NACS Magazine December 2020

convenience.org | DECEMBER 2020

BRIGHT IDEAS

Leaders teach leaders as the convenience community gathers for the Crack the Code Experience.

7-ELEVEN:

An exclusive look at the chain’s new direction

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. Š2020 Altria Group Distribution Company | For Trade Purposes Only

DECEMBER 2020

32

Bright Ideas

42

The Reimaging of 7-Eleven

Leaders taught leaders as the convenience community gathered at the Crack the Code Experience.

The global brand’s drive to rethink, remodel and regroup with an eye toward expanding its appeal.

Weak Signals No More 52

How the pandemic is shaping 10 key trends in the convenience and fuel retailing industry.

(Part 3 of 3)

58

Code Switch

62

Pandemic Pushes Design Rethink

New tech and new drivers revive the use case for QR codes in retail.

Queuing and traffic pattern adaptations may reflect a more lasting change in the shopping experience.

Cover Art by Beyond Definition STAY CONNECTED WITH NACS

 @nacsonline  facebook.com/nacsonline  instragram.com/nacs_online  linkedin.com/groups/1776505

TRY THIS!

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 2020 |

1

DECEMBER 2020

Our fresh foods are probably a lot better than what you would expect from a typical convenience store.

If you’re already a cigarette smoker and can now smoke throughout the day without having to go outside, you’re probably going to do that.

P.82

IDEAS 2 GO | P.28

06 Convenience.org

66 Cool New Products

08 From the Editor

76 Gas Station Gourmet

16 Good Work 18 Inside Washington

Year in Review: NACS examines the top legislative issues affecting the convenience industry.

28 Ideas 2 Go

Franklin Bros. Market diversified its offerings and added online ordering and curbside pickup.

78 Global Trends

Germany’s REWE To Go reveals how it optimizes store design and offers for high-traffic locations.

82 Category Close-Up

Reversing recent history, cigarettes are a bright spot in a chaotic year.

88 Back Page 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.

2

| DECEMBER 2020

CONVENIENCE.ORG

iStock.com/mphilips007

12 NACS News

In a New Hampshire tourist town, Meredith Station makes visitors and locals feel at home.

JANUARY 2021

3 IN 4

~

COKE DRINKERS CONSUME COFFEE

80%

PURCHASE INTENT AMONG TARGET CONSUMERS

CONTACT YOUR COCA-COLA REPRESENTATIVE, CALL 1-800-241-COKE, OR VISIT WWW.COCA-COLACOMPANY.COM

INFUSED WITH BRAZILIAN COFFEE. Source: Bev 360 12 MMT May 2020 © 2020 The Coca-Cola Company. All rights reserved.

VOLUME 19, ISSUE 12

DECEMBER 2020

EDITORIAL Kim Stewart Editor-in-Chief (703) 518-4279 kstewart@convenience.org Sara Counihan Managing Editor (703) 518-4278 scounihan@convenience.org Lauren Brooks Digital Content Manager (703) 518-4283 lbrooks@convenience.org

Get Get Inspired, Inspired, Wherever Wherever You You Are. Are. Get the inside scoop on Get the inside scoop onby all things convenience all things convenience by downloading our podcast! downloading our podcast!

Convenience Matters® empowers Convenience Mattersa® community empowers listeners and fosters listeners and a community of sharing by fosters providing of sharing byaccess providing on-demand to business on-demand access to business ideas from those who are at ideas from those who are at the forefront of disrupting the forefront of convenience.

Bydisrupting providing convenience.

By providing convenient access to industry convenient to industry knowledge, access fresh and candid knowledge, fresh candid perspectives fromand thought perspectives from leaders—inside andthought outside of the leaders—inside and outside ofitthe industry—the podcast makes industry—the podcast makes it possible for retailers and suppliers possible for retailers and suppliers to strengthen their bottom to strengthen theirimpact bottomtheir line and positively line and positively impact their communities. communities.

Available on: Available on:

CONTRIBUTING WRITERS Paige Anderson, Frank Beard, Anna Ready Bloom, Sarah Hamaker, Al Hebert, Doug Kantor, Samantha Oller, Renee Pas, Jon Taets, Melissa Vonder Haar, Christian Warning.

DESIGN Beyond Definition www.beyond-definition.com

ADVERTISING Stacey Dodge Advertising Director/Southeast (703) 518-4211 sdodge@convenience.org

NACS BOARD OF DIRECTORS CHAIR: Kevin Smartt, Kwik Chek Food Stores OFFICERS: Lisa Dell’Alba, Square One Markets Inc.; Brian Hannasch, Alimentation Couche-Tard Inc.; Andy Jones, Sprint Food Stores Inc.; Ken Parent, Pilot Flying J LLC; Victor Paterno, Philippine Seven Corp. dba 7-Eleven Convenience Store; Don Rhoads, The Convenience Group LLC; Jared Scheeler, The Hub Convenience Stores Inc. PAST CHAIRMEN: Frank Gleeson, Aramark Northern Europe; Julie Jackowski, Casey’s General Stores Inc. MEMBERS: Chris Bambury, Bambury Inc.; Chris Coborn, Coborn’s Inc. Little Dukes; Joseph M. DePinto, 7-Eleven Inc.; Bhagdeep S. Dhaliwal, Dhaliwal & Associates Inc.; George Fournier, EG America LLC; Anne Gauthier, St. Romain Oil

Company LLC; Varish Goyal, Loop Neighborhood Markets; Christine Hogan, Wheels Convenience Stores; William B. Kent, The Kent Companies dba Kent Kwik Convenience Stores; Sydney Kimball, Shell International Petroleum Company Limited; Chuck Maggelet, Maverik Inc.; Ina (Missy) Matthews, Childers Oil Co.; Charles McIlvaine, Coen Markets Inc.; Lonnie McQuirter, 36 Lyn Refuel Station; Glenn M. Plumby, Speedway LLC; Robert Razowsky, Rmarts LLC; Richard Wood, Wawa Inc. SUPPLIER BOARD REPRESENTATIVES: Rick Brindle, Mondelēz International; Brent Cotten, The Hershey Company STAFF LIAISON: Henry Armour, NACS GENERAL COUNSEL: Scott Sinder, Steptoe & Johnson LLP

NACS SUPPLIER BOARD CHAIRMAN: Rick Brindle, Mondelēz International

VICE CHAIRMEN: David Charles, Cash Depot; Kevin Farley, GSP; George Ubing, E&J Gallo Winery

Coca-Cola Company; TJ Lynch; Vito Maurici, McLane Company Inc.; Bryan Morrow, PepsiCo Inc.; Sharon Porter, Saputo USA LLC, dba Saputo Convenience; Lesley D. Saitta, Impact 21; John Thomas, iSEE Store Innovations LLC; Dean Zurliene, Monster Beverage Company

PAST CHAIRMEN: Kevin Martello, Keurig Dr Pepper; Brad McGuinness, Qopper Inc.; Drew Mize, PDI

RETAIL BOARD REPRESENTATIVES: Steve Loehr, Kwik Trip Inc.; Chuck Maggelet, Maverik Inc. STAFF LIAISON: Bob Hughes, NACS

Erin Pressley Publisher and Vice President, Education & Media (703) 518-4208 epressley@convenience.org

MEMBERS: Blake Benefiel, Altria Group Distribution Company; Alicia Cleary, Anheuser-Busch InBev; Tony Gaines, NVIP LLC; Mike Gilroy, Mars Wrigley; Josh Halpern, FIFCO USA; David Jeffco, Krispy Krunchy Foods LLC; Tim Knight; Kevin M. LeMoyne,

Rose Johnson Audience Development and Production Manager (703) 518-4218 rjohnson@convenience.org

NACS Magazine (ISSN 1939-4780) is published monthly by the National Association of Convenience Stores (NACS), Alexandria, Virginia, USA.

Jennifer Nichols National Advertising Manager/ Northeast (703) 518-4276 jnichols@convenience.org Ted Asprooth National Sales Manager/ Midwest, West (703) 518-4277 tasprooth@convenience.org

PUBLISHING

CHAIRMAN-ELECT: Brent Cotten, The Hershey Company

SUPPLIER BOARD NOMINATING CHAIRMAN: Joseph Vonder Haar, iSEE Store Innovations LLC

Subscriptions are included in the dues paid by NACS member companies. Subscriptions are also available to employees of nonmember companies at a rate of $70 per year.

Please add $15 for delivery outside the United States.

Subscription requests: nacsmagazine@convenience.org POSTMASTER: Send address changes to NACS Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA. Contents © 2020 by the National Association of Convenience Stores. Periodicals postage paid at Alexandria VA and additional mailing offices.

1600 Duke Street, Alexandria, VA, 22314-2792

Tune in weekly at Tune in weekly at conveniencematters.com conveniencematters.com

CONVENIENCE.ORG

APTER-FRENCH PRESS COFFEE MAKER-BL ACKING DEVICE-PORTABLE CELL CHARGER SE-WRISTBAND ACTIVITY TRACKER-ENTER INTRODUCING REAMING STICK-WEIGHTED BLANKET-4K A T-TELESCOPE-VOICE ACTIVATED AUTO VIR NT-BEARD GROOMING SET-LAPTOP BACKP SIZED MULTI-TOOL-CAR POWER CONVERT MERA-WIRELESS HEADPHONES-NEON SIGN ORBELL-HYDRATION BACKPACK-STREAMIN AYER-KITCHEN AIR FRYER-POKER TABLE T ART PROJECTOR-WIRELESS SMART SPEAK VERAGE COOLER-AUTOMATIC COCKTAIL M TENT-DRONE-TURNTABLE-6-PIECE KNIFE SET-WHEN SMART WATCH- SMART TABLET-GR CONSUMERS AIR ENJOY PURIFYING ROOM ESPRESSO MACHIN REWARDS, ART VACUUM-CANCELLING HEAD NES- SOUND BARGIFT CARDS-T-SHIRT BAGTHE -INTERNATIONAL BENEFITS. ADAPTER-FRENCH KER-BLUETOOTH TRACKING DEVICE-PORT TOP CASE-WRISTBAND ACTIVITY TRACKER every can purchased, consumers can UALWith -VOICE ACTIVATED earn points toward a wide selection of great ARD rewards.

GROOMING APT And you enjoy repeat business. - AUTOMATIC COCKT CKPACK-WEIGHTED BLANKET-CAR POWER GRILL & SMOKER-AIR PURIFYING ROOM FA CHINE-FLAT SCREEN TV-SMART VACUUM-N SUPPORT ZYN REWARDS AT RETAIL LLING HEADPHONES-SOUND BAR-GIFT CALL 800-367-3677 RDS-T-SHIRT-HOODIE-TOOL BAG-INTERNAT WER ADAPTER-FRENCH PRESS COFFEE MA OTH TRACKING DEVICE-PORTABLE CELL CH P CASE-WRISTBAND ACTIVITY TRACKER-E

YOU REAP

OR CONTACT YOUR SWEDISH MATCH REPRESENTATIVE FOR ADDITIONAL DETAILS

For trade purposes only. ©2020 Swedish Match North America LLC

*Visit ZYN.com/Rewards for terms and conditions. 21+. Min. purchase of 25 cans required to claim reward. Limit of 60 codes per account per month. Ends 10/31/21.

CONVENIENCE.ORG

WHAT’S ONLINE | DECEMBER 2020

In Uncertain Times, You Need an Ally…

In the Know

NACS Has Got Your Back.

Are you maximizing your benefits?

Learn more: convenience.org/2021ally

Keeping up with news in the fast-paced convenience industry can be challenging, especially when so much other media is competing for your attention. While the award-winning NACS Magazine is the centerpiece of NACS Media’s publications stable, bringing readers impactful thought leadership every month, NACS Daily is a quick-read digest of the latest industry news, legislative developments and trends delivered via email each weekday.

Articles also can be found on the news page at www.convenience.org/ Media, along with NACS press releases, Member News press releases and the Convenience Matters podcast. All are searchable by topic and date—and mobile friendly! See what articles are trending and search by popular categories—foodservice, fuels or community, for example.

Did you know that NACS has a blog? Convenience Corner showcases the dynamic convenience retail environment. Join the conversations on all things retail, NACS and convenience, brought to you by industry experts and guests. Read the latest at www.convenience.org/conveniencecorner.

HEROES Don’t forget that you can access NACS Magazine across SERVE HERE platforms, from print to website to digital pdf. Find the most recent digital issue at www.NACSMagazine.com.

While you’re there, catch up on articles from past issues.

Browse by topic, popularity or month. Insider tip: The latest issue typically publishes on the website before print copies arrive in mailboxes—be the first to read it!

convenience.org | NOVEMBER 2020

No matter what challenge they face, convenience retailers strengthen their communities.

CRACK THE CODE

The New Digital Experience Is Live

MUTUAL RESPECT Behind the YeswayAllsup's pairing

A GOOD YEAR

Exploring the Growth in Cigarette Sales

CONVENIENCE.ORG

iStock.com/Fertnig

NACS Membership helps convenience and fuel retailers from around the world stay competitive and profitable today, while preparing for tomorrow with specialized tools, resources, and exclusive events.

Happy -Your C ash Depot Famil y

CONTACT US! 1-800-776-8834 www.cdlatm.com

sales@cdlatm.com

FROM THE EDITOR

A New Perspective Kim Stewart Editor-In-Chief

We relish the cheer that the holiday season typically brings, but we are making our way on a different footing this year.

8

| DECEMBER 2020

O

ne of the upsides of spending more time at home during the past eight months is being able to take daily walks with our dog along the footpaths that wind through the woods in my Virginia neighborhood. The longest hikes are saved for weekends, and on a recent warm fall Saturday morning, my husband and I reversed course and started on a trailhead that usually marks the end of our jaunts.

Walking a path alongside a creek and enjoying the last burst of bright autumn, I glanced at the water and noticed for the first time a half-dozen thick tree roots extending like giant’s arms to span the opposing banks like a bridge. The roots had been there all along, missed by me if not for walking the same path but in a different direction.

Nine months into this pandemic, I’m betting at least some of you feel the same. We relish the cheer that the holiday season typically brings, but we are making our way on a different footing this year with a new perspective.

The five-week Crack the Code Experience kicked off in November and is now in the homestretch. Our cover story shares some of the highlights of this landmark NACS virtual experience.

Don’t despair if you missed it! Education sessions are available on demand through year’s end for registrants, and more than 5,000 products are available for you to learn more and contact exhibitors.

This fall I was honored to attend the NACS Women’s Leadership Program at Yale (held virtually this year), graciously

endowed by Altria, and connected with amazing female leaders from the convenience retailing industry from across the U.S. and the world. In one breakout session during the course, my cohorts shared how swiftly their companies reimagined operations to face the pandemic (from staffing and sanitation to innovations like curbside pickup and digital apps). Extra projects were jettisoned to allow for laser focus on immediate, urgent challenges, and there was 100% buy-in from the c-suite to the front line. Now, the struggle is to maintain that momentum when everyone has COVID-19 fatigue but businesses—and people—need to grow.

7-Eleven for one hasn’t tapped the brakes. In “The Reimaging of 7-Eleven,” join writer Renee Pas for an up-close look at how the iconic brand is pushing the envelope—both from a design aesthetic and product category standpoint—with foodservice moving into a new realm for the chain. The Laredo Taco Company, known for its made-to-order handmade tacos and street-style Mexican food, is part of that shift, as is Raise the Roost, a Southern-inspired fried chicken and biscuits quick-serve concept. Turns out, there’s a Laredo Taco near me, so after a morning walk very soon, I’ll be lining up for a breakfast taco.

Wishing you great peace, health and happiness, my friends.

CONVENIENCE.ORG

EPA Reg. No. 1677-251

Ecolab is committed to providing the latest public health resources to our customers.

By cleaning and disinfecting with our Peroxide Disinfectant and Glass Cleaner RTU, you can ®

help control the spread of Coronavirus, Norovirus and other viruses and bacteria. This product has demonstrated effectiveness against viruses similar to COVID-19 on hard, non-porous surfaces and can therefore be used against COVID-19 when used in accordance with the directions for use against Norovirus. Making Your Convenience Store Cleaner. Safer. Healthier.

PEROXIDE DISINFECTANT AND GLASS CLEANER RTU EPA Reg. No. 1677-251

✺ Kill times as fast as 45 seconds* ✺ EPA registered peroxide-based disinfectant ✺ Effective against Norovirus* ✺ Non-streaking formula ✺ Pleasant and mild fragrance ✺ No PPE required *Kills in the time indicated according to the ASTM Standard Test Method for Efficacy of Virucidal Agents Intended for Inanimate Environmental Surfaces modified in presence of 5% blood serum. *See product label for directions for use and a complete list of organisms and contact times.

For more information, call 817.527.3860 or email c-storeinfo@ecolab.com 56802/7300/1120

©2020 SSDC. All rights reserved. SSDC Division, Kay Chemical Company • 4050 Corporate Drive, #100 • Grapevine, Texas 76051 USA • 866.491.0973

WARNING: This produ Nicotine is an add Make up lost revenue with the #1 Vapor Brand.

Slate JUUL Device

Silver JUUL Device

uct contains nicotine. dictive chemical.

11 %

Of revenue in the vapor category comes from disposables.

75 %

Of disposables are at risk of being removed from the market by the FDA.

$6M

$6 Million in revenue will be lost from the disposables market.

$6 million in revenue per week will be lost with disposables being removed from the market by order of the FDA.1 The vapor brand that tops profitability, share, sales per week and units per week can help your stores recover potential losses.2 Source: 1. Nielsen; Total US Convenience; 13 Weeks Ending 7/18/2020.

2. Nielsen AOD, $ and Unit Sales and ACV % > 1.0%, L13W weeks ending 05/23/2020.

2020

To become a JUUL retail partner, send an email to retailers@juul.com.

Global — Brand Guidelines

Age restriction symbols

The sale of tobacco products to minors is prohibited by law.

This is an age-restricted product and age verification is required at sale.

CALIFORNIA PROPOSITION 65 WARNING: This product contains chemicals known to the State of California to cause cancer and birth defects or other reproductive harm.

TM and Š 2020 JUUL Labs, Inc. All rights reserved.

NACS NEWS

Fuels Institute Evaluates Emission-Reduction Efforts

12

| DECEMBER 2020

Additionally, the report found that policies promoting vehicle electrification seem to yield significant emissions reductions but carry with them similarly significant costs. Those policies addressing biofuels yield moderate emissions reductions coupled with moderate costs. Meanwhile, some policies like telecommuting yield modest emissions benefits with minimal associated costs.

“What becomes clear when evaluating the various options available is that there is no silver bullet—every initiative comes with offsetting compromises,” Eichberger explained.

The “Impact of Transportation-Related Environmental Initiatives” report is available at www.fuelsinstitute.org/research. You also can find an overview of the full 37 movements CONVENIENCE.ORG

iStock.com/luckyraccoon

A

s governments consider strategies to reduce emissions from transportation, a new Fuels Institute report provides valuable context to help guide their considerations, encouraging them to consider multiple perspectives before deciding how to proceed.

