Technology,” available at www.convenience.org/research.

The findings help retailers set priorities for implementing specific technologies based on convenience retailer business impact ratings. Benchmarking helps identify whether your company is ahead or behind other retailers in adopting certain technologies, understanding what to consider before implementing a technology and initiating the request for proposals for new technology providers.

You can also download the Convenience Retail Technology Implementation Mapping & RFP Guide— a benchmark on the current landscape of tech adoption and what retailers should consider when scoping for their next tech provider and building a technology RFP. The technology adoption analysis is presented as a radar graphic that covers the implementation progress, business impact and implementation difficulty for 41 technologies across six key categories.

JULY

OCTOBER

NACS Financial Leadership Program at Wharton July 17-22 | The Wharton School University of Pennsylvania Philadelphia, PA

NACS Show October 1-4 | Las Vegas, NV

NOVEMBER

NACS Innovation Leadership Program at MIT November 6-11 | MIT Sloan School of Management Cambridge, MA

NACS Marketing Leadership Program at Kellogg July 24-29 | Kellogg School of Management, Northwestern University Evanston, IL

NACS Women’s Leadership Program at Yale November 13-18 | Yale School of Management New Haven, CT

NACS Executive Leadership Program at Cornell July 31-August 4 | Dyson School, Cornell University Ithaca, NY

For more information about these NACS events, visit www.convenience.org/events.

CONVENIENCE.ORG

DECEMBER 2021 |

13

NACS NEWS

Lisa King Joins NACS as Managing Editor NACS welcomes Lisa King to the staff as managing editor.

King will oversee Lisa King NACS Magazine and Fuels Market News, among other editorial and content project management roles.

King joins NACS from Montgomery County, Maryland, Public Schools. Previously, King was

a writer/editor at the Insurance Institute for Highway Safety, managing editor for the Food Allergy & Anaphylaxis Network (now known as FARE) and a senior publications coordinator for Aspen Systems/Lockheed Martin at the U.S. Department of Justice. King holds a bachelor’s degree in sociology, with a concentration in journalism, from the University of Maryland, College Park.

NEW NACS MEMBERS NACS welcomes the following companies that joined the association between September 16 and October 15, 2021. NACS membership is companywide, so we encourage employees of member companies to create a username by visiting www.convenience.org/Create-Login. All members receive access to the NACS Online Membership directory, latest industry news, information and resources. For more information about NACS membership, call (703) 684-3600.

NEW RETAIL MEMBERS

Duffy’s Beer LLC Pittsburgh, Pa.

Northpoint Plaza Poynette, Wis.

US Exchange Inc. Deerfield Beach, Fla.

124th Street Inc. dba Brookfield Place BP Brookfield, Wis.

FTTT/Fab Training Nashville, Tenn.

Palm Springs Capital LLC dba Corner Store Oshkosh, Wis.

Welcome Break Milton Keynes United Kingdom

AGM Associates LLC West Coxsackie, N.Y. www.21btravelplaza.com

Henrietta Stop Inc. dba Texas Best 8 Henrietta, Texas www.texasbest8.com

Perrysville C Store Perrysville, Ohio

Wupi Express Zapopan, Jalisco Mexico

AZ Auto Spa LLC Lake Havasu City, Ariz.

Baba Group Lisle, Ill. Bharati Petroleum Hampton, Va. Crazy Joe Specialty Store Streamwood, Ill. www.crazyjoespecialtystore.com DFS Outdoors LLC dba Water Edge Country Store and Marina Lake Wales, Fla.

14

| DECEMBER 2021

Iowa Petroleum & Convenience Inc. Cedar Falls, Iowa JE Operadores S.A.C Callao, Peru www.estacion715.com M&M’s Pit Stop Party Store Inc. Jackson, Mich.

MLV C&G LLC Lititz, Pa.

Petro Gotham, Wis. www.petro.com

NEW SUPPLIER MEMBERS

R & S Minimart Chicago, Ill.

Amazon Web Services Seattle, Wash. aws.amazon.com/retail

RC GA Properties LLC dba Victory Express Acworth, Ga.

Asset Services Inc. Overland Park, Kan. www.AssetServices.com

Trieglaff Convenience dba Dennis’ Mobil Mart Brookfield, Wis. http://dennismobil.com

B2 Payment Solutions Inc. Delray Beach, Fla. www.b2ps.com

Nino Convenience Retail Beaumont, Calif.

CONVENIENCE.ORG

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NACS NEWS NEW NACS MEMBERS Battle Bars LLC Deer Park, Ill. UNITED STATES www.Battlebars.com Beck Flavors Maryland Heights, Mo. www.beckflavors.com

Fortney & Weygandt Inc. North Olmsted, Ohio www.Fortneyweygandt.com Fox Trail Consulting LLC Lone Tree, Col. www.foxtrailconsulting.com

Bite New York, N.Y. www.getbite.com Boss Facility Services Inc. Ronkonkoma, N.Y. www.bossfacilityservices.com Broadband TelCom Power Inc. dba BTCPower Santa Ana, Calif. www.btcpower.com

Funambulist Gaming LLC Omaha, Neb. www.funambulistgaming.com Genco Import Company dba Sillies Socks Austin, Texas www.silliessocks.com Golden Oil Company Inc. Oak Brook, Ill.

Cognira Atlanta, Ga. www.cognira.com Commercial Design Systems Sherwood, Ore. www.cdscandoit.com Commercial Fire Jacksonville, Fla. www.commercialfire.com Copack Sales LLC Sandy, Utah DD&B Solutions LLC Newark, N.J. www.ddnbsolutions.com Delicato Family Wines Napa, Calif. www.delicato.com Dough Explosion LLC dba Dough Explosion Distribution Midvale, Utah http://doughexplosion.com DSM Property Services Urbandale, Iowa www.dsmproperty.net

16

Ethan’s LLC Denver, Col. www.ethans.com

| DECEMBER 2021

Lit Supplies LLC Houston, Texas Localcoin Toronto, Ontario Canada https://localcoinatm.com

Salm Partners Denmark, Wis. www.salmpartners.com

Matador Foods LLC Blanchard, Okla.

Shell Energy Solutions The Woodlands, Texas

Millerpos Washington, D.C. www.millerpos.com

State Garden dba Olivia’s Organics Chelsea, Mass. www.oliviasorganics.org

Mobiquity Inc. Wayne, Pa. www.mobiquity.com Movista Bentonville, Ark. http://movista.com

Google Mountain View, Calif.

NEXTEP Systems Troy, Mich. www.nextepsystems.com

Gravitate Fayetteville, Ark. http://Gravitate.energy.com

ONTDEK CPG Inc. Southlake, Texas www.ontdek.co

HBCI Mount Brydges, Ontario Canada

Pactera Technologies NA Inc. dba Pactera Edge Dunwoody, Ga. www.pacteraedge.com

Ichor Chicago, Ill. https://ichorbrand.com JOECOOL BRANDS Henderson, Nev. www.joecool.com JSL Foods Los Angeles, Calif. www.jslfoods.com

Reward Cups Ft Lauderdale, Fla. www.rewardcups.com

Pelee Island Winery Kingsville, Ontario Canada www.peleeisland.com Phoenix Research Industries Inc. Duluth, Ga. www.phoenixresearch.net

Klean Freak Sandy, Utah www.kleanfreak.com

Plasticos Y Extrusiones SA DE CV Querétaro, Querétaro Mexico www.playexsa.com.mx

Kressner Strategy Group Bayside, N.Y. www.kressnerstrategygroup.com

Purdy Products Company Wauconda, Ill. www.sterasheen.com

SwiftSku Inc. Auburn, Ala. www.swiftsku.com Symphony RetailAI Atlanta, Ga. www.symphonyretailai.com Texan Stone LLC dba Texan Minerals and Chemicals Sugar Land, Texas www.texanstone.com The Lagunitas Brewing Co Petaluma, Calif.

The Sunflower Group Ottawa, Kan. UFSO Watertown, N.Y. www.ufso1.com United Tactical Systems LLC Lake Forest, Ill. www.pepperball.com Whoa Dough Highland Heights, Ohio www.whoadough.com Zero Energy Building Solar Evansville, Ind. www.zebsolar.com

CONVENIENCE.ORG

MEMBER NEWS RETAILERS Kum & Go announced that Brian J. Beckett has joined the company as chief financial officer. Beckett has more than 15 years of experience driving bottomline performance initiatives and leading active, engaged teams. He will report to CEO Tanner Krause. Beckett succeeds Erin Kuhl, who has transitioned to the role of chief financial officer for Kum & Go’s parent company, Krause Group.

Brian J. Beckett

Alex B. Harper

Maggie D. Gerhardt Jessica A. Cookmeyer

•M aggie D. Gerhardt has joined Matrix as director of compliance.

• J essica A. Cookmeyer has joined the firm as a marketing coordinator.

Erin Kuhl

GPM Investments LLC has welcomed Justin Odom to the team as senior category manager. Prior to joining GPM, Odom spent more than four years as an associate category manager and category manager at 7-Eleven Inc.

Sahan Pandey

Sound Payments welcomed two additional industry experts, Chad Ellis and Joshua Pierre, to the petroleum team to accommodate continued growth and its plans to offer more technology solutions. Additionally, Sound Payments recently promoted Mike White to senior vice president of its petroleum channel.

Justin Odom

SUPPLIERS Matrix Capital Markets Group Inc. announced several promotions and welcomed new team members.

•S ean P. Dooley, CFA, ASA has been promoted to managing director.

•M artin C. P. McElroy Jr., CFA has been promoted to senior associate.

• Nathan B. Wah, CPA has been promoted to associate.

• J ohn T. Mickelinc, CFA now holds the Chartered Financial Analyst designation and is a member of the CFA Institute.

•S ahan Pandey has joined Matrix’s Consumer & Industrial Investment Banking Group as an analyst.

•A lex B. Harper has joined Matrix’s Downstream Energy & Convenience Retail Investment Banking Group as an analyst.

Chad Ellis

Joshua Pierre

Mike White

ADD Systems announced that Linda Carrer, customer support manager, has retired after 30 years with ADD Systems. The company also announced the promotion of Steve Tymikiw as customer support manager.

Linda Carrer

Steve Tymikiw

OPW announced that it has named Warren Day as the new vice president and general manager for its Vehicle Wash Solutions business.

Sean P. Dooley, CFA, ASA

CONVENIENCE.ORG

Martin C. P. McElroy Jr.

Nathan B. Wah, CPA

John T. Mickelinc, CFA

Warren Day

DECEMBER 2021 |

17

NACS NEWS

BY THE NUMBERS

IT as a Cost Center No More Technology upgrades, maintenance and service renewals can feel like nothing more than a cost center for convenience retailers. EMV chip readers, enhancing remote work capabilities and pricebook software updates are expenses that have added to this narrative in the past. However, convenience retail strategy and technology leaders have a different perspective heading into 2022.

NACS research shows that 58% of retailers are prioritizing technology projects to improve growth for their business versus only 13% that look to technology to help cut costs. Additionally, convenience retail leadership is much more likely to view current technology spend as integral to the growth of the business. The challenges retailers look to solve through technology across the next two years reveal a focus on areas that are growth oriented.

Nearly half of retailers plan to implement technology in the next two years to allow store staff to spend more time on customer-facing activities. The top challenges retailers are addressing through technology during the next couple of years are intended to attract new HOW RETAILERS VIEW TECHNOLOGY SPEND and repeat shoppers: • Making payment fast and easy • Developing a contactless 100% shopping experience • Enhancing online/ 67% 80% mobile shopping • Ensuring a fast in-store 60% shopping experience Retailer technology plans designed for boosting growth are more likely to be customer-centric in nature. Focusing on the shopper will increasingly push retailers to view technology investments as pivotal for growth.

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| DECEMBER 2021

37%

40% 20%

3%

0

Source: NACS 2021 Convenience Retail Technology Survey CONVENIENCE.ORG

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GOOD WORK

Pilot Flying J Recognizes Road Warriors

Eric Curlett, driver for Maverick Transportation and resident of Crossville, Tennessee, is the 2021 grand prize winner of Pilot Flying J’s annual Road Warrior contest.

This recognition is one way we say ‘thank you’ to the professional drivers we get to serve each day.

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| DECEMBER 2021

I

n its annual Road Warrior Contest, Pilot Flying J rewarded three professional drivers who have gone the extra mile for their companies and communities. Pilot Flying J selected Eric Curlett of Crossville, Tennessee, as the $10,000 grand prize Road Warrior winner. Eduardo Andrade of Yonkers, New York, and David Rosenquist of Monon, Indiana, were named the second and third place Road Warrior winners, respectively.

Each year, Pilot Flying J, based in Knoxville, Tennessee, selects the Road Warrior based upon story submission, including contributions to the trucking industry, safe driving history, miles driven and community involvement.

