NACS Magazine July 2023

Help responsibly connect & engage with your ATCs 21+ in the digital environment

• Establishes a digital foundation to optimize the ATCs 21+ journey

• Enables an integrated marketing approach for your ATCs 21+

• Provides a clear road map for development, integration, and implementation supported by AGDC

Invest in digital infrastructure that responsibly optimizes & enables new channels for ATCs 21+ experiences

Enhance your retail digital capabilities & build a foundation of responsibility to meet the evolving ATCs 21+ expectations & improve their experiences

30

Get In on the National Day Craze

C-stores are tying food and drink deals to microcelebrations— and it’s working.

46

Category managers are staying nimble in the face of ongoing inflation.

50

Trendsetters

Here’s how c-store retailers—big and small—keep their shelves stocked with the latest products.

54

Clear the Clutter: Rethinking Merchandising

Are you bombarding customers with too many product choices?

IT’S A FACT

$3,977 the average per store, per month sales of frozen dispensed beverages in 2022

CATEGORY CLOSE-UP PAGE 66

ONTENTS NACS / JULY 2023

DEPARTMENTS

06 From the Editor

08 The Big Question

10 NACS News

18 Convenience Cares

20 Inside Washington Building strong coalitions is one way NACS advocates for the convenience industry.

28 Ideas 2 Go

Wally’s locations are 10 times the size of traditional c-stores to accommodate more foodservice, bathrooms and merchandise.

62 Cool New Products

64 Gas Station Gourmet Ozarks TravelCenter has a winning recipe for success … and a winning recipe for brisket.

66 Category Close-Up

Customers love the flavor, the fun and even the brain freeze of frozen dispensed beverages, while packaged beverages remain vital to c-store profitability.

80 By the Numbers

EDITORIAL

Jeff Lenard V.P. Strategic Industry Initiatives (703)518-4272 jlenard@convenience.org

Ben Nussbaum Editor-in-Chief (703) 518-4248 bnussbaum@convenience.org

Lisa King Managing Editor (703) 518-4281 lking@convenience.org

Sara Counihan Contributing Editor (703) 518-4278 scounihan@convenience.org

CONTRIBUTING WRITERS

Terri Allan, Sara Counihan, Sarah Hamaker, Al Hebert, Pat Pape

DESIGN Imagination www.imaginepub.com

ADVERTISING

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

Jennifer Nichols Leidich National Advertising Manager/Northeast (703) 518-4276 jleidich@convenience.org

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

PUBLISHING

Stephanie Sikorski Vice President, Marketing (703) 518-4231 ssikorski@convenience.org

Nancy Pappas Marketing Director (703) 518-4290 npappas@convenience.org

Logan Dion Digital Media and Ad Trafficker (703) 864-3600 ldion@convenience.org

NACS BOARD OF DIRECTORS

CHAIR: Don Rhoads, The Convenience Group LLC

OFFICERS: Lisa Dell’Alba Square One Markets Inc.; Annie Gauthier, St. Romain Oil Company LLC; Varish Goyal, Loop Neighborhood Markets; Brian Hannasch, Alimentation Couche-Tard Inc.; Chuck Maggelet, Maverik Inc.; Ken Parent, Pilot Flying J LLC; Victor Paterno, Philippine Seven Corp. dba 7-Eleven Convenience Store

PAST CHAIRS: Jared Scheeler, The Hub Convenience Stores Inc.; Kevin Smartt, TXB Stores

MEMBERS: Chris Bambury, Bambury Inc.; Frederic Chaveyriat, MAPCO Express Inc.; Andrew Clyde, Murphy USA; George Fournier, EG America LLC

NACS SUPPLIER BOARD

CHAIR: Kevin Farley, GSP

CHAIR-ELECT: David Charles Sr., Cash Depot

VICE CHAIRS: Josh Halpern, JRS Hospitality; Vito Maurici, McLane Company; Bryan Morrow, PepsiCo Inc.

PAST CHAIRS: Brent Cotten, The Hershey Company; Drew Mize, PDI Technologies

MEMBERS: Tony Battaglia, Tropicana Brands Group; Alicia Cleary, Video Mining LLC; Jerry Cutler, InComm Payments; Jack Dickinson, Dover Corporation; Matt Domingo Reynolds; Mark Falconi Oberto Snacks Inc.; Mike Gilroy, Mars Wrigley; Danielle Holloway,Altria Group Distribution Company;

Terry Gallagher, Gasamat Oil/ Smoker Friendly; Raymond M. Huff, HJB Convenience Corp. dba Russell’s Convenience; John Jackson, Jackson Food Stores Inc.; Ina (Missy) Matthews, Childers Oil Co.; Brian McCarthy, Blarney Castle Oil Co.; Charles McIlvaine, Coen Markets Inc.; Lonnie McQuirter, 36 Lyn Refuel Station; Tony Miller, Delek US; Jigar Patel, FASTIME; Robert Razowsky, Rmarts LLC; Richard Wood III, Wawa Inc.

SUPPLIER BOARD

REPRESENTATIVES: David Charles Sr., Cash Depot; Kevin Farley, GSP

STAFF LIAISON: Henry Armour, NACS

GENERAL COUNSEL: Doug Kantor, NACS

Jim Hughes, Krispy Krunchy Foods LLC; Kevin Kraft, Q Mixers; Kevin M. LeMoyne, Coca-Cola Company; Lesley D. Saitta, Impact 21; Sarah Vilim, Keurig Dr Pepper

RETAIL BOARD

REPRESENTATIVES: Scott E. Hartman, Rutter’s; Steve Loehr, Kwik Trip Inc.; Chuck Maggelet, Maverik Inc.

STAFF LIAISON: Bob Hughes, NACS

SUPPLIER BOARD

NOMINATING CHAIR: Kevin Martello, Keurig Dr Pepper

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

Subscriptions are included in the dues paid by NACS member companies. Subscriptions are also available to qualified recipients. The publisher reserves the right to limit the number of free subscriptions and to set related qualifications criteria.

Subscription requests: nacsmagazine@convenience.org

POSTMASTER: Send address changes to NACS Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA.

Contents © 2023 by the National Association of Convenience Stores. Periodicals postage paid at Alexandria VA and additional mailing offices. 1600 Duke Street, Alexandria, VA 22314-2792

Premier Manufacturing:

Bran s Built on Integrity

Owned by a cooperative of proud American farmers using the best U.S.-grown tobacco blends among their competitors, Premier provides high-quality, value-priced cigarette brands for the adult consumer. C-stores across the country are buying in.

Commitment to Quality

Premier Manufacturing, Inc. is the consumer products division of U.S. Tobacco Cooperative Inc. (USTC), an American grower-owne marketing cooperative base in Raleigh, NC.

500+ member farmers throughout the Southeast

Members maintain GAP Connections Certification Standards Ensures sustainable, ethical agricultural practices

Robust Partnerships

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

• Provides sales/service support across the U.S.

• Develops POS materials for high visibility

• Creates custom sales & merchandising programs

• Maintains strong relationships with top distributors

Trackable process includes all aspects of manufacturing under one roof Tobacco processing & stemmery Primary blending / Cigarette finishing

A Cut Above the Rest

All products made in USA & 100% guaranteed

Premier pro ucts use only top-en tobacco blen s.

The finest flue-cure tobacco in the worl

• All U.S. grown

• Environmentally sustainable

• Compliant with every regulation

The best blen among competitors

• Highest concentration of flue-cured tobacco

• Partners with top national and regional retail chains

• Vibrant color

• Blends provide exceptional aroma and flavor experience

Manufacture on in ustry-lea ing equipment

• Laser perforation

• Inked code dating

• Latest high-tech advancements

Focus on Fun

One of my favorite insights in this issue of NACS Magazine is in our cover story, “Get In on the National Day Craze.”

It’s from Jeff Hoover of Paytronix, who says these national days (think National Hot Dog Day or National Ice Cream Day) bring “new news to talk about.”

New news: Something a little different, just quirky and fun enough to prompt the customer to buy a soft pretzel on National Pretzel Day instead of a bag of chips or to eat fried chicken for lunch on National Fried Chicken Day instead of a sandwich.

An observation I hear occasionally from my NACS co-workers is that, at the end of the day, convenience stores are fun. That rings true for me: The c-store in my neighborhood might be the only store I go to regularly where shopping doesn’t feel like a chore.

My local c-store is always bright and colorful. The clerk I see most often knows me and is friendly. I’m in and out as quickly as I want to be. Sometimes I can’t resist an impulse item that seems … fun, maybe some new flavor I haven’t seen before.

I’m still pretty new at NACS, but I was initiated into the world of convenience stores years ago. When I was 19, I spent a summer working as a cashier at a Kum & Go in Grinnell, Iowa, the town where I went to college. I stayed on part time for a few months after school started, working second shift on the weekends.

I loved working there. I found it incredibly interesting because of the customers, many of whom came in frequently enough that felt like I got to know them. I think I learned more standing behind the register than I did in any of my classes that year. But most

of all the experience of working there was … fun. People came in with a smile on their face and left with a smile on their face.

Of course, operating c-stores is serious business. It takes a lot of hard work to make shoppers happy. This issue is packed with content of special interest to category managers, the decision-makers who take the lead in figuring out how to delight customers.

“Is It Over Yet?” looks at how category managers are navigating the ongoing effects of inflation. “Trendsetters” examines how they keep their assortments fresh. And “Selling the Brands Your Customers Want” gives category managers the scoop on the top brands, including which are trending up.

Going back to the idea of fun, be sure to check out our Ideas 2 Go profile of Wally’s, a retailer making big waves in Illinois and Missouri by making its stores quirky, colorful and memorable— especially for road trips.

Thanks for reading. And if you have a minute, let me know what you think of this issue by sending me a note at bnussbaum@convenience.org.

Ben Nussbaum Editor-in-Chief

It takes a lot of hard work to make shoppers happy.

UP FRONT THE BIG QUESTION

Let me give one example: When I started in this industry, Wawa did not sell gas. Now they sell massive amounts—yet I can also see a time when Wawa will no longer sell gas and will focus on EV charging or other fuels.

In the early 1990s, convenience stores were primarily small, independently owned businesses. NACS member leaders ran their businesses and were highly entrepreneurial. They also focused on relationships, whether in communities or in the industry. Those relationships fused our organization together, and that personal connection continues to hold tremendous value in how we view NACS and the industry today.

What changed? With success, those smaller operators got larger, and their sophistication helped reimagine convenience. Sheetz wanted to become the company that put Sheetz as we knew it out of business. That’s a radical concept that pushed innovation around how it interacted with customers, focusing on customization and made-to-order foodservice. Sheetz also put a focus behind the scenes, adopting computerized inventory systems, improving efficiency and selfdistribution to ensure popular items were always in stock.

Outside our channel, indirect competitors started to become

How has the industry changed over the past 30 years?

direct competitors. Hypermarkets set their sights on our gas business. Supermarkets and big-box retailers put more of a focus on convenience in their stores, and even launched their own convenience store concepts. Some of our new competitors succeeded. Many did not. The problem was they were replicating what they saw as the convenience model, but our industry was reinventing itself yet again, with a focus on enhancing the overall customer

experience, providing clean and well-lit environments, introducing loyalty programs and offering freshly prepared food options. And a big focus on nice, clean restrooms—no more restroom keys for customers attached to 2x4s.

The smartphone also revolutionized our industry, and that doesn’t mean that it was all for the better. When I started at NACS, a top traffic driver to c-stores was drivers getting lost and asking for directions— or buying maps. Camera film was a big seller, and so were greeting cards. The smartphone wiped out all of that in about a decade, and the Internet took a big bite out of magazine and newspaper sales. But that spurred another reinvention. Many stores introduced mobile apps that allowed customers to locate nearby stores, browse promotions and make mobile payments. This digital transformation made transactions more seamless and convenient for consumers.

The past decade we’ve seen our industry pivot around big, emerging trends, especially healthy choices. In the early 1990s, you never saw fresh fruits, vegetables, salads or organic snacks in stores. Today, customers increasingly expect them. Similar innovation happened with beverages—flavored water, functional beverages, kombucha, you name it.

On the surface, over the past 30 years everything’s changed. But really nothing has changed. Our industry remains highly entrepreneurial. We focus on our ever-changing customers’ needs, and our success is tied to our willingness to share great ideas with each other and to collaborate with our supplier partners. But if I were to boil the past 30 years down to one word, which will probably define our next 30 years as well, it’s the word “fun.”

When you genuinely like what you do and who you work with and believe in what we can all achieve together, a lot of great things can happen in what feels like a blink of an eye.