“Impact of Transportation-Related Environmental Initiatives” takes an in-depth look at the relative effectiveness and associated costs to society, government, industry and consumers of 14 distinct transportation movements, including those focused on emissions, fuel economy and carbon pricing; alternative fuels; congestion pricing, tolls and telecommuting; and mobility.

“As the world continues to focus on the transportation-energy sector to positively impact the environment, we commissioned this report to provide a resource to help policymakers and stakeholders better understand the menu of options available,” said Fuels Institute Executive Director John Eichberger.

The report compares 14 movements in the areas of effectiveness, impact and cost over the next 20 years (2020–40). Effectiveness is a weighted average measure of emissions, fuel economy and vehicle demand in terms of shift to alternative powertrains; impact is defined by whether the movement is nationwide, prevalent in some states or limited to only a few regions or cities; cost includes those incurred by industry participants and/or consumers to comply with a movement.

“The report found a correlation for most movements between their effectiveness for reducing emissions and their overall cost—the more expensive an initiative, the more effective it might be, with some exceptions,” Eichberger explained.

MEMBER NEWS RETAILER Kum & Go announced that Levon Hooks has joined the Des Moines, Iowa-based company as chief information officer.

Hooks has more than 20 years of Levon Hooks experience in information technology and has built his career by leading in change management and orchestrating complex problem-solving for enterprise and legacy business processes and systems.

SUPPLIER Interface Security Systems, a managed service provider delivering business security, managed network, UCaaS and business intelligence solutions to distributed enterprises, announced the Brent Duncan promotion of Brent Duncan to president and COO. Interface Security Systems is a portfolio company of SunTx Capital Partners and Prudential Capital Partners.

British American Tobacco in September appointed Guy Meldrum as president and CEO of Reynolds American Inc. Meldrum joined the BAT Management Board as regional director, Asia-Pacific and Middle Guy Meldrum East, in 2019. He succeeds Ricardo Oberlander. BAT also announced that Luc Jobin will succeed Richard Burrows as chairman following the company’s annual general meeting in April 2021.

Burrows will step down as chairman and retire from the board at the end of Michael (Mihovil) the company’s 2021 general meeting.

Dijanosic Jobin joined the BAT Board in 2017 as an independent non-executive director.

Michael (Mihovil) Dijanosic will succeed Meldrum as regional director, Asia-Pacific and Middle East.

Ecolab Inc. announced that Christophe Beck, currently Ecolab’s president and chief operating officer, will succeed Douglas Baker Jr. as chief executive officer effective January 1, 2021, becoming president and chief executive officer. Beck also has been elected to Ecolab’s board of directors.

CONVENIENCE.ORG

Christophe Beck

KUDOS Parker’s, based in Savannah, Georgia, was recently voted the “Most Fabulous Convenience Store” by readers of Effingham Living, a popular lifestyle magazine published by the Effingham Herald in Rincon, Georgia. This year marks the fifth time that Parker’s has been honored by Effingham Living readers for having the area’s finest convenience stores.

Paysafe Group, a specialized payment platform, announced that Petroleum Card Services, the group’s payment processing solutions provider for U.S. gas stations, won the Associate of the Year award at the Petroleum Marketers & Convenience Store Association of Kansas’ 2020 convention.

Sheetz Inc. was named to Fortune magazine’s 2020 list of Best Workplaces for Women in the large company category for the fifth year in a row. The Altoona, Pennsylvania-based c-store chain ranked No. 52 on the list, up from No. 58 in 2019. According to Fortune, “88% of employees at Sheetz Inc. say it is a great place to work compared to 59% of employees at a typical U.S.-based company.”

American Express is No. 15 on Fortune magazine’s 2020 list of Best Workplaces for Women in the large company category. The New York-based financial services firm gives mothers 135 paid days (20 weeks) and 100 paid days for fathers, according to Fortune. The U.S. average is four weeks, according to a Mercer survey on paid parental leave.

Several NACS members were named to the 2021 JUST 100 Companies Leading the New Era of Responsible Capitalism

by Forbes and JUST Capital. Procter & Gamble ranks No. 19 on this list, while Ecolab Inc. ranks No. 22, General Mills Inc. is No. 23, PepsiCo is No. 24, The Hershey Company ranks No. 34, Johnson & Johnson is No. 45, Nielsen is No. 47, Walmart ranks No. 50, Chevron is No. 61, Marathon Petroleum is No. 79, American Express is No. 89, 3M is No. 90 and Coca-Cola Company is No. 95. The list recognizes U.S. companies who are leading on issues such as investing in employees, supporting communities and reducing impact to the environment. The ranking looks at the 1,000 largest publicly traded companies in the U.S. and is based on a comprehensive survey conducted on public attitudes toward corporate behavior.

DECEMBER 2020 |

13

NACS NEWS

BY THE NUMBERS

Highs and Lows Many months into the pandemic, stores are still experiencing slow traffic, and total transactions are down 7.7% from last year. Customers are spending more per transaction, however, with inside sales per transaction up 12.9% year over year.

Incremental costs to retailers to operate in the COVID-19 environment are showing up in wages and benefits (via bonus or extra pay) in the form of “other benefits” expense and are up 23.9% year over year. Expenses for items such as plexiglass and other PPE also are beginning to show up in the data—in 2020, the equipment not capitalized expense has grown to $564 per store per month, or a 37.1% increase from 2019.

A bright spot in the expense side are credit card fees, which have declined 9.7% to $7,301 per store per month. This is a function of reduced transactions and fuel prices though, since the national average fuel price is $2.20 per gallon, down from $2.58 in 2020.

As expected, card use has increased to 54.1% of all transactions, up from 51.4% in 2019.

As transaction counts and fuel prices normalize, total card fees will follow and surpass historic levels.

Wages and Benefits Driving U.S. Direct Store Operating Expense Growth Jan.-June 2019

Jan.-June 2020

$28,894

$30,952

7.1%

Card Fees

$8,087

$7,301

(9.7)%

Utilities

$3,374

$3,376

0.1%

Repairs & Maintenance

$4,245

$4,448

4.8%

$412

$564

37.1%

Total DSOE

$53,930

$55,585

3.1%

Facility Expense

$14,816

$15,531

4.8%

TOTAL DSOE & FACILITY EXPENSE

$68,745

$72,313

3.4%

PER STORE/PER MONTH Wages & Benefits Other Benefits Up 23.9%

Equipment Not Capitalized Includes PPE, Safety Equipment

$

$

Source: CSX Time Period Difference January to June 2019 vs. 2020

14

| DECEMBER 2020

CONVENIENCE.ORG

NEW NACS MEMBERS NACS welcomes the following companies that joined the association between September 16 and October 15, 2020.

NACS membership is company-wide, 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 Gas Stations Services Corp dba MOIL Miami, FL www.gsscorp.us La Veta Country Store LLC La Veta, CO www.lavetacountrystore.com The Outlet Inc. dba Smokin' Joe's Tobacco & Liquor Outlets Davenport, IA Veterans Chev, LLC dba Shell River Ridge, LA

NEW SUPPLIER MEMBERS Atalanta Corporation Elizabeth, NJ www.atalantacorp.com

Bay to Bay Properties LLC Safety Harbor, FL www.baytobayproperties.com Canary Compliance Bryn Mawr, PA www.cancomply.io Canopy Growth USA LLC Evergreen, CO www.canopygrowth.com

FitVine LLC dba FitVine Wine Berkley, MA www.fitvinewine.com G and C Distributions LLC Mesa, AZ www.gandcdist.com GK Software USA Inc. Raleigh, NC www.gk-software.com/us J&C PetSupply LLC Lakewood, NJ LaBella Associates, D.P.C. Rochester, NY Meyer Natural Foods Loveland, CO www.meyernaturalfoods.com O'Dell Corporation Ware Shoals, SC www.odellcorp.com Proxy Retail Group Inc. Yorkville, IL www.proxyretail.com Solely Inc. La Jolla, CA www.solely.com

Charlotte's Web Stanley Brothers Boulder, CO www.charlottesweb.com

The Good Bean Berkeley, CA

Coin Wrap Inc. Harrisburg, PA www.coinwrap.com

Toysmith Sumner, WA www.toysmith.com

CV Sciences San Diego, CA www.cvsciences.com

ViruShields Inc. Placerville, CA www.virushields.com

Dynamis Ventures Inc. Bradenton, FL

CONVENIENCE.ORG

DECEMBER 2020 |

15

GOOD WORK

Maxol Plants 10,000 Trees

In Northern Ireland, the Maxol Group has joined forces with The Conservation Volunteers (TCV) in planting some of the 10,000 trees on community sites across Northern Ireland. Pictured L to R are Kausalya Gibson, senior project officer at TCV Tree Nursery; Brian Donaldson, CEO of the Maxol Group; and in the foreground, TCV volunteers Casey and Freya Turnbull and Sophie Quinn.

T

he Maxol Group announced a carbon emissions offsetting program to support sustainability initiatives, including planting 10,000 trees across the island of Ireland, local community projects and global projects designed to offset carbon emissions, including fuel emissions.

The program is intended to help balance out the environmental impact of Maxol’s new Premium fuel range rolling out across its network. Maxol Premium has fewer pollutants and contains a deposit control

SUSTAINABILITY RESOURCE Learn more about sustainability initiatives in the NACS Sustainability Playbook. Content throughout this robust online resource highlights where retailers can take credit for initiatives that are doing well and identifies opportunities to do more. Every business is on a different level of its sustainability journey, and retailers are encouraged to use the playbook as a guide for advancing the areas most relevant to their business today and consider how other areas could transform their business in the future.

Visit www.convenience.org/sustainability to access the playbook.

16

| DECEMBER 2020

additive that reduces buildup in the engine, while improving power and acceleration.

Launched in conjunction with GreenPrint, the program is the next step in Maxol’s journey toward reducing its carbon footprint.

“Environmental issues have never been so pertinent, and all of our green initiatives, including the recent launch of bright energy, are part of our group’s journey toward a more environmentally sustainable company,” said Brian Donaldson, CEO of the Maxol Group, which is based in Ireland. “The transition will not happen overnight, but we are taking important steps to get there.”

The initiative is the next step in Maxol’s long-term environmental strategy. Already the company has introduced 100% recyclable deli packaging and 100% compostable single-use cups and lids, and it harvests rainwater for its carwashes, has invested significantly in installing compostable and recyclable bins and encourages customers to reuse cups by offering a 25-cent discount on hot drinks.

For more details, visit www.maxolcarbonneutral.ie.

CONVENIENCE.ORG

IN THE COMMUNITY Pilot Company is hosting an in-store round-up fundraiser benefiting Wreaths Across America through the end of 2020. The funds raised will support Wreaths Across America’s goal to place more than 2.2 million wreaths in all 50 states to remember and honor fallen soldiers during the holidays.

Customers visiting any of the 750 company-operated stores in the U.S. can opt to round up purchases to the nearest whole dollar and donate the additional amount to Wreaths Across America. In remembrance of the company’s hometown heroes, Pilot Company is donating $20,000 and contributing $20,000 from the round-up campaign to support the Wreaths Across America ceremonies in Knoxville, Tennessee.

said Darren Rebelez, CEO of Casey’s General Stores, and a veteran of the United States Army. “As a veteran myself, I am proud to be a part of Casey’s support of military heroes and their families and these two remarkable organizations.”

As an added salute to all service members past and present, Casey’s also provided free coffee on Veterans Day, November 11, across its 2,200-plus locations.

Rutter’s donated $75,000 to local charities in York, Pennsylvania, to benefit the children and youth in the community. “Our support of local children’s charities is long-running and something our company is always proud to do,” stated Scott Hartman, Rutter’s president and CEO. “During these difficult times, we recognize how important it is to provide these charitable organizations with funding to benefit children’s education in York.”

Nittany MinitMart of State College, Pennsylvania, raised $44,969.18 for local volunteer fire companies in response to the challenges facing the companies due to COVID-19.

“Nittany MinitMart is a family owned business, and we believe it is part of our responsibility to the community to help those who help us,” said CEO Jim Martin.

Pilot Company is encouraging customers to round-up to support Wreaths Across America, which coordinates wreath­-laying ceremonies at more than 2,100 locations across the United States, at sea and abroad. In honor of Veterans Day, the company offered veterans one free breakfast combo.

Casey’s rallied the community across its 16-state footprint to support military veterans and those who continue to serve. Throughout November, Casey’s and its customers helped provide assistance and scholarships to veterans and their families through Hope For The Warriors and Children of Fallen Patriots. In addition, $1 was donated for every online or in-app purchase of a large pizza and two-liter Pepsi drink, up to $50,000 total.

“Every day, Casey’s is committed to supporting our guests, and we know our guests are just as committed to serving the men and women who have served this great country,”

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Pictured are Nittany MinitMart employees with the check from their recent fundraising efforts on behalf of local firefighters.

In October, Louisville, Kentucky-based Thorntons partnered with Norton Healthcare Prevention and Wellness to provide no cost mammogram screenings for women throughout the Louisville community. The Norton Healthcare Mobile Prevention Center traveled to Louisville-area Thorntons stores, where Norton Healthcare staff offered screenings from 9 a.m. to 4 p.m.

DECEMBER 2020 |

17

INSIDE WASHINGTON

The Year in Review NACS examines the top legislative issues affecting the convenience industry.

A

BY THE NUMBERS

2020

Being alive this year is special because it is the only year we are likely to live through wherein the first two digits will match the second two digits of the year.

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| DECEMBER 2020

year ago it would have been impossible to predict what would unfold in 2020. One of the most frequently used terms to describe 2020 is “unprecedented.”

It is fair to say that in modern times, the United States has not seen a public health crisis like COVID-19, nor the economic disruption that has followed. In reaction, Congress passed the CARES ACT, an economic relief package, with a price tag that tops $2 trillion—a spending level that rightly earns the descriptor “unprecedented.”

The NACS government relations team has been an active voice for the industry in Washington as Congress and federal agencies navigate legislative and regulatory responses to the crisis. Though COVID-19 is top-of-mind in the nation’s capital, NACS has championed a number of policy issues for the convenience and fuel retailing industry this year.

COVID-19–RELATED ISSUES Recognizing Convenience as Essential Throughout this crisis, NACS has worked to keep convenience stores open. In early March, NACS reached out to the White House, members of Congress and federal agencies to advocate for the essential nature of convenience stores and request that they be allowed to maintain operations in whatever action was taken at the federal level. In response, the Department of Homeland Security’s Cyber Infrastructure and Security Agency (CISA) released guidance recognizing convenience stores and their entire supply chain as part of the nation’s critical infrastructure workforce.

While this was not a federal directive, many states and cities heeded the CISA guidance when issuing stay-at-home orders and allowing essential businesses to remain open.

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iStock.com/Oakozhan

BY ANNA READY BLOM, PAIGE ANDERSON AND JON TAETS

Liability Relief for Essential Businesses NACS has been a leading voice for liability relief for essential businesses from frivolous lawsuits related to COVID-19. At the onset of the crisis, NACS was one of the first groups on Capitol Hill asking congressional leadership and the committees of jurisdiction to protect businesses that acted responsibly from legal claims related to COVID-19.

NACS formed a coalition of 35 essential industry associations that shared this objective. In May, Kevin Smartt of Kwik Check Food Stores testified at a U.S. Senate hearing on liability. Smartt, who was then NACS treasurer but now is chairman of the NACS Board of Directors, was the only witness from the business industry, and he asked Congress to pass liability legislation. NACS has worked to build bipartisan support for the issue and hosted numerous virtual townhalls with members of Congress. This summer, Senate Majority Leader Mitch McConnell (R-KY) and Senator John Cornyn (R-TX) introduced liability legislation that NACS supported. The Senate failed to reach the 60 votes needed to pass its COVID-19 relief package that included the liability legislation. Both parties continue to work on a deal, and liability is part of those negotiations.

Access to Capital in the CARES Act Paycheck Protection Program (PPP)—NACS supported the Paycheck Protection Program, which provides access to capital for smaller convenience store operators. However, NACS identified a loophole in the PPP that allowed restaurants with more than 500 employees access to PPP loans. Working with retail members, NACS called out the unlevel playing field to urge Congress to pursue a fix, but members haven’t enacted legislation to address the issue. Following the initial CARES Act, NACS supported legislation that created a more streamlined forgiveness process for the small businesses that received PPP loans.

Loan Programs for Larger Businesses— NACS successfully advocated for the creation of favorable loan programs for larger businesses ineligible for PPP loans. The CARES Act directed the creation of Federal Reserve facilities accessible to businesses of all sizes.

Economic Injury Disaster Loan—Small businesses are able to access such loans through CONVENIENCE.ORG

ONE VOICE This month, NACS talks with Richard Spresser, president, Pester Marketing Company.

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

I think community engagement may be one of the most important as well as most satisfying programs we are involved with. Because we Richard Spresser operate between 50 and 60 stores in suburban or rural areas, our involvement within the various communities is critical. Whether it is sponsoring the county fair, rodeo or a local little league team, it helps to ingrain us into the communities we depend upon for our success.

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

Within the last several years we have literally seen an explosion of new laws and regulations that impact our industry and our daily business. Working through NACS and getting to personally know our congressmen and congresswomen has never been more important. Supporting NACS’ political engagement efforts ensures us that Pester Marketing has a seat at the table and that we have a voice that will be heard. In my opinion, NACS Day on the Hill is a must-attend event.

What federal legislative or regulatory issues keep you up at night?

With the recent impact of the COVID-19 pandemic I worry about knee-jerk legislation that attempts to provide or regulate solutions that in the long run are detrimental to our business and industry going forward. All of our businesses have been negatively impacted in some form or fashion, and piling on further expensive regulations will only slow our recovery.

What c-store product could you not live without?

In Colorado our industry fought for years to be able to sell strong beer. Now that we are finally able to sell strong beer, the beer category has exploded and basically has provided us with an additional much-needed revenue stream that we never had before.

DECEMBER 2020 |

19

INSIDE WASHINGTON the Small Business Administration, and initially up to $10,000 was advanceable and forgivable.

Employee Retention Tax Credit— NACS successfully helped advocate for tax credits to help employers get and keep employees.

Qualified Improvement Property Fix—NACS successfully advocated for the inclusion of the fix to the Qualified Improvement Property depreciation category that arose from the Tax Incentives and Jobs Act. The fix helped free up capital at non-gas convenience stores.

Net Operating Loss Carryback— NACS successfully advocated to restore the ability of businesses to carry back losses from 2020 to previous tax years, a provision which had been removed by the Tax Incentives and Jobs Act.

NACS organized a group of retail associations that pressed the major card networks and the fleet card issuers to postpone the EMV liability shift date.

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| DECEMBER 2020

Tax Credits for Essential Workers NACS continues to advocate for including in the next stimulus package direct tax credits to employees of essential businesses. These efforts have resulted in legislation introduced in the House and the Senate, H.R. 6841—the AG Chain Act, and S. 4213 the FRNT LINE Act, which would have allowed convenience store workers to deduct some or all of their income earned during the crisis from federal income and payroll taxes.