“We are honored to host our annual Road Warrior contest and give back to

the professional drivers who have such a significant impact on our economy and who work so hard to serve our communities,” said Shameek Konar, CEO for Pilot Flying J. “This recognition is one way we say ‘thank you’ to the professional drivers we get to serve each day.”

Grand prize winner, Curlett, is a husband, father, U.S. Marine veteran and has been a glass hauler at Maverick Transportation for six years. Pilot said Curlett has an outstanding driving record and has been named Driver of the Month and Driver of the Year for the company.

While he is always willing to go out of his way to help fellow professional drivers, he also gives back to his community, including participating in a yearly convoy that raises money for the Arkansas Special Olympics.

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“After 20 years of faithful service in the Marine Corps, I knew the trucking industry had plenty of opportunities in any direction and found that open-deck trailers were the best fit for me,” said Curlett. “To those that are looking to get into the industry, I recommend they research everything and don’t hesitate to call companies and other drivers to get the information needed to make the decision that is right for you.”

Curlett was nominated by a fellow professional driver and friend, who described him as “one of the best humans” he has ever met. To announce

his grand prize win, Pilot Flying J partnered with Maverick Transportation and Curlett’s family to surprise him with the news in a congratulatory video (www.pilotflyingj.com/roadwarrior).

In addition to the $10,000 grand prize, Pilot Flying J awarded $5,000 to second-place winner Andrade, a father, grandfather, Army veteran and Master Driver for Baylor Trucking who has logged more than 2.5 million safe miles. Thirdplace winner Rosenquist received a $2,500 prize in recognition of his 40 years as a professional driver with five million crash-free miles.

IN THE COMMUNITY Temple, Texas-based CEFCO hosted the 20th annual Hackers-R-Us charity golf tournament on October 18, raising more than $280,000 for The Fikes Foundation. Donations will go toward giving back to the communities that are served by The Fikes Companies and provide scholarships and grants to various charitable organizations. The Fikes Companies include CEFCO Convenience Stores, Group Petroleum Services, CORD Financial Services, Digital Network Solutions, Fikes Fuels, Fikes Wholesale and JF Air. Volta Oil Company partnered with the Alzheimer’s Association to raise awareness and funds for Alzheimer’s care, support and research. Through Volta Oil’s Purple Pump Up for Alzheimer’s, Volta Oil raised more than $178,000 for the Alzheimer’s Association.

L to R: CEFCO COO Ken Rowland, CEFCO Brand Manager Reagan Francis, Fikes’ CAO Kim Fikes and Fikes’ President Raymond Smith.

Tiger Fuel Company’s gourmet-to-go convenience stores, known as The Markets, raised $10,000 to benefit Big Brothers Big Sisters of the Central Blue Ridge. While fueling up at The Markets, customers had the option to round up their transaction to the nearest dollar to support the nonprofit. The Markets also raised $1,000 for the Albemarle Housing Improvement Program (AHIP) by donating a $1 of each AHIP Special sandwich sold to the nonprofit group that provides families with safe and sturdy homes.

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The 9th Annual Parker’s Fueling the Community Golf Tournament raised a record $138,890 to support education, health care and other important causes in coastal Georgia and South Carolina. All proceeds from the tournament benefit local communities where Savannah, Georgia-based Parker’s operates convenience stores.

DECEMBER 2021 |

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INSIDE WASHINGTON

Short Supply

U.S. policymakers explore ways to ease the supply chain crunch and truck driver shortage.

F FACTS & FIGURES

80,000

Number of truck drivers needed to meet freight demand

160,000

Projected shortage of truck drivers by 2030

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| DECEMBER 2021

rom the news, around the water cooler or kitchen table, industry meetings or the White House and on Capitol Hill, everyone is talking about supply chain issues. And that is certainly the case with convenience retailers and NACS as our industry grapples with daily challenges in securing goods.

The scope of the problem is deep and diverse. It is truly a global issue and every industry sector, business and consumer is feeling the impact. Retailers are experiencing product shortages, delayed and inconsistent deliveries of materials and labor constraints, all of which lead to higher operating costs and higher costs for consumers.

Among the things in short supply are beverages and packaged goods, ingredients to prepare fresh food items and hot foods, and materials to package, wrap or carry foods, such as coffee cups, lids, utensils and napkins. Shortages in products, supplies and ingredients are having an

impact on how and what retailers serve their customers. Beyond this, retailers are also experiencing difficulties in finding substitutions, delays and unexpected cancellations of their orders, inflexible supply contracts that crimp their ability to fill shelf space with alternatives, plus find themselves ranking lower on wholesaler and supplier priority lists than other retail channels.

Suppliers are also experiencing labor shortages and difficulty getting inputs, materials and ingredients to produce, manufacture and package their products.

In addition, they are also experiencing transportation delays and a shortage of vehicles and truck drivers.

Labor is the most frequently mentioned underlying issue when it comes to supply chain problems. Shortages in skilled and unskilled labor are being felt in every business sector, and, again, the reasons behind this shortage are multifaceted.

Government unemployment subsidies and benefits, child-care burdens, CONVENIENCE.ORG

iStock.com/Irina_Strelnikova

BY PAIGE ANDERSON

accelerated retirements, families transitioning from two incomes to one income, reduced immigration and competition from other businesses and retail channels are just a few of the explanations despite businesses offering competitive wages, salaries and benefits.

The lack of truck drivers is especially acute and a major factor behind the difficulty in moving and delivering supplies and products from ports to manufacturers to retailers to consumers.

The trucking industry is 80,000 drivers short of those needed to meet increased demand for goods, and the gap could surpass 160,000 in 2030, according to the American Trucking Associations.

While the truck driver shortage, especially fuel haulers, has been a problem for quite some time, the pandemic spotlighted just how dire the situation has become. Again, an aging driver population nearing retirement, the stress of long hours and continuous runs during the pandemic, competition from other business channels and industries all play a role. In addition, many certification and training programs for new drivers were closed or delayed due to COVID-19.

Despite investments in recruitment, generous salaries and benefits and signing bonuses, along with scholarships and funding for training, education and certification, filling the gap for truck drivers will continue to be a challenge.

While business groups have been raising many of these issues and concerns to Congress and the White House for some time, it really took the looming holiday season and the impact on consumers to get the attention of politicians and policymakers. Congressional committees have been holding numerous hearings on the supply chain challenges. Members of Congress are hosting roundtable discussions with stakeholders, including NACS, on finding solutions to these problems.

During the summer, the White House announced the creation of the White House Supply Chain Disruptions Task Force to bring together public and private CONVENIENCE.ORG

sector stakeholders to examine the causes of the supply chain problems and devise solutions. The task force is mainly focused on transportation supply chain issues in the ports, rail and over-the-road sectors that arose because the pandemic disrupted the transportation and logistics nodes in the system. In October, the White House announced commitments from key groups, such as local governments, port authorities and labor unions in the port sector, to address bottlenecks at the Ports of Los Angeles and Long Beach to keep open and operating 24 hours, seven days a week. Other ports also have agreed to assist in helping to ease the bottleneck and accept rerouted cargo where feasible. Similar work and agreements have been forged with the railroad sector.

In addition, the Department of Commerce’s International Trade Administration has convened the Advisory Committee on Supply Chain Competitiveness (ACSCC), which brought together key people from the U.S. Commerce and Transportation departments, the Office of Trade Relations at Customs and Border Patrol and the National Security Council to explore improving the national freight infrastructure and freight policy to support the U.S. supply chain.

With the spotlight on the White House and Congress on supply chain issues, NACS continues to educate and advocate for the convenience and fuel retailing industry.

From participating in stakeholder meetings and roundtable discussions, to advocating for and securing various regulatory waivers, such as hours of service or fuel waivers, or working on legislation, such as allowing for commercial truck driving licenses for 18- to-21-year-old drivers or working on retail channel discrimination, NACS is pursuing a multi-issue, multiprong, multilayered approach in helping the industry, including pursuing opportunities to join or help establish coalitions to address these issues before the Biden Administration and Congress.

The pandemic spotlighted just how dire the truck driver shortage has become.

Paige Anderson is the NACS director of government relations. She can be reached at panderson@convenience.org.

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ONE VOICE

What role in the community do you think convenience stores should play?

I truly believe that convenience stores are the heart of the community, especially in smaller communities where they may be the only game in town. So much revolves around what we do and what we offer on a day to day basis. We are absolutely essential to the fabric of American society, and I don’t think it’s hyperbole to say that.

Beyond that, we have a responsibility to unite, support and provide smiles to the communities we serve. We can do this by building our stores as gathering places for morning coffee, by donating to worthwhile community organizations and by developing personal relationships with our guests.

to political engagement. There are so many issues that affect our industry and our companies, so we need to stay informed. We need to build personal relationships with our elected officials. And we need to take the time necessary to do all of that. It’s critical in protecting our businesses, and we need to treat it as a non-negotiable. I know I do.

My personal political engagement has helped my company in many ways. I see the way my members of Congress vote, and it makes me feel my voice has been heard. But I have to say, it feels extremely good to influence my representatives in ways that help the industry as a whole.

More than once, the elected officials from my district have been the lead sponsors on legislation that was voted into law and helped our industry greatly. Whether it’s true or not, I feel like I personally played a big part in that. It doesn’t get much better than being able to help the greater good of our industry as a whole. And the best part is, we all have the power to do that.

What does NACS political engagement mean to you, and what benefits have you experienced from being politically engaged?

Political engagement is a critical function of my leadership at The Hub. It’s not just one of those extra things I deal with if I have the time. It’s kind of like what I tell people who want to work out or exercise more. They need to make their workout time a non-negotiable part of their calendar, just like a one-to-one with a team member. The same concept applies

What federal legislative or regulatory issues keep you up at night (with respect to the convenience store industry)?

Though I tend to sleep pretty well, there are a few issues that frustrate me to no end. The first is the exorbitant amount of money we all pay in swipe fees. I really hope that all convenience retailers get as infuriated as I do when looking at monthly P&Ls. What Visa and Mastercard are doing to us and our consumers is dead wrong, and we all need to stand up with a strong, united voice and do

Jared Scheeler

24

This month, NACS talks to Jared Scheeler, CEO, The Hub Convenience Stores Inc. and 2021-22 NACS chairman.

| DECEMBER 2021

Your voice can save your business. Scan the QR code to tell us what’s keeping you up at night and where you’re willing to lend your voice to NACS’ advocacy efforts.

something about it. One other longerterm concern I have, even though it may not directly affect me like it will in more populated areas, is the future of EV charging stations. It’s vital that our industry leads the country in the installation of EV chargers and not let other interested parties beat us to the punch. With public utilities fighting for the space, and now General Motors announcing that they’ll be installing them at all of their dealerships around the country, we have some work to do. And Congress must play a role in ensuring we can do so on an even playing field.

What c-store product could you not live without?

Maybe it’s the North Dakotan in me, but I’m a sucker for Dot’s Pretzels. The taste is incredibly addicting! I’m proud that they’re a North-Dakota-based company, and I’m proud that I’ve been able to introduce them to so many others in our industry. Now you can get them in all 50 states!

CONVENIENCE.ORG

Looking for Anti-Competitive Behavior?

LOOK NO FURTHER THAN THE MAJOR PAYMENT CARD BRANDS.

iStock.com/Atstock Productions

BY ANNA READY BLOM

This summer, the Federal Trade Commission (FTC) requested comments on any contract terms that may harm competition. In response, NACS filed comments urging the agency to look at the global card brands, Visa and Mastercard, which use their contract agreements to block out competitors.

While there are more than a dozen payment networks in the United States, Visa and Mastercard have historically blocked smaller competitors such as Star, NYCE, Shazam, Accel and Pulse, among others, from competing with them for credit card transactions. This behavior preserves their market dominance, drives up the swipe fees retailers pay and inhibits innovation in the payments marketplace.

Payment cards are issued by banks who have chosen what network will be on the card. In Visa and Mastercard’s contractual terms, any bank that uses their networks is prohibited from allowing those credit card transactions to be handled by competing card networks. NACS argues that forcing such exclusivity “inhibits competition for credit card network services and removes competitive market dynamics that might otherwise exist for credit card transactions.”

In 2010, Congress addressed the issue of network competition on debit cards with the passage of the Durbin Amendment, which requires issuing banks to enable two unaffiliated CONVENIENCE.ORG

networks on debit cards. The networks have tried to circumvent these nonexclusivity provisions, especially on internet and many gas pump transactions, and the FTC and Department of Justice are investigating actions that undermine debit network competition. But Visa and Mastercard provisions preventing network competition for credit card transactions have not yet been the subject of regulatory scrutiny and action.

“The time has come for such action because credit card network exclusivity continues to undermine competition, and financial institutions that issue credit cards should have the option to contract with multiple networks whenever they find such arrangements to be beneficial to their businesses. Any and all contractual provisions preventing that freedom to contract with competitive networks should be removed,” NACS states in its comment letter.