 Brian Kimmel, NACS EVP, COO and CFO In May, Brian celebrated 30 years as a member of NACS staff.

ZIP UP BEVERAGE PROFITS

Z I P

NACS Show Registration Is Open

The NACS Show is back in Atlanta in 2023. From thousands of products to top-notch education sessions led by industry thought leaders, you don’t want to miss this year’s event. And don’t forget about the invaluable opportunity to tap into a co-learning network of 20,000+ attendees. When our industry wins, everyone wins.

Full conference registration includes access to all general sessions, education sessions, expo and the NACS Show Kick-Off Party taking place on Tuesday, October 3 from 5:30 p.m.-7:00 p.m. at Mercedes Benz Stadium (located next door to the Georgia World Congress Center, the location for the NACS Show).

There are also one-day registration options available for buyers only:

• Wednesday one-day registration : Includes access to all education sessions and general sessions on Tuesday and Wednesday, the expo on Wednesday and access to the NACS Show Kick-Off Party Tuesday, October 3 from 5:30 p.m.-7:00 p.m. at Mercedes Benz Stadium. Note: You must be 21 years of age or older to attend the Kick-Off Party. ID (with proof of age) is required to access the event.

• Thursday one-day registration : Includes access to all education sessions, general session and expo on Thursday.

• Friday one-day registration : Includes access to the general session and expo on Friday. Visit www.nacsshow.com/register to register today!

NACS Food Safety Forum

Now in its second year, the NACS Food Safety Forum—the only industry-specific event of its kind for the global convenience retail community—will take place on October 3, 2023. The Forum will be co-located at the NACS Show in Atlanta.

Foodservice sales in convenience stores are about 26% of in-store sales. It’s a category that continues to be a key focus area for retailers, representing an impressive 36.1% of inside gross margin in 2022, according to NACS State of the Industry data. Food safety is paramount, as outbreaks affect not only individual brands but the entire industry.

Join convenience retail food safety, foodservice, quality assurance and risk management professionals at the NACS Food Safety Forum. This event is tailored to global convenience retailers who are leading their company’s food safety and food handling procedures and protocols.

Participants can expect to achieve the following objectives:

• Understand how food safety culture can support, align with and contribute to your company’s vision and mission.

• Learn how to communicate the why behind food safety protocols and how certain behaviors can enhance and protect your people, your customers and your brand.

• Discover collaborative solutions to the safe food handling challenges of today and the future.

Food safety is not a competitive advantage—it’s how foodservice will continue to elevate the industry. Register to join your colleagues at the NACS Food Safety Forum at www. convenience.org/education/food-safety-forum

Max Your NACS

Did you know NACS retail member companies receive discounted registration rates for the NACS Show?

Becoming a NACS retail member is a business investment that will deliver solutions for your company to thrive today and solve tomorrow’s challenges. Paying less for the NACS Show is just the first benefit.

Plug into the latest insights, trends, tools and innovations from around the globe. NACS makes it easy for you to exchange knowledge and cultivate partnerships with leading retailers and experts in our industry.

All employees of NACS member companies enjoy:

Calendar of Events

2023

JULY

NACS Financial Leadership Program at Wharton

July 16-21 | The Wharton School University of Pennsylvania | Philadelphia, Pennsylvania

NACS Marketing Leadership Program at Kellogg

July 23-28 | Kellogg School of Management | Northwestern University | Evanston, Illinois

NACS Executive Leadership Program at Cornell

July 30-August 03 | Dyson School Cornell University | Ithaca, New York

OCTOBER

• Free or discounted rates for reports, resources and a global portfolio of events.

• Members-only access to VIP and industry-leading events, expos and education.

• Personal introductions and representation through our national advocacy.

From Capitol Hill to the forecourt, learn how NACS membership is something your company cannot afford to operate without. For more information on membership dues, applications and more, contact the retail membership team at MaxYourNACS@convenience.org.

NACS Advanced Category Management Certification Course

October 03 | Georgia World Congress Center | Atlanta, Georgia

NACS Food Safety Forum

October 03 | Georgia World Congress Center | Atlanta, Georgia

NACS SHOW

October 03-06 | Georgia World Congress Center | Atlanta, Georgia

NOVEMBER

NACS Innovation Leadership Program at MIT

November 05-10 | MIT Sloan School of Management | Cambridge, Massachusetts

NACS Women’s Leadership Program at Yale

November 12-17 | Yale School of Management | New Haven, Connecticut

2024

FEBRUARY

NACS Leadership Forum

February 13-16 | The Ritz-Carlton

Amelia Island, Florida

MARCH

NACS Convenience Summit Asia

March 05-07 | Signiel Seoul Hotel

Seoul, Korea

For a full listing of events and information, visit www.convenience.org/events.

Member News

RETAILERS

Steve Ward joined VP Racing Fuels Inc. as director of marketing. With over 30 years of marketing experience across a broad range of product categories, Ward brings a background in product and channel expansions. Most recently, as director of marketing at financial services giant H&R Block, Ward led the vision and strategy for H&R Block web properties.

Darren Rebelez , president and CEO of Casey’s General Stores Inc. now serves a member the Genuine Parts Company’s board of

of Casey’s, Rebelez is responsible for the company’s overall strate gic plan and operating success. Previously, he served in executive roles at IHOP Restaurants, 7-Elev en, Inc., ExxonMobil and Thornton Oil Corporation. Reblelez brings a wealth of experience as a busi ness leader and senior executive in the convenience retail, fuel and restaurant industries.

SUPPLIERS

Scott Erickson, chief technology officer and fourth-generation owner of Harbor Foods, passed away unexpectedly. He began working in the family-owned distribution business back in high school and worked at Harbor in many capacities

Scott was instrumental in taking Harbor from a small, local Aberdeen, Washington, company to a thriving business across the entire West Coast.

Josef Matosevic joined the Electrolux Professional Group Board of non-executive directors. Matosevic brings over 26 years of global operating and business experience and has a strong background from the commercial foodservice equipment industry after his years with Welbilt Inc. Additionally, Helios Technologies, where Matosevic is president and CEO, is a global leader in highly engineered motion control and electronic controls technology for diverse end markets.

Katie Brewer joined Flexeserve Inc. as office manager. Brewer will support the overall growth strategy and spearhead the creation of the company’s U.S. headquarters. Highly experienced in management and operations, Brewer has expertise in client and financial management.

Patrick Walker joined Flexeserve Inc. as vice president of technical service. In this role Walker will oversee third-party suppliers, maintenance and repair services, and training across the technical service

network. Walker will utilize his technical, sales and account management skills to help ensure continuity for a variety of hot food operators.

KUDOS

OnCue convenience stores received 2023 Top Workplaces National Culture Excellence recognition for Compensation & Benefits. Issued by Energage, Top Workplaces awards are based solely on employee feedback. OnCue focuses on building and maintaining a work environment where employees feel engaged, appreciated and fulfilled through strong foundational practices like industry-leading pay, professional development, robust benefits and an employee-sponsored 401k.

Steve Ward

Darren Rebelez

Scott Erickson

Josef Matosevic

Katie Brewer, Office Manager – Flexeserve Inc.

Katie is supporting Flexeserve Inc.’s sales and marketing functions and is also playing an instrumental role in the creation of Flexeserve HQ, which will feature a state-of the-art Culinary

Support Center.

Brewer said: “I’m delighted to join this amazing team, and we have some exciting challenges ahead of us as we establish this incredible brand’s rightful place at the forefront of the American foodservice market.

“I’m passionate about solving complex problems and empowering a team’s progress through excellent organization. This is perfect for Flexeserve, and I couldn’t apply my breadth of skills like this anywhere else.

“I take great pride in being part of something revolutionary. The facility we are creating here in Dallas is unlike anything our market has ever seen. The only comparable location is 5,000 miles away – at Flexeserve’s Global HQ in the UK!”

Building the nerve center

Located less than 10 minutes from DFW Airport, Flexeserve’s forthcoming 8,000 sq ft. U.S. HQ will offer its customers and independent rep partners the freedom to utilize its facilities and inhouse team of world experts – with the latest digital technologies for remote collaboration.

Katie Brewer

Patrick Walker

New Members

NACS welcomes the following companies that joined the association in May 2023. 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 and the latest industry news, information and resources. For more information about NACS membership, visit convenience.org/membership.

NEW RETAIL MEMBERS

6 Carat Enterprise Inc. Encinitas, CA

Bill Gray Inc. dba Wild Bills New Albany, MS

Corner Store Seminole, TX www.cornerstoretx.com

Figueiredo Branco Belo Horizonte, Brazil FLOW Beverly Hills, CA

Gas King Oil Co. Ltd. Lethbridge, AB, Canada www.gasking.com

Georgia C-Stores LLC Smyrna, GA

Midway Petroleum Group LP Conroe, TX

Narragansett Gasoline Narragansett, RI

R & E Petroleum Harvey, LA

Redbud Retail Inc. dba C Express Norman, OK

Sourdough Fuel Fairbanks, AK www.sourdoughfuel.com

Sunpro dba Sunpro Chevron Springville, UT

Tillamook Farmers’ Cooperative Tillamook, OR www.tillamookfarmerscoop.com

Tommy’s Petroleum LLC Granbury, TX

Valley Petroleum Wilkes-Barre, PA www.valleypetroleum.com

Ware Oil & Supply Company Inc. Perry, FL www.wareoil.com

Zanbaka USA 30 LLC DBA Duke’s Canton, TX

NEW SUPPLIER MEMBERS

Barrier1 Systems LLC Greensboro, NC www.barrier1.com

Basse Nuts Inc. Laval, QC, Canada www.bassenuts.com

Bazo Construction Taylor, MI www.bazoconstruction.com

Biztracker POS Seminole, FL www.biztracker.com

Bollin Label www.bollin.com

Clarity Retail Services West Chester, OH www.clarity-retail.com

Cloverdale Foods Mandan, ND www.cloverdalefoods.com

Columbus Consulting International LLC Columbus, OH www.columbusconsulting.com

DYMA Brands Demotte, IN

Father Sam’s Bakery Buffalo, NY www.fathersams.com

First In Services Marietta, GA www.thefirstinservices.com

FLO EV Charging Quebec, QC, Canada www.flo.com

G.O.A.T. Fuel Inc. Plano, TX goatfuel.com

Giganto Brecksville, OH www.gigantoagency.com

Guangdong OFL Automatic Display Shelf Co. Ltd. Zhuhai, China www.gdofl.com

I Bake Um Pico Rivera, CA www.lahvash.com

Ideal Shield LLC Detroit, MI www.idealshield.com

Illinois Wholesale Cash Register Elgin, IL www.IWCR.com

iVueit Westerville, OH ivueit.com

Lazlo 326 Inc. Alpharetta, GA www.playlazlo.com

Litehouse Sandpoint, ID www.litehousefoods.com

McIntyre Metals Inc. Thomasville, NC www.mcintyremfg.com

Merchants Grocery Co. Inc. Culpeper, VA www.merchants-grocery.com

Microfiber and More LLC Holland, MI www.microfiber4sale.com

Mondoux Confectionery Laval, QC, Canada sweetsixteen.ca

Nature’s Way Green Bay, WI www.naturesway.com

o’sole mio inc Boisbriand, QC, Canada osolemio.ca

PD International Inc. Newnan, GA www.pdinternational-inc.com

PDS Solutions dba PetroDataSync Atlanta, GA www.petrodatasync.com

ProGlove Chicago, IL www.proglove.com

Richelieu Foods Inc. Braintree, MA www.richelieufoods.com

Rise Baking Company Minneapolis, MN www.risebakingcompany.com

S&P Global Commodity Insights Houston, TX www.spglobal.com/commodityinsights/en

Small Refrigerated Trailer Sales LLC Marietta, GA www.smallrefrigeratedtrailersales. com

Solut! Lewis Center, OH www.gosolut.com

The Renegade Group Plano, TX Ticon www.ticon.co

Toshiba Global Commerce Solutions Inc. Durham, NC www.toshibacommerce.com

Valley Inventory Service Fairfield, CA www.valleycount.com

Worcester Industrial Products Leominster, MA www.shortening-shuttle.com

World Kinect Energy Services Doral, FL www.world-kinect.com

Wawa Pledges $1 Million to Second Harvest

Wawa pledged a $1 million grant to Second Harvest Food Bank of Central Florida to feed children and families in the area. Second Harvest aims to increase the amount of fresh produce available to kids who are experiencing food insecurity.

Wawa and Second Harvest’s Fly Beyond pilot program set a goal to reach more than 53,000 households over a 12-month period.