Tax Credits for Businesses to Purchase PPE and Cleaning Supplies NACS continues to advocate for a tax credit to enable businesses to deduct expenses related to safety and cleaning supplies purchased during the crisis.

There is bipartisan legislation that would cover personal protective equipment (PPE), as well as cleaning supplies.

Delayed EMV Deadline and Swipe-Fee Increases At the beginning of the crisis, it was evident that stay-at-home orders and supply and equipment delays would make the approaching October deadline for EMV compliance at the pump impossible for many fuel retailers to meet. NACS organized a group of retail associations that pressed the major card networks and the fleet card issuers to postpone the EMV

liability shift date. Following letters from NACS and the other groups, the four major credit card networks and U.S. Bank Voyager Fleet Services agreed to an April 2021 delay.

Additionally, NACS advocated against Visa and Mastercard swipe-fee increases slated to take effect in April. Facing pressure from Congress and other stakeholders, the card networks announced they would delay the increases until April 2021.

Winter to Summer Fuel Blend Transition Early in the pandemic, NACS members shared concerns about the impact that the COVID-19 crisis would have on the fuel supply chain. In the spring, retailers were concerned that the dramatic decline in demand for gasoline would lead to storage and pipeline capacity constraints as the market transitioned from winter to summer blends. NACS participated in industry calls with EPA and sent a joint industry letter with other fuel retail and marketing organizations requesting a Reid Vapor Pressure (RVP) waiver. As a result, EPA granted a 20-day RVP waiver for winter-grade gasoline and temporarily waived the summer low volatility requirements for gasoline sold by terminals from May 1 to May 20, 2020.

EPA’s action provided flexibility to the marketplace in transitioning from winter grade, high volatility gasoline to summer grade, low vapor pressure gasoline.

Hours of Service As restrictions on travel and work-fromhome orders were issued, the ability to move vital goods became a primary concern. While the Federal Motor Carrier Safety Administration (FMCSA) provided a national Hours of Service (HOS) waiver for commercial motor vehicle operations providing direct assistance in support of emergency relief efforts related to the COVID-19 outbreaks, the agency did not include fuel in its original waiver. NACS, along with other fuel retailer associations, asked FMCSA to include fuel in the waiver, and the agency complied.

Coin Shortage Since Americans were largely staying at home and many businesses were CONVENIENCE.ORG

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INSIDE WASHINGTON closed, the majority of coins in the U.S. were out of circulation, leading to a nationwide coin shortage. The U.S. Mint, which produces a small percentage of new coins each year, scaled back operations during the stay-at-home orders, which also contributed to the issue. NACS worked with the congressional committees of jurisdiction to pressure the Federal Reserve to deal with the coin shortage. The Fed formed a U.S. Coin Task Force to explore solutions to the issue.

SNAP Hot Foods Purchases NACS asked Congress to allow low income Americans to use their Supplemental Nutrition Assistance Program (SNAP) benefits to purchase hot foods during the pandemic. The House of Representatives passed language to accomplish this in its version of a COVID-19 relief package, the HEROES Act. In July, 65 members of Congress, led by representatives Grace Meng (D-NY) and Adriano Espaillat (D-NY), sent a bipartisan letter to Senate leadership urging them to include the hot foods language in their next

COVID-19 relief package. NACS advocated for members of Congress to join this letter.

Access to PPE A number of member companies indicated that the federal government had seized orders of PPE such as masks. Through communications with EPA and others, NACS discovered that the shipments weren’t seized, but some manufacturers prioritized government orders over private sector ones, and NACS members eventually received their shipments.

OTHER ISSUES Electric Vehicles and Charging Infrastructure As Congress worked to encourage the use of electric vehicles (EVs) and expand EV charging infrastructure, NACS advocated to promote competition, a level playing field for all parties interested in building charging infrastructure and access for convenience and fuel retailers to any federal incentive programs. Working with other industry groups, NACS made progress toward ensuring that retailers and other private sector entities would

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, 2020, are: Amy Ashley-Burke NACS

Benjamin Englefield Englefield Inc.

Michael Jorgensen MMJJWS Corp.

Ina M. Matthews Childers Oil Co.

Greg Scriver Kwik Trip Inc.

Elizabeth Babyak Coen Markets Inc.

Kevin Farley GSP

Doug Kantor Steptoe & Johnson LLP

Danielle Mattiussi Maverik Inc.

Jerome Sedelmeyer CMI Solutions Inc.

Wynne Barrett Jera Concepts

George Fournie EG America LLC

Taylor Kennedy Coen Markets Inc.

Brad McGuinness Qopper Inc.

Kay Segal Business Accelerator Team

Jeff Blalock Cookies United

D. Brian Griffith Golden Pantry Food Stores Inc.

Paul Kern NCR Corporation

Shaun O'Brien Perfetti Access Strategies

Frank Squilla InComm Payments

Rick Brindle Mondel z International

Ieva Grimm J.M. Davis Industries Inc.

Kyle J. Krause Kum & Go L.C.

Jigar Patel SAASOA

Alan J. Thiemann, Esq. Conexxus

David Charles, Sr. Cash Depot

William Henry Kellogg Company

Troy Link Jack Link's Protein Snacks

Robert Razowsky Rmarts LLC

Frank White White Knight Marketing

Jason Cooper Coen Markets Inc.

Angela Holland Georgia Association of Convenience Stores

Chuck Maggelet Maverik Inc.

Donald R. Rhoads Convenience Group LLC

Joseph Zietlow Kwik Trip Inc.

Wolfgang Manz PWM Electronic Price Signs Inc.

DeAnn Scheeler The Hub Convenience Stores Inc.

Nick Marino CORD Financial Services

Jared Scheeler The Hub Convenience Stores Inc.

Jerry Cutler InComm Payments Michael Deal Moyle Petroleum Company

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INSIDE WASHINGTON have access to grants and rebates to build charging infrastructure and language to encourage states to allow non-utilities to offer charging to EV drivers without being regulated like a utility. This issue will continue to develop into the next Congress, and NACS will keep advocating for private sector solutions to offer consumers alternative transportation energy.

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

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

Jon Taets is the NACS director of government relations. He can be reached at jtaets@convenience.org.

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| DECEMBER 2020

Consumer Data Privacy and Data Security Congress is working on a federal framework to protect consumers’ data and privacy. As a founding member, NACS works closely with the Main Street Privacy Coalition, which represents a wide group of businesses, to support legislation that ensures that any federal law apply to all industry sectors rather than shifting the requirements onto the retail sector. Federal privacy bills should not pick regulatory winners or losers among different businesses, nor should they exempt any industry or business. NACS worked closely with Senator Jerry Moran (R-KS), who introduced legislation with these same principles and may serve as a model to bridge the gap between other proposals that are more problematic.

EPA and Fuel Regulations Several regulatory proposals EPA finalized during 2020 will affect the convenience and fuel retailing industry. NACS, along with other fuel retail groups, participated in the process by meeting with EPA staff and submitting comments to the agency.

In several of these proposals, EPA heeded our industry’s recommendations. From the Renewable Fuel Standard’s (RFS) renewable volume obligation process, to concerns over the RFS small refiner exemption process to its streamlining rule, EPA listened to our industry to ensure that the marketplace continues to operate effectively and efficiently in providing motor fuels to consumers.

FDA Guidance on Flavored E-Cigarettes In January, the Food and Drug Administration (FDA) published final guidance banning most flavored cartridge-based e-cigarettes, except for

tobacco and menthol flavors, from the market. The FDA first proposed guidance in March 2019 that would have effectively banned flavored e-cigarettes from convenience stores, while allowing them to still be sold over the internet and in stores that don’t allow minors to enter. NACS strongly opposed the proposal in a comment letter and in meetings with FDA, President Trump and other White House officials. The final guidance recognized those concerns and contains no language that discriminates between the type of retail outlet.

PMTA Transparency For e-cigarettes to legally be on the market, the manufacturers of those products had to submit premarket tobacco product applications (PMTAs) to FDA by September 9. If manufacturers failed to meet the deadline, their products must be removed from the market. However, retailers, who could face possible enforcement, have no credible way of knowing which products have submitted PMTAs and which ones do not. To avoid confusion and potential enforcement, NACS asked FDA to publish a list of the products for which the agency has received PMTAs. NACS raised these concerns in a letter to the agency signed by other retail associations. In early September, FDA announced that it would publish a list but that it would not be publicly available immediately. NACS has asked the agency to practice enforcement discretion until a list is published.

Closing the Online Loophole for E-Cigarettes For the past three years, NACS has championed legislation that would regulate the online sales of e-cigarettes by applying the same measures that are required when traditional cigarettes are purchased online. In July, the Senate passed this legislation, the Preventing Online Sales of E-Cigarettes to Children Act (S.1253), by unanimous consent. While the House passed its version of the bill last year, given that the Senate bill is slightly different, the House will need to pass the Senate’s version before it can become law.

Editor’s Note: This article reflects updates as of November 16, 2020.

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INSIDE WASHINGTON

NACS Advocacy in the Courts

BY DOUG KANTOR

NACS led the way to push for all merchants to get justice regarding the antitrust violations of Visa, Mastercard and the card issuing banks.

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| DECEMBER 2020

The industry may be most familiar with NACS advocacy efforts in Congress and before federal administrative agencies, but NACS has long believed that it must advocate for the industry in all of the branches of government in order to maximize its effectiveness. With that in mind, NACS has been consistently involved in litigation matters that can impact the industry. Current examples of NACS advocacy in the courts are: PAYMENT CARD INTERCHANGE FEE AND MERCHANT DISCOUNT ANTITRUST LITIGATION NACS led the way to push for all merchants to get justice regarding the antitrust violations of Visa, Mastercard and the major payment card issuing banks. In 2005, NACS was a lead plaintiff in the leading class action case filed on these issues. Then, when an inadequate settlement was forced through the court in 2012, NACS led the successful efforts to have that settlement overturned by the U.S. Court of Appeals for the 2nd Circuit.

Having opted out of that inadequate settlement, NACS worked with the leading

UNITED STATES V. PHILIP MORRIS The U.S. Department of Justice filed suit against the major tobacco manufacturers in 1999 alleging wide-ranging violations of law relating to their sales and public representations regarding cigarettes.

In 2007, the U.S. District Court for the District of Columbia found in favor of the Justice Department, but one aspect of the many parts of the remedial order entered by the court would have required retailers to put signs on their counters next to their points-of-sale indicating that consumers were misled about the harms of smoking. NACS filed a brief on appeal arguing that the sign requirement violated retailers’ due process, property and free speech rights—particularly because retailers were never involved in the litigation prior to the order. The U.S. Court of Appeals for the District of Columbia Circuit agreed with NACS and sent the case back to the District Court for further consideration. NACS has submitted multiple additional briefs on these issues to the District Court and is now preparing for an evidentiary hearing on these issues, which is scheduled to be held in 2021.

STANDING ROCK SIOUX V. U.S. ARMY CORPS OF ENGINEERS A number of Native American tribes filed suit against the U.S. Army Corps of Engineers and the Dakota Access Pipeline alleging that the pipeline had not CONVENIENCE.ORG

iStock.com/Sagittarius Pro

group of merchants that opted out of the settlement to file a new case—7-Eleven v. Visa. NACS continues as an active plaintiff in that case. Summary judgment motions filed by both sides in that case in September 2020 await decisions by the court in the U.S. District Court for the Eastern District of New York.

performed the necessary environmental reviews prior to beginning operations.

In July 2020, the U.S. District Court for the District of Columbia agreed with the plaintiffs and entered an injunction ordering the pipeline to stop operations pending the completion of the review, which typically takes more than one year.

NACS joined other industry groups in filing a brief asking the U.S. Court of Appeals for the District of Columbia Circuit to allow the pipeline to continue operating while the litigation continues. The Appeals Court agreed with NACS, and the pipeline remains in operation. NACS also filed a brief arguing that the District Court’s decision requiring further environmental review should be overturned and is awaiting a decision on that question.

NEW HAMPSHIRE LOTTERY COMMISSION V. BARR In a major victory for NACS, the U.S. Department of Justice in 2018 reverted to its traditional view that the Wire Act makes all internet gambling illegal— not just sports gambling. The New Hampshire Lottery challenged that decision in federal court. NACS filed a brief in the U.S. District Court supporting the Justice Department’s view that the Wire Act bans internet lotteries, but the New Hampshire Lottery prevailed.

On appeal, NACS again filed a brief detailing why internet lotteries are not allowed under federal law. The case was argued before the U.S. Court of Appeals for the 1st Circuit in June 2020 and is awaiting a decision.

Doug Kantor is a partner at Steptoe & Johnson and counsel to NACS.

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DECEMBER 2020 |

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IDEAS 2 GO

Part of the Neighborhood

Franklin Bros. Market diversified its offerings and added online ordering and curbside pickup.

BY SARAH HAMAKER

We can’t have customers inside our small store because of the impossibility to socially distance.

Online orders now are the main business mode at Franklin Bros. Market. The 900-square-foot store is too small to socially distance customers, so owner Jennifer Freese added online ordering and curbside pickup during the spring.

D

o you shop at your local corner store? Jennifer Freese didn’t stop by her neighborhood shop much except for emergencies.

“I lived across the street from the store for 22 years but only shopped there when I really needed something quick,” she said

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 2019 and earlier, go to www.convenience.org/Ideas2Go.

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| DECEMBER 2020

of the store in Berkeley, California. “I used to ask the owner about selling more stuff beyond beer, cigarettes and lottery tickets, but he didn’t want to change.”

Freese figured the store, owned by the same family since 1970, would continue as usual into the future as well. “I would joke with the owner that I’d buy the store when he was ready to retire, since I had all these ideas about how to make it more relevant for people like me,” she said. Then one day, he knocked on her door and said he was ready to get out of the business.

Faced with putting her money where her mouth was, she took the plunge along with some friends who joined her as silent partners. In 2015, she reopened the store as Franklin Bros. Market.

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ABOUT

During the pandemic, Franklin Bros. Market added a walk-up window, which opens around noon on weekdays for customers to place small orders like hot soup, sandwiches and salads. The tiny store stocks fresh foods, bread and organic produce.

OUT WITH THE OLD After purchasing the store, Freese rolled up her sleeves and got to work. “We ended up buying the entire building, which had a lot of deferred maintenance to attend to beyond a deep clean and general sprucing up,” she said. All the windows had been boarded up with plywood for years and needed repairing or replacing, for example.

She revamped the 900-square-foot interior into a full-service market with snacks, drinks, regular grocery items, organic produce and a prepared food section with homemade sandwiches, soups and salads. “We wanted to make a store with something for everyone in the neighborhood, which is very diverse with low-income apartment buildings next to million-dollar homes,” she said.

With the store a block from a commercial office zone, Freese added options for takeout lunches and dinners. With an elementary school also a block away, she upgraded the coffee service for the parents and stocked ice cream for the kids.

In her opinion, the best improvement was bringing in more fresh food options.

“Our fresh foods are probably a lot better than what you would expect from a typical convenience store. All our produce is organic, and all of our bread comes from a local bakery each morning,” she said. Local vendors provide fresh chicken and ground beef.

PANDEMIC PIVOT The coronavirus pandemic altered the way Franklin Bros. Market did business.

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Once the lockdown went into effect, Freese expanded the business with an online store with curbside pickup.

“Before COVID-19, we sold a lot of snacks, drinks and lunches, but now most of our online business is from people reluctant to do in-person shopping at a big supermarket,” Freese said. The store’s produce sales have tripled, while chip sales have plummeted to a quarter of previous sales.

Name of company Franklin Bros. Market Date founded 2015 # of stores 1 Website www.franklinbrosmarket.com

BRIGHT IDEAS Jennifer Freese, owner of Franklin Bros. Market, pivoted to add online ordering and curbside pickup for customers during the pandemic. “When a customer places an order through our website, our staff starts filling the order right away,” she said. “We email the customer as soon as their order is ready to pick up and hold it for them until they arrive.”

Upon arrival, customers alert the store, and staff puts their groceries in the “order pickup” cart at the entrance. “Some customers request we place the order in the trunk of their car, and we’re happy to do that as well,” she said.

Many regular customers now order online and walk to pick up the order. “These are people who live in the neighborhood, many of whom now work from home,” she said. Franklin Bros. Market did lose its office worker customer base, since those buildings have been closed.

“However, we’ve also gained new customers who live outside of the neighborhood but who prefer the safety of our no-contact curbside pickup over in-person supermarket shopping,” she said.

DECEMBER 2020 |

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IDEAS 2 GO

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

Visit her online at www. sarahhamakerfiction.com.

HR2021_NOV_HalfPgAd_ROSE.pdf

Franklin Bros. Market offered delivery for high-risk customers at the beginning of the shelter-in-place orders. However, after a couple of months, it stopped this service for new customers because of staffing limitations. Franklin Bros. Market continues with its online-only shopping model and recently added a walk-up window option, which is open weekdays around lunch time.

“We can’t have customers inside our small store because of the impossibility to socially distance,” Freese said. “The window is open for small orders, like lunch pickups. We also recently resumed making hot soup and sandwiches for lunch, so those orders can be picked up at the walk-up window. Most of our 1

10/15/20

business is still larger grocery online orders with curbside pickup.”

Through it all, Freese has continued to make customers feel at home. “Our business has grown by word of mouth more than marketing,” she said. “We’re a neighborhood store, not a destination location, and we operate for the people in the area.”

Her greatest desire is for customers to know that Franklin Bros. Market is part of their neighborhood—and their everyday lives. “Back when we were open to customers inside, people would drop by in the mornings for coffee and pastries wearing their pajamas and slippers,” Freese said. “I took it as a huge compliment because it said to me they felt like this place was an extension of their own home.”

9:47 AM

Succeeding in a Post-Pandemic Workplace

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BRIGHT IDEAS Leaders taught leaders as the convenience community gathered at the Crack the Code Experience.

T

his month wraps up an amazing opportunity for the convenience industry to come together during a very tumultuous year. The NACS Crack the Code Experience featured more than 50 content-rich education sessions loaded with insights and new ideas, more than 5,000 products displayed in hundreds of virtual showrooms, and numerous Cool New Products ready to adorn store shelves.

Educational opportunities offered during the five weeks of the experience provided tools for both retailers and suppliers to grow personally and professionally. From retailer-led education sessions on many different operational topics, to small-group meet-ups with industry leaders such as Sheetz CEO Travis Sheetz, to spotlight sessions with dynamic storytellers, to live small

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operator training, there were countless opportunities to learn and connect.

Clearly, Crack the Code attendees now have an edge: They will emerge from the pandemic ready to gain customers and generate revenue after what they learned during the past several weeks.

For those of you who were part of the experience, know that you can continue to revisit Crack the Code to watch any education sessions on-demand, on your time, until the year ends. And for those of you who missed joining us this year, we can share some of the highlights with you.