The emergence of new technologies in payments has the potential to dramatically open competition. Transactions do not have to be bank-to-bank; they are also consumer-to-consumer. Consumerto-merchant should be just as easy. The rapid pace of innovation is opening up more payment options than ever before, yet the contractual terms of the dominant networks preserve their market power at the expense of competition. NACS is making clear that it’s time for regulators to address this monopolistic behavior.

Anna Ready Blom is NACS director of government relations. She can be reached at ablom@convenience.org.

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INSIDE WASHINGTON

NACSPAC DONORS NACSPAC was created in 1979 by NACS as the entity through which the association can legally contribute funds to political candidates supportive of our industry’s issues. For more information about NACSPAC and how political action committees (PACs) work, go to www.convenience.org/nacspac. NACSPAC donors who made contributions October 1-31, 2021, are: Aloki Advani SuckerPunch

Tom Corcoran Winsight LLC

Mike Flebotte Business Accelerator Team

Mark Hanners InComm Payments

Jeff Keune MAPCO Express Inc.

Tim Ahlering Winsight LLC

Christopher Crichton Hathway

Cedric Fortemps Matrix Capital Markets Group Inc.

Roger Audette Excel Tire Gauge LLC

Jerry Cutler InComm Payments

George Fournier EG America LLC

Shalen Haribhai KESSS Investments #10001 dba The Market

Joey Knight Independent Buyers’ Co-op Convenience Store

William Baine

Sarah Daigle Gravitate

Jessica W. Frend NATSO Inc.

Christopher Hartman Rutter’s

Rob Knight Independent Buyers’ Co-op Convenience Store

Heather Davis Parker’s

Wilson Friend Altria Group Distribution Company

Lisa Dell’Alba Square One Markets Inc.

Tony Gaines Botanic Tonics

Jaspreet Dhillon 7-Eleven Franchise

Mike Gancedo Parker’s

Jayden Dolechek The Hub Convenience Stores Inc.

Angela Gearhart Nittany Oil Company

Juston Dooley Dooley’s Petroleum Inc.

Larry Gerosa Mr. Cartender Inc.

Sean Dooley Matrix Capital Markets Group Inc.

Roland Gilfour Lard Oil Company Inc.

William P. Douglass Douglass Distributing

Brion Gillett Kretek International

James Drendel Drendel’s Corner

LeeAnn Goheen NATSO Inc.

Robert Eastman II QuickSav Food Stores Ltd.

Vincent Gramuglia Betty Beaver Fuel Stops, Countryside Management

Wynne Barrett Jera Concepts Michael Bernstein MichaelAngelo’s & More John Bertucci III RowLogic LLC Gary Bevers Joshua Birdwell Pilot Travel Centers LLC Brett Brobston Altria Group Distribution Company Sherri Brudon Nittany Oil Company Alisha Budhwani Encore Franchises LLC Scott Burchfield Impact 21 Brandon Burns Lucas Oil Products Spencer Cavalier Matrix Capital Markets Group Inc. David Charles Jr. Cash Depot

David B. Ezell Conexxus Scott Faulkner C-Store Master David H. Fialkov NATSO Inc.

David Charles Sr. Cash Depot

James F. Fiene CAL’s Convenience Inc.

Michael Claeys JUUL Labs Natalie Clark

Shane Finnerty Ronnoco Coffee

Amy Coleman MichaelAngelo’s & More

Rick Fitzgerald TXB Stores

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| DECEMBER 2021

William Henry Kellogg Company Sam Herro Hathway Brandon Hofmann Parker’s Angela Holland Georgia Association of Convenience Stores

Clay Lambert

Tom Jackowski Dale Jackson TXB Stores Amar Jamal Chestnut Petroleum Dist. Inc. Sharif Jamal Chestnut Petroleum Dist. Inc.

Dave Jeffco

Stephen Griffith CAF Outdoor Cleaning

Vanessa Kosloski Taiga Data Inc.

Melanie Isbill RaceTrac Inc.

Karina Green The Hub Convenience Stores Inc.

Mark A. Griffin Michigan Petroleum Association

Shameek Konar Pilot Travel Centers LLC

Rajeev Kumar DMN Market Place LLC

Amanda Jamerson Summit Labs dba Kore Organic

Simran Grewal Dhaliwal & Associates Inc.

Francine Koffler The Hub Convenience Stores Inc.

Jim Hughes Molson Coors Beverage Company

Travis Greco Techniche Americas LLC

Ravinder Grewal Happy Day

Jack Kofdarali J&T Management

Eric Jones Parker’s Jennie Jones S & D Coffee & Tea David Jordan Jordan Oil Co. Inc. Sharan Kalva C-Store Master

Mia Lambert Metro Petro Ronald J. Quratul Leone Missouri Petroleum & Convenience Store Association Ann Malik NSR Petro Services LLC Nick Marino CORD Financial Services Miguel Martin JT International U.S.A. Inc. Nicole Masullo Nittany Oil Company Ina M Matthews Childers Oil Co. Sean Mccaffrey GSTV Brian C. McCarthy Blarney Castle Oil Co. Dennis B. McCarthy Blarney Castle Oil Co.

CONVENIENCE.ORG

Bill McCloskey Rmarts LLC Michael McDade McDade Products LLC Brad McGuinness PDI Andy McIlvaine Coen Markets Inc. Lonnie McQuirter 36 Lyn Refuel Station Sunita Mehta SAASOA Josh Milazzo Lard Oil Company Inc. Jason Mongin Parker’s Gib Moyle Moyle Petroleum Company Sydney Moyle Moyle Petroleum Company F. Scott Myers Altria Group Distribution Company Manraj Natt Fresno Elite Carwash Inc. Brian Thomas Neutze Mr. Cartender Inc. Daniel Neutze Mr. Cartender Inc. William Neutze Mr. Cartender Inc. Ian Edward O’Donnell Google Richard Oneslager Jr. Balmar Management Group Shreepal Parikh Panhandle Wholesale and Distributors LLC Scott J. Parker Chestnut Petroleum Dist. Inc. Arjun Patel Harry’s Chirayu Patel Hari 1 LLC Hetal Patel SAASOA Jay Patel Sav-A-Ton Inc.

CONVENIENCE.ORG

Mehul Patel Minesh Patel Ram’s of Virginia Inc.

Donald R. Rhoads Convenience Group LLC

Abby Smartt TXB Stores

Jennifer Rhoads

Scott Smith Parker’s

Nimesh Patel Amrut LLC

Kayli Rhoads Convenience Group LLC

Nirav K Patel AASOA Illinois

Donnie Rhoads III Convenience Group LLC

Nitul Patel Narayan 512 LLC

Jason Ricks Taylor Quik Pik

Pragnesh Patel Express Mart

Michael Rodgers Pilot Travel Centers LLC

Pratik Patel Amrut LLC

James Rogers Society of Independent Gasoline Marketers of America

Rajesh Patel VAASOA Ralpesh Patel Univer-Sale Novelty LLC Ramesh Patel Sunrise Market of Soddy-Daisy Sandip Patel SAASOA Sandra Patel C-Store Master Saurin Patel Harry’s Vinodkumar Patel Shubham Convenience Stores Inc Vipul Patel V CONNECT LLC Channing Phillips Einstein Bros Bagels Duane Phillips Jr. Dandy Mini Marts Inc. Sean Piper CAF Inc. Robby Posener RaceTrac Inc. Gabriel Purvis Downey Wholesale Inc. Robert Razowsky Rmarts LLC Ryan G. Razowsky Rmarts LLC Charles Reesman Nittany Oil Company

Frank Squilla InComm Payments Melanie Stradling The Hub Convenience Stores Inc. Eric Taylor Taylor Quik Pik Alan J. Thiemann, Esq. Conexxus Alan Thomas Core-Mark International Inc.

Jim Roy Persist Solutions

Doug Vander Weide SuckerPunch

Brent Runion Independent Buyers’ Co-op Convenience Store

Sanjay Vaswani Tustin Arco Kurt Weigel Weigel’s Stores Inc.

Bianca Russo-Davis MichaelAngelo’s & More

Conner Wiegand Taiga Data Inc.

Chuck Ryan Good Oil Co. Inc.

Elizabeth Wiles JUUL Labs

James Sachs Moyle Petroleum Company

Amy Wiley Fast Lane

Aman Sahi Luke Family of Brands

Brian Wright Executive Leadership Solutions Inc.

Sukhi Sandhu 7- Eleven Franchise

Michelle Wright RPF Oil Company

Vance Saunders Matrix Capital Markets Group Inc.

Luke Young Techniche Americas LLC

Mike Scharf capSpire

Dathan Zang Harbor Industries

Jared Scheeler The Hub Convenience Stores Inc.

Joseph Zietlow Kwik Trip Inc.

Greg Scriver Kwik Trip Inc.

Jason Zimmer Apter Industries Inc.

Kay Segal Business Accelerator Team Josh Sharp Illinois Fuel & Retail Association Jagmeet Sidhu George F. Saunders Inc. David Simendinger Wesco Amandeep Singh Fresno Highway Fuels Inc.

DECEMBER 2021 |

27

IDEAS 2 GO

A Healthy Revolution

Foodsmart convenience stores are built around health-conscious treats and snacks.

BY SARAH HAMAKER

We want to give plenty of healthy choices but know people do want traditional salty snacks, too.

While Foodsmart does have traditional snacks and sodas, the emphasis is more on foods and beverages that promote wellness and social responsibility, Foodsmart founder and CEO Adam Musa says.

B

roccoli bites, dried fruit, snappea crisps, chickpea puffs and cheese crisps are flying off the shelves at Fuelco’s Foodsmart convenience stores, something that makes founder and New York-based Foodsmart CEO Adam Musa proud.

“I grew up working in the fuel retail

SEE MORE! Ideas 2 Go showcases how retailers today are operating the convenience store of tomorrow. To see videos of the c-stores we profiled in 2020 and earlier, go to www.convenience.org/Ideas2Go.

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| DECEMBER 2021

business, and when I had the opportunity to build my own c-store concept, I wanted to provide a place with plenty of healthy snacks,” he said.

Musa pointed to the changing American palate, with successful stores like Trader Joe’s and Whole Foods offering many vegan, kosher and glutenfree products, as another factor in his decision to open Foodsmart. “People are trying to be more healthy, and that gives us a real opportunity to meet that need with bigger selections of healthful snacks at a place they already stop at frequently.”

A HEALTHY START For Musa, inspiration came from attending the 2018 NACS Show in Las Vegas.

“I’m a third-generation retailer with my CONVENIENCE.ORG

ABOUT

The store’s design is meant to evoke a warm, healthy aesthetic, and that carries through to the grab-and-go items, which include prepackaged wraps, sandwiches, salads and parfaits. Guests can blend flavors at the frozen yogurt station.

grandfather and my father in the business,” he explained. “So, I already had a feel for the overall business.”

The NACS Show opened his eyes to more possibilities. “I’m talking to farmers from Iowa who are making their own beef jerky, as well as many other vendors,” he said. “That made me realize there’s a million ways to source products that will resonate with the customers I wanted to attract.”

He designed the store’s aesthetics to convey a warm, healthy feeling through Italian tile on the floors, bricked walls and wood tones to complement the healthier selections. “All too often, we can get stuck selling the same items for decades,” Musa said. “But when we do that, we’re missing out on expanding our customer base and reaching new shoppers.”

While Foodsmart does have traditional snacks and sodas, the emphasis is more on foods and beverages that promote wellness and social responsibility. “Many Foodsmart customers aren’t just looking for a quick munchie,” he said. “They are living lifestyles that integrate concerns about a product’s carbon footprint with vigilance about calorie counts.”

Foodsmart selects products that meet those requirements. “We’ve entered a period of consumer hyperawareness and activism,” he said. “Shoppers want their values and aspirations reflected in the products they buy, and they’re willing to CONVENIENCE.ORG

Name of company Fuelco Foodsmart

pay more for items that demonstrate a commitment to those beliefs.”

His own research into Foodsmart’s bestsellers backs that up. Between 2020 and 2021, the products with the biggest sales gains were Rhythm Broccoli Bites, Amphora Soft Dried Fruit, Harvest Snaps Green Pea Snack Crisps, Hippeas Chickpea Puffs and Whisps Cheese Crisps—all of which check the healthy and social responsibility boxes.

“For every two types of potato chips, there’s a lentil chip option—we have roughly a 2-1 ratio of traditional to healthy alternatives,” he said. “We want

Date founded 2019 # of stores 2 Website www.fuelco.com/foodsmart

BRIGHT IDEAS While Foodsmart CEO Adam Musa touted the NACS Show as one of the best places to explore new ideas for the convenience and fuel retailing industry, he also recommended talking to customers about what they like to buy and to employees about their thoughts on what they see customers purchasing or discussing.

Develop a list of key vendors who can think outside the box and help you get products that might be off the beaten path. “Also, be OK with failure,” he said. “It might not work the first time, so be open to change and be willing to explore different options. You never know when you might stumble upon a winning combination, so keep trying.”