“Through this first-of-its-kind investment, Wawa is ensuring children in Central Florida have access to the nutritious, wholesome food they need to thrive,” said Derrick Chubbs, president and CEO of Second Harvest. “Inflation is causing more families to make difficult decisions about what they can afford, and this partnership can help lessen worries about food costs.”

Throughout the year, Wawa’s culinary team will create recipes that feature many of the food items being distributed. Those recipes can be found online at the Fly Beyond landing page. Wawa and Second Harvest intend to use the Fly Beyond pilot program and results as a road map for collaborations with other food banks or for others to implement similar programs.

“Fueling up takes on a whole new meaning with Fly Beyond. We hope this new pilot program inspires goodness by making fresh, healthy foods conveniently available to families to create nutritious meals at home without worrying about how to afford it. Having greater access to fresh produce will improve the ability of kids in our communities to learn, lead and succeed,” said Robert Yeatts, senior director of Florida operations, Wawa.

Wawa is ensuring children in Central Florida have access to the nutritious, wholesome food they need to thrive.”

—Derrick Chubbs, president and CEO, Second Harvest

In The Community

Every year, the convenience retail industry dedicates billions of dollars to advancing the futures of individuals and families in our communities. The NACS Foundation unifies and builds on NACS members’ charitable efforts to amplify their work in communities across America, and to share these powerful stories. Learn more at www.conveniencecares.org

TRAVELCENTERS OF AMERICA SUPPORTS TRUCKERS RELIEF FUND

1 TravelCenters of America Inc. launched its annual Round Up campaign in support of the St. Christopher Truckers Relief Fund (SCF). From Memorial Day weekend through Labor Day, customers at participating TA, Petro and TA Express locations can round up their purchase to the nearest dollar. The difference will be donated directly to SCF to help support professional drivers who have experienced an injury or illness that has taken them off the road within the last year.

7-ELEVEN BRINGS BACK OPERATION CHILL

2 Now in its 28th year, Operation Chill allows law enforcement officers to create positive connections by awarding a coupon to

kids they see doing good deeds or exhibiting positive behavior— which can be redeemed for a free small Slurpee drink at any participating 7-Eleven, Speedway or Stripes store. This summer marks the first time kids are able to redeem their Slurpee drink coupons at their local Speedway store. Since its inception in 1995, Operation Chill has expanded to hundreds of cities across the country, donating more than 24 million coupons to U.S. law enforcement agencies in 7-Eleven Inc. communities.

RUTTERS RAISES OVER $880,000 FOR KIDS

3 Rutter’s Children’s Charities announced that its 21st Annual Charity Golf Outing, held in May, raised over $880,000 to benefit local charities. This marks the largest amount raised at the outing since its inception. The annual two-day golf event began in 2003 and has helped Rutter’s Children’s Charities raise over $4.7 million to support local children’s charities in Pennsylvania, Maryland and West Virginia over the past 21 years.

LOVE’S SUPPORTS OK CITY ZOO EXPANSION

4 Love’s Travel Stops donated $1 million to the Oklahoma City Zoo and Botanical Garden’s newest habitat expansion, Expedition Africa. Opening in June, Expedition Africa is the zoo’s most ambitious and immersive conservation habitat experience in its history. An iconic feature of

Expedition Africa is the zoo’s historic pachyderm building proudly sponsored by Love’s Travel Stops. The building, which is listed on the National Register of Historic Places, was constructed in the early 1960s to provide habitat space for the zoo’s elephants, rhinoceroses and hippopotamuses.

PILOT COMPANY HONORS VETERANS WITH $100K

5 In honor of Military Appreciation Month in May, Pilot Company donated $100,000 to Hire Heroes USA in an effort to further its commitment to helping veterans transition back into the workforce. USA Heroes is an organization dedicated to providing employment opportunities to U.S. military veterans and spouses.

CROSBY’S PRESENTS $86,805 DONATION

6 Crosby’s and Reid Petroleum Corp. donated $86,000 to the Patricia Allen Fund benefiting John R. Oishei Children’s Hospital in Buffalo, NY. Crosby’s offered multiple ways for customers to support pediatric critical care through a variety of donation programs. Lenny Smith, vice president and general manager of Crosby’s, stated: “Our Crosby’s customers really responded to supporting the Hospital. Donations through our fuel pumps and customers enjoying the Bills Mafia endorsed signature The Mafia Pizza proved to be a huge success!”

Marshanna J. is one of nearly 3,700 truckers out of work due to illness or injury helped by St. Christopher Truckers Relief Fund.

Many Twisted Fibers Make the Strongest Rope

BY THE NACS GOVERNMENT RELATIONS TEAM

Key Figures

20+

The number of issue-specific coalitions with which NACS works

42 million

The number of Americans who receive assistance from SNAP

As we like to say in the NACS government relations department, “The convenience store industry has more issues than National Geographic.” Unlike other industries that can focus on specific committees (banking, for example), activity in every committee in Congress can affect us.

One of the key tactics we use to effectively represent the industry is to identify and work with other industries and organizations with aligned positions on a given issue. There are currently over 20 issue-specific coalitions with which we are working to achieve positive results … and more are formed on a regular basis as new issues arise. On issues of top priority to our industry, NACS usually forms and leads the coalition. With other issues, we may just participate. Either way, the coordination with like-minded organizations is essential to success on Capitol Hill. Following are some examples of how we use coalition armies to fight some of our biggest battles.

SWIPE FEES

In the early 2000s, NACS co-founded the Merchants Payments Coalition (MPC), a group of merchant trade associations seeking legislation to curtail an ever-increasing cost for Main Street businesses—swipe fees. Over time the MPC’s membership has grown to include associations representing

everything from general retail to grocers, restaurants, college bookstores, theater operators, sporting goods stores, beverage stores, lumber companies and more. MPC’s policy objective—tackling unfair swipe fees—is one that unites almost any business accepting payment cards today because the business is completely beholden to the Visa and Mastercard duopoly. The global networks not only determine the rails transactions run over but the operating rules, who is liable for fraud and the swipe fee rates levied by their issuing banks. The current system leaves Main Street businesses bearing enormous operating costs and American households paying more than $1,000 a year in these hidden fees.

In 2010, NACS and its coalition partners were successful in passing legislation known as the Durbin Amendment that regulated debit card swipe fees. The legislation also required there be two network routing options on debit cards. Since its implementation, debit card

swipe fee reform has saved U.S. merchants billions of dollars.

Most recently, the MPC has advocated for the passage of the Credit Card Competition Act, bipartisan legislation that would require there be two network routing options for retailers on credit cards, similar to what we have on debit cards today. The legislation has gained traction, with more than 220 associations at the federal, state and local level endorsing the bill. NACS estimates that credit card routing competition would save the convenience store industry more than $1 billion a year in swipe fees, an average of about $7,000 per location.

While the coalition focuses primarily on legislation, NACS regularly coordinates with other retail associations to raise these issues with regulatory agencies that have jurisdiction over the networks and their issuing banks, including the Department of Justice, the Federal Reserve, the Federal Trade Commission and the Consumer Financial Protection Bureau.

SNAP

Convenience stores play a unique yet essential role in the Supplemental Nutrition Assistance Program (SNAP) as small format retailers. NACS works with several nonprofits and associations in order to ensure our retailers have the ability to participate in the program and provide food to the 42 million Americans who rely on SNAP.

Congress is currently drafting the 2023 Farm Bill, which authorizes SNAP. One of the top issues NACS is focused on this Farm Bill is removing the hot food restriction. Bipartisan legislation was introduced in the House and Senate to allow SNAP customers to purchase hot foods at SNAP-authorized retail stores. NACS strongly supports the legislation and is working with industry leaders, such as the Food Research and Action Center, to advocate for its inclusion in the Farm Bill.

NACS is also working with an informal coalition of associations repre-

The current system leaves Main Street businesses bearing enormous operating costs.

senting SNAP retailers to advocate for a permanent ban on state-contracted EBT processing fees. The Department of Agriculture, which oversees SNAP, is planning a migration of EBT cards to chip card technology. NACS and other retail groups believe it is imperative that the ban on processing fees is made permanent in the Farm Bill to ensure that retailers are protected from bearing costs of this costly transition and from other fees that should be borne by state-contracted EBT processors.

FUELS AND EVS

In the fuels and EV area, NACS has effectively created and used coalitions, formal and informal, to advance our issue priorities. With so many issues at the federal and state level affecting what type of transportation fuel we sell and how we sell it, identifying allies and working together with like-minded stakeholders is even more important than it is with other issues.

Creating a Competitive Electric Charging Market

As part of its climate agenda, the Biden Administration has focused its efforts on expediting the electrification of the transportation system, including the goal of installing at least 500,000 EV chargers in the transportation refueling system. The Infrastructure Investment and Jobs Act and the Inflation Reduction Act included major incentives programs for EV charging.

At the state level, many states are pursuing policies to promote EVs, including banning the sale of cars using internal combustion engines or mandating zero-emissions vehicles. In several states, electric utilities have been approved to charge all customers (or ratepayers) to subsidize the cost to build the necessary infrastructure as well as own and operate the chargers themselves. In addition, some states require businesses that sell electricity for the purpose of charging

EVs to be regulated like a utility. Further, businesses are also having to pay additional fees or tariffs, called demand charges, above and beyond the cost of the electricity itself. This outdated market design dampens private sector investment and makes it difficult for convenience and fuel retailers to participate in the EV charging market.

As part of its advocacy strategy in responding to these policies, NACS works with a wide range of stakeholders, including other fuel retail groups, oil and gas producers and refiners, ethanol producers, EV equipment suppliers and manufacturers and state associations. NACS co-founded the Charge Ahead Partnership to advance our priority of creating a competitive EV charging market and stop efforts that favor one industry sector, such as investor-owned utilities, from monopolizing this emerging market.

NACS believes that EV charging should be an open, competitive market. Convenience and fuel retailers should have the option to sell any legal source of transportation energy in a competitive market with a level playing field. Allowing the private sector to compete evenly is the best way to spur investment in and the development of electric charging infrastructure. It is also the best way to ensure that vehicle owners get the best prices and experience over the long term.

With over 116,000 fueling locations, the convenience industry is well-positioned to meet the energy needs of future drivers—regardless of the energy source. All industries, whether it be a gas station, utility, technology company or other type of business, should have fair access to incentive and investment opportunities to provide consumers the widest range of choices in fueling their vehicles.

E15

Today, fuel retailers are unable to sell E15 year-round to their customers unless the EPA grants an emergency waiver. A permanent one-pound Reid vapor pressure

NACS believes that EV charging should be an open, competitive market.

Conference: October 3-6, 2023

Expo: October 4-6, 2023

Georgia World Congress Center, Atlanta

BE PART OF A WINNING TEAM

“Nobody understands what I do, what I go through, what’s real for me like my peers. I get my best ideas at the NACS Show, and I feel like I belong to something bigger than my company. I’m part of a winning team.”

waiver is needed to fix this obstacle for the fuel retailing industry.

NACS has informally worked with a wide group of associations representing the ethanol industry, the oil and gas industry and fellow fuel retailer groups to push legislation that would provide a permanent waiver for E15 and allow for the sale of E15 the entire year.

NACS believes fuel retailers should have the opportunity to sell any legal fuel, such as E15, to customers who wish to buy and fuel their vehicles with that fuel. As a result, NACS supports the Consumer and Fuel Retailer Choice Act (S. 785/H.R. 1608), introduced in the Senate and House by a bipartisan group of members of Congress. While the EPA has granted a temporary emergency waiver to allow E15 to be sold this summer, a permanent legislative solution is needed.

CONSUMER DATA PRIVACY

In response to advances in technology, numerous media reports about privacy abuses and the proliferation of state legislation on consumer data privacy, Congress is working to create a federal privacy law and grant consumers rights with respect to information about them. NACS supports a national uniform privacy bill that applies to all industry sectors that does not shift the requirements solely onto the retail sector of the economy and does not pick regulatory winners and losers among different business sectors, nor exempt any industry or business.

ONE VOICE

This month, NACS talks to Lance Klatt, Executive Director, Minnesota Service Station Association

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

Convenience stores are cornerstones within our communities—they are a great place for creating jobs (many first jobs) and a place everyone visits. They are places of togetherness! C-stores support their communities through grassroots agendas, such as supporting youth sporting activities, educational funding and getting involved in local student participation programs. Communities matter.

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

NACS allows myself and members of the Minnesota Service Station and Convenience Store Association to build stronger relationships with Minnesota’s federal congressional delegation. Communication is essential to our political platforms and the future of our industry, and engagement is key to the survival. NACS provides informative data leading to better opportunities to a better tomorrow.