GAS STATIONS EYE AN EV FUTURE Electric vehicle fast charging: “Why now? Why not now?” That point was made by Brad Petersen, director of retail fuels at Kum & Go, a retail chain with more than 500 stores in 11 Midwestern states. “Yes, the new EV sales are not

DECEMBER 2020 |

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HUNDREDS OF SHOWROOMS

The NACS Crack the Code Experience held hundreds of showrooms from big-name brands and new exhibitors, enabled with appointment setting, chat functions, request for quotes and samples, virtual demos and more. At the click of a button, retailers could access more than 5,000 products in hundreds of showrooms.

drastic in numbers—less that 2% of the vehicle fleet—but we know it’s coming, and we want to be prepared for it and offer fuel to all of our customers, whether that be gas or charging.” Petersen was speaking at the session: “How to Succeed in the EV Market.”

The panel also featured representatives from Future Fuel Strategies, National Car Charging LLC, Smart Electric Power Alliance and EVgo, in addition to Kum & Go. The session covered three basic EV charging options: • The first involves an electric vehicle manufacturer such as Tesla establishing a charging network to support vehicle sales.

• The second involves an independent third party, such as EVgo, that will essentially partner with a retailer through a rental agreement (or with a municipality or commercial fleet) to support its charging network.

• The third model involves retailers working with a company like National Car Charging to set up and operate their own charging infrastructure.

Supporting a third-party network is painless to the retailer but comes with risks.

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The charging technology of choice, at least in retail applications, is DC fast charging, which dramatically reduces the amount of time required to give a vehicle a decent charge and get back on the road. The ideal site focuses on having a charging experience as close to liquid fuels as possible, while also providing opportunities for the customer to take advantage of store profit centers.

The panel offered a range of “dos and don’ts” around working with utilities, and made it clear that each utility will likely have a slightly different relationship than the next.

EV retrofits and new construction were discussed, and a final piece of advice given: Even retailers that are not ready to pull the trigger immediately should be making considerations with new site construction so that adding EV charging will be relatively painless when the decision to proceed is made.

DIGITAL AGE ID PROGRAM Paper is out and digital is in, according to Gray Taylor, executive director, Conexxus, who presented “Age Verification in the Digital Age.” Today, when shoppers display a paper ID to purchase age-restricted CONVENIENCE.ORG

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merchandise, they reveal their age—plus 32 additional personal facts—to the store clerk. “We need to reimagine identity and return privacy back to the consumer,” Taylor said. “And we’re going to start seeing that in the next 10 years.”

NACS and Conexxus have partnered to create a turnkey, digital program that can validate a shopper’s age via his or her mobile device, while protecting personal information, providing a frictionless experience and taking the burden of certification off the cashier.

NACS and Conexxus have partnered to create a turnkey, digital program that can validate a shopper’s age via his or her mobile device.

The program will utilize the store POS to calculate age and validate IDs, while integrating with the retailer’s loyalty program. It also can collect information about an individual’s purchases, which could help authorities curtail “social selling”—the act of an adult purchasing numerous age-restricted products and then reselling them to teens. Best of all, the program will be free of charge.

The program will be implemented in three phases. Now through 2021, baseline capabilities will be available to participating retailers, including new processes for scanning a driver’s license to verify the customer’s age. The second phase, scheduled for later in 2021, will involve

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launching a consumer “ID Container” application for smartphones to replace the driver’s license scan. Phase three will add retailer- and supplier-desired capabilities, including loyalty programs and 1:1 couponing, plus convenient features for consumers, such as mobile payments tied to an “ID Wallet.”

“What we’re trying to do here is give the consumer the ability to maintain their own identity,” Taylor said. “And we’re trying to prove to government that we—private businesses—are ready for them to do the right thing with digital identification, and we will work with them and provide the ability for the consumer to use that digital identification.”

BEVERAGES GIVE RETAILERS AN EDGE A retailer with a robust beverage program can lead the pack when it comes to repeat customers and sales. “Eighty percent of consumers already have or plan to return to purchase dispensed coffee and soft drinks,” said Scott Reed, communication and data specialist at Bunn-O-Matic Corporation, during the “Beverages for the Win” session.

It’s no news that consumers have become more health conscious, and that includes what they drink. “More than 50% of consumers said they would visit a convenience store more often if there were more healthy food and drink options available,” Reed said.

Reed recommended that retailers consider how they can make their beverage program healthier. “C-store consumers who said they purchased a hot dispensed beverage based on health reasons jumped 5% from Q2 2019 to Q2 2020,” he pointed CONVENIENCE.ORG

out. While younger consumers are the ones driving much of the push toward more healthy options, older consumers enjoy healthier beverages, too.

Top healthy beverages include coffee drinks, juice/smoothies, frozen dispensed beverages (particularly noncarbonated offerings) and tea. Reed also discussed how frozen dispensed beverages, particularly noncarbonated, have picked up. “People reverted back to old favorites [in the beginning of the pandemic],” he said. “Now we think consumers see noncarbonated [frozen dispensed] as [healthier],” and that’s been driving sales.

TAPPING INTO FOOD TRENDS In “Feeding the New Consumer: Health, Food Trends, Pandemics and More!,” presenter Jack Li, haiku master at Datassential, shared data and trends about what consumers want in a foodservice concept. “The No. 1 message is meeting the consumer perception of safety,” he said.

“Convenience stores are pretty high up on the list as one of the safest restaurants.”

Healthy continues to be important to consumers, but the definition of what healthy eating means has changed.

“Functional foods, or positive nutrition, are foods and beverages that actually do something for you,” Li said. “We think this market will be huge in the coming years.”

Some functional foods that have been showing up on restaurant menus lately include chia seeds, bee pollen, turmeric and spirulina. “The key is that ‘fads’ are in fact now ‘trends,’” he said. “Everything moves faster, and we cannot ignore the more short-term stuff, as those are often part of the broader trend itself. It’s ever more important to CONVENIENCE.ORG

Find New Products

The Cool New Products Showcase was filled with just-debuted products and organized in the same product categories you’re used to seeing in person at the NACS Show in the Cool New Products Room. Attendee favorites were used to determine the Top 10 Cool New Products each week.

(Look for the January 2021 issue of NACS Magazine, where we will unveil the Top 10 Cool New Products for the entire Crack the Code Experience.)

The interactive showroom, featuring nearly 80 exhibitors and more than 165 products, was organized by familiar tradeshow product categories: Facility Operations, Foodservice, Fuel Equipment & Services, Merchandise, Candy & Snacks, Technology and CBD. For more Cool New Products, visit www.convenience.org/coolnewproducts.

DECEMBER 2020 |

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shorten the innovation cycle and bring things to market more quickly.”

The bottom line for retailers is that food trends have become more fragmented. “It used to be there was an answer to the question of what’s the big food trend,” Li said. “But there’s no clear answer today because of the many smaller trends growing super-fast. The better question is what are all the trends happening, and which ones make sense for me to explore in my store?”

DAYPART DILEMMA In “Understanding Dayparts and Optimizing Each Hour of the Day,” presenter Alex Williams, COO of Hammer Williams company/Jiffy Trip, talked with Roy Strasburger, president of StrasGlobal, about how his stores use foodservice, among other things, to differentiate from the competition.

Jiffy Trip has its own proprietary foodservice concept called JT’s, which offers self-serve and made-to-order options. For example, new Jiffy Trip stores have roller grills with JT’s branding and graphics. During the COVID-19 pandemic, the roller grills are manned by crew members instead of allowing customers to serve themselves.

JT’s also serves extra-large pizzas, serviced from hot cases at checkout.

“We built our checkout counters around being a food destination,” Williams

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said. “We put a pastry and donut case at checkout in the mornings and have our hot food cases there as well.” The chain has a well-stocked grab-and-go section—a great way for retailers to get started in foodservice.

Beyond foodservice, Jiffy Trip shared several ideas to boost sales and garner repeat customers. “We started using promo endcaps in each store with quarterly promotions,” Williams said.

“But then we realized three months was too long—customers wanted fresh, new items.” Now Jiffy Trip rotates those items every two to four weeks. The chain also brought in seasonal apparel, which has brought great margins.

Williams discussed an H2O cave for case water, two liters, 12-packs and other waters and non-alcoholic beverages. “We tried to take a little bit away from grocery or dollar stores and added more variety than most convenience stores in the water category,” he said. Jiffy Trip also expanded its alcohol footprint into larger beer and wine sections. The beer caves have saved on labor because staff doesn’t have to restock as often. Plus, customers enjoy having a wide variety of beer cold, giving Jiffy Trip a decided advantage over the competition.

Explore all the session topics covered at this year’s Crack the Code Experience at www.convenience.org/crackthecode.

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THE

REIMAGING OF 7-ELEVEN The global brand’s drive to rethink, remodel and regroup with an eye toward expanding its appeal.

BY RENEE PAS

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tops every c-store ranking chart when it comes to numbers, securing that spot with upward of 9,300 locations in the U.S. Look beyond store count charts, however, and the behemoth chain does not generally hold that coveted No. 1 spot.

The chain ranked No. 22 on Food and Wine’s list of “America’s Best Convenience Stores” (Buc-ee’s took the top spot, notably for its Texas barbecue, followed by Wawa with a nod to its hoagies). Another list, a Retailer Preference Index for the Convenience Store Chanel by customer data science company dunnhumby, didn’t rank 7-Eleven in the top tier either (QuikTrip, Wawa and Sheetz ranked as the top three, respectively). That index also noted that smaller regional chains tend to outperform national retailers in consumers’ views.

While “best” lists can be subjective in a way that numbers are not, don’t count 7-Eleven out on its aspirations to climb to the top of any list. The chain’s latest efforts could potentially bump it up a few notches on those foodservice lists—food is a featured element in 7-Eleven’s Evolution Stores.

The stores represent an all-in effort to elevate all things 7-Eleven. No area was left untouched by the internal 7-Eleven team that remains laserfocused on mastering the learnings of these lab stores, with plans already in place to integrate elements system-wide throughout 2021.

The reimaging effort may prove the chain’s most prolific attempt to push the envelope of the iconic brand, both from an aesthetic and product category standpoint, with foodservice perhaps moving the farthest into a new realm for the chain.

TRY EVERYTHING Four Evolution Stores have been built since 7-Eleven opened its first one in the chain’s home base of Dallas in March 2019. One year later, three additional Evolution Stores emerged: One in Washington, D.C., one in Manhattan and one in San Diego, all opening within a roughly threemonth time frame between the end of February and the end of April.

So, what’s happened in that period between the first and latest opening? Well, a massive collection of observations and data based on consumer choices, for starters. 7-Eleven initiated its Evolution Stores as a place to test concepts and ideas, intentionally creating a retail living lab. An internal project team was tasked to explore a range of concepts, layouts and design elements, with the customer experience underscoring every effort. “It’s the totality of it all,” explained Chris Tanco, 7-Eleven’s

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Clockwise from top: 7-Eleven continues its quest to innovate with new platforms at its lab stores since opening the first Evolution Store in Dallas in 2019. Pickup lockers remain in a test phase outside the Dallas Evolution store. The design and entry point for Laredo Taco Company intentionally creates distinction for the foodservice brand.

executive vice president and chief operating officer. “I’m thrilled to see customers experience a much more contemporized 7-Eleven.”

Contemporized fits as a description both aesthetically and operationally. Design elements are universally sleek and modern throughout every area of all four lab stores. From flooring to wall coverings to fixtures to new offerings, nothing was overlooked, right down to details like the door handles on the cold vault. The longer-thannormal, elegant stainless-steel door pulls on the reach-in coolers are something more akin to a highend café in a five-star hotel. An immense number of those kinds of small upgrades exist, which all add

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up to something unexpected for customers when they enter the store.

“People are shocked that it’s a 7-Eleven,” said Molly Long, vice president of store evolution and design. “It’s been really exciting to see the customer reaction. We are hitting the most important goal: not alienating the people already coming into our stores. We want them to still feel like it’s a place for them.” Her comment emphasizes the efforts in place to determine just how far 7-Eleven can move the needle and draw in a new customer base— namely millennials—while retaining regulars.

The expansive exploratory mission goes beyond aesthetics to scrutinize areas that can become more operator-friendly. For instance, gondolas with pullout shelves to speed restocking and auditing efforts and adjustable shelves in the cold vault.

Myriad concepts address potential consumer interest in different areas, such as whether consumers are receptive to buying high-end electronics at 7-Eleven, or if shoppers would visit a 7-Eleven to fill a growler with local craft beer.

Each Evolution Store comes with its own variables, allowing the internal team to home in on exactly what customers prefer. Another example: Do customers want to serve themselves a cold brew coffee from a self-serve tap system or would they prefer a staff pour? Both service models are in test at different Evolution Stores.

The premise of the Evolution Stores has always been to churn out new platforms, take the ones customers love, inject them into the larger CONVENIENCE.ORG

7-Eleven system and proliferate them going forward as store standards, explained Tanco. “We are testing multiple different platforms, designs and concepts,” he said. “We want to get them to the place where we can scale them and integrate them as a store standard.”

ELEVATING TO QSR AND FSR STATUS While each Evolution Store includes an abundance of unique elements, 7-Eleven’s approach to foodservice with its Laredo Taco Company (LTC) and Raise the Roost brands offers a glimpse of its foodservice intentions. “We want these both to be stand-alone brands under the 7-Eleven halo,” said Brad Williams, senior vice president of corporate operations and restaurant platforms at 7-Eleven.

Williams conceded that the full-service, madeto-order formula built into LTC is not a concept that can easily fit into 7-Eleven’s existing store base; the franchise network largely consists of smaller stores that lack the space to execute the LTC model. Raise the Roost, however, has greater potential as a fit with the bulk of existing franchisees, he said.

Raise the Roost offers chicken sandwiches, chicken tenders and bone-in and boneless wings.

The Southern-inspired fried chicken and biscuit concept originally launched in 2017 under a different name. Today, branding elements place the emphasis on made-from-scratch, hand-breaded items and homemade propriety sauces. Another key component of the concept connects to transparency, which 7-Eleven hopes will translate with customers as they watch staff prepare the chicken in fryers behind the counter. “It gives us more credibility with the customer to have things made on-site,” noted Williams. “We want to move as many of the elements of preparing fresh food as front and center as possible.”

Looking at larger industry-wide trends, transparency and daypart are working in 7-Eleven’s favor with both Raise the Roost and LTC. The desire among consumers for a sense of transparency existed before COVID-19 but certainly became acutely more important with COVID-19, noted Tanco. Add to that a dip in breakfast business CONVENIENCE.ORG

TWO IN TRANSITION 7-Eleven continues to fine-tune its Evolution Stores. Here, two examples demonstrate some learnings in motion.

Tap System Customers love the tap concept, said Chris Tanco, 7-Eleven’s executive vice president and chief operating officer, but the equipment has proved a bit oversized for 7-Eleven’s model store size. Now, the team is on a quest to reengineer a more space-efficient piece of equipment.

The chain continues to test two approaches to the tap system, a clerk-served version at the both the Dallas and Manhattan Evolution Stores (seen here) and a self-serve variation at the San Diego store. The taps offer novelty beverages such as cold brew coffee.

7NOW The 7NOW logo proved such a strong visual it left customers wondering if it was a rebranding of the iconic 7-Eleven name.

7-Eleven will add the word “delivery” as a ticker along the bottom of the logo to better identify 7Now as the company’s delivery app.

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Laredo Taco Company operates in three of the four Evolution Stores. Every fixture and merchandising element was scrutinized for each Evolution Store, with the intent to improve functionality—think gondolas with pullout shelves for restocking ease—as well as upgraded design elements.

that similarly left many c-stores with a void in the morning daypart as the coronavirus shifted shopping patterns. Given the primary lunch and dinner daypart focus of Raise the Roost and LTC, 7-Eleven’s emphasis on these two food concepts comes at an opportune time, he said.

Manhattan is the only Evolution Store with a Raise the Roost concept to date, while LTC operates in the three other Evolution Stores. In total, 7-Eleven operates more than 15 Raise the Roost concepts, the bulk of which are in corporate stores. Two of those stores, one in South

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Carolina and the other in Virginia, operate with an expanded menu with a larger platform that includes a made-to-order option.

The Manhattan Raise the Roost focuses on a grab-and-go model. The reduced-size version has tested really well, said Tanco. “The goal is to craft it so it’s an easier platform for franchisees,” he added. “We continue to fine-tune it.”

Raise the Roost has the potential to complement the more operating intense, full-service LTC. However, Tanco remained noncommittal about how the formula will bear out in the future. “Whether we put both in a store is yet to be decided,” he said.

It does not take a huge leap to speculate that large facilities, such as high-traffic highway stores, may provide the kind of real estate and customer flow that could support two different food concepts paired with a 7-Eleven. Notably, the company inherited just that kind of location with its acquisition of more than 1,000 Sunoco stores in 2018. Sunoco had built up a strong travel center presence across the U.S. That same acquisition also brought 7-Eleven Laredo Taco Company, which originated in 2006 as a proprietary brand of Stripes Convenience Stores.

Industry observers who follow merger-andacquisition activity closely will recall that the Sunoco deal was complicated and included Federal Trade Commission-mandated divestitures. As a result, additional Laredo Taco Company stores continue to operate independent of 7-Eleven. Add to that count the 500-plus 7-Eleven Laredo Taco Company sites, all of which operate as corporate stores. None of this is evident to consumers, of CONVENIENCE.ORG

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I’m thrilled to see customers experience a much more contemporized 7-Eleven. course. The connection to any c-store merely appears as a notation on LTC’s website: “Find us at your local 7-Eleven or Stripes stores.”

Top: Contemporary design elements flow throughout each Evolution Store with nods to the community, such as the neon Statue of Liberty décor that stands out in the Manhattan Evolution Store. Below: The Raise the Roost concept in Manhattan focuses on a grab-and-go model; at other stores the concept operates from a larger platform with an expanded menu.

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FULL SPEED AHEAD FOR LAREDO TACO CO. LTC, with its full-service, made-to-order model, sits on the opposite end of the foodservice spectrum than Raise the Roost. Known for its handmade tacos and street-style Mexican food, LTC menu items range from breakfast tacos to traditional plates such as the Mexican Plate that includes two enchiladas, two tamales, beans and rice; and even family meals with enough food to feed six people.

7-Eleven deserves credit for elevating the LTC brand with the integration of its Evolution Store concept. “It was a very fortunate timing of events,” said Long, noting that LTC came into the mix in the early stages of development of the Evolution Store.

“With the lab, we wanted to make LTC feel like its own restaurant inside,” she said. Prior to that, she described some of the LTC locations in South Texas as being a little more shoehorned into the c-store.

Un-shoehorning the concept offers an appropriate metaphor to describe 7-Eleven’s approach with LTC. This is as close to a stand-alone unit as possible while still sharing four walls. From the outside, consumers may not even connect LTC as a 7-Eleven brand. The design positions it much like a co-branded property, complete with two entrances, and reflects what consumers widely already accept today with brands like McDonald’s and Taco Bell.

That distinction helps define the Mexican QSR as its own brand versus a proprietary offering, and some might argue it could develop that CONVENIENCE.ORG

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7-Eleven continues to fine-tune its digital package with the goal of offering a touchless, contactless checkout experience.