DECEMBER 2021 |

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IDEAS 2 GO

to give plenty of healthy choices but know people do want traditional salty snacks, too,” he said.

For now, Musa has no plans to add fresh-made foodservice because of the lack of square footage available for a kitchen. Instead, he offers a full line of prepackaged wraps, salads, sandwiches and parfaits in open-air cold cases. A satellite deli owned by Foodsmart prepares the items for the chain.

Sarah Hamaker is a freelance writer and NACS Daily and NACS Magazine contributor based in Fairfax, Virginia.

Visit her online at www. sarahhamakerfiction.com.

Half Horz.indd 1

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| DECEMBER 2021

A HEALTHY WORD To generate community interest in his store, Musa has a multifaceted grand opening strategy. For example, when the first store opened in Valhalla, New York, two years ago, Musa gave away a Chevy Camaro. Customers entered by downloading the FuelCo app, which he plans to do for each new location. Musa’s FuelCo company provides the fuel for the stores.

With the Valhalla store near a hospital, he donated $10,000 to the hospital plus a $5 free gas gift card to every hospital employee. The $5 in free gas is also available to any customer who downloads the FuelCo app.

“I also paid attention to how my grandfather and father treated their employees—many times, they had team members who had worked for them for 30 years,” Musa said. “So, I make sure my employees are trained right and have all the tools to do their jobs.”

So far, both Foodsmart stores are located in New York, with six more under construction at other locations in the state. For Musa, the bottom line is making sure customers and employees know Foodsmart cares about them. “It’s about the three Cs—cleanliness, consistency and customer service. These are crucial to getting repeat customers,” he said.

11/10/2021 12:37:30 PM CONVENIENCE.ORG

It’s About the Nan Thomae, vice president human resources, Casey’s

The NACS IDEA Conference brought honest discussion around inclusion, diversity, equity and awareness.

By Sara Counihan

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| DECEMBER 2021

CONVENIENCE.ORG

Treasa Bowers, chief diversity officer, 7-Eleven

A

journey is defined as traveling from one place to the next, usually for a rather long time, and those who participated in the NACS IDEA Conference in October agreed that the journey to an inclusive, diverse, equitable and aware (IDEA) culture is not an overnight trip.

“Everyone has used the word journey,” remarked Treasa Bowers, vice president and chief diversity officer at 7-Eleven, during her presentation. “Why do we say ‘journey’ versus ‘trip’? Well, a trip is fun. It’s something you look forward to, but we say ‘journey’ because it’s hard. It’s a reflection of experiences that are not easy.”

The NACS IDEA Conference, which took place on October 4 before the 2021 NACS Show, brought together convenience store industry members who are in some way responsible for diversity, equity and inclusion (DEI) within their companies. The conference was sponsored by NACS Hunter Club members Altria Group Distribution Company, Mondelēz International, The Coca-Cola Company and PepsiCo Inc. Facilitated by Michelle Duguid, Ph.D., associate dean of diversity, inclusion and belonging at Cornell

CONVENIENCE.ORG

University, the conference was comprised of six quick-fire 30-minute presentations and a panel discussion of four additional convenience retailers who shared their perspectives, experiences and plans on how they are leading the charge in diversity and inclusion in their companies.

BEGINNINGS “More than a year ago several of our leading members came to me to ask if NACS could help them address [DEI] issues,” said Henry Armour, NACS president and CEO, as he opened the conference.

“Everyone expressed a different need, but there was one commonality. These retailers all wanted to find out what others had done and were perfectly willing to share their experiences.”

Before retailers began sharing, Duguid kicked off the conference with a keynote on defining, understanding and leveraging different types of diversity and how to foster an inclusive climate. In explaining the differences between diversity and inclusivity, Duguid said that diversity refers to the traits and characteristics that make people unique, while inclusion refers to the behaviors and social norms that ensure people feel welcome. “Diversity

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Paul Shore, chief people officer, Pilot Company

management is counting numbers, and inclusion is making those numbers count,” she said.

For companies, working toward DEI isn’t just about kindness of the heart, though many companies do have good intentions. There also is a business case for diversity. Diversity makes employees more creative, diligent and harder working, and it makes them smarter, according to Duguid. “We want diversity because we have customers that are diverse,” she explained. “We want to open up the talent pool by seeking diverse workers.”

Bringing different people into a company impacts the creativity of the work environment, and the organization becomes more open to innovation, she explained. But it’s not only diverse people who bring in different ideas, it’s the entire group. Studies have shown that hiring diverse coworkers allows the entire company, including current employees, to bring new ideas to the organization.

Some companies have been on the journey toward a DEI workplace in recent years, but the idea of DEI is a relatively new concept. According to GRC Insights, workplace diversity training first emerged in the mid-1960s following the introduction of equal employment laws and affirmative action. Though that was six decades ago,

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there are many older Americans who remember workplaces that didn’t consider racial discrimination and other types of inclusivity. After the murder of George Floyd and the subsequent Black Lives Matter movement and attacks on Asian Americans, companies across the country woke up and realized that DEI must become a priority.

Duguid asked the participants to speak in small groups about how their pasts have influenced having tough conversations about racism, sexism, ageism and other sensitive topics with their coworkers and employees. Many participants acknowledged that having these conversations was difficult.

“Yes, these conversations are difficult,” agreed Duguid, “but we cannot avoid them. Not anymore.

It’s not good enough to say ‘oh, we all know our values.’ … It may be difficult, but if we don’t address it, it may be worse.”

Read more about Duguid’s keynote, including the four sets of leader behaviors essential for shaping inclusive climates, our own implicit and unconscious biases, as well as case studies on labor market discrimination at www.NACSMagazine.com.

7-Eleven, Casey’s, EG America, GetGo Café+Market, Sheetz and Pilot each shared where their companies are on their DEI journey, why the retailers chose to begin the journey and what they’ve learned along the way. Some organizations are in the infancy stages of their development.

Some have been focusing on this topic and implementing measures for years. But everyone agreed that the journey to a diverse and inclusive culture is not about the destination.

SHEETZ’S JOURNEY Sheetz, based in Altoona, Pennsylvania, has an organic base of inclusivity through its “DNA” and CONVENIENCE.ORG

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INDUSTRY LEADER TAKEAWAYS Q: Did any of the presenters or presentations stand out to you?

Paris: GetGo Café+Market has taken real action to meet their verbal commitments around IDEA. They commit to act against racism with many inspiring goals. They are an amazing example of how this work can be done well.

LETTY GEORGE

DAILLARD PARIS

Meet Letty George and Daillard Paris—two attendees at the NACS IDEA Conference. George is the director of global communications at Alimentation Couche-Tard, and Paris is director, petroleum supply, and IDEA initiative lead at Sheetz.

Here’s what they thought about the conference.

George: Each presenter stood out, and I walked away learning something from each one. It takes a lot of courage to have these conversations. I appreciated the transparency they each shared, especially some of the struggles. Engaging with our front-line store team members is vital in our business, and we shared some best practices on how to do that. I’ve already connected with two organizations and shared some digital platforms that have helped us engage with our stores.

Q: What is the biggest takeaway you got from the NACS IDEA Conference?

George: No matter which company was represented, we came together as leaders in our industry on this journey together.

When you bring together individuals from different walks of life, various backgrounds and experiences, each bring broader ideas and new perspectives to the conversation.

Q: Anything you learned at the conference that you plan to implement or have further discussion around?

George: Absolutely! I have a whole deck of takeaways that I’m excited to share with my leadership, and even more so, I’m excited to implement! We have had great success in the D&I space because of the support of our leadership team and our executive sponsors. They really have paved the way to turn courageous conversations into action to drive change and build a more inclusive workplace.

Paris: The biggest takeaway from the IDEA Conference is not only how bold and deliberate many companies are being with the work they are doing around their IDEA efforts but also how they acknowledge that the work is never done.

Paris: I learned that this work cannot be done alone. Sheetz can learn from other companies, and they can learn from Sheetz.

Collaboration and the sharing of information between companies will be crucial in this journey.

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James Colino, senior talent acquisition manager, Sheetz

Henry Armour, NACS president and CEO

family culture. The Sheetz DNA consists of seven characteristics that make up Sheetz’s values. They are pioneering, driven to win, dependable, connected, real, high energy and respect.

“Respect is at the core of our DNA because we view respect as the biggest, most important cultural value that we have,” said James Colino, senior talent acquisition manager, Sheetz.

Though Sheetz has its core values, it did not have a formal action plan for DEI until last year. Sheetz began its formal DEI work by forming a team, which included four vice-president-level executives. The group began by reading “Uncomfortable Conversations With a Black Man” by Emmanuel Acho.

“We realized how woven [DEI] was in every function of our work,” said Daillard Paris, director, petroleum supply, and IDEA initiative lead for Sheetz. “For us at Sheetz, this work [on DEI] is not a choice. It’s a business imperative for us.”

Initially the group was enthusiastic about DEI in the organization, and each department came up with myriad ideas for inclusion, such as the store ops team wanting pronoun pins for employees and the sales team wanting to work with minority-owned businesses. But reality quickly set in, said Paris.

“IDEA [inclusion, diversity, equity and awareness] is big,” he said. “We can’t do everything, and we can’t start everywhere.” The company has partnered with a consultant to assess its current state with DEI to better build a foundation to grow future initiatives.

For now, Sheetz has built from a base that its employees are already familiar with, which was inclusion. This built on the company’s past successes and increased the likelihood of adoption, according to Paris. Examples of inclusion that CONVENIENCE.ORG

Sheetz has adopted are 12 weeks paid maternity leave, store team helper roles for neurodiverse applicants, tattoo and piercing policy revisions and transportation assistance via Uber and Lyft.

“Every day we are one step closer, but there is not an end date. We are never done learning. We are never done being better than we were yesterday,” said Colino.

CASEY’S EVOLUTION Casey’s, headquartered in Ankeny, Iowa, also admitted to being at the beginning stages of its DEI journey. “We didn’t have values up until 2021.

Our service principles were the closest thing we had,” said Nan Thomae, vice president of human resources for the retailer.

Casey’s has been and continues to evolve its business both inside the company and outward. In 2019, the company brought on a new president and CEO, Darren Rebelez, who wanted to modernize processes. In 2020, Casey’s went through a total rebrand, and in 2021, it released its first ESG (environmental social governance) report.

Casey’s has identified key elements of its DEI framework, which include a vision statement, areas of focus and outcomes. Focus areas include diverse talent acquisition, talent development and retention, and culture and engagement. “We are evolving our culture from one that is commanding and controlling to one based on commitment,” said Thomae.

Though Casey’s is just getting started on its journey, it’s already learned a few lessons. With a new CEO at the helm, the company had the unique

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L to R: Shelly Gibson of Thorntons, Merlix Reynolds of RaceTrac, Heather Schott of Kum & Go and Colette Matthews of Circle K Thank you to these NACS Hunter Club members who committed support to the NACS IDEA Conference and have shown support for IDEA efforts in their own companies and communities.

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opportunity to restructure its leadership team, bringing on board more diverse talent. Embracing the belief that diverse leadership recruits diverse talent, Rebelez, who is Latino, hired a female chief operations officer and a Black chief information officer, among others. According to 50/50 Women on Boards, women directors hold 50% of the company’s corporate board seats, making the retailer one of only 6% of Russell 3000 companies with a gender-balanced board. Casey’s has also broadened its pool of job candidates by softening its policy of exclusively hiring from within and expanding job searches beyond the borders of Iowa.

These efforts are a powerful example of change at the highest level and a strong corporate commitment to reach equity.

Visit NACSMagazine.com to discover where 7-Eleven, EG America, GetGo Café+Market and Pilot are on their DEI journeys. Learn why 7-Eleven could be the most advanced in DEI of all c-store companies, how EG America is working hard to roll out DEI across six acquisitions, how Pilot works with its board to set aspirational goals and find out what happened when GetGo took a firm political stance in its Pittsburgh community.

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The conference wrapped up with a panel discussion among four diversity leaders: Colette Matthews, vice president of global marketing, customer experience at Circle K; Heather Schott, diversity, equity and inclusion manager at Kum & Go; Merlix Reynolds, accounting executive director and founding member/executive sponsor of the business recourse group for people of color at RaceTrac; and Shelly Gibson, chief legal and people officer at Thorntons.

With some conference attendees not yet on the DEI journey, Matthews of Circle K offered this advice: “Start with a coalition of the willing. That’s where you’re going to get a lot of your momentum and energy. That’s where you can grow from.”

When asked how to get started on the journey, Schott said, “You just do. You can’t afford not to get started. Start with a committee or how you handle things that happen on your social media accounts.

The key is to get started.”

Sara Counihan is contributing editor of NACS Daily and NACS Magazine. Contact her at scounihan@convenience.org.

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ver the past year and a half, the c-store chain Casey’s has partnered with third-party food delivery companies, supplementing its own in-house driver program as at-home demand for its pizza and other foodservice items surged during the COVID-19 pandemic. According to Art Sebastian, vice president, digital experience at the Iowabased company, the partnerships “have been going very well for us as we’re working hard to meet our guests’ needs.”