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

All of them … there are so many issues that touch our industry, including flavor bans on tobacco, EPA requirements, labor issues and more! Of course, credit card fees are always on our mind.

What c-store product could you not live without?

Mountain Dew Kickstart and Wenzel’s Farm beef sticks. Kickstart has only 80 calories per can and the Wenzel’s Farm beef sticks are the real deal! Just call me Bubba!

While the EPA has granted a waiver to allow E15 to be sold this summer, a permanent legislative solution is needed.

As part of its advocacy strategy, NACS co-founded the Main Street Privacy Coalition (MSPC), which is comprised of a broad array of national trade associations representing businesses that line America’s Main Streets. From retailers to realtors, hotels to home builders, grocery stores to restaurants, and gas stations to convenience stores, the businesses represented by member associations interact with consumers every day.

Throughout the legislative process, including markup of the House Financial Services Committee privacy bill and hearings and markup of the House Energy and Commerce Committee privacy bill, NACS has worked closely with its Main Street partners in sending letters, hosting district meetings with Main Street business owners and their member of Congress, educating members and staff on the committee and testifying at legislative hearings.

To date, NACS and the Main Street Privacy Coalition have convinced members of the House Energy and Commerce Committee to make significant improvements from the original draft in preserving loyalty and rewards programs and ensuring Main Street businesses are not responsible for the misuse and mishandling of consumer data by third parties and service providers. NACS and the coalition continue to push for changes to protect Main Street businesses from frivolous lawsuits, strengthening federal preemption over state laws and ensuring business sectors under different privacy requirements or regulatory regimes are able to work with Main Street businesses

in complying with consumers’ requests regarding their personal information.

LABOR

One of the concerns we hear about most frequently from members is the limited availability of labor. The convenience retailing industry is certainly not alone in struggling to find reliable workers to fill shifts. It is a challenge being felt by all industries across the economy. NACS has helped launch the Critical Labor Coalition, which is a group of varied industry interests who have come together with the goal of finding unique ways to help expand the U.S. labor force. The coalition is focused on finding ways to improve the availability of specific universes of workers, including immigrants, asylum seekers, seniors, caregivers and second-chance workers. The goal is to enact meaningful legislation to help reduce barriers that keep some of these populations from entering or reentering the workforce.

While working to expand the workforce, employers are also finding themselves facing headwinds in terms of the cost of labor. In some cases, much of that cost is being driven not by natural market forces but by regulatory actions taken by federal agencies. Both the National Labor Relations Board and the Department of Labor have been busy lately proposing rules that will unnecessarily drive up direct store operating expenses. To help push back on many of these efforts, NACS is also a part of a few different coalitions focused on specific efforts, be it joint-employer regulations or overtime.

These are also areas where we rely on you as well. Direct comment campaigns, such as the one many of you supported in relation to the NLRB’s joint-employer rulemaking, can have a real impact on the outcome of these proceedings. The government relations team will continue to encourage you to file comments and write letters to legislators.

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 in May 2023 are:

Karla Ahlert RaceTrac Inc.

Scott Apter Apter Industries Inc.

Dell Cromie Glassmere Fuel Service

Michael Custer Whirley Industries Inc.

Brandon Duckett RaceTrac Inc.

Jim Garret Volta Oil Company Inc.

Matt Harris RaceTrac Inc.

Henry Latifzadeh Callaway Oil Inc.

Eva Rigamonti RaceTrac Inc.

Tom Wake Core-Mark International

Todd Walker Altria Client Services LLC

Bigger Is Better

Name of company:

Wally’s

Year founded:

2020

# of stores:

2

Website: www.wallys.com

BY SARAH HAMAKER

When cousins Michael Rubenstein, president and CEO, and Chad Wallis, chairman, formed Wally’s in 2019, they immediately agreed on one thing—their new convenience store concept needed to have lots of space. “We wanted to create a destination and an experience for people to stop, and that meant we needed to expand beyond the usual 3,000 to 5,000 square feet of a typical interstate gas station,” Rubenstein said. “Our ideas put guests at the forefront, and we designed an inviting,

Wally’s locations are 10 times the size of traditional c-stores to accommodate more foodservice, bathrooms and merchandise.

open space with a glass storefront to create the right guest experience.”

“My personal background in real estate development and Chad’s in operations meant we understood both the retail landscape and the need for travelers to have a family-oriented destination stop between Chicago and St. Louis,” Rubenstein said. Wally’s currently has two locations: one in Pontiac, Illinois, and the other in Fenton, Missouri.

FILLING THE SPACE

When drawing up the plans for Wally’s, the duo focused on the main areas most important to a road trip store—bathrooms, foodservice and merchandise.

“We made sure to install large, clean bathrooms,” Rubenstein said. “The women’s has 20 private stalls and the men’s has 10, along with open floor space.”

In the 10,000 feet of retail space, they put in a full-size Winnebago with merchandise in and around it to highlight being a road trip stop. “That goes quite well with our retro-vintage branding and private label,” Rubenstein said. Naturally, Wally’s has branded apparel, including t-shirts and hats.

The retail space also has grocery items, such as milk, beer and wine, and typical c-store snacks and packaged beverages, plus camping items. “We tried to have what you would want on your road trip as well as what you might need from a grocery store,” Rubenstein said.

The foodservice section has branded fresh-prepared options, including a popcorn station, sandwich and barbecue station, a beef jerky bar and a bakery. “You watch the food being prepared right in front of you,” Rubenstein said. The store prepares all grab-and-go items fresh as well as made-to-order items.

CONNECTING WITH CUSTOMERS

The cousins feel an obligation to the communities in which their two stores

are located. “We advertise Wally’s on billboards along the highway, but also sponsor golf tournaments, high school basketball teams, etc., to develop a good presence in the communities,” Wallis said.

Social media, including Instagram and Facebook, are a large part of the store’s marketing, which has drawn in a younger crowd. For example, during prom season, many high schoolers come to Wally’s before and after the dance. “We didn’t plan on this becoming a meeting spot for high school kids, but it has definitely become that,” Rubenstein said.

“It’s also become a meeting spot for politicians on their way to the Illinois State Capitol building, and we’ve been asked many times about putting in a conference room,” Wallis added, saying they’ve discussed it but haven’t decided whether to accommodate the legislators.

The management team put a lot of time and effort into standard operating procedures and training team members how Wally’s works. “We hire people who believe in the things Chad and I believe in,” Rubenstein said. “It’s a family-oriented business, and we give our whole team ownership of making sure we uphold our vision.”

The cousins extend that hospitality to every customer. “It’s important for us that people are greeted right off the bat and welcomed to our store,” Rubenstein said. For example, when customers ask where the bathroom is, a team member walks them to the location, rather than pointing in the correct direction. “We go out of our way to ensure every customer has the best experience we can give them,” Rubenstein said.

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

BRIGHT IDEAS

At Wally’s, private label merchandise is a big part of the store, from retail to foodservice. The Wally’s retro ’70s brand taps into nostalgia in the fonts and colors. The entire foodservice is under the Wally’s brand. “We don’t want to promote anyone else in our food program,” said Chad Wallis, chairman. “We decided to get our brand on as many items as seems reasonable and are always looking for new opportunities to promote Wally’s private label products.”

“We’ve been experiencing growth in our private label foodservice and try to be thoughtful about which items we take private label,” said Michael Rubenstein, president and CEO. For example, the retailer sells Wally’s branded popcorn, beef jerky, hot sauce and coffee beans. “We pick products with enough sales to justify the expense of having them private label,” he noted. The retailer also sells branded merchandise, such as hats, t-shirts, drinkware, coffee mugs, air fresheners, stickers and coasters.

Ideas 2 Go showcases how retailers today are operating the convenience store of tomorrow. To see videos of the c-stores we profiled in 2022 and earlier, go to www.convenience.org/Ideas2Go

CRA Get In on the National Day

are tying food and drink deals to microcelebrations— and it’s working.

E

As the calendar flips to July, Spinx stores gear up for one of their busiest traffic days of the year. National Fried Chicken Day is July 6, and the annual celebration serves as a springboard for the South Carolina-based convenience retailer to promote its fried chicken offerings for the remainder of the month. “Spinx is known for its fried chicken—it’s fresh, homemade and delicious,” remarked Hayley Thrift, director of marketing and advertising. “Celebrating National Fried Chicken Day makes sense for us.”

An increasing number of c-stores have gotten behind special days that salute products such as coffee, doughnuts, pizza, hot dogs and even ice cream for breakfast. The promotions are effective in driving guest visits and create novel interactions with customers. “National ‘holidays’ provide marketing and merchandising teams with easy tools to capitalize on,” explained Thrift, noting that Spinx starts planning its National Fried Chicken Day programming six months in advance. “They’re fun holidays and consumers want to participate. So why not join in?”

Liudmila Chernetska/Getty Images

AR TO

BONUS

At Pilot Flying J—which promotes occasions like National Cold Brew Coffee Day (April 20) and National Hot Dog Day (the third Wednesday in July)—the promotions allow the retailer to stand out from the competition. “We’re always looking for ways to support and interact with our guests, whether through national day deals, food innovation or seasonal LTOs,” said Jamie King, senior director, food and beverage, Pilot Flying J. Thierry Lyles, head of digital marketing for Family Express, added that with the national days already built into today’s consumer culture, they are a readily available sales tactic. “Often, retailers get hung up on executing a promotion, but it doesn’t have to be complicated,” he said. “C-stores should take advantage of these days.”

STRATEGIC TIE-INS

The celebration of product holidays isn’t benefitting just convenience stores. Other purveyors are getting in on the action as well.

In April, Family Express c-stores promoted National Burrito Day by offering a BOGO deal on its heatto-eat burritos via its app. The program was designed to be a bit of an internal test. “We wanted to track how our app users responded to the offer,” explained Thierry Lyles, head of digital marketing at the Indiana-based chain. “We wanted to know who redeemed the offer and who didn’t take advantage of it.”

First Thursday in April National Burrito Day

Many customers were attracted to the two-for-one deal, he said, but in an effort to win over those who weren’t, the company followed up with a free burrito, available via the app. “Overall, we were very happy with the results,” Lyles said of the program.

In fact, Family Express did such a good job promoting National Burrito Day that a local burrito shop reaped some of the benefits. According to Lyles, the restaurant reported to the c-store that due to Family Express’s promotion, the burrito shop received numerous phone calls from consumers asking about deals. “We were even able to help other local businesses capitalize on National Burrito Day,” he remarked.

Spinx’s celebration of National Fried Chicken Day in July follows its support of National Grilled Cheese Day in April. With the recent addition of grilled cheese sandwiches to its menu, the chain offered Spinx Xtras loyalty members a $1.49 deal on its Ultimate Grilled Cheese sandwich. Other food-related holidays promoted by Spinx include National Peanut Butter Day (January 24) and National Ice Cream for Breakfast Day (the first Saturday in February).

Indiana’s Family Express, meanwhile, has promoted national day deals with vendor support for years, according to Lyles. Since the chain launched its made-to-order food program in 2017, the promotions—which include National Pizza Day (February 9), National Chicken Wing Day (July 29) and National Breadstick Day (the last Friday in October)— have taken on a greater prominence. “Our strategy is to make sure they pair well with our in-store sales strategy, including foodservice,” he explained. “With so many national holidays—at least one for every day of the year—you can’t promote them all. We try to stay focused on about six every year.”

Love’s Travel Stops celebrated National Coffee Day (September 29) last fall by offering customers any sized coffee or hot beverage for the reduced price of $1.

REWARDING LOYALISTS

September

29 National Coffee Day

National day offers tied to loyalty and app platforms are setting the course today. The fast-casual restaurant chain Blaze Pizza, for example, has been running a successful Pi Day (March 14, in honor of the mathematical constant π, which rounds up to 3.14) promotion for rewards members for a decade, but a recent emphasis on encouraging customers to download the app to access the deal has seen particularly impressive returns. During this year’s promo, the app reportedly registered 500,000 downloads, bringing the chain’s loyalty membership to 3.5 million.

Moreover, proceeds from coffee purchases made through the Love’s Connect app went to the chain’s Children’s Miracle Network Hospitals campaign. According to Bryan Street, manager of deli at Love’s, the $1 coffee promo resulted in more than 40,000 redemptions. For National Hot Dog Day, meanwhile, app users were entitled to one free hot dog or roller grill item via a partnership with Schwab Meat Co. “We saw more than 13,000 redemptions,” Street reported, a 14% increase from the previous year. Other holidays promoted by the Oklahoma Citybased chain include National Cold Brew Coffee Day and National Mac and Cheese Day (July 14).