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We want to move as many of the elements of preparing fresh food as front and center as possible.

way, perhaps at some point devoid of a 7-Eleven store altogether. The evidence mounts when considering that Joe DePinto, 7-Eleven’s president and CEO, maintains a direct link to two casualdining brands as chairman of the board for Brinker International, which owns Chili’s Grill & Bar and Maggiano’s Little Italy.

The larger 7-Eleven growth model has altered a bit with LTC in the mix, namely in terms of both the preferred size and location of potential market areas. “We’re looking for sites that will be great for a c-store, restaurant and fuel—that trifecta,” said Williams. For a store-plus-restaurant location that means 4,650 square feet, he noted, with the potential for a footprint as large as 6,800 square feet for a store that would include on-premises dining. One of the ways 7-Eleven tests viability of LTC in a market is through food trucks, which offer a trial in the community to see if they embrace the concept.

Laredo Taco Company and Evolution Stores are both on parallel paths in terms of growth, explained Williams. “Both are moving fast,” he said, with new stores and retrofits prime opportunities. By the end of 2020, 7-Eleven will add another 75 LTC locations to the mix and plans to open 100 more in 2021. In addition, 7-Eleven plans to open approximately 10 more Evolution Stores in 2021.

the clock ticking on building new stores with that design, she said, although she added that it could take a full year before a new store opens with the 2.0 design footprint.

“We will see hints of 2.0 as we remodel stores in 2021, and it will impact certain new builds in the pipeline,” said Long. “I can truly say I’ve never been more bullish as a large company truly transforming ourselves. It’s hard to change so many stores. We let that be a roadblock for a while, but we cannot let the existing store base be a reason we cannot evolve.”

It’s a lot to take in, for customers, the 7-Eleven corporate team and franchisees alike. If Long, Williams and Tanco reflect the views of everyone at 7-Eleven, there is a clear, unified outlook for the future. Here’s how those three summed things up: The experience is the North Star (Evolution Stores), from there the work transitions to standardizing the vision and making it scalable (2.0 prototype). Add in a remodel package to impact existing stores and, if the team can pull all of that off, they may just get what they are after: Draw in a new group of customers while retaining the original core base, and, perhaps, even a top spot on a best neighborhood food chart.

MOVING TOWARD 2.0 Not to go unnoticed, 7-Eleven remains in the midst of a 2.0 prototype that springboards off the Evolution Store design with the intent to land squarely in the franchise and new-build space.

Executives are gearing up to launch its 2.0 prototype that Long anticipated will happen toward the end of the second quarter of 2021. That will start

enee Pas’ writing draws R from both her c-store background and her more than 20 years writing about various retail channels. She gravitates toward the intersection of ideas and execution, where the rubber meets the road.

She can be reached at reneepas4@gmail.com.

| DECEMBER 2020

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A Critical Time for Educating New Lawmakers March 23-24, 2021 Virtual Meeting

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Registration opens this month

convenience.org/DayOnTheHill

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How the pandemic is shaping 10 key trends in the convenience and fuel retailing industry.

F

BY FRANK BEARD / PART 3 OF 3

ew topics dominated industry discussions in recent years like convenience retailing’s shift toward foodservice. Moving beyond outdated notions of “gas station food,” leading brands had gained national attention for their cravable, destination-worthy meals.

From the 10-year period between 2009 to 2018, foodservice as a percentage of inside sales increased from 16.0% to 22.6%, according to NACS State of the Industry data. In 2019, it jumped further to 25.4%.

Although this change was driven primarily by top-quartile retailers, it offered a compelling picture of how the industry might continue to evolve in this new decade.

But it was clear that the quick-service and fast-casual brands were not going to cede ground without a fight. Last year’s $300 million acquisition of Dynamic Yield

by McDonald’s indicated that technology and drive-thru efficiency would be a major priority for the brand in the near future.

Starbucks also ended November 2019 with more than 17.5 million members in Starbucks Rewards—one of the country’s most successful loyalty programs.

At the same time, established consumer packaged goods companies began attempting

CONVENIENCE.ORG

to embrace the direct-to-consumer (D2C) approach of their digitally native competitors. Given the advantage convenience retailers have over QSRs through their beverage and snack selection, what would it mean if leading brands began to bypass the channel altogether?

As with many trends, much has happened in recent months amid the COVID-19 pandemic. Let’s take a closer look.

QUICK-SERVICE RESTAURANTS AND FAST CASUALS It goes without saying that the pandemic has been catastrophic for restaurants.

According to the National Restaurant Association, the sector is likely to see $240 billion in lost sales and the closure of nearly 100,000 locations this year. In comparison, a typical year might see the closure of 50,000 restaurants and the opening of 60,000.

Lurking beneath the headlines, however, is a story of bifurcation: Many quick-service chains are thriving, while local favorites are going out of business. On Yelp, three-quarters of the nearly 22,000 restaurants that closed between March 1 and September 10 had fewer than five locations.

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We’re working with a client on a drive-thru with four lanes. They’re devoting 100% of their real estate to both drivethru and pickup.

“Compared to other restaurants, QSR chains are more likely to be doing well,” said Cliff Albert, a longtime packaging executive who operates The Shares, a popular newsletter about the restaurant industry. “When you talk about brands that have made the systematic shift toward off-premise,

10 Key Trends Shaped by COVID-19 1. Last mile 2. Cashless society 3. Plastic 4. Consolidation of c-store industry 5. Tobacco/vaping/marijuana 6. Electric vehicle market 7. Dollar stores 8. Starbucks and high-end coffee 9. Fast-casual restaurants 10. Direct-to-consumer CPG products

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they were ahead of it. The ones who were always going to struggle were the independents.”

With the closure of dining rooms and lingering health concerns after their reopening, the pandemic inadvertently rewarded brands that had already invested in drive-thrus and other off-premise solutions. Indeed, Domino’s saw same-store sales rise 17.9% in its third quarter.

McDonald’s saw an increase of 4.6% in its third quarter, along with a rise in the low double digits during September—its best monthly performance in nearly a decade.

National brands that lacked off-premise solutions—including many in the casual and fine dining space—now find themselves in similar positions to the independents. Ruby Tuesday filed for Chapter 11 bankruptcy protection in October, closing 185 locations.

“The problem facing these brands is that off-premise was never the core of their business,” said Howland Blackiston, principal at consulting firm King-Casey. “They were suddenly at a disadvantage and had to scramble to adjust. The easy solution for casual dining brands was delivery, but that’s the least profitable due to the fees. You can squeak by, but it’s not desirable.”

According to Blackiston, many QSRs are now using this momentum to double down even further on drive-thrus. The challenge is that many are finding their current systems overwhelmed with demand. According to an annual study by SeeLevel HX, average wait times have increased by nearly 30 seconds—costing brands around $64 million in lost revenue.

“I think everyone feels that drive-thru usage is here to stay. Even before COVID-19, QSR brands were doing 50% to 70% of their business that way,” said Blackiston. “The challenge is that for many years, the drive-thru hadn’t really changed much in terms of the basic strategy and design. The new solutions coming out are much different. We’re working with a client on a drive-thru with four lanes. They’re devoting 100% of their real estate to both drive-thru and pickup.”

Chipotle is benefitting from having made investments in off-premise solutions. In 2019, the company began introducing “Chipotlanes” where CONVENIENCE.ORG

customers pick up orders placed via app or website without having to leave their cars. Digital sales in the second quarter of 2020 grew 216.3%, accounting for 60.7% of total sales.

Baird analyst David Tarantino recently told Yahoo! News that he views Chipotle as second compared to Starbucks in digital engagement, describing the ability at his local stores to order on an app and simply stand in a line for curbside pickup.

“Why have the dining room at all?” he asked. In fact, Chipotle announced the opening of its first digital-only store in November in Highlands, N.Y. There are always exceptions to these trends.

Despite the success of national QSR brands, many consumers have become even more invested in their communities amid the pandemic. The desire to shop local is especially strong. “Where our company is located in South Dakota, the local businesses are thriving,” said Gina Kuck, director of national accounts at Daktronics.

“Our local ice-cream shop has a small dining experience, but this year only the drive-thru is open,” said Jess Bern, who manages strategic marketing for on-premise at Daktronics. “Cars are now backed up into the road just waiting to get ice cream. It’s like we want to treat ourselves, and we’re willing to wait for something special.”

STARBUCKS It’s no secret that Starbucks has presented a challenge to convenience retailers in recent years— especially during the morning daypart. Indeed, the inspiration for Tennessee-based Twice Daily’s White Bison coffee program was partially due to an observation that customers would drive across the street to Starbucks after refueling.

But Starbucks has had a tough year. By July, sales were down $3.1 billion compared with the prior year. Although same-store sales improved from negative 40% in the third quarter to negative 11% in August, recovery will surely continue to be slow.

One reason is that many of the company’s locations are designed around the in-store experience and reliant upon now-empty offices. Although 60% of Starbucks locations have a drive-thru, 40% lack that critical lifeline. A third of that 40% are located in urban business districts.

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Remote work presents a significant challenge for many brands. Estimates vary, but between 1 in 5 and 1 in 6 workers are projected to continue with remote work arrangements in the near-future. Yet in a strange twist of fate, this shift seems to have benefitted brands like Folgers. Parent company J.M. Smucker Co. has seen its coffee products enter 1.3 million new homes during a three-month period, and Folgers is leading the way. Some of this may be due to stock-up behavior, but there’s no denying that remote work has changed the habits and buying patterns of many consumers.

There’s a silver lining for Starbucks as the number of local coffee shops is shrinking for the first time in nine years. The U.S. will have 25,307 locations specializing in coffee or tea by the end of 2020—down 7.3% from a year earlier, according to Euromonitor. Not only does this help Starbucks, but it rewards brands like McDonald’s and Dunkin’ that aggressively target coffee customers.

Shifting away from on-premise consumption will be a key priority for Starbucks. Almost 90% of sales volumes flowed through a combination of drive-thrus and mobile orders during the company’s third quarter. Delivery transactions tripled.

Starbucks Rewards also continues to perform

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As we see customer visits shifting from urban cafés to suburban drivethrus, customers are also purchasing multiple beverages and food items on a single order, essentially a group order.

strong, representing 46% of tender—an increase in four percentage points from a year ago. Mobile orders are at 22% of total transactions and also up six percentage points.

“Although our digital platform continues to be a source of strength, disruption to the weekday morning routines, notably commuting to work and school, is a headwind we are focused on across the U.S. as we continue to recover our business,” CEO Kevin Johnston said in the company’s third-quarter earnings call. “We continue to see improvements in the morning peak period as well as some customer occasions shifting to later in the morning daypart. As we see customer visits shifting from urban cafés to suburban drive-thrus, customers are also purchasing multiple beverages and food items on a single order, essentially a group order.”

Starbucks’ earnings call also flagged three areas for potential growth and differentiation: new store formats, digital customer engagement and plant-based menu items. Development of 50 new pickup stores will arrive in urban markets that don’t support a drive-thru. Several hundred are planned for the next three to five years. Starbucks Rewards also will shift to provide members with the ability to earn rewards for paying directly— thereby removing the need for pre-loading.

“I think Starbucks will be all right,” said Neil Saunders, managing director of GlobalData. “But there’s a little bit more distress in their situation because some people will cut back. It’s one of those things you can cut out spending on, as it can get quite expensive. There’s also a longer recovery period for channels that relied very heavily on the work commute.”

DIRECT-TO-CONSUMER CPG The direct-to-consumer (D2C) shift has been difficult to ignore in recent years. Many American consumers likely own Warby Parker glasses, Away luggage, or perhaps bedding from Casper or Tuft & Needle. A few may even have a subscription for Quip brushes and toothpaste.

This has raised the question of whether the major CPG companies might find success with the

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D2C model—and what it would mean for retailers if those brands were less reliant on their stores.

In the apparel industry, for example, Nike is currently on track to have digital sales represent 50% of total revenue.

“The accelerated consumer shift toward digital is here to stay,” said the shoe brand’s CEO John Donahue in a recent statement to CNBC. “Digital is fueling how we create the future of retail.”

Nike is an outlier, and shoes are different than soda and chips. Still, it’s not hard to see that a similar situation might play out for brands that are strong enough to drive a trip to a convenience store. Incentives might feasibly line up for a consumer to shift spend to a subscription model for a preferred energy drink. It’s also hard to ignore the success of digitally native brands like GFUEL that sell directly through their website. Fans of GFUEL even join waitlists for limited edition drops.

“I think a lot of CPG companies are really looking for ways to enhance their own margins,” said Saunders. “They see more consumers buying things online, and they like the idea of having that relationship. They also like subscription models because when you lock consumers into a subscription, they no longer think about buying that product. They’re not lured away by promotions or special offers. The churn rate of the brand drops down significantly.”

The challenge for brands that aren’t digitally native, however, is how do you work backward?

“Would an impulse buy for a bag of chips push a consumer to make an online purchase directly through Frito-Lay? Probably not,” said Joshua Schall, owner and president of J. Schall Consulting. “Those items don’t scale well with individual D2C experiences.”

Schall points to companies like PepsiCo that have the added advantage of many brands within their portfolio. Working backward to make a D2C shift is easier due to their ability to bundle. In May, Pepsi rolled out Snacks.com and PantryShop.com to facilitate D2C sales of more than 100 Frito-Lay products. Specialized bundles with top-selling items were designed with affinity research and targeted at groups like CONVENIENCE.ORG

If you control your distribution, you control your destiny. remote workers and homeschoolers. The company reported that e-commerce sales had nearly doubled for its third quarter.

“If you control your distribution, you control your destiny,” said Schall. “Whether this is D2C or owning retail locations, you at least have control of that even if the world around you is crumbling.

A website for a CPG company is national scale.

Even if your products are out of stock at a retailer, you still have a way to get them to your customers.

That’s invaluable.”

While it’s tempting to view D2C as more an emerging trend, Schall cautions that while the shift may appear comparatively small, many of the brands with under $100 million in revenue are growing at more than 10 times the rate of their larger competitors.

“It’s a death by one-thousand cuts scenario,” said Schall. “It’s important for CPG brands to focus right now on being where consumers’ attention is directed, even if it doesn’t appear to show profitability parity to existing physical retail channels.

Looking at D2C as purely a profit center today is the wrong way to think about it, instead it’s a land grab within the future of retail.”

Frank Beard is a speaker and retail consultant who serves as the director of Safe Shop. He resides in Des Moines, Iowa.

Follow Frank on LinkedIn or Twitter at @FrankBeard.

This is the final article in a three-part series on how the pandemic is shaping 10 key trends in the convenience and fuel retailing industry.

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New tech, new drivers revive the use case for QR codes in retail.

C

BY SAMANTHA OLLER

all it bad timing, a confusing user experience, poor execution—or all of the above. Quick-response (QR) codes have struggled to gain traction in retail in the United States. But the evolution of smartphone tech, combined with the rise of loyalty programs and the pandemic’s push toward contactless commerce, have finally given QR codes a chance to prove their worth.

Perhaps the biggest early stumbling block for QR codes was the clunky user experience. “If you just look at the core of mobile technology of your phone, four years ago you had to go get a QR code reader app to read them,” said Gray Taylor, executive director of Conexxus. Now newer models of the Apple iPhone and Android smartphones have QR code readers built into their cameras, making scanning simple and intuitive.

The tech also is more accessible to retailers, with most point-ofsale systems built to a standard that is now capable of reading a QR code, said Taylor. “So that fundamental change tossed the economics back in favor of QR codes.”

Early QR code applications also were troubled by “massively bad execution” by marketers, said Jimmy Matorin, founder of consultancy Smarketing in Cannes, France. For example, an airline’s magazine featured QR codes—which became useless once the airplane took off.

A major coffee chain placed a QR code on a sign with no messaging— and after scanning, users found the promotion was over. “I don’t think [marketers] had the right calls to action, and I don’t think they had the right content waiting for you when you scan,” said Matorin.

As QR code technology has improved, its applications in retail have grown more sophisticated and revealed the tremendous capabilities of that small, inscrutable box—from contactless shopping to personalized, simplified identification.

CHECK IT OUT QR codes are serving as a keystone in retailers’ ability to deliver a frictionless shopping experience. 7-Eleven is leveraging QR codes in

TRY IT FOR YOURSELF!

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TRY THIS!

its contactless Mobile Checkout tool. At the store, customers open the 7-Eleven app and log into the 7Rewards loyalty program. Then, they use the tool to scan barcodes on their purchases to add to their basket and earn points and discounts. Customers can pay with a debit or credit card, or Apple Pay or Google Pay. After the payment is authorized, the user scans a QR code on a confirmation screen.

“The checkout process utilizes unique, onetime-use only QR codes for customers to confirm their purchases on their way out of the store, providing an assured, worry-free and convenient shopping experience for the customers, while enabling a seamless verification to the stores of the purchase,” said Sajjad Khan, senior director of product management, 7-Eleven Inc., Irving, Texas.

Mobile Checkout is available at select locations in Dallas; Manhattan and Long Island, New York; and Utah.

The Mobile Checkout tool has the added benefit of increasing customer engagement with 7-Eleven’s app and loyalty program. “QR codes have proven to be an incredibly useful tool for helping customers discover our 7-Eleven app and learn more about specific products and offers,” said Khan.

7-Eleven also is tapping QR codes in its pilot of a fully self-serve cashierless store at its 700-squarefoot Store Support Center in Irving, Texas. Users download an app, check in at and enter the store, and then leave once done shopping. “QR codes serve as a unique identifier for each customer, allowing

The contactless nature of the QR code interaction is a selling point during the pandemic.

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them to check in when entering the pilot store and experience automated shopping,” said Khan.

LOYALTY CONNECTION Casey’s is using QR codes to drive engagement with its loyalty program—and cut down on contact points. In January, the retailer launched its Casey’s Rewards program. As part of the rollout, Casey’s placed signage at the fuel island explaining how to interact with the Casey’s Rewards program, along with a callout directing customers to sign up with a QR code.

“When they point their camera at that QR code, we’ve got some technology behind that that will interpret what device the guest is coming from—an Android or an iPhone—and then it will seamlessly route them out to the app store for their device and drops them right into the details page for our mobile app,” said Mike Templeton, director of digital marketing for Ankeny, Iowabased Casey’s. “That’s been a huge win for us as people are on their device already at the pump; they’re interested; they want to engage.”

Casey’s Rewards members can use their personalized QR code in the Casey’s app as a shortcut to connect a transaction to their loyalty account. So instead of punching in a phone number at the PIN pad on the counter, members just hold up their device and the employee scans the QR code.

The contactless nature of the interaction is another selling point during the pandemic. “It’s one less thing I have to touch that I’m not familiar with,” said Templeton.

ExxonMobil and Shell are using QR codes to enable contactless payment at the pump through their new partnership with Google’s GPS navigation app Waze. In the Waze app, users get directed to nearby Exxon, Mobil and Shell branded sites. Once they pull into a location, the app prompts them to pay and earn rewards through the Exxon Mobil Rewards+ or Shell app. Customers enter their pump number or scan a QR code at the dispenser that prompts the app to coordinate the transaction.