Leveraging third-party delivery providers “is helping to add to our scale, allowing us to move quickly and to meet growing demand,” Sebastian said.

On-demand orders have indeed been on the rise in recent years, with all sorts of retail and restaurant businesses benefiting. According to the NACS “Last Mile Fulfillment in Convenience Retail” report released last year, 46% of North American c-stores offer mobile ordering for delivery to alternate locations, such as homes or offices. Of those that do provide off-premise delivery, half employ more than one platform, including the likes of DoorDash, Uber Eats and Grubhub, as well as own-store delivery, the survey found.

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Third-party providers bring new consumers to c-stores but at a cost.

By Terri Allan

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Incorporating thirdparty providers is a great opportunity to tap into a segment of customers that convenience stores may not otherwise reach.

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The growth in the marketplace delivery landscape has been stellar in recent years. DoorDash, for example, reported that its second-quarter 2021 revenue increased 83% over the year prior to $1.2 billion. Uber Eats, meanwhile, continues to be buttressed, with its acquisition of Postmates in 2020 and Drizly, an on-demand alcohol delivery service, earlier this fall. DoorDash has expanded its sales opportunity by recently launching the DoubleDash function, which allows app users to add items to their orders from select nearby stores, including c-stores. Among the c-stores reportedly featured on DoubleDash are 7-Eleven, Casey’s, Wawa and QuickChek.

PANDEMIC PUSH “Incorporating DoorDash and other third-party providers is a great opportunity to tap into a segment of customers that convenience stores may not otherwise reach,” said Jim Rastetter, category manager at GPM Investments LLC, parent to chains including E-Z Mart, Scotchman and Apple Market. GPM has partnered with DoorDash since July 2020, and according to Rastetter, “Our relationship allowed us to serve individuals who were nervous to enter stores during the height of the pandemic, as well as those quarantined at home.”

At the time of this writing, Rastetter said the company is in talks with other third-party providers “for potential projects.”

Chicagoland’s PRIDE Stores has partnered with Uber Eats for about three years to deliver food from the company’s Urban Counter and Taco Urbano eateries. Arrangements with Grubhub and DoorDash were added this summer, owner Mario Spina reported. He described overall results of the partnerships as “not bad. The biggest issue has been the high fees.” Spina added that he has seen an improvement in the delivery providers’ models since first teaming up with them, including the ability to track drivers’ routes. The retailer is hoping to put his own mobile ordering and delivery program, including ownstore delivery, in place in 2022.

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AGE-RESTRICTED PRODUCTS Alcohol and tobacco provide their own challenges when it comes to the digital marketplace. “State regulations around age-restricted products differ, so it’s important that we have partners who are able to deliver in states where we operate,” said Raghu Mahadevan, senior vice president, digital, at 7-Eleven, which partners with both Instacart and Minibar Delivery for on-demand beer and wine delivery in select markets. The partnership with Minibar—which only offers the platform for alcohol orders, with delivery handled by the stores or outsourced to others—launched over the summer.

“So far, we’ve been very excited about early results,” said Mahadevan. The platform’s “Snacks & More” option allows users to tack on other convenience items. “Salty snacks like chips, popcorn and mixed nuts have been especially popular with our customers thus far,” the 7-Eleven executive noted.

Lindsey Andrews, Drizly CEO and co-founder, added that the platform and its delivery provider partners work to comply with state and local laws. Upon checking out, for example, a user receives a pop-up message that a $20 restocking fee will be rendered if the government identification used when ordering doesn’t match that at delivery.

“Hopefully, that’s a monetary disincentive,” she said.

Beyond users, Mahadevan noted that 7-Eleven relies upon the delivery platform “to ensure that the person in store collecting the items are over the age of 21.”

(NACS’s new TruAge™ digital identification solution enhances age verification, including for online ordering and home delivery usage. For more info on TruAge visit www.convenience.org/truage.)

GPM Investments LLC expanded its partnership with DoorDash this year to include alcohol delivery in Virginia.

“So far, we’ve seen a great response,” remarked Jim Rastetter, category manager at GPM Investments. “We continue to see an increase in popularity week over week.” He also pointed to the challenges that come with on-demand delivery of licensed products. “In the state of Virginia, for example, each delivery sale containing alcohol must include the alcohol permit number for the location making the sale,” Rastetter said. “During the rollout, our team worked closely with DoorDash to research and outline the procedures specifically required.”

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Once that’s up and running, he plans to use the third-party platforms as marketing tools.

Casey’s has partnered with DoorDash since 2020 and earlier this year added Uber Eats. According to Sebastian, the DoorDash partnership started with its marketplace platform, and this summer expanded to include the white-label program, DoorDash Drive, whereby orders are placed and processed through Casey’s, with deliveries carried out by DoorDash.

“We’re seeing tremendous traction,” he said of the white-label program just four months after its inception. At press time, the c-store chain had just added DoubleDash to its on-demand offerings following a successful pilot program. “We’ve seen incremental orders,” Sebastian reported, although average order value has been smaller than that of other on-demand orders.

CHALLENGES ABOUND Still, according to the NACS Last Mile report, only 61% of retailers are satisfied with their third-party delivery partners. Concerns include high fees, little access to consumer data, difficulties delivering age-restricted products and service and operational issues.

“In the c-store world, consumers aren’t generally ordering high-cost items,” remarked Patrick Loftus, survey research and data visualization manager at NACS. “When a meal is ordered from a restaurant for a family of four, there may be more of a willingness to pay high delivery costs, but for the small basket sizes at c-stores, there may be less of a willingness.”

Spina expressed concern about high commission fees as well and believes that as the platforms expand into merchandise ordering and delivery, the charges may negate retailer margins. He pointed to products like beer and wine, with margins of about 25%, and questioned the practicality of paying a 30% fee to the delivery provider.

“While I understand that people are looking for convenience today, the price structure is high,” he said. For larger operators like Casey’s, however, the fees aren’t as much of a factor. Sebastian cited the chain’s “economic model and scale” when negotiating with the marketplaces.

Loftus said that little access to customer data for orders placed on the third-party platforms has “big long-term ramifications. As a retailer, you want information about your customer.

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Little access to that data doesn’t make for a great partnership,” he said. Relatedly, Loftus pointed to concerns over data security. “As customers are paying with credit and debit cards, their information is floating around. Retailers can be concerned about how secure the platform is. They don’t want to be blamed for any breach.”

At the 2021 NACS Show, retailers debated the challenges of using delivery services. “With so many orders online, I want people to say, ‘I ordered from The Hub,’” Jared Scheeler, NACS 2021-22 chairman and CEO of The Hub Convenience Stores, said during a general session panel with NACS President and CEO Henry Armour and Kevin Smartt, 2020-21 NACS chairman and CEO and president of TXB Stores (Texas

Born). “But today they are saying, ‘I ordered from DoorDash,’ and we need to change that.”

Smartt said that convenience retailers need to act now to protect their data from third-party delivery providers. “The most important point for the industry is we do not want DoorDash and those third-party companies owning our data,” he said. “And we need to come together as an industry and get it in our contracts that we own the data, not them.”

Third-party delivery platforms also bring other service and operational challenges. “When a delivery provider arrives late to the store for a pickup, who gets blamed?” asked Loftus. “It can often be the retailer.” Rastetter agreed, adding, “Delivery times can always be improved. Long delivery times can

PERCENTAGE OF RETAILERS THAT LEVERAGE EACH OF THE MOST FREQUENTLY USED DELIVERY SERVICES

Convenience retailers most frequently use Uber Eats and their own staff for delivery.

Source: NACS Last Mile Fulfillment in Convenience Retail Report, www.convenience.org/lastmile.

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PERCENTAGE OF STORES IN NORTH AMERICA, EUROPE AND AUSTRALIA THAT CURRENTLY OFFER LAST-MILE FULFILLMENT SERVICES.

lead to a negative customer experience.” To address the issue, GPM is working with DoorDash to adjust available delivery times for stores, expanding or contracting delivery areas around a store and keeping products in stock to reduce cancellations, he said. At Casey’s, the partnerships have given rise to some operational challenges, Sebastian said.

“Picking, staging and merging items is new to our team members,” he noted, while managing differing product temperature states—ranging from hot to frozen—also requires training.

Given that some delivery service providers are more regional in nature, the delivery services used vary considerably between North America, Europe and Australia. North American stores are more likely to use their own staff (48%) or DoorDash (33%) for delivery. Retailers in Europe and Australia are more likely to use Uber Eats (74%) and Deliveroo (53%).

Other delivery options retailers are partnering with include smaller players such as Glovo, Hugo, Vroom and WAITR. Source: NACS Last Mile Fulfillment in Convenience Retail Report, www.convenience.org/lastmile.

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HERE TO STAY Despite the challenges, c-stores continue to partner with third-party delivery providers. For some, it may be due to “fear of being left behind as others get into it,” Loftus noted. He advised retailers to negotiate access to data when forming a partnership. Also, “don’t run into delivery too quickly,” he said. “There are a lot of options out there. Do your due diligence.”

One solution for some retailers is the white-label model, like Casey’s uses with DoorDash Drive.

“White-label delivery is more accessible for retailers,” said John Nelson, CEO of Vroom Delivery—a platform partnered with DoorDash Drive—and eases some retailer pain points. “It’s cheaper for retailers,” he explained, with an average fee of about $6 on an average basket of $40, most of which is passed along to the consumer. In addition, with white-label platforms, “the provider doesn’t know about the end user. They don’t know basket information,” Nelson continued. “They only act as a fulfillment partner.”

Regardless of the model, retailers and marketplace providers agree that on-demand delivery isn’t going away. According to Sebastian, “the need state of delivery will continue to grow, and c-stores will have to figure out their approach.

Delivering convenience and addressing our guests’ needs makes business sense.”

Terri Allan is a New Jerseybased freelance writer, specializing in the beverage industry. She can be reached at terri4beer@aol.com and on Twitter at @terriallan.

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UNDERSTANDING YOUR

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How retailers can find and hire employees in a postpandemic economy.

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recent drive down the main street of my hometown revealed a familiar theme on numerous retail marquees: Help Wanted. Many also advertised signing bonuses and starting wages far above the federal minimum.

“Participation in the labor force in general is declining,” said Jayme Gough, NACS research manager. “Baby boomers are aging and retiring, removing a large group of people from the workforce, while there’s a new wave of workers quitting in what some are calling the Great Resignation.”

Those factors make it even harder for retailers to hire good workers.

Knowing what the current hiring trends impacting retailers are—and what they can do to get workers—is crucial to continuing to meet the needs of customers. Earlier this year, NACS hosted a series of webinars designed to help retailers find, hire and retain workers in this everchanging post-pandemic economy. Here’s what you need to know.

COMPETING FOR WORKERS As many retailers have experienced, the competition for hourly workers is especially fierce. “Wages have gone up, creating more competition around hourly rates especially,” said Gough during the NACS webinar “The Hiring Landscape.” “And COVID-19 accelerated some of these most sought-after employee benefits, including flexibility, peer coaching, teamwork, diversity and work/life balance.”

With flexibility topping the list of what workers want, she reminded retailers that they can build flexibility into their schedules for hourly employees.

“Flexibility can be how long an in-store shift is, what days an employee wants to work or not work, what store location they want to work in, etc.,” Gough said. “There are more options for flexibility out there on the front line than CONVENIENCE.ORG

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One thing any retailer can do to figure out how to retain and hire workers is to find out the reasons why people stay in the job. “Conduct stay interviews with long-term employees to find out why they stay with you, then consider how to emphasize all those positives to both new and current employees,” Kistler said.

COMPETING FOR CANDIDATES? HERE ARE SOME IDEAS THAT COULD GIVE YOUR STORE THE EDGE: • Be flexible with hours, shifts and work locations • Focus on building a great customer experience as well as employee experience • Hold dedicated hiring days and make job offers on the spot • Offer realistic job interviews that include job shadowing • Find out why people stay on the job—then share those learnings with recruits • Create and share your employee value proposition

retailers realize, and it’s an asset for a company to provide that flexibility for hourly workers.”

As Travis Kistler, principal at Oliver Wyman, pointed out, “The importance of the customer experience is also on the rise not just for customers but also for prospective employees. If they don’t like the customer experience, they’re not going to apply for a job.”

Kistler gave the example of a retailer with customer experience focused on being community oriented and then also treating employees like family. “Retailers need to make sure the employee experience and the customer experience are complementary,” he said.

Both Gough and Kistler reminded retailers that wage earners want more than competitive pay. “The good news is that there are lots of great options for retailers to create an attractive and compelling work package, as companies are testing a lot of different things to see what’s the most effective in retaining workers as well as bringing new workers in,” Kistler said. For example, he suggested tailoring benefits to the different life stages of employees to see what works best for a retailer’s diverse workforce.