Pilot Flying J stores also promoted National Coffee Day (app users could get a free cup of coffee), National Cold Brew Coffee Day, and National Hot Dog Day (customers could purchase one hot dog and receive another for free). The Oscar Mayer Weinermobile also made stops at Pilot Flying J travel centers on National Hot Dog Day, courtesy of Kraft Foods. “Pilot Flying J saw a positive response to these promotions and the overall in-store experience from guests,” King remarked.

Family Express experienced its own successful National Pizza Day promo this year, thanks to its rewards program, powered by Paytronix Loyalty. Under the program, loyalty members could purchase two extra-large pizzas for $12. But since only 30 of the chain’s

Third Wednesday in July National Hot Dog Day

National days allow for communication that breaks through the general loyalty message and bring new news to talk about.

Irina Shilnikova/Getty Images; LauriPatterson/ Getty Images

81 units offer the pies, the campaign was targeted to just members in close proximity to participating stores via push notifications and emails. The targeted approach worked, Family Express and Paytronix said, with nearly 10 times the number of typical orders.

Spinx’s National Fried Chicken Day promo helps launch the chain’s annual CluckaPalloza contest, which runs throughout July. Under the program, customers who scan their loyalty cards and purchase chicken during the month are entered into a contest to receive free chicken for a year. According to Thrift, the implementation of Spinx’s mobile app a few years ago brought attention to the contest to a “whole new level,” and made it easier for the chain to promote. For National Ice Cream Day (the third Sunday in July), meanwhile, Spinx loyalty members receive a coupon on the app for a free cone.

“National days allow for communication that breaks through the general loyalty message and bring new news to talk about,” remarked Jeff Hoover, director of strategy and data insights at Paytronix. “Tying this to loyalty can also help drive acquisition of new members who want to take advantage of the offer.” That’s been the case at Spinx with the CluckaPalloza program, Thrift said. “We see a lot of new registrations in loyalty, particularly in-store signups,” she explained. “Customers feel that they might as well sign up because with just one purchase they could win free chicken for a year.”

July 14

National Mac and Cheese Day

September 22

National Ice Cream Cone Day

BUILDING BASKETS

Higher basket rings are another benefit of national day programming, Thrift and King said.

According to the Pilot Flying J executive, promos like the chain’s coffee and hot dog deals led “many guests to engage in other high-quality offerings available in our store, on top of the national holiday deal being offered.” Similarly, this year’s Family Express National Pizza Day promo spurred additional purchases, with the average ticket price rising to $18.

Pilot’s recent offers were supported via social media channels, emails and its app, King reported, along with media pitching. Family Express’s National Pizza Day offer relied entirely on digital messaging, including push notifications, emails, social media and digital billboards. “We found it to be the perfect messaging formula,” said Lyles. Added Paytronix’s Hoover, “Digital marketing allows for one-to-one targeting that can enable differentiated offers based on a guest’s purchase behavior. It’s also much more cost-effective and flexible to extend the offer if it’s going well. Very little planning or time is needed to execute versus promos that require in-store signage or other media planning.”

C-stores are clearly smitten with the opportunities national days offer. Love’s is celebrating National Mac and Cheese Day this month, followed by National Taco Day (October 4). After this month’s National Ice Cream Day, Family Express is looking ahead to National Sausage Pizza Day (October 11) and National Breadstick Day (October 27). For nearly every product offered by c-stores today, there’s a day for that!

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Citrus Grapefruit

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Selling the Brands Your Customers Want

BY CHRISSY BLASINSKY

NCEO Henry Armour said it best at this year’s NACS State of the Industry Summit: “You have to run a business very differently in an inflationary environment, and you learn quickly that focusing on dollar metrics is a fool’s errand. The focus has to shift to units.”

Inflation had a major impact on the products convenience stores sold in 2022 and continues to do so in 2023. Although sales were strong for the top six merchandise categories, with the exception of cigarettes, NIQ data revealed that units were down for packaged beverages, cigarettes, beer and candy. The only category to increase units was salty snacks.

In-store trips are on the rise again, which is fantastic news. The average basket—what customers spend per visit—increased 4.9% to $7.52 in 2022. Convenience retailers can keep this momentum going by stocking the products their customers are looking for, or better yet, the products that people didn’t know they wanted until they saw them in their favorite c-store.

Now that we’re halfway through 2023, we can use 2022 insights not as a look back but to show us where we sit now and the situation heading into 2024. With that in mind, we dive into the top brands that can help drive trips and bigger baskets, and ultimately let you do what you do best: excite and delight your customers.

Data for the six top merchandise categories throughout this article is from NIQ (formerly NielsenIQ) and based on total convenience sales for 2022. This data reveals the brands that are driving category growth within the biggest convenience store merchandise categories.

Packaged Beverages

alcoholic beverages. Larger 8,000-square-foot to 10,000-square-foot formats may have even more space for beverages, as well as a walk-in beer cave. This industry is serious about refreshments.

Packaged Beverages

We could argue that no other retail channel is a destination for packaged beverages quite like convenience retail—and we’d likely win.

In 2022, the industry experienced a significant sales increase for packaged beverages on a consistent month-over-month basis, with 2022 coming in 10.1% higher in sales than 2021; however, unit sales were down about 1%.

NIQ data shows that the top 11 packaged beverage brands accounted for 58% of sales. There are more than 2,000 total brands available in the c-store space, giving customers ample choice for refreshments.

Notice the top two brands are Red Bull and Monster. Could energy drinks be the new morning coffee? A bit of a spoiler alert, but the answer may be yes, according to heatmap data by PDI Insights Cloud that you can access in the NACS SOI Report.

Dive Into the Data

%ACV (all commodity volume) is a measure of the distribution of a brand’s products, weighted by the size of the stores that carry them. For example, if a brand’s %ACV is 75%, that means all the locations that carry that brand, added together, account for 75% of the convenience industry’s revenue—meaning the brand is not carried in stores that, in the aggregate, account for 25% of the convenience industry’s revenue.

Beer

The top 11 brands accounted for 73% of beer category sales in 2022, with more than 2,000 total brands selling in the c-store channel, according to NIQ.

If you haven’t been paying attention to imports like Modelo and Corona, it’s time to start looking for cooler door space. Mexican lagers have been driving the imported beer subcategory the past few years. Unit sales for Modelo were up more than 19% in 2022, while Corona had an 8.3% increase.

Although conversations around flavored malt beverages tend to include the word “saturation,” it’s a different conversation with hard seltzers. The top two brands, White Claw and Twisted Tea, saw double digit increases in unit sales in 2022.

SNACKS

Convenience stores are where the residents of Snack Food Nation lay their head at night.

According to Mondelez International’s 2022 State of Snacking report, globally 71% of consumers snack at least twice a day, and more consumers are replacing meals with snacks.

Consumers are also loyal to their favorites. The Mondelez report found that six in 10 (61%) people will go out of their way to find their favorite snack, while a similar percentage (63%) would pay extra to bring back some of their favorite childhood snack brands. Also, the top brands are winning: two-thirds (65%) of snackers prefer brand-name snacks to store brand or generic ones.

Salty Snacks

Bold flavors, redonkulously hot and spicy flavors, tangy, salty, traditional, cheesy, barbecue—you name it, the salty snacks category has it.

In 2022, salty snacks was the only top six merchandise category that saw both sales and unit increases year over year, with units up by 2.8%.

There are more than 1,500 salty snacks brands selling in the convenience store space, and the top 11 brands cited by NIQ make up 57% of category sales. Frito-Lay dominates the top products, with the top two potato chip brands, Lay’s and Ruffles. Potato chips have historically been the dominant salty snacks subcategory at about 40% of overall category sales.

What’s impressive is that every top 11 salty snacks brand was up in both sales and units, except for a very—and we mean very—slight dip in unit sales for Fritos.

Salty Snacks

Candy

The top 11 confection brands were responsible for 63% of c-store sales, with more than 1,600 brands selling in the channel.

Let’s talk about seasonal opportunities for confections. The standout subcategory for convenience stores in 2022 was novelties/seasonal candy. This subcategory is growing at a faster rate than all other candy subcategories, with the obvious spikes around Valentine’s Day, Easter, Halloween and the winter holidays in November and December.

Here’s some advice from candy suppliers: Get ahead of the game and get your orders in a few months prior to the holiday selling period. Also, don’t be afraid to be the first to drive excitement among consumers who cannot wait to get their hands on their favorite holiday-inspired treats. Case in point: Pumpkin spice everything doesn’t wait for the fall.

One trend that continues to live on is strong sales of gummies, and no shape or animal is off limits to being gummified. Gum is also making a comeback, a subcategory that suffered a bit during the pandemic. Now that more people are buying coffee again, going to work again and communicating closer than six feet again, they’re remembering the refreshing role of gum and mints.

Alternative Snacks

The alternative snacks category first cracked the top 10 list of in-store categories in 2017 in terms of gross profit contribution. These products appeal to customers who are looking for a healthier option or a protein-rich snack, as well as an energy boost or meal replacement.

Inflation clearly impacted the category in 2022: The average unit price for alternative snacks was up 7.9% and sales were up 3.8%, but units were down 3.8%, according to NIQ data.

According to NIQ, half of the category’s sales come from meat snacks, which is consistent with NACS State of the Industry data (50.6%). Health/energy bars from brands like Clif and Kind, which saw unit sales increase in 2022, are no strangers to new flavors and pack sizes. These types of product introductions appeal to on-the-go consumers who are looking for a healthier alternative to traditional candy and salty snacks offers or a snack with sustenance until their next meal.

CIGARETTES

Is Don Draper in the house? The story with cigarettes takes an interesting turn with Lucky Strike—a 131.7% unit change from 2021-2022. That level of unit change is something to keep an eye on, especially after you read the next sentence.

In 2022, convenience stores saw a -3.2% sales change year over year for cigarettes, which was also accompanied by a unit change of -7.5%, according to NACS State of the Industry data. The top 11 brands accounted for 66% of sales; more than 150 total brands had sales in the channel.

Regulation at every level can impact how retailers sell cigarette products. In April 2022, the FDA proposed a ban on the sale of all menthol cigarettes and all flavored cigars in the United States. California enacted its own menthol ban in December 2022.

The opportunities for smokers to smoke could be a factor, especially if they’ve returned to work. Working from home had its perks for smokers, while being back in an office environment may mean less chances for a smoke break. But does that cause people to smoke less? It’s a consideration, but the jury is still out.

Alternative Snacks

Cigarettes

Chrissy Blasinsky is the digital and content strategist at NACS. She can be reached at cblasinsky@convenience.org.

OVER IS IT YET?

Category managers are staying nimble in the face of ongoing inflation.

BY SARA COUNIHAN

Boris Zhitkov/Getty Images

After hitting a four-decade high of 9.1% in June 2022,

inflation has slipped each month over the past year. Despite the downward trend, inflation’s ripple effects will be felt for months and even years to come. But the convenience store industry is strong and fluid, having adapted to a changing consumer, and some industry experts see a light at the end of the inflation tunnel.

SOARING FOOD PRICES

Foodservice sales at convenience stores grew in 2022 over the previous year, with sales now representing 25.6% of average in-store sales and 36.1% of in-store gross margin, according to the NACS State of the Industry Report of 2022 Data. However, the foodservice consumer price index increased 9.7% last year, a large obstacle to overcome.

Michelle Weckstein, director of food and beverage brands, SunStop, saw the pinch of food inflation firsthand throughout the retailer’s 79 locations. SunStop’s foodservice program features made-from-scratch Southern comfort food. The chain is known for its chicken, potato logs and mac and cheese. A couple years ago, the company’s margins began to suffer because costs were rising and SunStop hadn’t raised its prices.

“We didn’t want to turn off the customers, because they were just starting to come out of the house after COVID,” Weckstein said. “So we made incremental increases in our pricing.”

SunStop customers let the retailer know they were not happy with paying more for their favorite foods.

“Every time we would raise our prices, the customers certainly vocalized their opinion,” she said. “A lot of it was right at the counter where they would, let’s just say, be very expressive to some of our employees, unfortunately.”

On top of raising prices, SunStop added another tool to its inflationary defense. It found a new broadline distributor that has a partnership with a group purchasing order (GPO), and it’s given the company “significant” savings on food prices.

Every time we would raise our prices, the customers certainly vocalized their opinion.”

“We are getting phenomenal buying power because we’re part of this GPO,” said Weckstein. “We can, of course, share the [savings] with our customers.”

SunStop is also sticking to its core food items, the “things we do best,” Weckstein said. These foods require simple preparation, meaning the company can spend less on labor.

“We’re really just focusing on consistency of availability and quality products and making sure things are convenient,” she said. “If we can really master those things as an industry, I think we can remain competitive.”