ExxonMobil has been using QR codes at its branded sites since its app launched in 2014. In the Waze application, the tech provides a contactless option to customers who want to minimize how much data they share.

“Our most seamless experience is when consumers using or sharing location data can skip this step and pay for gas from inside the comfort CONVENIENCE.ORG

of their vehicle,” said Eric Carmichael, Americas fuels marketing manager for Houston-based ExxonMobil. “That said, it is important to offer the option for those who are more comfortable with QR codes rather than sharing location data.”

GETTING PERSONAL In July, Coca-Cola introduced the capability for a consumer to operate its Coca-Cola Freestyle machine from a smartphone. The user scans a QR code at the machine, which transfers the machine interface to their smartphone. “You then select from the full menu of brands and flavors—and pour,” said Michael Connor, chief architect for Coca-Cola Freestyle, in a press release announcing the new feature. “The idea is to be safe, seamless and fun.”

The software is slated to be uploaded to all CocaCola Freestyle dispensers before the year’s end.

Taylor with Conexxus says Coca-Cola’s move demonstrates the new waterline for QR code applications. “That’s conveyance of identity: my mix, my blend. It’s conveyance of value,” he said. “What retailers tend to do is … conveyance of getting you to a website so you don’t have to type in ‘www whatever.’”

QR codes can no longer have a one-note payoff.

Instead, they need to create a shortcut that makes the experience easier, seamless and more secure for the user. Templeton points to the adoption of personalized QR codes by payment companies such as Venmo. Before, a Venmo user had to search for the right person’s account to send or receive money.

With personalized QR codes, Venmo users simply scan and transact. “The expectations for the experience have risen,” said Templeton.

QR codes also can give consumers greater control over their identity. As part of the age verification initiative, Conexxus and NACS are developing standards to create a personalized QR code for consumers to buy age-restricted products such as cigarettes and beer, instead of using a driver’s license. The QR code can be conveyed from a cellphone to the retailer’s POS for age verification.

(For more about the age verification initiative, read the Crack the Code coverage in this issue.)

“We have taken all of your personally identifiable information out of the mix,” said Taylor.

“So QR codes are a great way to cheaply convey a synthetic attribute of your identity in a trusted service provider environment.” The program should go into pilot by year’s end and launch in 2021. Through the age verification effort, NACS CONVENIENCE.ORG

7-Eleven’s Mobile Checkout tool allows customers at select stores to scan barcodes to ring up purchases and pay via app, then show a QR code as their proof of purchase. 7-Eleven uses QR codes as a unique identifier for customers at its cashierless test store in Irving, Texas.

and Conexxus are striving to be “the tip of the spear” for secure, synthetic identities.

“The consumer deserves to have all of their identity tokenized, and they deserve that data minimization as part of the use case of that identity,” said Taylor. “They need to be in total control of it.

And it should be in a free container that is standardly available to any consumer who wants it.”

Taylor predicts that the trend toward tokenization will grow over the next decade. “And the best way to convey that outside of a radio frequency communication is to use a QR code,” he said. “So QR codes are only going to get more popular.”

Samantha Oller is a Chicagobased journalist with 17 years of experience covering retail and fuels. Follow her on LinkedIn or Twitter at @OllerWriter.

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ommonplace elements now in c-stores include hand sanitizers readily available for customers and staff, floor markers to maintain social distancing, masks for all and some kind of protective barrier shielding staff and customers from each other. These could largely be argued as the new norm in standard operating procedures more than a shift in store design, but they are certainly a marked change in the c-store shopping experience. Whether or not they will be permanent components of a c-store remains an unanswered question, but most expect they will stick around at least until a COVID-19 vaccine permeates through the U.S. What’s happened to date are adaptations, said Steve Montgomery, president of b2b Solutions LLC, a c-store consultant group based in Lake Forest, Illinois. Some of those adaptations may not remain over the long term, but he feels what will stick around is building stores with “what if” in mind. “The pandemic accelerated the process of what was already happening,” he noted, making conversations about how to execute contactless payments and experiences or adding a drive-thru all the more pressing.

DESIGNING AROUND THE QUEUE Industry observers agree that the pandemic accelerated a lot of things for the c-store industry.

“Instead of plan, test and act, chains are going straight to act,” said Ed Burcher, a consultant with Business Accelerator Team based in Phoenix. He identified the forced queue as one component nearly everyone has put into action with floor markings, although the strategy behind a great customer checkout line goes deeper than that.

Even without social distancing mandates, he said, “Forced queuing is a logical and brilliant way to force people through a store.”

While it can take time and new builds to incorporate larger structural changes, such as separating primary entrances and exits into a design, Burcher noted that many chains are already doing just that or were making strides before the pandemic in newer stores. He points to Speedway and Wawa as two examples already embracing new queuing philosophies. “It’s about guiding people through the store the way the operator wants,” he said.

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Another store worth looking at for best practices in customer flow is QuikTrip, said Nathan Underhill, president of iSEE Store Innovations, a design and manufacturing company based in St. Louis, Missouri. One of the things that he sees as a strength at QuikTrip is the chain’s precisely marked checkouts. “It’s clear where you are supposed to be,” he said.

“We were already seeing the importance of queuing grow; the current situation is bringing a lot of things that were already in motion and expediting them,” Underhill said. “Customers don’t want to think about anything or touch anything. Retailers are adapting to that and showing wayfinding and subtle cues.”

Queue management is a mix of art and science, said Perry Kulkin, director of marketing for Lavi Industries, a queue management solutions provider and manufacturer based in Valencia, California. “Queuing at checkout is one of the last things businesses think about,” he admitted, well, at least pre-pandemic. As crowding happens and customer flow issues become more apparent, there is a greater need to manage that flow of people to avoid groups of people congregating—something that was never a good approach, he noted.

“Forced queuing is a logical and brilliant way to force people through a store.”

“When it comes to the pandemic, a single-line queue is probably the safest way to execute things,” Kulkin said. It not only keeps people organized, but it can create impulse opportunities as people go through that queue, he added. A typical strategy starts with the head of the queue being well marked with signage and fixtures. Since people can generally find that easily, it creates a natural starting point. Merchandising fixtures can help extend the flow, he said.

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A DESIGNER’S VIEW OF THE NEW NORMAL

“I await with great interest to see how our industry reacts and moves forward post-COVID,” said Joe Bona, president of Bona Design Lab, a retail design firm based in Franklin, Massachusetts.

While we all wait for the post-COVID-19 era to begin, he offered his take on a few considerations related to store design: •D esignated floor markings: Tape on the floors gives way to better designed and more open layouts and may have a positive net effect on inside sales.

•F orced flow layout: That was actually an old idea that was created several years ago that had a high degree of success in how we were able to get more customers past high-margin food and beverage categories. It resulted in a higher percentage of customers purchasing food and beverage items. In thinking about social distancing, it occurred to me that what is old may be new again, and this type of approach to layout may be a more effective way to provide a more organized flow of customers through the space and place greater emphasis on enhanced food programs.

•S eating spaces: Seating was added to help build credibility for expanded food programs. As social distancing and closed-off in-store dining areas have become today’s new normal, less seating capacity might be the end result, with wider aisles and more open vistas that enhance the overall experience while providing a sense of public safety.

•D rive-thrus and more: We have recently read how Wegmans grocery stores have eliminated their in-store, white tablecloth restaurants—never to reopen—to better expand their delivery service, curbside and in-store pickup due to consumer demands.

And the likes of Wawa and other convenience stores have begun exploring drive-thru-only locations as a result of new consumer behavior, while others are rapidly advancing technology applications to provide contactless in-store interactions.

• Future-forward design: Several of our clients are challenging us to help plan layouts and environments that consider the current crisis. We are working to come up with new designs that address many of these areas in anticipation that when life does return to normal, the stores we design will be relevant, customer focused and forward thinking, while also providing a sense of place where customers feel welcome, safe and secure with their purchases, however they are made.

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“In the last six months we have seen even small operators switch to single-line queues to better manage flow,” Kulkin said. “The last thing they want is to give the impression that it’s a free-for-all inside. The pandemic forced people to look at how they are dealing with the customer flow inside and out of their store.”

IN AND OUT SAFELY Speed of transaction and customers’ ease to find what they want also is amplified today, added Joseph Vonder Haar, CEO/partner of iSEE Store Innovations and former chairman of the NACS Supplier Board. He explained it this way: People want to get in, touch as few items as possible while finding what they want and get out. “Speed of transaction is more important than ever because it connects to safety now.” To support the goal of touching fewer things, iSEE is vetting a new product that can open cold vault doors without requiring customers to use their hands.

“We have seen even small operators switch to single-line queues to better manage flow.”

“It’s about a contactless experience,” said Vonder Haar, who believes consumers now extend that notion to curbside pickup. In fact, many c-store designers concur that curbside pickup, as well as drive-thrus, may significantly change the design of c-stores down the road.

While by no means a c-store mainstay, c-store chains were testing—or already executing— curbside pickup prior to the pandemic. The bulk of those chains are, no surprise, well-known names: Casey’s, Kum & Go and Wawa among them.

However, even lesser-known operators can find success with contactless options such as curbside, delivery and drive-thru. Ever hear of FavTrip? This CONVENIENCE.ORG

Curbside pickup, as well as drive-thrus, may significantly change the design of c-stores down the road.

11-store operator out of Missouri has been successfully executing drive-thru service (and delivery and curbside pickup) for more than four years. And owner Babir Sultan has some advice for those considering designing one into their operation.

DRIVE-THRU ADVICE As for all the talk Sultan knows is happening in the industry around drive-thru, his advice for operators thinking of adding a drive-thru is to make sure they clearly understand the potential pitfalls. “Don’t just add it because of COVID,” he said. It can actually create chaos, as store parking may already be tight, leaving customers to park in the drive-thru lane. He faced that issue when he first added drive-thrus. “It took a while to build customer awareness of it,” he said. “You don’t want to mess up the customer experience.”

At FavTrip, the experience includes options for curbside pickup, delivery or drive-thru at all three FavTrip-branded stores; the additional nine stores Sultan owns operate under different gasoline brands. Most delivery orders start on the FavTrip website, where customers can order anything, including alcohol and tobacco.

“Everyone is a lot more focused on essential items now,” said Sultan of his customers’ preferences today. As a result, he has changed his product mix to include more frozen grocery products and teamed up with a fresh produce company to deliver fresh produce seven days a week. “You have to adapt to change; we shifted spacing to accommodate more household essential items.”

Sultan’s other piece of drive-thru advice is for operators to consider restaurant-type technology intended for a drive-thru experience. He’s looking at register technology compatible with drive-thrus and notes there are limitations integrating this technology with legacy gasoline CONVENIENCE.ORG

station technology. His preference is more of the Chick-fil-A model, where staff can be found outside on tablets taking orders.

By the way, his stores currently don’t sell hot food, which was a problem when it came to partnering with a third-party delivery operation. The drive-thru is plenty successful without hot food, although he does plan to add it—likely pizza— when his new 4,000-square-foot ground-up store is complete mid-next year (his current stores average between 900 and 1,200 square feet). Notably, COVID-19 has slowed progress with the new site as the city moves at a slow pace at the moment for things like permits.

“Drive-thrus at c-stores are not expected,” confirmed Mike Lawshe, president of Paragon Solutions, a consulting, design and branding services firm headquartered in Fort Worth, Texas. “You have to educate and work with your customer.” He cited one example of a retailer with drive-thru sales of 5% prepandemic, that saw drive-thru sales reach 30% when the pandemic hit.

Drive-thrus, combined with pickup and delivery, are among the three most talked-about things since the pandemic, Lawshe noted. “The flow and functionality of design has changed forever.”

Renee Pas has spent more than 20 years writing about various retail channels. Her formative c-store years were spent in communications at White Hen Pantry, a familyowned c-store chain acquired by 7-Eleven in 2006. Queuing took on new meaning for writer Pas after this story. She’s now acutely aware of how she walks through every store and cannot stop wondering if she’s taking the intended path. She can be reached at reneepas4@gmail.com.

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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 last year’s NACS Show (after October 4).

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

COMPANY

Ecolab®

PRODUCT

SSDC Sink Dispensing System

Easier, Safer and More Cost Efficient for Your C-Store

The SSDC Sink Dispensing System for 3-compartment sinks is an innovative solution designed to make cleaning tasks in your c-store easier, safer and more cost efficient. Our patented SnapPacTM bottles snap into wall-mounted brackets that save space and allow for easy access. Closed-loop technology prevents spills and eliminates the need for personal protective equipment. Special features include measured portion control and chemical mixture dispensed automatically, tamper and spill proof for 100% utilization, color coded for safety and service-free. For more information, call (817) 527-3860 or email c-storeinfo@ecolab.com.

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COMPANY

The Pinnacle Corporation PRODUCT

Affiniti Cloud Mobile Ordering

Affiniti Cloud Mobile Ordering

With Affiniti Cloud Mobile Ordering, your customers can order the products they use the most—whether food or general merchandise—and schedule pickup curbside or pumpside from your website or from their mobile device. And with mobile payment, the process is fast, safe, frictionless, and easy! For more information, call 817.795.5555 and visit www.pinncorp.com/nacs-cool-new-products-2020

COMPANY

Compliance Safe PRODUCT

COMPANY

Tree-Rolls Hemp Company PRODUCT

Compliance Safe

Tree-Rolls® CBD Hemp Pre-Rolls

Compliance Safe Solves Permit Problems

You Smoke’em—We Plant’em

Managing business-critical paperwork is a headache for every retailer, with risks that can lead to disruptions in your operations and loss of revenue. Built by retailers for retailers—no more spreadsheets, sticky notes or missed deadlines with Compliance Safe. Secure and store your documents in the cloud for easy access anytime and anywhere. Save time and money with CSP 2020 Retailer Choice Best New Technology Product. Available for $10/month, per location. For more information, contact Gerry@ compliancesafe.com and visit www.compliancesafe.com.

CONVENIENCE.ORG

Discover slow-cured USA organically grown Tree-Rolls® Hemp pre-rolls: Sequoia, Aspen, Palm, and Hemp & Herbs pre-rolls: Hemp & Lavender, Hemp & Peppermint and Hemp & Rose Petal—all rich in CBD & CBG. Products undergo four points of compliance testing, with a DEA-certified laboratory final test. Available in a 12/1 unit display, perfect for countertop impulse sales. Proudly partnered with Trees For the Future (www.trees. org), a tree is planted for every product sold. Contact your HLA Representative and visit www.treerolls.com.

These products are not available for sale, and the FDA maintains that the sale of such products is illegal under the Federal Food, Drug & Cosmetic Act.

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COMPANY

The Coca-Cola Company PRODUCT

Coke with Coffee

Sips Like a Coke, Finishes Like a Coffee.

This is not a Coca-Cola flavored coffee. And it’s not coffee flavored Coca-Cola. This is Coca-Cola with Coffee. It is literally the best of both. And it’s more than a blend of two beloved drinks.

It’s the uplift and refreshment of Coca-Cola. It’s the rich experience of coffee. Each bring their own iconic qualities for one totally unique taste. So unique—there’s literally nothing else like it. Coca-Cola with Coffee. Sips like a Coke, finishes like a coffee. For more information, call 1-800-241-COKE and visit www.coca-colacompany.com.

COMPANY

Hostess Brands, LLC PRODUCT

Voortman® Mega Size Wafers

Voortman®: A Treat to Feel Good About

This sweet treat from Voortman® delivers all the joy of a tasty snack with none of the artificial flavors, artificial colors or high fructose corn syrup ingredients. Indulge in the rich, triple layer crème filling wrapped by a crispy crunchy wafer. Now available in Mega Size, this item is perfect for on-the-go snacking and sharing. Available in vanilla, chocolate and strawberry flavor varieties and sold in 10 count, 5.17-ounce mega size packets. For more information, email sales@hostessbrands.com.

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COMPANY COMPANY

PepsiCo, Inc. PRODUCT

Cheetos® Crunch Pop Mix

PepsiCo, Inc. PRODUCT

Cheetos® Mac ‘n Cheese

Bringing Two Favorites Together!

Your Favorite Snack Is Now a Cheesy Mac!

COMPANY

COMPANY

PRODUCT

PRODUCT

The Flavor You Have Been Waiting For!

The Newest Addition to the DEW Flavor Family

The NEW Cheetos® Crunch Pop Mix gives you double the Cheetah® power and cheddar flavor with the perfect mix of Cheetos Popcorn and Crunchy Cheetos. Available nationwide in multiserve (7oz/ SRP $3.99) and single serve packages (2.5oz/ SRP $1.89).

For more information, visit www.cheetos.com.

PepsiCo, Inc. Pepsi™ Mango

In March 2021, Pepsi will introduce the most popular fruit in the world to the cola category. Pepsi™ Mango—the deliciously refreshing taste of the Pepsi you love now with a splash of Real Mango. Uniquely refreshing, universally appealing. Also available in Zero Sugar.

CONVENIENCE.ORG

Introducing Cheetos® Mac ‘n Cheese. Bold, creamy and full of Cheetos® flavor, this is the mac you’ve been dreaming of for lunch, dinner and anytime in between. Get your paws on a box or cup of this deliciousness. Available Summer 2021. For more information, visit www.cheetos.com.

PepsiCo, Inc. MTN DEW® MAJOR MELON™

MTN DEW® MAJOR MELON™ is the newest addition to the DEW flavor family. Its juicy, watermelon flavor has an added DEW twist and is sure to be an instant Dew Nation favorite. MTN DEW® MAJOR MELON™ is available nationwide in two iconic variations; Full Sugar and Zero Sugar.

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COMPANY

COMPANY

PRODUCT

PRODUCT

Exciting New Flavors Launching from Johnsonville

Get Your Hands on Something New from Johnsonville

Johnsonville

Johnsonville

Queso, Southern BBQ, & Smoked Honey BBQ Sausages

Flavor is on the rise with Johnsonville's new Ultimate and Natural Smoked Sausages!

Introducing our Ultimate Queso, combining Tex-Mex spices and creamy Pepper Jack cheese. Our new, naturally smoked, skinless Southern BBQ and Smoked Honey BBQ flavors offer bold heat or sweet heat, as preferred. All bring exciting flavors your roller grill customers are craving, with the assurance of safety, a premium product, and Johnsonville's trusted name. Family-owned and operated, Johnsonville has been known for legendary sausage since 1945. For more information, call (800) 837-5391 and visit website www.cstore.johnsonville.com.

Jalapeño Cheddar Sausage & Beef Hot Dog Handhelds

We’ve set the standard for high-quality again with our new enrobed sandwiches!

Our skinless, smoked Jalapeño Cheddar Sausage offers a spicy kick, while our Beef Hot Dog brings an indulgent, classic favorite to our sandwich line up. Each portable sandwich is enrobed in golden-brown bread and wrapped in a clear, microwavable film—perfect for in-store warmer displays. Unwrap the power of premium of quality and convenience. Family owned and operated, Johnsonville has been known for legendary sausage since 1945. For more information, call (800) 837-5391 and visit www.cstore.johnsonville.com.