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A NEW WAY TO CONNECT Retailers have adapted and adopted new practices and technologies to attract and hire team members in unforeseen circumstances. As society continues to return to normal, retailers continue to modify business practices to retain and hire workers by building flexibility into hiring and adapting quickly to meet the changing dynamics of the market.

For example, at GPM Investments LLC, Talent Acquisition Manager Bianca LaFountain leaned heavily on virtual hiring in the Midwest region.

Earlier this year, the national chain expanded the practice company-wide. “We implemented virtual interviews every week,” she said during the NACS webinar “Attracting and Hiring Team Members in the Next Normal.” “The first one we held had [more than 600] interviews in one day. Since then, we’ve averaged between 300 and 400 per interview day.”

Those dedicated interview days have made it easier to fill positions. “We’ve also switched to making candidates a job offer on the spot,” she said, adding that in 2020, the company hired 300 to 350 candidates a week, but with the virtual interview days, that average is up to 500 hires per week during the summer of 2021. “This gives our operational teams a relief and support for them by easing the burden of understaffed stores,” she said.

Over at TXB Stores, Nathan Graham, director of human resources, created a slightly different process that has proved successful for the Texas chain. “People work for people, so we’ve taken the interview process and created a Realistic Job Preview (RJP) instead,” he said. The RJP involves on-site interviews with designated store employees, plus a short period of job shadowing.

The up-to-one-hour process can end with an offer extended to the candidate, who can start training for the position immediately.

“So far, we’ve seen a huge improvement in retention since we started this process,” he said.

“Our goal is for the new employee to know half of their team members on day one.” Interviewer employees go through coaching and role playing to prepare for the process, and stores prepare for this by scheduling interview days on the calendar.

“Our goal is to roll RJP out to every store soon,” Graham said.

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What both LaFountain and Graham stressed is that their processes are simply different ways to find the same answer to the question: Will this person fit into the store culture and position? “We’re really trying to gauge a person’s interest in the actual position by focusing more on those softer skills and attitude,” she said. “We can teach register and food—we can’t teach attitude,” Graham added.

EMPLOYEES ARE PART OF YOUR STORY Are your employees telling your story? Do you have a story to tell both prospective and current workers? If not, then you need an Employee Value Proposition (EVP). Whether you have defined one or not, you attract and retain employees because of your values, commitment to customers and how you pay, retain and develop those who work for you.

Telling prospective employees how they can benefit from working for you can be the difference between fully staffed stores and scrambling to cover shifts.

“How your employees feel about coming to work for you on a day-to-day basis is what an EVP is all about— it’s like the employee experience,” said Joanne Loce, managing partner of Fortify Leadership Group and NACS HR Forum facilitator, during the NACS webinar “Employee Value Proposition: Telling Your Story.”

The benefits of an EVP include: • Attracting people to come work for you • Establishing an emotional connection (especially appealing to younger workers) • Providing a roadmap for managers on how to treat employees “Everybody has an EVP whether you’ve written it out or not,” said Chris McKinney, HR director for Victory Marketing/Sprint Mart. “An EVP demonstrates that you understand your employees as well as they understand your customers. It also increases engagement, which is tied to employee retention, better customer service and greater business results.”

For McKinney, one of the major benefits to having a formal EVP is that it “creates a consistent experience across the organization. … At Sprint Mart, we use it to clearly communicate to managers what it means to work here, often through the words of our own employees.”

Building an Employee Value Proposition isn’t difficult. Loce identified at least five building blocks of an effective EVP: 1. Company brand 2. Commitment to customer 3. Values, purpose and mission 4. Pay and benefits 5. Development opportunities Sprint Mart uses video recordings of its own employees talking about what it means to work for the company as a recruitment tool. “Oftentimes, we hear

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echoes of our EVP when we’re interviewing potential employees because of these videos,” McKinney said.

He pointed out that when he first started at Sprint Mart, the storytelling in employee orientation focused more about the history of the organization. “While valuable, I noticed that new employees resonated far less with the company story than with what their own story at the company would be,” he said. “We’ve intentionally crafted an onboarding function within HR to reinforce … this sense of belonging and of being part of something bigger than just your store.”

Sarah Hamaker is a freelance writer and NACS Magazine contributor based in Fairfax, Virginia. Visit her online at www.sarahhamakerfiction.com.

CONVENIENCE JOBS ARE GOOD JOBS To help convenience retailers attract and retain top-notch people, NACS has partnered with the nonprofit Good Jobs Institute to bring the Good Jobs Strategy to the industry. The Good Jobs Strategy, which is a combination of investment in people and smart operating choices, increases employee productivity, motivation and contribution and promotes operational excellence. Case studies show that implementing the Good Jobs Strategy can grow a business and increase customer loyalty.

Retailers can access the Good Jobs Calculator, designed exclusively for NACS and the convenience industry. This tool allows retailers to use their own data and customized assumptions about the amount of improvement or uplift achievable, and executives can run scenarios on the bottom-line impact of a Good Jobs system. Visit www.convenience.org/goodjobs for more information and to access the calculator.

WATCH AND SEE The NACS Labor Landscape three-part series on finding, attracting, interviewing and hiring labor in the convenience industry is available for viewing at www.convenience.org/Education/ Webinars/NACS-Webinars.

• Part 1: The Hiring Landscape • Part 2: Attracting and Hiring Team Members in the Next Normal • Part 3: Employee Value Proposition: Telling Your Story

CONVENIENCE.ORG

April 12-14, 2022 Hyatt Regency O’Hare Chicago, Rosemont, IL

Get ready for the next wave of

B Consumer & Shopper Insights

customer-centric innovation.

B Networking Breakfast, Lunches and HHs

Sharing growth-igniting data and insights is what

B Deep-Dive Regional Breakouts

we do at NACS and the NACS State of the Industry

B Latest Trends and Emerging Innovations

Summit is where it’s all unveiled. We’re gearing

B Retailer Perspectives

up for 2022 in Chicago — our first live, in-person

B NEW IN 2022 – Tech Expo

summit in two years. Join us for two jam-packed days designed to help you understand the industry outlook and use it to your advantage.

Registration is open.

Reserve your seat today.

covenience.org/SOI *A ll ret ail and sup p lier reg ist rat ions includ e a d ig it al access license t o t he NA CS St at e of t he Ind ust ry Rep ort ®of 20 21 d at a.

Dat a (p ub lished m id -June) t o t he NA CS St at e of t he Ind ust ry Rep ort ®of 20 21.

COOL NEW PRODUCTS This advertorial-style guide of services and packaging appears monthly and is an information-packed tour of ideas and approaches that can change how consumers view your store or choose your brand. It spotlights the newest thinking in convenience and fuel retailing and gives you an advance look at ways of staying in front of industry trends.

Products are categorized the same way we organize the Cool New Products Preview Room at the NACS Show each year in October— New Design, New to the Industry, New Flavors, Health & Wellness, Green (EcoFriendly), New Services and New Technology. Products are considered “new” this year if they’ve been introduced since October 2020.

The products featured here also can be seen at www.convenience.org/coolnewproducts.

HEALTH WELLNESS

ZOA Energy ZOA Energy Drink

THE FASTEST GROWING BRAND IN ENERGY

Founded by Dwayne “The Rock” Johnson, ZOA is re-defining the energy category by offer a healthier option, reaching a much broader audience. ZOA offers a balanced profile of 160mg of natural caffeine from green tea and green coffee (a typical coffee in this size has 240 mg of caffeine), along with B vitamins. ZOA also features 100% daily value of Vitamin C, as well as branched-chain amino acids, choline, and turmeric. Available in 5 amazing flavors in both Zero Sugar and 100 calorie versions, with 2 new flavors launching in January 2022. Visit zoaenergy.com or follow us at @zoaenergy.

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| DECEMBER 2021

CONVENIENCE.ORG

NEW FLAVORS

Monster Energy Company Monster Reserve

Monster Reserve Watermelon and White Pineapple

Introducing the NEW MONSTER ENERGY RESERVE line! Bringing popular fruit forward flavors to extend our core family. MONSTER RESERVE WATERMELON is the perfect nostalgic summer flavor that can now be enjoyed all year long. MONSTER RESERVE WHITE PINEAPPLE is our take on the classic, tropical fruit flavor with different notes blended to give you a truly unique and delicious experience. These flavors are consistently ranked in the top 5 flavors that shoppers of all ages prefer. Plus, full sugar, full flavor energy drinks are still the fastest growing segment within the category. It’s the same beast with new flavors. Available nationwide on October 11, 2021. For information, call 951.739.5522 www.monsterenergy.com

NEW TECHNOLOGY

Coin Cloud Digital Currency Machine (DCM)

Partner With the World’s Leading Digital Currency Machine Provider

Over 20 million people search for cryptocurrencies every month, with a high intent to purchase or cash out. Coin Cloud attracts these customers to your location. When you put a Digital Currency Machine (DCM) in your store, shoppers will come from near and far to buy and sell over 40 different assets with cash. This is the perfect solution for C-stores that want to offer customers digital currency services without all the typical complications. In fact, you don’t have to do anything — it’s 100% turnkey, and you get paid every month for just 1.9 square feet of floor space. Discover how you can attract MORE shoppers and generate MORE revenue with ZERO work and ZERO cost at www.Coin.Cloud/Hosts.

CONVENIENCE.ORG

DECEMBER 2021 |

55

NEW TO THE INDUSTRY

NACS NACS State of the Industry Compensation Report® Survey®

Win the Race to Attract and Retain Talent

The labor shortage is real, and finding high-quality talent is increasingly difficult. So, what do workers want? Offering a competitive wage and benefits package is key to talent acquisition. NACS State of the Industry Compensation Report®—is the most up-to-date and convenience industry-specific benchmarking snapshot of employee compensation, benefits, turnover, and recruitment. To produce this essential annual report, we need your help by confidentially submitting your data. In exchange for your data, you will receive a digital license to the complete comprehensive report (a $349 value) with the benchmarking data, analysis, and insights. Get the first look at the data—and free digital license to the published report in Spring 2022—by confidentially submitting your data at www.surveymonkey.com/r/NACSCompensationSurvey2021.

NEW DESIGN

INDEX HEALTH AND WELLNESS

ZOA Energy................................................................................ 54 NEW FLAVORS

Monster Energy Company..................................................... 55 NEW TECHNOLOGY

Coin Cloud................................................................................... 55 NEW DESIGN

Federal Industries

Federal Industries..................................................................... 56 NEW TO THE INDUSTRY

Vision Series

Engineered to Inspire

NACS State of the Industry Compensation Survey....... 56

A fresh spin on proven quality, the Vision Series is sure to impress on every level – from its sleek, contemporary design to its ease of operation and unparalleled reliability. By combining an elegant Italian inspired aesthetic with American ingenuity, Vision Series sets a bold new precedent in food merchandising that elevates product appeal and maximizes profits. With Heated, Non-Refrigerated & Refrigerated offerings, you’ll find everything you need to gain a competitive edge. Visit us at www.federalind.com or call at 800-356-4206.

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| DECEMBER 2021

CONVENIENCE.ORG

Celebrate 60 in style with a NACS 60th Anniversary t-shirt!

We Connect and Inspire Our Members.

Our commitment is to always meet our members and customers where they are, ensuring they are prepared for, and out in front of, what tomorrow may bring. And after 60 years, we ‘re just getting started!

An Industry Champion for 60 Years

Get your t-shirt at convenience.org/60years Limited availability

GAS STATION GOURMET

Cluckin’ Hot

Eureka Eatery in Monroe, Michigan, causes a stir with spicy chicken sandwiches.

BY AL HEBERT

Customers line up at Eureka Eatery in Monroe, Michigan, for spicy “Cluckin’ Hot Chicken” sandwiches ranging from no heat to inferno and served on a bun with cole slaw, pickles and sauce.

I

magine this. You have a winning menu.

Customers love it. You’re getting five-star reviews. From a business standpoint, you’re where everyone hopes to be. The food program is sailing along well. Then, you decide to change the menu and drop customer favorites.

Starting with something completely new is the plan. Sounds crazy, right?

That’s what Kenny Sharrak, owner of the Eureka Eatery in Monroe, Michigan, decided to do. He said, “The Eureka Eatery started off as a gas station. It was a dog. When we came in, $8,000 was owed to the jobber. We decided to build it up and sell it. We did $2.7 million in sales in a year.

Six months into it we decided to open a restaurant.

I knew nothing about cooking; I couldn’t cook an egg, but I did love food.”

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| DECEMBER 2021

Sharrak liked Mediterranean cuisine. He went with that and opened the restaurant as Eureka Gyro. They sold bowls, salads, gyro bowls and other items. It was very successful. “People loved it. The neighborhood loved it. As I was progressing, I wanted to see how I could drive more business inside,” Sharrak recalled.

That’s when it hit him. He would embark on a culinary odyssey to find something new that customers would love. He decided to try new flavors.

“I went on food adventures. I tried 23 restaurants in three days. I went to Arizona, Texas and Ohio.