TOUGH TIMES FOR HIGH-PRICED CIGARETTES

Another in-store category hit particularly hard by inflation is tobacco. While consumers are not leaving the cigarette and other tobacco products categories completely, they are trading down within categories and out of certain subcategories. According to Bill McCloskey, chief operations officer, RMarts, which has 13 stores in the Chicagoland area, cigarette sales are plummeting because they are the most expensive tobacco option by far. A pack of cigarettes in the chain’s operating region can range in price from $11-$14, while a can of moist smokeless tobacco is $7-$8 on average. But moist smokeless prices have been hit by inflation, too—up around $2 on average over the past couple years, says McCloskey— so many consumers are moving to a newer tobacco subcategory, modern oral.

“The modern oral [sub]category is benefiting from both cigarette and snuff users because that price point is still around $4 or $5,” said McCloskey. “What you have is cigarette smokers moving into that category.”

According to McCloskey, RMarts has seen 85%-90% sales growth in the company’s modern oral subcategory over the past two years, while moist smokeless tobacco sales have declined by 3%-4%, and cigarettes are down 6%-8% in the same time period.

McCloskey says RMarts is using SKU rationalization to manage any declining subcategories. The company’s category managers watch the movement of their brands closely so RMarts doesn’t hold onto SKUs that are no longer selling.

“If we normally carry nine or 10 [flavors of moist smokeless], maybe we’re only carrying five or six now,” he said. “But on the other hand, in the [brands] … that are growing, we’re making sure that we have all the SKUs … because that customer is looking for something, and we don’t want to miss an opportunity to sell it to them.”

TOOLS IN THE TOOLBOX

Feeling the sting of inflation, consumers have been more open to brand swapping, and private label has become a go-to for consumers. In fact, private-label food sales have increased 16% over the last two years, according to NIQ data. In April 2023, private label captured 19.1% of consumer spending in the CPG market.

Capitalizing on this consumer trend is Texas-based CEFCO, which is overhauling its private-label line, formerly known as CEFCO Premium. According to Rachel Puepke, vice president, marketing and category management, CEFCO, the company’s private-label line was incohesive, with different branding across its products.

“We did a whole brand strategy for CEFCO to find who we are, who we want to be,” said Puepke. “We wanted to use our private label as a way to drive awareness of who CEFCO is.”

CEFCO came up with Y’ALL, a tie to CEFCO’s Southern roots and a way to show that CEFCO gives back. A portion of Y’ALL prod-

We wanted to use our private label as a way to drive awareness of who CEFCO is.”

Klaus Vedfelt/Getty Images

uct sales is donated to the Fikes Foundation, a nonprofit started by CEFCO’s founders. The company debuted its new private-label branding strategy with an alkaline-enhanced water.

“Water is a great product for any company to start with,” said Puepke. “It was a quick way for us to drive that instant recognition of our new brand.”

The water retails for $2.79 for one liter, but CEFCO is running a promotion on the water— two bottles for $4—to drive more volume and increase the value perception.

“We purposefully positioned and priced our products to be a better value to the national brands or to the major brands. Value doesn’t always necessarily mean price point,” she said. “However, we are slightly under or cheaper from a price point perspective when you look at national brands.”

According to Nielsen, promotional sales play a crucial role in driving sales growth. Promotions accounted for 13% of sales in April 2023.

“People are looking for value, and they are watching their pennies,” said McCloskey. “We have to address that and come up with more value proposition promotions.”

RMarts is also using water to add value for customers and drive foot traffic. The company prices a gallon of water at $1.79.

“Water is the new driver,” he said. “We’re finding more people picking up cases … and gallons of water than ever before. And then obviously that gets them into the store and hopefully they buy something else to go with the water.”

According to Kelley Gutierrez, senior category manager, candy and snacks, MAPCO, inflation has impacted in-store categories, forcing the company to raise prices. To not deter customers, Gutierrez says the company is getting creative with promotions.

“People are taking a second look at everything that they’re spending on,” she said. “Even people in higher income brackets can be easily turned off by the price of an item that has the same margin it had a year ago, but it just happens to be a dollar higher because of cost increases.”

It’s about adjusting the perception of that good and the value of it, she says. “That’s where I really think that smart promotions are going to come into play.”

Loyalty is another way convenience retailers are adding value for their customers. CEFCO’s

loyalty program, CEFCO Rewards, offers its members free products when they sign up, as well as exclusive promotions like BOGOs. “That’s keeping our consumers coming back to us,” she said. “They will spend on that candy bar because they can buy two drinks for the price of one.”

SunStop also offers discounts to loyalty program members. “If you are a loyalty member, you get treated special,” said Weckstein.

SEEING THE LIGHT

Although inflation is still historically high, convenience retailers are seeing a light at the end of the inflationary tunnel.

“I do believe c-stores are still holding strong on transactions,” said Puepke. “From a total sales perspective, we’re doing a great job of offsetting any trade down or any loss of categories in the basket. So even though basket sizes are smaller, we’re not necessarily seeing a significant drop in our transaction spends.”

According to Weckstein, c-stores have other ways to draw in customers on top of quality foodservice, whereas QSRs just have food and drink.

“We need to really capitalize on everything that we have within our four walls,” she said. “If we can do that with consistency of availability and still make it convenient, I think we’ll win.”

According to McCloskey, there’s definitely cause for optimism. He’s seen the best volumes all year in the past two weeks.

“I’m encouraged,” he said. “I think it’s going to be a good summer.”

Sara Counihan is contributing editor of NACS Magazine and NACS Daily. She can be reached at scounihan@ convenience.org

I think it’s going to be a good summer.”

TRENDSETTERS

TRENDSETTERS

tocking convenience stores with the latest on-trend products can be a challenge. Consumer tastes change rapidly, and this week’s TikTok-made-me-buy-it product could be old news by the time you get it on your retail shelf. But convenience retailers also need to stay ahead of their competition and offer a product assortment that attracts customers with novelty while meeting customers’ expectations that their current favorite products will be stocked. So how can convenience retailers strike a balance between investing in the latest craze and supplying timeless c-store staples? And how do category managers even find

If you’re wondering what products your customers want, it may be as

“We speak with [our customers] daily,” said Rachel Krupa, owner of The Goods Mart, a three-location New York City-based c-store chain that stocks better-for-you products. “The incredible team members in our store talk with our customers, asking for feedback and what we’re

At Loop Neighborhood stores, a mid-sized convenience retailer based in California, employees are encouraged to share any feedback they receive from customers with their managers, which eventually makes its

their shelves stocked with the latest products.

Every industry expert interviewed for this article said trade show attendance is a must to stay in the know on the latest products.

The NACS Show provides the most comprehensive array of products and services for the industry. This year’s NACS Show is in Atlanta October 3-6. Register at nacsshow.com

“We give them several outlets to let us know what is working, what isn’t and what we can do differently for the customer,” said Pervez Pir, president of retail for Loop, adding that the company also sends out automated surveys to its loyalty program members so that it can learn about their shopping experiences and whether Loop should offer something different to meet their needs.

An example of a product that Loop took a leap on carrying in its stores is the drug Narcan (naloxone). Narcan is a nasal spray that reverses drug overdoses, and in late March, the Food and Drug Administration approved the drug for sale without a prescription.

“As soon as we heard this, we started planning out where we would purchase from, where in the set should we put it, age restrictions, etc.,” Pir said.

Even large convenience retailers with millions of customers make it a priority to talk to those who walk into their locations.

“My favorite way to connect with guests is through direct engagement at the store. Our team members are in the field on a near constant basis, asking questions and really listening,” said Jason Wakley, director of general merchandise, truck supply and electronics, Pilot Company, which has more than 870 locations and serves an average of 1.3 million guests per day.

Wakley says that continuous engagement allows Pilot Company to learn about any issues customers may have and find solutions.

“We can tailor our product assortment based on direct guest feedback to further improve guest experience,” he said. And like Loop, Pilot Company also surveys both customers and employees to see how it stacks up across a range of metrics.

“When companies listen to their audience and deliver the goods that are important, those positive interactions build, resulting in repeat guests and increasing brand loyalty,” he said.

GET SOCIAL

Along with talking to your customers in person, try connecting with them and/or your target audience on social media.

“The team is engaged on several plat forms, looking to see what’s getting the most attention, what new products folks have found and are talking about and even taking feedback on our product assortment,” said Wakley. “Drivers are the best resource for offering creative solutions to the challenges they face. By following them closely, we can take steps to help to provide those solutions to our broad base of guests.”

Kay Segal, president and managing executive, Business Accelerator Team, suggests following industry and research leaders on LinkedIn to stay abreast on product trends, like Mark DiDomenico at Elohi Strategic Advisors, Kelley Fechner at Datassential and David Portalatin at Circana.

Segal also says retailers should subscribe to online news feeds from various industry publications. Depending on a retailer’s product strategy, this could be news about the grocery industry, foodservice, refrigerated or frozen foods, private label, specialty foods or others, she said.

TAKE A LOOK AROUND

A savvy convenience store operator knows it’s vital to understand what’s going on next door or down the street at a competitor. Understanding why some customers choose that outlet over yours is a growth opportunity, and taking a look at their product assortment can breed new ideas.

“Visit competitors, other stores within your sector and stores that have no crossover,” said Wakley. “Seeing new and varied ideas inevitably leads to innovation.”

Loop also checks out its competition often, especially in the foodservice space.

“With food, we look at what new fast feeders/restaurants are popping up, their menu offerings and the advertising themes that are in the marketplace,” said Pir.

Loop also makes a point to visit a variety of food outlets, such as grocery stores and food trucks, that service people from all

Seeing new and varied ideas inevitably leads to innovation.”

backgrounds so it can find unique items for its customers. For example, poki bowls are growing in popularity in the areas Loop operates in, so Loop began offering the menu item

“Another example would be when we rolled out cha siu bao [pork barbecue filled buns] a few years back. We realized this would be something that would serve the community well and is unrepresent-

HOW TO GET WHAT YOU WANT

Once you’ve spotted a product to carry, how do you get it in your stores? Krupa at The Goods Mart says she works directly with the brands themselves.

“The majority of the brands we carry are not with distributors, so we work with brands directly,” she said. “We don’t rely on our suppliers to keep us up to date with what customers want—that’s our job.”

“Like many of the best specialty retailers, we go directly to the sources of innovative ideas. We may find those ideas online, at a trade show or out in stores as we trend shop. From there, we find the manufacturer and begin to build a relationship,” said Wakley. “Traditionally, innovation in our industry was brought to us by distributors that specialize in our line of business. However, with the need to evolve and differentiate, we have expanded our internal sourcing of on-trend products.”

But what if you’re unable to work with a brand directly and are at the mercy of what your distributor can supply you with?

“Depending upon a retailer’s positioning or the specific needs of its customer base, it may need products that its distributor does not typically carry,” said Segal.

Segal suggests three tactics if a c-store’s distributor does not agree to slot certain items. The first is to discuss with your distribution partner which of your customers’ needs you are working to fulfill.

“They already have a truck coming to your facility. If they can add some needed products, this is a good approach,” said Segal.

Small retailers could also create their own cross-dock, she suggests. She has visited with owners of chains as small as 10 stores with a cross-dock.

“Some start simply with shelf-stable items as well as supplies. Once routes are running smoother, it may make sense to move into refrigerated or frozen,” Segal said. “The retailer may even determine that the best way to start is to find a partner with a service to pick up and deliver the products, allowing the retailer to focus on purchasing the products, picking the individual store orders and staging the orders for a distribution partner.”

Her third suggestion is simple. “If your current distribution partner cannot slot the products desired, look at other distributors.”

FINAL THOUGHTS

Ultimately, a retailer’s product assortment should address the needs of the customer and be based on facts, according to Segal.

“Items should never be brought in based solely on a belief that they will sell. The research needs to support that demand exists,” she said, adding that it’s imperative that retailers understand the overall %ACV (all commodities volume) for desired products in a trading area, in addition to the need states of its customers.

“I truly think you have to immerse yourself in your community and society to get the real gem to surface that separates you from the pack,” said Pir.

Offering on-trend products is not an exact science, according to Wakley. There are benefits and risks to supplying trendy items, but sometimes, retailers need to just go for it and take the risk on certain items, he said.

“The important message is that trendy items we find in the market aren’t always successful, but we have the willingness to try, and if they fall short, learn from that experience,” he said. “This ensures that our assortment will continue to evolve.”

Sara Counihan is contributing editor of NACS Magazine and NACS Daily. She can be reached at scounihan@ convenience.org

We find the manufacturer and begin to build a relationship.”