COMPANY

BIC Lighters

COMPANY

The Great Spirit Baking

PRODUCT

BIC EZ Reach™ ®

BIC EZ Reach

The new BIC® EZ Reach™ lighter features a 1.45-inch extended wand that helps keep fingers further from the flame. Its body is the size of a pocket lighter, so it fits comfortably in your hands, making it perfect for lighting candles, grilling and everything in between. The new design lights at any angle. Every lighter is 100% safety tested and up to 50% More Lights vs. non-refillable wand pocket lighters.

BIC® EZ Reach™ is The Ultimate Lighter. Visit ShopBIC.com/newinquiry.

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| DECEMBER 2020

PRODUCT

Guinness, Captain Morgan, Baileys & Pallini Limoncello

New Spirit Flavor

Our premium, individually wrapped 4-ounce cake slices are the perfect on-the-go indulgence. The globally recognized spirit brands, eye-catching packaging and amazing taste are sure to be a hit with your customers! No liquor license, no problem! Our cakes have less than 0.5% alcohol by volume and carry a 90-day ambient shelf life. For more information contact us at (844) 487-2253 and visit www.greatspiritsbakingcompany.com.

CONVENIENCE.ORG

COMPANY

Sungal Displays PRODUCT

Walk-In Cooler Shelving System & Roller Mats

Introducing SUNGAL NEXGENTM Cooler Shelving System

Front and rear uprights are welded one-piece with easy no-tool assembly. Free-standing design allows for recessing from the door to increase light in the center of the shelf. Plus, twice the slots, with 3/4" centers, compared to the 1-1/2” of current uprights equals more adjustability. Upright slots are numbered so shelves can be installed without packaging. Shelves are easier to install as the front-top prong is 1" longer. Only engage two prongs at a time. The second prong prevents the shelf from twisting, resulting in stronger structure. NSF Certified – US10660435. Plus – Sungal offers Innovative Roller Mats in all sizes—UL962 Certified and five-year warranty. Patents pending. Competitively priced. For more information, contact Don Miller, Chief Innovation Officer: don.miller728@gmail.com, (618) 444-2802 or Winn Esterline, VP Sales, wfesterline@gmail.com, (610) 858-1549.

COMPANY

Krispy Krunchy PRODUCT

Perfectly Cajun by Krispy Krunchy® Seasoning & Marinade

Krispy Krunchy® Introduces a Perfectly Cajun Seasoning

Perfectly Cajun by Krispy Krunchy® Seasoning and Marinade combines the unique flavor profile and signature coloring exclusive to Krispy Krunchy Chicken® in a convenient take-home package. Made using only the best ingredients, Perfectly Cajun invites consumers to shake the enjoyable Krispy Krunchy Chicken® flavoring onto their favorite dish or mix with water or butter and inject into the meat or seafood of their choice for a delicious Cajun-infused kitchen creation. For more information, please visit www.perfectlycajun.com or email info@krispykrunchy.com.

CONVENIENCE.ORG

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COMPANY

Sargento Foods Inc. PRODUCT

Sargento® Balanced Breaks® Cheese & Crackers

Introducing Sargento® Balanced Breaks® Cheese & Crackers

COMPANY

Jacquet

PRODUCT

Belgian Waffle Bites

New Belgian Waffle Bites

Ready-to-eat, these authentic Belgian Waffle Bites combine convenience and indulgence in a to-go cup, perfect to fit in your car’s cup holder. Three flavors available: Vanilla, Cinnamon, Lemon, 3.5 oz - SRP: $1.99. For more information, contact Jim Shankin, phone (805) 450-2129, email jim.shankin@jacquet.com.

We've taken your favorite snacking duo—cheese and crackers—to the next level by perfectly pairing Sargento® real, natural cheese with your favorite crackers—RITZ® crackers*, WHEAT THINS® snacks* and TRISCUIT® crackers*. Each convenient, individually sized snack contains bite-sized pieces of two cheese varieties and has at least 7 grams of protein and 170 calories or less to create a deliciously satisfying snack! Visit sargento. com/cstore, or contact your Sargento® Sales Representative or current Distributor Representative for more information. *RITZ, WHEAT THINS, AND TRISCUIT are trademarks of Mondel z International group, used under license.

COMPANY

TAAT Lifestyle & Wellness PRODUCT

TAAT Beyond Tobacco Cigarettes

Beyond Tobacco Cigarettes—Disrupting the Market!

Over 50 million Americans are addicted to some form of nicotine. Despite existing for over 15 years, e-cigarettes and vaping still represent less than 5% of total U.S. nicotine consumption, according to Nielsen data, with many users returning to cigarettes over time. The reason for this is simple; these alternatives only perpetuate the problem of nicotine addiction, using a delivery mechanism that consumers don’t prefer. At TAAT we understand that smokers don’t just use cigarettes because of the nicotine, it’s also about the rituals, moments and experiences associated with smoking a cigarette. TAAT Beyond Tobacco cigarettes mimic those experiences without nicotine or tobacco. Smokers now truly have the choice to reduce their nicotine intake without compromising their smoking experience. For more information, email hello@trytaat.com and visit www.trytaat.com.

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CONVENIENCE.ORG

COMPANY

iSEE

PRODUCT

PumpLoc Refill Sanitizer Dispenser

Get Pumped: A Sanitizer Dispenser for Everywhere!

The new PumpLoc Refill dispenser from iSEE and RPP allows retailers to create a clean shopping experience with sanitizer dispensers that can go virtually anywhere in the store—from the front door to the cold vault to the front counter—secured by iSEE’s patented DisplayLoc suction technology. Even better, the PumpLoc can be easily refilled with the dual-purpose removable funnel and driptray, providing a more flexible option for retailers. PumpLoc Refill can be purchased on its own or as part of a bundle with RPP’s premium and readily available Premier Pure Hand Sanitizer. For more information, contact iSEE, email: info@iseeinnovation.com, phone: (888) 417-2457 or RPP, email: customerservice@rppproducts.com, phone: (800) 657-4811.

COMPANY

COMPANY

PRODUCT

PRODUCT

Explore Unchartered Flavors

Explore Unchartered Flavors

Ocean Spray Cran Energy™ Cranberry Energy Juice Drink

Enjoy the crisp, clean taste of real cranberries, now enhanced with caffeine from green tea extract. Each 12oz bottle contains 90 mg of caffeine*, delivering natural energy on-the-go. Made with real fruit juice and no added sugar, Cran Energy™ Juice drink is an excellent source of Vitamin C and B vitamins. The new 12oz offering is available in two great tasting flavors, Cranberry Pomegranate and Cranberry Raspberry. Contact your Crossmark Representative and visit www.oceanspray.com. *Caffeine content naturally occurring from green tea 90 mg/12 fl oz.

CONVENIENCE.ORG

Ocean Spray Craveology™ Snack Mix with Cranberries

Explore a delicious, uniquely flavored dried fruit and nut snack mix that can be eaten as is or added to your favorite meal for a whole new taste experience. Sweet cranberries combined with salty nuts in three unique flavor combinations—Vanilla Chai, Spicy Coconut Curry, and Tuscan Herb. Craveology™ Snack Mix with Cranberries is packed with 6g of plant protein and no artificial colors, flavors, or preservatives. Available in a 2oz recyclable pack, perfect for on-the-go. Contact your Crossmark Representative and visit www.oceanspray.com.

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COMPANY

NACS

PRODUCT

COMPANY

Energizer Holdings Inc. PRODUCT

STP® Tire Fix

NEW STP Tire Fix

STP, one of America’s most trusted automotive brands, now offers STP Tire Fix for peace of mind during a tire repair emergency. New STP Tire Fix seals and inflates flat tires instantly. A universal hose offers quick and easy repairs. It is engineered to seal punctures up to 1/4” wide and hold air for at least three days. Tire sensor safe. Available in 16 oz. and 20 oz. to fill standard and large size tires. EPA compliant formulations available for all 50 states. Contact Craig Terry at Craig.Terry@advantagesolutions.net.

NACS State of the Industry Compensation Report®

Insights to Attract & Retain Top C-Store Talent

The NACS State of the Industry Compensation Report® of 2019 Data. This report provides critical benchmarking data and up-to-date standards in the key human resource categories of compensation, turnover, benefits and recruitment. It also breaks down the newest available numbers in the convenience industry and is considered an essential guide for HR professionals. Purchase your digital copy today at convenience. org/compreport2020-cnp. For more information, contact Doug Spencer, Director, Products and Services, (703) 518-4293.

COMPANY

NACS

PRODUCT

NACS State of the Industry Report® of 2019 Data

The Only Benchmarking Report for Convenience

Today’s dynamic landscape requires agility along with a balance of efficiency and effectiveness to free up resources and fuel new growth. But how do you know where to invest in technology and how to harness data to deliver targeted, personalized offerings and customer experiences? For more than 50 years, the convenience and fuel retailing industry has relied on the NACS State of the Industry Report® to answer that question and more. The report gives retailers the essential edge to win trips, exceed shopper expectations and grow in an increasingly competitive retail landscape. Both hard copy (last year in this format) and digital PDF versions are available now at convenience.org/soireports2020. Grab your copy today.

For more information, contact Doug Spencer, Director, Products and Services, (703) 518-4293.

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| DECEMBER 2020

CONVENIENCE.ORG

COMPANY

Chart Inc.

PRODUCT

Chart NSF Certified Beverage Tanks

Safety In…The Perfect Pour™

Chart Inc. is the leading global manufacturer of CO2 products to the beverage industry supplying safe, efficient, and reliable beverage equipment. Our Bulk CO2 Carbo-Series tanks store liquid CO2 for a continuous supply of gas to ensure your beverage is The Perfect Pour™ with optimal carbonation performance at convenience store or fast food operations. To go a step further into the safety aspect of the pour and/or beverage, Chart’s entire line of the Carbo-Series beverage tanks is certified to meet NSF International standards, including the European Commission 1935/2004 approval. This ensures Convenience Store and Fast Food Retailers of a new, higher level of food grade standards, safety, and quality for fountain beverage systems in serving the public. For more information, call (800) 247-4446 and visit www.ChartBeverage.com.

INDEX NEW TECHNOLOGY

NEW TO THE INDUSTRY

Compliance Safe....................................................................... 67 Ecolab®......................................................................................... 65 The Pinnacle Corporation...................................................... 67

BIC Lighters................................................................................ 70 Energizer Holdings Inc............................................................ 74 The Great Spirit Baking........................................................... 70 iSEE................................................................................................ 73 Jacquet......................................................................................... 72 Krispy Krunchy........................................................................... 71 Ocean Spray............................................................................... 73 Sargento Foods Inc.................................................................. 72 Sungal Displays.......................................................................... 71 TAAT Lifestyle & Wellness..................................................... 72

HEALTH & WELLNESS

Tree-Rolls Hemp Company.................................................... 67 NEW FLAVORS

The Coca-Cola Company........................................................ 68 Hostess Brands, LLC................................................................ 68 Johnsonville................................................................................ 70 PepsiCo, Inc................................................................................ 69

NACS

NACS............................................................................................. 74 NEW DESIGN

Chart Inc....................................................................................... 75

CONVENIENCE.ORG

DECEMBER 2020 |

75

GAS STATION GOURMET

Be Our Guest In a New Hampshire tourist town, Meredith Station makes visitors and locals feel at home.

BY AL HEBERT

Tourists flock to New Hampshire’s Lakes Region, and Meredith Station is a gathering spot when they arrive in Lake Winnipesaukee. The convenience store is known for its friendly customer service and high-quality foodservice program.

HIRE THE RIGHT PEOPLE “Don’t hire the first person that fogs up the mirror,” is Rusty McLear’s first rule when staffing Meredith Station.

“Pat [Wade] has a good knack for knowing if people will fit into our space,” he said. Once hired, employees find that store manager Wade will shepherd them through training, as well as their personal lives.

Wade is so good at picking people that employees feel at home and seek her help with personal problems.

“Employees feel they are part of the family. This makes working together in a positive way easy,” she said.

Hanging on to employees is easy if there’s a sense of fun in the community and the store. “Most people coming in during the summers are tourists, and they’re excited to be there. In the winter people are local, and they’re the ones who take care of the tourists, so there’s a year-round community spirit to make sure that everyone who walks in is taken care of. This is a fun operation,” said McLear.

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| DECEMBER 2020

M

eredith, New Hampshire, is a picturesque little town that sits on Lake Winnipesaukee. The natural beauty of the Lakes Region draws tourists from surrounding states, and many people from Boston escape the city and reside there part-time in summer homes.

Rusty McLear has a true passion for the town.

He’s built three hotels that fit perfectly with the community aesthetics, but one location in town had always made him cringe. “There was a small gas station in a pivotal spot that was not in good shape. I bought the site to get rid of it,” he said.

He had the eyesore demolished and began construction on a c-store that would fit in with this quaint resort town. The 900-square-foot Meredith Station was opened in July 1999.

McLear said, “We’re a small town, people not only buy gas here, but they get breakfast, lunch and dinner. The community gathers here.” He added, “Our hotels had 80,000 guests last year, and tearing down this old property garnered a great deal of attention. With the extra attention CONVENIENCE.ORG

and traffic flow, we needed to live up to that attraction, and Pat Wade [manager] made that happen.”

FRESH-MADE FOOD At the outset, McLear and Wade decided on menu items that were simple but with excellent quality and flavor. “People have always loved our traditional topped pizzas, but it’s the specialty pizzas that have grown in popularity,” said Wade, adding, “Among the favorites are Chicken, Bacon & Ranch, BBQ and Buffalo Chicken.

They are all a twist on regular pizza.”

Sub sandwiches were added to the menu, made with rolls baked in-house.

“We tested a few, found what we liked best, and then we chose Boar’s Head meats and cheese,” said Wade. “We’re baking rolls, slicing our own meat and prepping fresh ingredients. People are surprised that this quality comes from a gas station. Customers say, ‘We get the best stuff at the gas station.’ They’re not used to having the quality of what we have,” she said.

That attention to quality has paid off.

McLear and Wade are proud of the store’s online reviews. The local accolades mean a lot. Customers selected Meredith Station as the 2019 Best of the Lakes Region Favorite Convenience Store.

For Wade, customer service is the most important thing. “Every staff member hears the same thing. I tell them we’re not the biggest store in town, we’re not the least expensive store in town, but we’re the friendliest store in town and that’s what made us so successful,” she said.

“The staff knows 75% of customers’ names. Many of the tourists move here and become locals. Our gas station is the first introduction to the community. Now we’re their home base,” McLear said.

THE PANDEMIC In the early days of the pandemic, New Hampshire issued a stay-at-home order.

Restaurants could only offer take-out CONVENIENCE.ORG

We’re a small town, people not only buy gas here, but they get breakfast, lunch and dinner.

Pat Wade, store manager (left), and Missy Hickey, crew member (right), show off two of Meredith Station’s popular specialty pizzas. Sub sandwiches on fresh baked bread also are favorites.

service. Meredith Station has no tables inside, so this was not a problem. However, things changed a bit around town.

“The town quieted down for a few weeks. We cut back hours and closed early.

After three or four weeks our population felt safe in our area. Things began to pick up when people from urban areas decided to leave for a less congested environment,” Wade said.

“We’re only 90 miles from Boston and 60 from the Massachusetts state line. Many people who summer here own homes on the lake. A number of them have left their homes in Massachusetts and have moved here. This summer we were up 20% at the store. Hotel traffic was down with fewer tourists, but permanent residents are increasing,” explained McLear.

The influx of new residents has fostered new construction, and that brings new customers. “We usually see a slowdown this time of year, but this year we have not. People are coming from out of state, building homes, and we get a lot of construction workers, electricians, etc.

They are the backbone of our daytime business,” Wade observed.

In the meantime, folks still head to the center of town to Meredith Station to enjoy great food and to simply feel special.

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.

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GLOBAL TRENDS

German Convenience

A Q&A with REWE To Go reveals how it optimizes store design and offers for high-traffic locations.

BY CHRISTIAN WARNING

The new REWE To Go concept uses modular solutions for the store design, technology and product range tailored to each location, based on local conditions and consumer behavior. The stores offer a choice of grab-and-go foods and beverages plus prepared food offers.

C

onvenience retailers like REWE Group in Germany are committed to a continuous quantitative and qualitative development of convenience retail propositions in response to the growing market opportunity, particularly among time poor and younger shoppers. This process of evolution has continued through the course of the global pandemic, helped no doubt by the relative efficiency of the German response building back consumer confidence.

REWE Group, the 2017 NACS Sustainability Retailer of the Year, has itself been meeting these developing consumer needs with its REWE To Go concept since 2011.

At the beginning of 2020, REWE Group had more than 550 convenience stores, most of which are located in high traffic locations such as Aral petrol stations, train stations, downtown pedestrian areas and airports. The concept is

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constantly being refined and adapted to market developments, demonstrating the increasing sophistication of retail capabilities to be found in the German market.

Christian Warning, the NACS representative for German-speaking markets, talked with the people behind the concept: Philipp Pauly, head of REWE Convenience Formats; Dr. Alexander Kรถnig, head of Business Development, REWE Convenience Formats; and David Safar, head of Category Management, REWE Convenience Formats.

The REWE To Go concept has recently been relaunched. What are the most important developments and first experiences?

Pauly: The new generation of the REWE To Go concept focuses on highly frequented locations.

It was first brought to life at the train station in the former capital of Germany, Bonn, in May CONVENIENCE.ORG

2019 in nearly 160 square meters of sales area. The store’s results have really exceeded our expectations in terms of revenue and customer traffic. The second store at Cologne Central Station has just been converted according to the further developed concept and learnings from the store in Bonn.

On the basis of the experience we have gained to date, we have focused even more strongly on customer wishes and needs.

Customers want to satisfy their hunger and thirst in a fast, convenient and healthy way while on the move. All of this must take place in a pleasant, clearly structured environment and be uncomplicated. In order to bring all this together even better than before, we took a look at the store layout, design, product ranges, as well as the technology and processes.

What concrete changes have been made to the product ranges?

Safar: We have become even more modular in our product range, so that we can supply every location with the right assortment. At high-frequency travel locations, we focus on a broad and innovative “food for now” assortment, i.e. snacks for immediate consumption.

This includes changing products in the categories bake-off, cold and hot counter like fresh burgers, wraps, soups, sandwiches, as well as cold and hot drinks.

Due to their high frequency and wide customer spectrum, the two new stores are also very well suited for testing product innovations.

What was optimized in the design of the stores and the processes?

König: Every location is different. In our view, modular solutions are the key to success. The design of the store, processes and technology must be based on local conditions and consumer behavior.

At the two train stations with several thousand customers a day, we reserved CONVENIENCE.ORG

space for many checkouts in the store design to enable fast shopping and make sure that customers catch their train.

And you need the right technology. In Bonn, we were very successful with newly introduced self-checkouts. They reduce waiting times and were well received. In Cologne, we planned more self-checkouts from the very beginning. Before [COVID19], up to 20% of customers used these self-checkouts, and currently around 50% of customers use them. Everything at these locations is designed for speed.

At other locations, however, such as those with many offices in the vicinity, we might create a spacious and inviting seating area because that’s where customers spend their lunch break.