I would launch monthly specials to see how they would work,” he explained.

As new specials launched, Sharrak developed marketing strategies. “We did corned beef egg rolls. We did Chicago hot dogs, BLT dogs,” he said.

CONVENIENCE.ORG

You take a bite into this sandwich, and it’s just pure joy.

Eureka Eatery owner Kenny Sharrak fell in love with what’s known as Nashville hot chicken on a trip to Tennessee and decided to develop a recipe for his Michigan restaurant. The gas station sells 300-400 of the sandwiches a day.

Then, a trip to Nashville, Tennessee, changed everything.

“I fell in love with hot chicken. I launched Nashville hot chicken. I spent countless hours and nights developing the chicken. The kitchen would close at midnight, and I’d start tearing up the kitchen all night. I had chefs come with me. We were playing around. It was fun and exciting trying new flavors. You don’t usually get that experience at gas stations,” Sharrak said.

It wasn’t all smooth. “Chefs would get cocky. I ended up firing every chef. I wanted more. I knew there was more to achieve and develop. I was lost at some point with the chefs. I was 28, and the chefs were older than me.”

AND THEN, SUCCESS “I launched Nashville hot chicken a second time, and it did phenomenally well. Last year, I launched a whole Nashville hot chicken menu. I took off all the Mediterranean food. We were a successful restaurant. We had 400-500 five-star reviews. To develop a successful brand and convert it was tough.”

As Sharrak grew his business, the pandemic hit, but instead of hurting sales, it helped them. “We tripled our business CONVENIENCE.ORG

during COVID. During the second month, we saw growth right away. Right before the shutdown in February 2020, we opened the drive-thru. Sales started to pick up immediately. We started to grow. We had 40% growth month over month. We had to hire more people. It was so exciting. The business was booming, and people were loving the food.”

Customers can taste the attention to detail in the food. “When the chicken comes in, we inspect every breast,” Sharrak said. “We massage the breast. We open it to make sure it’s fit to be consumed. If we find spots we don’t like, we throw it out.

We marinate 48 hours before we bread it.

Then, we fry it and dip it into butter and season to the customers’ seasoning level.”

That means turning up the heat.

“There are seven different seasonings, from mild to medium hot, hot, burning, cluckin’ hot and inferno and, of course, no heat at all. We use the hottest stuff in the world,” he said.

PURE JOY Eureka Eatery sells 300-400 Nashville hot chicken sandwiches a day and is now a regional favorite. “Our flavor is phenomenal,” Sharrak said. “We compete with any big chain restaurant. You take a

DECEMBER 2021 |

59

GAS STATION GOURMET

Al Hebert is the Gas Station Gourmet and showcases America’s culinary treasure— gas station cuisine. He shares these stories and on occasion, a recipe or two at www.GasStationGourmet.com.

He is a NACS Magazine contributor, bringing foodservice ideas to readers.

bite into this sandwich, and it’s just pure joy.” He’s constantly tweaking ingredients, from the pickles to the buns.

Lines at the eatery’s drive-thru back up into street, which Sharrak deems “amazing.”

To handle demand, Sharrak had to grow the store and make it more efficient, including investing in new equipment.

“We’d switch friers, buy better holding cabinets,” he said.

Sharrak has good reason to be proud of what he’s accomplished. “Today, we’re a destination food spot even though we’re located in a gas station. People want great customer service and great food.” He adds, “15% of our customer base drives an hour to get here.” Plans for a food truck and new locations are in the works.

Sharrak knows great food brings people in, but customer service is paramount: “I think people want to be appreciated. Nobody wants to go to a place where they’re not appreciated. We take orders outside on order pads. We have multiple registers up front to take care of guests. We’re launching an app.

I want customers to be treated right.

It’s one of the most important aspects of the business. It’s flavor, customer service, marinating, massaging. It’s the drive-thru process and the register process. Each part is its own driver. Each part is a piece of the puzzle.”

Are you the leader you want to be?

This transformational program provides rising leaders across the convenience industry an opportunity to discover personal strengths that will help them create a more positive, profitable and performance-oriented work environment.

Accept the challenge.

May 15-20, 2022 | Glen Allen, Virginia convenience.org/lleadershipforsuccess Half Horz.indd 1

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| DECEMBER 2021

11/10/2021 12:39:01 PM CONVENIENCE.ORG

March 8-9, 2022 Virtual Live

Our Business. Our Future.

Your participation and support is the key to maintaining a strong voice in DC to protect our industry year after year.

Plan now to join us in March to advocate for your business, and ultimately, all c-stores across the U.S. convenience.org/DOH2022

GLOBAL TRENDS

Berlin: The Future of Convenience The city’s entrepreneurial drive sets the bar for next-gen “foodvenience.”

BY MARK WOHLTMANN

From grocery to food to go: Berlin supermarkets increasingly serve hot food to go, leveraging their fresh produce competence, like this Hit Supermarket.

I

n preparation for the NACS Convenience Summit Europe, which will be held in Berlin May 31 to June 2, 2022, I visited the city in September 2021, to look for best practices and innovation to share during the summit’s store tours. After having been in a pandemic hiatus for almost 18 months, I was keen to see how the city’s convenience and fuel retail industry had fared and how much food for thought the summit delegates will find in June. To summarize my thoughts after everything I saw and learned into one word: “Wow!” Berlin has it all: a thriving foodservice scene from street-food entrepreneurs to grown-up

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| DECEMBER 2021

convenience startups to all the big players— from grocery to fuel retailers—with their latest formats. And there are even some brand-new, world-first store design concepts from big energy company brands. I left the city with more amazing store locations on my list than we could ever accommodate on our store tours and with more groundbreaking ideas to talk about than we could ever cover during our conference.

While the logistical challenge of making sure that our delegates can get the most out of their time is now up to me, I thought I’d share a few things I saw and learned in Berlin that highlight the key trends of where our industry is heading.

CONVENIENCE.ORG

NACS GLOBAL CALENDAR NACS Convenience Summit Asia www.convenience.org/csa

MAY 31-JUNE 2, 2022 NACS Convenience Summit Europe Berlin, Germany www.convenience.org/cse

OCTOBER 1-4, 2022 NACS Show Las Vegas, Nevada, USA www.nacsshow.com L to R: Growing herbs directly in the supermarket for later on-site harvesting and sales reduces supply chain emissions. Moving impulse zones to where the impulse consumer is—for example, to the self-serve coffee machine—is seen with Total’s new store concept.

CONVENIENCE-PLUS In a global trend during the pandemic, convenience retail has expanded its offer —from emergency purchases to planned purchases, from impulse to weekly shopping, from top-up to full basket and from packaged and ambient to deep into the fresh and chilled categories. And this effect can be seen all over Berlin: petrol stations selling loads of freshly baked bread, small grocery stores expanding ready-to-eat options (far beyond the German-typical in-store bakery) and foodservice providers entering the convenience space through a mix of fresh produce and some packaged food and beverage items. Some of this is a holdover from the COVID-19 lockdowns when everything else was closed or no one wanted to shop at far-away hypermarkets. And as it seems, this is a trend to stay.

RETAIL TECHNOLOGY The acceleration of retail technology can be found in nearly any store in the form of more cashless payment options (keep in mind that many Germans still prefer cash over card), self-checkout systems and fully integrated POS solutions.

One solution that stood out is an in-store cigarette dispensing system.

Cigarette sales call for an abundance of attention: needing to secure sales to CONVENIENCE.ORG

eligible customers only, accommodating ever-increasing advertising restrictions and dealing with shrinkage. One German tobacco wholesaler, tobaccoland, is offering an innovative cigarette dispensing system called EWA-Wall. It is akin to an in-store vending machine, fully operated by the cashier, with a huge display surface and options to return products into the machine if, for example, chosen wrongly.

Technology will define the future of retail, and Berlin shows some of the latest innovation already in action.

SELF-SERVICE COFFEE Years ago, we talked a lot about the “Fast-Laner” petrol customer who had no intention to shop, browse or be tempted with impulse items. Just in, pay, out. The discussion was how to offer them the fast lane without compromising the upselling to other customers. Today, a new FastLaner is emerging: the coffee customer.

While petrol stations increasingly become destinations for foodservice, the “Express-Espresso-Customer,” who might not even have fueled, just wants coffee without queuing, without waiting in line to pay.

And increasingly petrol stations are answering this by introducing coffee stations in the center of the store with a direct way from the door to the coffee

Technology will define the future of retail, and Berlin shows some of the latest innovation already in action.

DECEMBER 2021 |

63

GLOBAL TRENDS

Clockwise from top left: From stylish bathrooms at Total to fully automated and shrinkage-reducing cigarette in-store vending machines to a bistro vibe at Shell, Berlin is all about the experience. A local favorite is the Berlin Currywurst (or “Hotdog with Currysauce” for nonlocals).

machine and back. Contactless payments at the machine are thereby the preferred quick-pay option.

And some retailers have now discovered that among these Fast-Laners some impulse-buyers are hiding. And the solution to that is introducing self-service impulse around the self-service coffee machine. Smart.

Mark Wohltmann is director, NACS Global. He can be reached at mwohltmann@ convenience.org.

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| DECEMBER 2021

TOILETS Even though those keys with the attached empty oil canisters that open the questionable facility on the rear of the petrol station still exist (fast decreasing, though), the opposite end is now booming. Think luxury toilets with mirrors with perfect lighting, clean and well-smelling and with a modern design. In Berlin, I must say it was a pleasure “having to” use the toilet at any petrol station I visited.

DELIVERY The pandemic has accelerated the need of consumers to get grocery items delivered. And 10-minute delivery companies have emerged, as well as financed startups that are trying to monetize from that massively acquired customer base. Two of Germany’s biggest grocery delivery startups are based in Berlin: Flink and Gorilla’s.

This shows the energy that is in Berlin’s market, driving innovation and pushing boundaries. The city is a thriving, multicultural brewing pot for new business ideas, technological innovation and an example of the positive power of competition when multinational retailers clash with an abundance of startups and produce retail formats that we all can learn from. I am very much looking forward to going back.

CONVENIENCE.ORG

Diversity Thank You = Strength Thank you to these NACS Hunter Club members who have committed support to the NACS IDEA Conference and have shown support for IDEA efforts in their own companies and communities.

Premium Sponsors

Partner Sponsors

More than a conference.

A conversation.

Learn more at

convenience.org/idea

CATEGORY CLOSE-UP / CIGARETTES

Smokin’ Sales

A slower return to normalcy may benefit a major category.

BY MELISSA VONDER HAAR

JUST THE FACTS In 2020, cigarettes again represented the largest contributor of in-store sales (27.79%) and were third in terms of in-store gross margin (13.92%).

in 2020 that have been typical of recent years. Sales grew by 3.6%, according to the NACS State of the Industry Report of 2020 Data (SOI).

This uptick in sales was a bright spot for convenience retailers, especially given the importance of the category to a c-store’s overall sales and profit.

In 2020, cigarettes again represented the largest contributor of in-store sales (27.79%) and were third in terms of in-store gross margin (13.92%), falling behind prepared food (21.97%) and packaged beverages (19.02%).

“Sales and profit increases from 2019 to 2020 were largely attributed to increased consumption throughout lockdown and work from home,” said Jayme Gough, NACS research manager.

But the question is: What happens to cigarette sales as the country slowly eases back to normal?

NEXT TO NORMAL In looking at monthly CSX sales data, Gough said 2021 has tracked pretty closely to 2020’s numbers.

“It’s hard to tell at this point,” she said.

“Looking at July, we were a little lower than last year in terms of monthly sales, but then we were a little bit higher in March than last year. It might even out in the end.”

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CONVENIENCE.ORG

iStock.com/Grafissimo

W

ithout a doubt, 2020 was a great year for cigarettes. Even though just 16% of the U.S. adult population smoked as of 2019, cigarette sales didn’t experience the same declines

Industry Sales

% of In-Store Sales 2019

2020

26.87% 27.79%

% of Stores Selling

Avg. Sales/Store 2019

2019

2020

2020

99.8% 99.8%

$526,252 $545,447

iStock.com/BlackJack3D

Source: NACS State of the Industry Report of 2020 Data

These data suggest that convenience cigarette sales will ultimately be flat or slightly up in 2021—a net win for the channel, given the tough comps to 2020.

“Last year’s 3.6% sales increase year over year was pretty huge for cigarettes,” she said. “I would consider it a win for the category if we were flat because that means we kept that 3.6% sales growth from the previous year.”

Just as stay-at-home orders and remote work helped the cigarette category in 2020, a slower-than-anticipated return to normalcy has likely allowed retailers to keep those increased cigarette sales in 2021. Despite vaccinations, as of July, building security company Kastle Systems reported that only 32% of office workers had returned to large office buildings. NACS data tell a similar story, with store transactions up 7% for midyear 2021 versus midyear 2020—but transactions are still not back to prepandemic levels.

“I don’t think we can say it’s even close to normal yet,” Gough said.