Sometimes, retailers need to just go for it and take the risk on certain items.

Rethinking Merchandising

Are you bombarding customers with too many product choices?

BY SARAH HAMAKER

Straight lines of shelving stuffed with products are so last century, when linear feet of static shelves stuffed with products greeted customers walking into retail stores. The mindset of the more products, the better has been prevalent in retail circles for a long time, but this type of merchandising can leave customers wanting to get in and out of your store rather than wanting to linger a bit—and buy more.

“Clutter and space are always an issue,” said Scott Hein, travel store manager for Iowa 80 Truckstop in Walcott, Iowa, which bills itself as the world’s largest truck stop. “Even in our large store, we still have to be choosy about what products to bring in to avoid a cluttered space.”

From supermarkets to convenience stores, retailers are clearing the clutter as they rethink merchandising to better fit how consumers shop their stores. This means revamping not just the type and position of shelving units, but also how many items to stock and what promotional displays to incorporate.

THE MERCHANDISE LANDSCAPE

As consumers continue to have more options for where to spend their shopping dollars, retailers need to stay on top of merchandising trends to keep customers engaged and coming back on a regular basis. “Over the past decade, the convenience store merchandising landscape has undergone notable changes to adapt to shifting consumer preferences and market dynamics,” said Tim Young, customer business manager with Crossmark.

Here are the top four merchandising trends in the convenience industry.

Inviting store layout . Retailers are investing in creating more appealing and customer-friendly store designs. “They have adopted open and inviting designs with wider aisles, well-organized product sections and prominent displays,” Young said. “Clear signage, efficient checkout counters and designated areas for promotional displays have become standard to enhance the overall shopping experience.”

Iowa 80 created wide aisles to accommodate heavy traffic, especially during the May

to November prime traveling season. “We want to keep our pathways as open as possible, so we’re very picky about adding temporary vendor displays or other merchandising units,” Hein said. “We always look at the broader view when considering changes to displays.”

Data-driven merchandising . The availability of advanced analytics and sales data has enabled c-stores to make more informed merchandising decisions. Having a data-driven approach helps c-stores improve inventory management, reduce waste and maximize profitability.

At Iowa 80, the 11 department managers review merchandise data on a daily as well as monthly basis. “Sometimes, when you’re looking to get your sales up, you think adding more options is the way to go,” Hein said. “But then you’re left with too much stuff, and it’s not shoppable for the consumer.” Instead, to keep inventory fresh, Iowa 80 analyzes the sales data on its nearly 60,000 SKUs to see which ones are selling and which are not.

Product placement . Retailers now place greater emphasis on optimizing the place-

High-Traffic Destinations for Impulse Snacks

Leveraging

Impulse purchases build basket sizes, and snacks are one of the industry’s biggest impulse buys.

Here are four ideas on how to create these impulse opportunities from Daniel DeMeyer, senior director sales strategy, Kellogg Company.

Place multiple best-selling items, such as salty snacks, crackers, confections, sweet snacks, gum and mints here. “It’s a great opportunity to add impulse sales that will lead to higher basket rings,” he said.

If your store has space, install queuing lines or use manufacturerprovided racks to add space for impulse snacks.

FRONT COUNTER AREA

LOBBY AREA

We want to keep our pathways as open as possible, so we’re very picky about adding temporary vendor displays or other merchandising units.”

ment and visibility of products. “This involves strategic positioning of high-end items at eye level, near checkout counters or within a queuing design to ensure easy access and to capture consumer attention,” Young said.

Promotional displays. “Eye-catching displays near entrance areas, endcaps or designated promo zones highlight featured products, limited-time offers or bundled deals,” Young said. “These visually appealing displays create a sense of urgency and encourage impulse purchases.” He mentioned that one retailer is testing an endcap display that automatically changes product assortment based on dayparts.

FOUNTAIN BEVERAGE AREA, COOLER DOOR RACKS AND FOODSERVICE COUNTER AREA

These areas are prime for adding secondary top-selling salty snacks, since this category has a strong affinity with beverages and foodservice items. These can also be bundled during meal dayparts.

COFFEE AREA

Create space for items typically purchased with coffee, such as breakfast bars and pastries.

NO CLUTTER ZONES

Clearing merchandise clutter in c-stores while maintaining the desired product selection requires a strategic approach by retailers.

Here are six effective strategies to achieve a clutter-free environment while still catering to your customers’ needs.

Develop a clean store design. Consider a minimalist store design to bring a sense of spaciousness. Neutral colors, adequate lighting and clean signage contribute to an inviting environment. “This design approach can make the store feel less cluttered,” Young said.

“We work hard to reduce the visual clutter for our customers,” said Nathan Arnold, director of marketing for Englefield Oil in Heath, Ohio, the parent company of Duchess, a 120-unit convenience retailer. “Using merchandising fixtures like bins and tables, we take product out of floor displays and shippers to strategically place them on those fixtures. This reduces an extra and often busy-looking cardboard display on the floor while ensuring the product is visible and in locations where our customers are shopping.”

Use space well . Retailers and manufacturers have worked together to create merchandising vehicles that draw consumer attention without creating clutter. For example, many retailers have fixtures placed under the counter at the payment area, under the foodservice counter and on top of the coffee bar and fountain drink areas. “Manufacturers also provide side panels that affix to the side of an end cap to merchandise product without getting in the way of consumers,” said Daniel DeMeyer, senior director sales strategy, Kellogg Company.

Wall-mounted racks, gondola extenders and hanging displays create a sense of openness while showcasing items. “Going vertical allows for a more efficient use of floor space and reduces clutter on counters and checkout areas,” Young said.

Evaluate the layout and organization of your store shelves to make sure products are neatly displayed and aren’t crushed together. Planograms can help organize shelf space. Young recommends adjustable shelving systems to accommodate different product sizes.

These visually appealing displays create a sense of urgency and encourage impulse purchases.”

Simplify product categories to avoid overwhelming customers with too many options. By grouping related items together under clear labels, customers can navigate your store more efficiently. For example, organize snacks by type (chips, cookies) or dietary preferences (gluten-free, organic).

Garner feedback . Successful c-stores actively engage with their customers and employees to improve their merchandising strategies. “This can be done via a loyalty program, surveys or interactive touchpoints within the store,” Young said. Ask employees at all levels for their suggestions on how to merchandise categories. By listening to customer preferences and team member ideas, stores can continuously refine their product selection and merchandising techniques.

Have impulse-purchase zones. Create dedicated areas near checkout and high-traffic areas to display small, high-margin products. “Retailers are using space at high-traffic destinations to merchandise high-impulse, high-margin items to help build their basket size,” DeMeyer said. He gave several examples from the industry. A decade ago, 7-Eleven began using the space under the front counter to place confections, gum, mints and salty and sweet snacks. Sheetz and Wawa have historically merchandised salty snacks under the foodservice counter to entice consumers to purchase sandwiches with chips.

In-queue merchandising has become a recent trend for convenience retailers. It does require adequate space to merchandise to customers as they approach the transaction counter. “The best results are seen by placing top-selling, core SKUs in secondary positions along the queuing lanes,” DeMeyer said. Circle K, Rutter’s and Sheetz have all implemented queuing lines, with snacks strategically placed along the path to the transaction area.

Self-checkout lanes are also an opportunity. “Retailers are placing high-impulse snack items near the self-checkouts to incentivize last-minute purchases,” DeMeyer said.

Cross-promote merchandise. Arrange related products together to encourage cross-purchasing, such as putting chips and dips together or breakfast items near the

Look at how other retailers merchandise products, what fixtures they use, what products they promote and feature and how they develop a customer experience.”

coffee service. This strategy not only increases sales, but also enhances the customer’s shopping experience by suggesting complimentary items. “Knowing the category affinities can help retailers understand what the best products are to place in each area,” DeMeyer said. For example, salty snacks have a strong connection to both the foodservice and fountain beverage areas, as consumers who buy a sandwich, slice of pizza or fountain drink are all likely to pair those items with a salty snack.

Ask outsiders. With many c-store chains being small, often family-run businesses, Arnold suggests tapping into supplier partners who have planogram merchandise software. “They can give you suggestions for improving customer flow and identify possible im-

pulse-purchase decision locations,” he said. Arnold also pointed out the value of looking at retailers outside of the convenience store industry. “Look at how other retailers merchandise products, what fixtures they use, what products they promote and feature and how they develop a customer experience,” he said. “These large retailers have teams focused on these merchandising components, and you can learn a lot by analyzing their choices.”

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

Cool New Products Guide

This advertorial-style guide of services and packaging appears monthly and is an information-packed tour of ideas and approaches that can change how consumers view your store or choose your brand. It spotlights the newest thinking in convenience and fuel retailing and gives you an advance look at ways of staying in front of industry trends. Products are categorized the same way we organize the Cool New Products Preview Room at the NACS Show each year in October— New Design, New to the Industry, New Flavors, Health & Wellness, Green (EcoFriendly), New Services and New Technology Products are considered “new” this year if they’ve been introduced since October 2021. The products featured here also can be seen in the Cool New Products Discovery Center at www.convenience.org/coolnewproducts

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Introducing Twizzlers Gummies

HIGH 5 FOR HEROES

Every July 24 (24/7 Day), the NACS Foundation unites convenience stores across America in recognizing first responders, medical personnel and American Red Cross volunteers who work around the clock, 24/7, to serve our communities. Now in its fifth year, the event unifies the collective efforts of tens of thousands of convenience stores that honor and thank the extraordinary commitment of hometown heroes with items like a hot cup of coffee, cold beverage or a breakfast sandwich.

To learn more about participating, contact Stephanie Sikorski at ssikorski@convenience.org, or visit 247Day.org.

Farm, Family, Food

Ozarks TravelCenter has a winning recipe for success

and a winning recipe for brisket.

BY AL HEBERT

Long before the concept of a convenience store existed, intrepid entrepreneurs like Frank Wilmoth operated service stations in small buildings. It was simpler times. Frank opened his small gas station more than 80 years ago. Four generations later, the Wilmoth family continues in the business on a scale that would astound great-granddad.

Frank’s son Dwight, Dwight’s sons Greg and Brent, and their sons Chase (Greg) and Eric and Kyle (Brent) combined to open six c-stores and two truck stops over the years. In 1980, Dwight led the first company awarded a Truckstops of America (now TravelCenters of America) franchise.

On April 25, 2023, the latest Wilmoth family operation, the Ozarks TravelCenter in Mount Vernon, Missouri, opened for business.

This 30,000-square-foot flagship store has 56 fueling stations with eight diesel pumps. “We had planned to build for years. We watched our competitors, Buc-ee’s and Wally’s, become successful with their large presence and a lot of different offerings like food, gifts and nice restrooms,” said Chase, adding, “we did something a little different by adding a professional drivers area.”

A FAMILY OPERATION

“We were a chicken strip and potato wedge company up until three years ago,” said Bryan Davis, foodservice manager. Food costs skyrocketed after the

…

If you talk to people who barbecue with passion, you will find they keep some secrets. Ozarks TravelCenter is no different. “Our trade secrets are more in the barbacue area. We make our own rubs. We use a dry rub for the brisket. When we get ready to cut it, the juices run out of it. It falls apart in your mouth. Our chopped brisket is as popular as our sliced,” Davis said.

The sliced brisket sandwich is the most popular menu item. There’s a reason. It’s fresh. “A lot of c-stores are forced to use frozen products. Ours is fresh and smokes for 12 hours,” said Davis.

pandemic and the company decided to implement a new supply chain strategy.

“We supplement as much meat as we can from our farm,” said Chase. Wilmoth Ranch started in 1998 and continues to expand. It’s been part of the supply chain for the family’s retail business for two years. “With how we’re doing our cattle, we can provide three or four months of brisket and quite a lot of hamburger. We’re kind of building our foodservice brand around our farm brand. ‘Farm, Family, Food’ is the motto,” Chase explained.

“When you take something out of the freezer, the moisture will evaporate as it thaws. It’s why companies that produce frozen food will flash freeze it. We want to go in with as much moisture as possible since it will sit in a hot case. We want to hold onto it for an hour before we pull it out. We keep our turns frequent. We have enough volume,” Davis explained. The volume that allows those quick turns comes from the three to four thousand customers who walk through the doors each day. “On the weekends, we have five or six thousand people come through each day,” he said.

In a store with a 10,000-square-foot sales floor and a customer volume that’s mind-blowing, it might be hard to remember that this is a family-owned business until you hit the dessert island. There it feels a bit like grandma’s been baking. There’s a reason.