Safar: It really is a complex interaction.

Store design, integrated technology and product range must complement each other and fit the location and especially its customers. It’s really important to think from the customer’s point of view when planning a store. With this in mind, we plan the layout of the product ranges.

For example, where products are placed for direct consumption or how to create a “fast in-out” zone for quick purchases.

We also offer customers the choice of different convenience levels for food and beverages. For example, they can get a snack or coffee from the staff but also use takeaway shelves with fresh or baked goods or pull their coffee from machines on their own.

It is also important to draw customers’ attention to the offers, especially the warm meals, which vary depending on the time of day. We use digital signage to present our offers exactly on time of day and week.

NACS GLOBAL CALENDAR NOVEMBER 2DECEMBER 4

Crack the Code Experience www.convenience.org/crackthecode NACS Convenience Summit Asia www.convenience.org/csa

JUNE 1-3, 2021

NACS Convenience Summit Europe Dublin, Ireland www.convenience.org/cse

OCTOBER 5-8, 2021 NACS Show Chicago, Illinois, United States

Before [COVID-19], up to 20% of customers used these selfcheckouts, and currently around 50% of customers use them.

Which locations do you want to focus on with the fine-tuned format, and what are your next projects?

König: The most important location criterion is frequency. REWE To Go is

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GLOBAL TRENDS

At highfrequency travel locations, we focus on a broad and innovative ‘food for now’ assortment, i.e. snacks for immediate consumption.

Christian Warning is the NACS representative for German-speaking markets.

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| DECEMBER 2020

New store formats feature self-checkout stations to reduce wait times, and about half of customers use them, up from about 20% before the pandemic.

a format for areas of up to 300 square meters in high-frequency locations.

In addition to train stations, these are also airport locations if we return to some form of normality in a period after [COVID-19]. We opened our first airport store at the airport in Nuremberg in November 2019.

How do you think the expansion of convenience stores in Germany will continue in general?

König: Compared to other countries, the convenience trend in Germany is still in its early stages. The German market is very special and challenging. Successful players from abroad have tried to gain a foothold here but found it difficult.

However, there are many indications that a future market is developing here. For example, we can see that the customers at REWE To Go are on average younger than in our supermarkets.

We would like to take advantage of those opportunities. That is why we strategically positioned ourselves with our concept several years ago to be able to serve the growing trend toward out-of-home consumption. However, the competition is picking up. Even

supermarkets and discounters are increasingly focusing on convenience.

Starting with convenience assortments and shelf placement, right through to the choice of high-frequency locations.

Pauly: We are currently experiencing a continuous quantitative and qualitative development of the many formats that already exist today. From the kiosk around the corner, to the gas station and the airport store, I can already see many great approaches, whether it’s product ranges, concepts, layouts or technology solutions. All market participants, whether established or newcomers, are reacting to the increasing convenience sector. We want to remain a driving force in this.

ABOUT REWE TO GO AND LEKKERLAND Since 2020 Lekkerland has been part of REWE Group, one of the leading trading and tourism groups in Germany and Europe. In 2019, REWE Group achieved a total external turnover of around 63 billion euros (US$75 billion). REWE Group, founded in 1927, is present in 24 European countries with more than 360,000 employees.

Lekkerland is a specialist for on-the-go consumption and offers innovative services, tailor-made logistics and a broadly based wholesale product range in five European countries. Its customers include service stations, kiosks, convenience stores, bakeries, food retailers and quick service restaurants.

In 2019, Lekkerland serviced around 85,500 sales points throughout Europe and employed around 5,000 people.

REWE To Go within the REWE Convenience Formats team is now part of Lekkerland and the new business area.

This article was reprinted with permission from Global C-Store Focus, the monthly newsletter from U.K.-based Insight; www.insightresearch.co.uk.

CONVENIENCE.ORG

Accelerate Your Growth in a Disrupted Retail Landscape

FREE DOWNLOAD

The retail landscape is being increasingly disrupted by last mile fulfillment and convenience retail is no exception. Get important insights on the ways you can win trips, grow baskets and reinforce industry leadership through last mile fulfillment solutions.

This new landmark research study by NACS Research explores: How readily convenience retailers are adopting last mile fulfillment Current and anticipated use of delivery services Retailer options for accepting orders Difficulties retailers face with adopting last mile services

Download your free, digital copy today Convenience.org/LastMile

CATEGORY CLOSE-UP / CIGARETTES

A Full Pack

Reversing recent history, cigarettes are a bright spot in a chaotic year.

BY MELISSA VONDER HAAR

JUST THE FACTS Cigarette sales are up about 4.4% through the end of August, according to NACS CSX data. By comparison, cigarette sales were down 0.6% from January to August 2019.

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Then came COVID-19.

Like virtually every category, cigarettes had a bit of spike in March as state and local governments issued shutdown measures and consumers stocked up for an indefinite quarantine. Though April looked a little more normal (as smokers presumably smoked through that inventory), sales were back up in May. And June. And even as summer came to a close.

“Our CSX data show cigarette sales up about 4.4% through the end of August,” said NACS Research Manager Jayme Gough. “By comparison, cigarette sales were down 0.6% from January to August 2019.”

Here’s a look at what is happening with cigarettes in 2020—and whether or not it will continue into 2021.

THE WHYS When it comes to the success that the cigarette category has enjoyed during the COVID-19 pandemic, retailers and suppliers pointed to a wide variety of factors, including: •W ork From Home: Gough pointed out that the millions of office workers who switched to home offices no longer faced limitations of where or when they could smoke. “If you’re already a cigarette smoker and can now smoke throughout the day without having to go outside, you’re probably going to do that,” she said.

•M ore Money to Spend (for Some): Billy Gifford, CEO of Altria Group Inc., added that working from home—and limitations on businesses like restaurants, movie theaters and CONVENIENCE.ORG

iStock.com/mphillips007

F

vor more than a decade, recapping the cigarette category has meant trying to put a positive spin on declining sales and an increasingly difficult regulatory environment. The positive spin was desperately needed given how crucial the category is to convenience. Cigarettes remain the single greatest contributor to in-store sales—30.48% in 2019 per NACS State of the Industry (SOI) data.

Yet that same year, SOI data showed cigarette sales declined by 1.9% (largely offset by price increases), and gross profits were down 5.9%, compared with 2018. This is more or less in line with what happens every year with cigarettes.

Chuck Maggelet, chief adventure guide for Maverik Inc., described the category as “a bit of a melting ice cube for us” at the 2020 SOI Summit Virtual Experience.

Industry Sales

% of In-Store Sales 2018

2019

31.8% 30.5%

% of Stores Selling

Avg. Sales/Store 2018

2018

2019

2019

99.8% 99.8%

$711,925 $698,676

iStock.com/Chinnasorn Pangcharoen

Source: NACS State of the Industry Report of 2019 Data

concerts—also has helped the category. “Tobacco consumers reduced purchases from non-tobacco discretionary items like gas, transit and entertainment, contributing to an increase in available discretionary income,” Gifford said in a company earnings call.

•T he Essential Designation: Ray Johnson, operations manager for Speedee Mart Inc., saw huge gains when convenience stores were deemed essential—smoke shops and liquor stores had to temporarily close.

“Our customers we kept, and all the customers from those closed businesses we gained,” he said.

• A n In-Person Purchase: The legal reality that cigarettes must be purchased at brick-and-mortar stores—versus services like InstaCart and Drizly—also benefitted the industry. “While online shopping and delivery has exploded, adult smokers need to come into your store,” said Renee Duszynski, vice president of sales for cigarette manufacturer JTI USA. But perhaps the biggest reason the category has fared well in a tough year is the fact that while people may be pantryloading, cigarettes are an item that can be consumed a lot faster, especially in times of stress (similar to beer and wine or sweets and snacks).

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“The more you have, the more you smoke,” Johnson said. “It’s not like stocking up on Tide or toilet paper.”

THE WHATS In terms of what pack sizes and subcategories are driving this growth, the simple answer is everything.

Though NACS data do not track pack sizes, Nielsen showed carton sales were up $959 million, and single packs were up $1.2 billion as of August 2020 (unit sales also were up in both cases). Some retailers saw even more impressive growth in cartons. Johnson said Speedee Mart’s carton sales doubled. “That was a huge jump for us.”

Anna Bettencourt, senior category manager for VERC Enterprises, operates stores in the heavily regulated Massachusetts market, as well as in the more regulatory-friendly (and

While online shopping and delivery has exploded, adult smokers need to come into your store.

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 2020 |

83

CATEGORY CLOSE-UP / CIGARETTES

PER STORE, PER MONTH SALES

2017

2018

2019

2020

$50,000 $47,566

$48,000 $46,000 $44,000 $42,000 $40,000 $38,000 $36,000 JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

Massachusetts border state) New Hampshire. Her numbers have been better in New Hampshire; however, cartons were even up slightly in Massachusetts at the start of COVID-19—despite high taxes and a menthol ban that went into effect in June. “It’s really about people wanting to make fewer trips out,” she said.

The news was equally good when looking at the types of cigarettes being purchased in the pandemic. CSX data for January to August 2020 show sales in virtually every subcategory were up (only fourth tier and imports were down; however those subcategories account for less than 1% of convenience cigarette sales). Premium cigarettes were up 4.5%, branded discount were up 3.9% and sub-generic-private label were up 7.5% during the eight-month period.

“We have seen a great deal of consumers trading down to deep discount

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| DECEMBER 2020

brands,” said Jessica Fratarcangelo, marketing director for cigarette maker Cheyenne. “It coincides with other time periods where consumers have traded down in a recession.”

Besides economic anxiety, director of operations at 36 Lyn Refuel Station Lonnie McQuirter credits growth in discount anxieties over being able to find some of the more niche brands.

Shoppers “have the concern of not being able to get their smoke of choice,” he said. “When they see them in, they buy out the inventory.”

Gifford of Altria said the increase in the lower tiered segment may actually predate COVID-19 as the year started off with an increase in smokers older than age 50 who returned to combustibles after trying e-vapor. “This demographic has a greater tendency to purchase discount brands than younger CONVENIENCE.ORG

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Source: CSX; csxllc.com

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CATEGORY CLOSE-UP / CIGARETTES

Subcategory Performance Percent of Sales

Avg. Sales/Store

2018

2019

2018

2019

2018

2019

2018

2019

Premium

75.2%

79.6%

$535,178

$555,977

$74,225

$71,841

13.87%

12.92%

Branded Discount

7.2%

8.8%

$54,365

$45,898

$10,112

$7,249

18.60%

15.79%

Sub-Generic/Private Label

7.6%

6.6%

$51,178

$61,482

$11,964

$14,929

23.38%

24.28%

Fourth Tier

9.7%

4.9%

$68,940

$34,491

$4,515

$895

6.55%

2.59%

Imported

0.3%

0.1%

$2,264

$830

$327

$303

14.43%

36.52%

100.0%

100.0%

$711,925

$698,676

$101,142

$95,217

14.21%

13.63%

CIGARETTES

TOTAL

Avg. GP$/Store

Gross Margin %

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

Source: NACS State of the Industry Report of 2019 Data

adult smokers, which increased discount segment share,” he said.

The continued economic uncertainty and growing number of jobless claims could further benefit discount options.

“Consumers have to make choices,” said Fratarcangelo. “Purchasing a discount brand that still delivers the taste they’re looking for can be a good alternative.”

I think we’ve won over quite a bit of customers, especially female customers. Smoke shops are not female-friendly; they aren’t 24 hours; they aren’t convenient. We are.

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| DECEMBER 2020

REGULATIONS STALL…FOR NOW Besides new consumers and growing sales, the lockdowns offered another net positive for the cigarette category: Every level of government was busy dealing with the pandemic, pausing the new cigarette taxes, flavor bans and other regulations that the industry has come to expect.

At the federal level, the U.S. Food and Drug Administration (FDA) extended the premarket tobacco product application (PMTA) deadline for electronic cigarettes and vapor products from May to September and postponed the effective rule date of its graphic warning label rule to October 16, 2021. The COVID-19 pandemic was cited as the sole reason for both moves. “There’s a lot of stuff being pushed back,” Gough said.

At the state and local level, retailers like Bettencourt had to deal with regulations that were enacted pre-pandemic but went into effect after—namely Massachusetts’s

mint and menthol flavor ban, which took effect in June. “In the month of June, Massachusetts lost over $8 million in tax revenue,” she said, adding that cigarette sales in her New Hampshire stores have been up 198% compared with last year.

“All they’ve done is send people over the border and dumped millions of dollars into another state’s pocket.”

That said, even regulation-happy regions like the Northeast have been quiet this year. “I haven’t seen anything pop up in the towns where I operate so far,” said Bettencourt.

“Everyone seems to have forgotten about cigarettes, vape and all that,” Johnson added. “Not even up for discussion, that just went away.”

But 2021 is looming, with many states facing massive budget deficits.

Surprising few in the industry, cigarettes are already being targeted to make up some of those deficits. In August, New Jersey Governor Phil Murphy unveiled a budget plan that would take the state’s excise tax from $2.70 to $4.35 per pack (a $1.65 increase). Though New Jersey lawmakers ultimately nixed the tax, retailers and suppliers expect other cashstrapped governments will move forward with similar plans.

“If they haven’t done it yet, I’m sure it’s going to be a thing soon,” Bettencourt said.

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CAN IT LAST? There’s little doubt around the fact that cigarette taxes and other regulations will likely return to normal in 2021. The bigger question for the industry is whether the growth the category has seen this year will continue—or is it just a COVID-19– related blip?

“What we saw before the pandemic was that cigarette smoking was on the decline in the long term,” said Gough of NACS. “It’s hard to say what things will look like in the next 12 months, two years. That’s the million-dollar question.”

In the more near term, Altria was confident enough to adjust its projected cigarette volume declines from the 4% to 6% predicted at the start of 2020 (in line with previous years’ declines) to 2% to 3%.

“The cigarette category has demonstrated resilience,” Gifford said of the change.

Johnson was more optimistic about longterm gains in his stores because of the new

customer base they’ve found. It’s not just people smoking more while working from home, but more people coming into his stores during the shutdown phase … people who continue to come into his stores now that the restrictions have lifted.

“I think we’ve won over quite a bit of customers, especially female customers,” he said. “Smoke shops are not femalefriendly; they aren’t 24 hours; they aren’t convenient. We are.”

Whether or not cigarettes continue this upward trajectory into 2021 and beyond, there are ways retailers can—and should— leverage the current situation, however long it lasts.

“Make your store a destination for all products including pantry items, fresh foods and cleaning supplies,” Duszynski of JTI said. “Adult smokers will make your store a one-stop shop when purchasing [cigarettes], driving your market basket sales.”

ADVERTISER INDEX 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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AGDCTradeRelations@Altria.com............................... Inside Front Cover www.altria.com www.tobaccoissues.com

L iggett Vector Brands Inc............................................................31 (877) 415-4100 www.liggettvectorbrands.com

Premier Manufacturing Inc............................................................ 21 & 85 www.gopremier.com

C ash Depot.....................................................................................7 (800) 776-8834 sales@cdlatm.com www.cdlatm.com

NACS Convenience Matters.......................................................................4 www.conveniencematters.com

S wedish Match North America (Game)......................................47 (800) 367-3677 www.smna.com

Charleys Philly Steaks............................................................................. 27 www.charleys.com ClickIt Inc.................................................................................................49 www.clickitinc.com The Coca-Cola Company...............................................................3 www.coca-colacompany.com Dietz & Watson Inc..................................................................................25 www.dietzandwatson.com EcoLab........................................................................................................9 www.ecolab.com The Hershey Company................................................. Back Cover www.hersheysolutions.com

NACS Crack The Code Experience................................. Inside Back Cover www.convenience.org/CrackTheCode NACS Day on the Hill................................................................................51 www.convenience.org/DayOnTheHill

Swedish Match North America (Zyn)...........................................5 (800) 367-3677 www.smna.com Swisher International Inc...........................................................35 (800) 874-9720

NACS HR Forum.......................................................................................30 www.convenience.org/HRF2021 Cool New Products Guide......66-75 www.convenience.org/CNP

NACS Hunter Club Thank You.............................................................39-41 www.convenience.org/HunterClub NACS Last Mile......................................................................................... 81 www.convenience.org/LastMile NACS Retail Membership..........................................................................6 www.convenience.org/2021ally Ocean Spray Cranberries Inc..................................................................23 www.oceanspray.com

JUUL..........................................................................................10-11 retailers@juul.com

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DECEMBER 2020 |

87

BACK PAGE

Ramen For a Star

Celebrity Sightings Before they made their claim to fame, some celebrities made ends meet by working at a convenience store. Some even have ties to the convenience industry to this day.

• Carrie Underwood’s first job was at the local gas station as a cashier, and during a long drive to the “American Idol” auditions, she changed into her outfit in a gas station bathroom.

•S teve Carrell admits to using stories about former customers at his Store 24 cashier job for inspiration. He also owns the Marshfield Hills General Store in Massachusetts.

• Hugh Jackman worked at a 7-Eleven store —but it didn’t last long.

• Ranjeeta Masand, better known by her maiden name Ranjeeta Kaur, was a Bollywood actress in the 1970s and 1980s and now runs a 7-Eleven on Hampton Boulevard in Norfolk, Virginia.

• Eddie Vedder of Pearl Jam worked as a security guard at a gas station in Old Town San Diego.

• John Mayer spent 15 months working as a fullservice gas station attendant for $7 an hour. He referenced that experience in his first hit, “No Such Thing” that includes these lyrics: “See this shirt I’m wearin’? Used to wear it all the time.

Workin’ at a gas station, Dreamin’ about the sensation, of playin’ for you, playin’ for me.”

• Clint Eastwood was a gas station attendant.

• Wayne Rogers, best known as Trapper John from the TV show M*A*S*H, was chief executive of the convenience store chain Stop-N-Save, which at one time had 200-plus stores.

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| DECEMBER 2020

South Korea’s convenience stores are famous for their assortment of products and foods, from bagged drinks to baked eggs to instant ramen that customers can prepare on-site and take to go. Actor Ji Chang-Wook, star of “Backstreet Rookie,” a Korean romantic comedy TV series set in a convenience store, recently shared his favorite do-it-yourself Korean convenience store recipe in an interview with the Philippine Star. “Even though the combination of hot chicken stir-fried ramen and cheese ramen is mentioned a lot,” he said, “the most delicious food combination is still jajangmyeon and Neoguri ramen,” a combination of noodles in an oily black bean paste sauce and a popular brand of thick Udon-style instant ramen.

Bears, Oh My! A convenience store in Lake Tahoe has been receiving a few bear visits—and the bears are starting to get a little too comfortable around humans.

Surveillance footage shows a bear relaxing on the floor of the store, eating some candy and crackers, while another video shows a bear waltzing around the store and a brave customer swatting at its behind to leave. And yet another bear was captured on tape as it lunged at an employee who was trying to prevent the bear from entering the store. “Not in the job description, no. Not at all ... fighting off bears was not in the job description,” said store clerk Paul Heigh.

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