“Normal” may prove to be a relative term in the post-pandemic world. A survey by the National Association for Business Economics found that just 11% CONVENIENCE.ORG

of companies expected all staff members to return to full-time, in-office work in 2021, and a global employee survey by market research firm Ipsos found that nearly two-thirds of respondents want flexibility in the amount of time they go into the office.

While not a universal win for the cigarette channel, a more permanent shift toward working from home would likely benefit the cigarette category.

“Because convenience caters to so many lifestyles, there are some categories that are obviously going to benefit from people returning back to the office and the commute,” Gough said. “But with cigarettes, beer, wine and liquor, some of

Sales and profit increases from 2019 to 2020 were attributed to increased consumption throughout lockdown and work from home.

THE POWER OF CSX DATA CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database. Contact Chris Rapanick at (703) 518–4253 or crapanick@convenience.org for a complimentary executive walkthrough.

DECEMBER 2021 |

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CATEGORY CLOSE-UP / CIGARETTES

Subcategory Performance % of Sales

CIGARETTES

Avg. Sales/Store

Avg. GP$/Store

Gross Margin %

2019

2020

2019

2020

2019

2020

2019

2020

Premium

78.5%

77.5%

$413,004

$422,512

$58,357

$74,354

14.13%

18.24%

Sub-Generic/Private Label

11.9%

12.1%

$62,695

$66,094

$10,376

$11,096

16.55%

17.40%

Branded Discount

5.2%

4.7%

$27,260

$25,586

$3,754

$4,394

13.77%

17.80%

Fourth Tier

2.2%

3.6%

$11,721

$19,643

$1,643

$3,072

14.02%

16.21%

Imported

2.2%

2.1%

$11,572

$11,614

$2,172

$2,072

18.77%

18.49%

100.0%

100.0%

$526,252

$545,447

$76,309

$94,993

14.50%

17.42%

TOTAL

For more information on NACS category definitions, visit www.convenience.org/categorydefinitions.

Source: NACS State of the Industry Report of 2020 Data

PER STORE, PER MONTH SALES

2018

2019

2020

2021

$43,333 $45,000 $35,000 $25,000 $15,000 $5,000 $0 JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

those categories benefited from consumers being at home more.”

INCREASING PRICES, DOWNTRADING PRESSURES In terms of cigarette subcategory performance, premium cigarettes tend to drive how the category performs given that they accounted for 77.5% of cigarette sales in 2020. Premium cigarettes, like cigarettes overall, have been more or less flat this year.

Subgeneric/private-label cigarettes, while just 12.1% of the category, have been “a lot more interesting,” according to Gough.

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| DECEMBER 2021

“It was a breakout starting at the end of 2020 and has continued so far into 2021,” Gough said of the segment. Monthly sales for the subcategory so far in 2021 have averaged nearly $4,000 per store per month, higher than any other year going back to 2018.

“Consumers have realized that they don’t need to sacrifice quality to get a less expensive product,” said Jessica Fratarcangelo, marketing director for Cheyenne International. “Whether the consumer is becoming more educated about the cigarette category as a whole, or trading down due to recent economic pressures, we find CONVENIENCE.ORG

iStock.com/Givaga

Source: CSX; www.csxllc.com

BEST

SELLER

GoPremier.com

CATEGORY CLOSE-UP / CIGARETTES

FEDERAL REGULATIONS LOOM LARGE Regulations have always played a big role in the cigarette category, and 2021 was no exception. The difference is who is passing those regulations.

In recent years, most onerous legislation—menthol bans, taxes, retail license limitations—has happened at the state and local level. Before 2020, on a federal level, things had remained relatively stable. This year, cigarette retailers are bracing for (at least) a trio of proposed federal regulations with the potential to upend the category: a 100% increase to the federal excise tax, a complete ban on menthol cigarettes and a lowering of the allowable amount of nicotine in cigarettes.

Getting the most traction in Congress this year is legislation to increase the federal excise tax. The Tobacco Tax Act, first proposed by Senator Dick Durbin (D-Ill.), wouldn’t just double the federal tax on cigarettes, it would also apply it to other forms of tobacco and nicotine. While the legislation didn’t gain traction as a solo bill, House Democrats originally included it as a funding source for their reconciliation package. However, given the strong pushback from retail businesses and consumers, they removed the FET increase of tobacco products in their final version of the Build Back Better Act but left a tax on vape. Their bill proposes taxing vape, which is not currently taxed federally, based on the volume of nicotine. In many cases, this would tax vape at a rate even higher than cigarettes. As of the time of this writing, the package has not yet been brought to the House floor for a full vote, and the Senate is currently drafting its own version of the reconciliation package, according to NACS Director of Government Relations Anna Ready Blom.

“Exorbitant increases in tobacco and nicotine taxes have unintended consequences as we have seen at the state level and in other countries,” Ready Blom said. “When an increase is as substantial as what has been proposed in Congress, it will not dissuade current users of the products but instead push them to the illicit market.”

The proposed menthol ban, Ready Blom said, would result in similar black-market activity. Fortunately, because the Food and Drug Administration must follow a strict rulemaking process, there is time for retailers to get involved.

“FDA announced in May that it will initiate a notice and comment rulemaking in the next year to ban menthol cigarettes, as well as cigars and cigarillos,” said Ready Blom.

“As part of the notice and comment rulemaking process,

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FDA will publish a proposal to ban these items, and then the public will have a time period to file comments before the agency finalizes the rule.” Ready Blom expects to see the FDA’s proposal on menthol sometime in 2022.

The potential nicotine mandate is even further out. While the FDA began considering this policy under the Trump Administration (and continues to do so under Biden), it has not yet issued a notice of proposed rulemaking to do so.

Goldman Sachs Analyst Bonnie Herzog noted in a research note that “at a minimum, there is a mandatory one- to two-year delay between issuing a final rule and policy implementation.”

Both Altria and British American Tobacco (parent to Reynolds American Inc.) have expressed concerns about the real-world consequences of lowering nicotine levels. “(Any FDA action) must be based on science and evidence and must consider the real-world consequences of such actions, including the growth of an illicit market and the impact on hundreds of thousands of jobs,” Altria told Bloomberg.

“Many consumers wrongly believe that a cigarette very low in nicotine content is lower in risk than traditional cigarettes, a misconception that poses a major hurdle in determining proposed rulemaking for low nicotine cigarettes,” British American Tobacco told Bloomberg.

What would such a policy look like? It’s likely too early to tell.

“FDA has some authority to reduce nicotine levels,” Ready Blom said. “They clearly can't make nicotine zero, but it’s not clear exactly how far they can go. FDA will have to go through a full notice and comment rulemaking to do it, and it is likely they will face litigation.”

With cigarettes remaining such a crucial category to the convenience channel, Ready Blom said NACS will continue to help retailers get involved: There is already a Call to Action where retailers can send a pre-drafted letter to their members of Congress opposing the excise tax increase, and a similar campaign is expected once the FDA releases its menthol ban proposal.

“It’s imperative that both legislators and regulators hear from convenience retailers about the impacts of these policies on their businesses,” she said.

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that deep discount cigarettes can deliver what the consumer desires at a reasonable price, while still providing retailers with attractive penny profit.”

One reason for the increase in subgeneric/private-label sales could be more frequent price increases leading to downtrading pressure on price-sensitive consumers. This year, most major cigarette manufacturers have adopted a quarterly price increase.

“We continue to expect stepped up price increases, especially in light of a potential for a state and federal excise tax increase,” Goldman Sachs Analyst Bonnie Herzog wrote in a research note.

While those price increases were largely across all segments, they may have boosted the appeal of lower-priced options.

“Across the board, in general last year, shoppers were more wary about spending, especially with unemployment being so high,” Gough said.

Retailers that took part in Goldman Sachs’ quarterly “Nicotine Nuggets” survey agreed, with 65% reporting the cigarette downtrading picked up in the second quarter of 2021.

“Unsurprisingly, respondents broadly agree that downtrading trends have moderately picked up in the second quarter versus the first quarter as government stimulus money dries up and increased spending options with the reopening, which puts pressure on wallets and given the increased frequency and strength of cigarette price increases,” Herzog said.

ADVERTISER INDEX Contact Information

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A ltria Group Distribution Company................ Inside Front Cover AGDCTradeRelations@Altria.com www.altria.com www.tobaccoissues.com Calico Brands Inc. (Scripto)....................................................................30 (800) 544-4837 www.calicobrands.com C ash Depot.....................................................................................3 (800) 776-8834 sales@cdlatm.com www.cdlatm.com Cheyenne International LLC.....................................................................31 www.cheyenneintl.com Conexxus..................................................................................................51 www.conexxus.org Cool New Products Guide................54-56 www.convenience.org/Media/ NACS-Magazine/Cool-New-Products

Contact Information

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Melissa Vonder Haar is the marketing director for iSEE Store Innovations. Follow her on Twitter at @iSeeMelissaV.

Thank you to these advertisers who have demonstrated their support of the convenience and fuel retailing industry by investing in NACS Magazine.

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Contact Information

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Federal Industries...................................................................................47 www.federalind.com

NACS Leadership for Success................................................................. 60 www.convenience.org/leadershipforsuccess

Invenco Group Limited ............................................................................9 (877) 515-0939 www.invenco.com

NACS IDEA Conference............................................................................65 www.convenience.org

JT International U.S.A. Inc............................................................7 www.jti.com Liggett Vector Brands Inc........................................................... 19 (877) 415-4100 www.liggettvectorbrands.com Living Essentials LLC (5-hour ENERGY)....................... Back Cover (866) 960-1700 www.5HErewards.com

NACS Retail Membership.............................................. Inside Back Cover www.convenience.org/renew NACS SOI Summit....................................................................................53 www.convenience.org/SOISummit NACS TruAge.............................................................................................4 www.convenience.org Premier Manufacturing Inc............................................................. 5 & 69 www.gopremier.com

Mondelez International .............................................................35 www.mondelezinternational.com

RadiusAI Inc.............................................................................................43 www.radiusai.com

NACS 60th Anniversary.......................................................................... 57 www.convenience.org/60years

Swedish Match North America (Zyn)..........................................15 (800) 367-3677 www.smna.com

NACS Day on the Hill............................................................................... 61 www.convenience.org/DOH2022 Diaego Beer Company USA.....................................................................39 www.diageo.com

Last year’s 3.6% sales increase year over year was pretty huge for cigarettes.

NACS Foundation.......................................................................................6 www.conveniencecares.org

Vitamin Energy LLC.............................................................................10-11 www.vitaminenergy.com

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Convenience Store Crooning

Love Is in the C-Store Air Love is eternal—especially when a couple’s love for a certain convenience store is involved. A Wisconsin couple not only declared their love for each other but also Kwik Trip when the duo took their wedding photos at a Janesville, Wisconsin, location. Mark Steinke and Ashley Ormes were already married before the shoot, but they couldn’t resist taking more photographs at one of their favorite spots, which happens to be a favorite of the wedding photographer as well. The couple took various pictures throughout the Kwik Trip, including one on the forecourt with a gas nozzle in Steinke’s hand, one of them smooching while cheers-ing with Big Buddy cups and one of Steinke “proposing” to Ormes with a doughnut. They cut the doughnut together to celebrate, and of course, fed it to each other in true wedding cake fashion.

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Bear Bailey was like many other TikTok users trying to get their singing voices heard via the platform. The 33-yearold crooner was doing relatively well with followers on his account, but once he started singing at the Super Serve convenience store near his home in Houma, Louisiana, his TikTok fame exploded. Cashier Melissa McGee and her daughters, Renee Hayes and Ashley McGee, also cashiers, take turns asking Bailey to sing a song when he approaches the counter, drink in hand. The first few videos were of him singing acapella, and then the cashiers started playing the songs over speakers while he covered the music with his impressive pipes. In October 2020, before the gas station serenades took off, he had less than 140,000 followers, and now he has 3.1 million. The artists he covers have even taken notice—country music legend Keith Urban played one of his covers at his concert, and Clay Walker played Bailey’s cover of his song while he commented and complimented his singing.

Trucker Doppelgänger Look twice next time you’re at a truck stop in Celina, Tennessee. You might just spot celebrity comedian Amy Schumer—or at least someone who looks just like her. Truck driver and Schumer lookalike Amelia often stops at Celina 52 Truck Stop, and after the gas station tweeted about the resemblance, Schumer had to comment. “Wait, what’s going on at a truck stop?—me (tear drop emoji),” tweeted Schumer.

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Why are the convenience industry’s most successful companies

NACS members?

NACS is more than an association. It’s an alliance. It’s a movement dedicated to advancing the convenience industry here and globally.

NACS is single-store operators. It’s multi-billion dollar companies and everything in between. It’s a network where sharing intel, insights, and innovations is the rule, not the exception. Isn’t it time to plug in?

They say you can size up a person by their friends. You can size up a leader by their network. Join the tribe. Join the movement.

Plug in. Power up. And profit.

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