Customers entering the parking lot can’t miss the obelisk. “There was a trail before Route 66. It was called the Ozark Trail. They had these in towns pointing for directions. Ours is a 66-foot-tall version of one of them. Our original truck stop was on Route 66,” explained Chase Wilmoth.

“We have my grandmother’s chocolate cake,” Chase said. “We have in-house baked goods with eight varieties of cookies.” The dessert island is centrally located so it draws customers to the middle of the sales area.

GETTING THE LOCALS IN

If a c-store is close to an interstate, it can be a challenge to get local customers to come in. Of course, the team at Ozarks TravelCenter has a plan.

“We do something different. We sell the meat by the pound, sliced brisket, sliced turkey, pulled pork and burnt ends. Locals come in for this. We have a good following in town,” said Davis, adding, “if someone is having a family gathering they can stop and get six pounds of pulled pork.”

“To get locals in, you have to treat it more like a restaurant than a c-store. You have to have a consistent product. In my previous job I traveled the country. The biggest problem was consistency and freshness. They wanted to cook food at eight in the morning and customers who came in later get subpar, less-thanfresh, almost day-old food. Fresh has made us successful. Our hot case is flawless. We never try to reuse anything that’s going to harm our consistency.”

Consistency is critical for a successful food program, but it’s not easy to maintain.

“It took me eight months to get everyone on the same page in all of the stores. It’s a repetition thing,” explained Davis. “The employee needs to do it seven or eight times. It’s burned into the brain

so they can do it consistently. We have how-to guides and procedure guides, so when in doubt they can look.”

STAFFING SUCCESS

When c-store operators gather, at some point the conversation will turn to staffing. Who has a winning strategy?

“We don’t want to be the place where people are working and they’re looking for a job that pays better. We want to be the place that pays better,” Chase said. “In my mind, it’s people skills, not past experience. If you can talk to people, be friendly and carry on a conversation, it’s better than experience. We can train people to be good employees.”

Davis likes the work environment.

“The Wilmoths treat the employees very well. People enjoy working here. It’s a drama-free zone. If you’re a single mom and you need to get off early to pick up a child from school, they accommodate that. We have our core employees. We have one or two that turn over, but that’s because we let them go if they don’t fit. It’s because we don’t want to damage what we have.”

Al Hebert is the Gas Station Gourmet, showcasing America’s hidden culinary treasures. Find him at www.GasStationGourmet.com.

Bryan Davis (left) and Chase Wilmoth

A central dessert island draws customers into the middle of the store.

93.6%

BY PAT PAPE

When Dee Post of Dallas takes her twin granddaughters for a weekend outing, she typically stops at a convenience store before the day is over and treats them to a frozen slushy-style drink.

“I get a small blueberry and drink right along with them,” Post said. “It reminds me of my summers growing up when my friends and I rode our bikes to 7-Eleven. And it turns my tongue blue, which the girls think is hysterical.”

Both popular and nostalgic, frozen dispensed beverages accounted for 5.5% of foodservice sales in 2022, the smallest foodservice category, and 1.60% of in-store sales. Frozen dispensed sales and gross profit improved over 2021, according to Jayme Gough, research manager at NACS.

“Frozen dispensed sales registered $3,977 per store, per month in 2022, 11.3% higher year over year,” she said. “Gross profit rose 5.6% in 2022 to $2,525 on a per store, per month basis. Finally, the gross margin percentage for frozen dispensed beverages experienced the largest decline among foodservice categories, falling 3.44 points in 2022 to 63.50%.”

Traditional slushy drinks remain the category’s mainstay, but the frozen dispensed menu has grown to include milkshakes, smoothies and blended iced coffee.

5.5%

Percent of foodservice sales from frozen dispensed beverages.

Source: NACS State of the Industry Report of 2022 Data

KEEP ’EM COMING BACK

7-Eleven introduced the Slurpee in 1966, and the retailer distributes millions of free frozen drinks on the chain’s designated birthday (July 11) each year. To keep Slurpee fans returning, 7-Eleven frequently offers new flavors.

“Our customers tell us that flavor is the number one factor when deciding which Slurpee to purchase,” said Ben Boulden, director of proprietary beverages at 7-Eleven. “And they look to us to deliver unique and innovative products. We love blending our beloved proprietary beverages with popular national brands. For example, this summer we’re introducing Fanta Dragon Fruit Zero Slurpee. It’s perfect for those who prefer a sugar-free option but also want to satisfy their sweet tooth.”

Two additional new flavors are Summertime Citrus and Sprite Lymonade Legacy.

“Slurpee is more than a frozen drink,” said Boulden. “It’s a lifestyle that creates moments and memories for our customers.”

Meanwhile, Kum & Go has teamed with ICEE to bring back colorful Red, White and Boom for July 4, “since it was such a hit with customers last year,” said Marco Calderon, senior category manager of beverage at Kum & Go. “We’ll also offer Llama-nade, a whimsical flavor name. It’s a traditional flavor—lemonade—but with a fun twist.”

Frozen drinks have traditionally been considered kid treats, but many adults indulge in them as well. “Our goal is to offer options for all—both kids and adults,” Calderon said. “We’ve expanded our frozen beverage offerings over the last year. Before, we primarily served traditional soda flavors, and we’ve since expanded to fruit-forward flavors like cherry, blue raspberry and tropical fusion (mango, pineapple, orange). We’ve seen a huge increase in the amount of frozen dispensed syrup that we’re moving through.”

TWEAKING DRINKING

Slushy shoppers love creating their own personal beverages by combining colors and flavors, according to Chad White, food service category manager at Rutter’s.

“Mixology and customization are big in this category. People fill up a cup with half of one flavor and then another, and add a flavor shot,” he said. “Four flavor shots can be dispensed from our machines—lemon, lime, cherry and vanilla.”

Sunny Sky Products is one manufacturer producing flavor shots to enhance both fountain and frozen beverages.

“We offer flavor shots in frozen format for the FBD multi-flavor unit,” said Isabel Atherton, director of marketing for Sunny Sky. “They’re available in flavors like caramel, French vanilla, hazelnut, mocha, blueberry and mango,

The better and more frequently the machine is cleaned, the better experience for your consumers and for you as an operator.”

CATEGORY CLOSE-UP FROZEN DISPENSED BEVERAGES

NACS CSX Benchmarking Database, Per Store, Per Month Sales

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and they provide customers endless possibilities for customizing their frozen beverage experience.”

The company also offers shots with healthy supplements, such as ginseng, ginkgo biloba and vitamin C. To help consumers design their drinks, Sunny Sky produces recipe cards and supporting POS materials, including danglers, to attract attention at the fountain.

ENERGY BOOSTER

Another supplier delivering energy at the fountain is Frazil, a division of Freezing Point of Salt Lake City, Utah. Last year, the company launched a Frazil energy slushy with caffeine, ginseng, taurine and B vitamins that’s available in four flavors: orange cream, smashberry, pina colada and lemonade. Attendees at the 2022 NACS Show saw it displayed among the Top 10 Cool New Products.

“It’s doing extremely well,” said Kyle Freebairn, CEO of Freezing Point. “Ener-

gy drinks in the c-store space have been on fire for the last few years, and there are no signs of that slowing down.”

Another recent Frazil intro is Café Tango, which comes in French vanilla and mocha and targets the discerning adult. “We’re obsessed with our flavor

We’ve seen a huge increase in the amount of frozen dispensed syrup that we’re moving through.”

Source: NACS CSX Benchmarking Database

Subcategory Data

Same-Firm Sample, Per Store, Per Month

profile,” he said. “It’s a premium product and costs a bit more, but consumers are consistently willing to pay it.”

Convenience operators receive Frazil beverage equipment at no cost. “We’ve developed technology that can track the machine through a cellular connection,” Freebairn said. “Our team in Salt Lake monitors the machines in real time. If there’s an issue with the equipment, they open a service ticket and arrange for a service call. Retailers receive a Frazil app that allows them to track store sales, flavor rotation and service from their mobile phones. It’s a turnkey program.”

ADULTS-ONLY SLUSHY

The Fine Dining Restaurant Group of Jackson, Wyoming, owns Bodega, a one-stop shop for locals and tourists at the base of Teton Village. Customers buy “sloshie” drinks in every type of weather. The 16-ounce sloshies are made from fresh juices and ice, plus a nip of vodka, gin or rum.

“We started selling sloshies when we opened in 2012,” said Neil Loomis, vice president of beverage for Fine Dining. “Now about five places offer them. Imitation is the sincerest form of flattery.”

Teton Village permits pedestrians to stroll and sip alcoholic drinks in public, and Bodega sells about 800 16-ounce sloshies on a busy day.

In areas where the law permits, Rutter’s stores offer a similar treat dubbed a “spiked slushy” in 20-ounce cups or a 64- or 128-ounce party bag. GetGo outlets sell frozen malt beverages made with premium brands, such as Seagram’s and Smirnoff. 7-Eleven doesn’t sell spiked drinks, but the chain’s website provides recipes for customers who want to make their own “hard Slurpee.”

THE SLUSHY SUMMARY

According to Adam Holler, product manager for cold beverages at equipment maker BUNN, the most important thing about a successful frozen drink

Source: NACS State of the Industry Report of 2022 Data

Expect to see dispensers evolve, incorporating exciting technology, such as remote Wi-Fi monitoring and new opportunities for customization.

CATEGORY CLOSE-UP FROZEN DISPENSED BEVERAGES

program is not flavor options or a shot of booze. It’s faithfully cleaning the dispenser every day.

“Make sure to disassemble the components and wash them. And don’t try to extend the life of the remaining product by adding more product to it,” he said. “The better and more frequently the machine is cleaned, the better experience for your consumers and for you as an operator.”

Frozen drinks have long been an important part of the c-store culture, said Melinda Pritchett, director of category strategy and innovation at The Coca-Cola Company. “They will continue to drive consumer interest, especially beverages with sensorial benefits, like hot and cold combinations using frozen

beverages in combination with spicy flavor shots or syrups,” she said.

And expect to see dispensers evolve, incorporating a variety of exciting technology, such as remote Wi-Fi monitoring and new opportunities for customization.

“From smaller in-store footprints to flavor shots, equipment is changing to meet product innovation and the needs of c-store operators, as consumers continue to seek out unique and novel flavors they can’t get elsewhere,” she said.

Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer. See more of her articles at patpape.wordpress.com.

Mixology and customization are big in this category.”

CATEGORY CLOSE-UP PACKAGED BEVERAGES

Liquid Gold

BY TERRI ALLAN

While inflation has been an issue in all categories, including packaged beverages, the category is nevertheless the No. 2 in-store gross profit contributor behind prepared food for the convenience industry. And as a leading motivator for in-store visits and a top basket builder, the non-alcoholic section of the cold vault offers plenty of opportunity regardless of the pricing environment.

“Following a dip in 2020 and rebound in 2021, packaged beverages continued growth in 2022,” said Jayme Gough, NACS research manager. But, as with virtually all categories, “the impact of pricing and inflation played a role in the performance of packaged beverages last year,” she added.

According to the NACS State of the Industry Report of 2022 Data, sales of packaged beverages in c-stores jumped 10.1% in 2022. “NACS

Packaged beverages are vital to c-store profitability, especially during inflationary times.

10.1% Year-over-year sales increase of packaged beverages from 2021 to 2022.

Source: NACS State of the Industry Report of 2022 Data

generated an inflation model which indicated that 7.9% of merchandise sales in 2022 were price driven, so outpacing that figure means true sales growth for the category,” Gough said.

“We’re seeing an increase in packaged beverage sales,” remarked Luke Gardner, co-owner of Colorado-based Miltons c-store chain, with three locations. “Even with inflation, these products are still selling. Consumers are habit-based.” Stephanie Johnson, manager of Pit Stop Express in Dorton, Kentucky, reported that customers “are still buying packaged beverages,” with all packaged beverage subcategories showing strength. While energy drinks are the store’s top sellers, Johnson said, “there aren’t any underperforming subcategories in the cold vault.”

DOUBLE-DIGIT GAINS

Indeed, nearly all packaged beverage subcategories posted increases in sales and gross profit dollars in 2022, Gough said, including the leading segments of carbonated soft drinks, energy drinks and sports drinks. Energy, sports and enhanced waters were particularly strong and enjoyed double-digit sales and gross profit gains during the period.

Energy drink sales in c-stores were aided by expanded household penetration last year, said Brenda Jones, senior vice president, business development and e-commerce at Zoa Energy. Zoa—co-founded by celebrity Dwayne “The Rock” Johnson—contributed to that expansion as the brand increased distribution in 2022.

“Zoa sales are driving category incrementality with approximately one-third of Zoa’s national sales growth coming from new consumers in the energy category,” Jones said. Earlier this year, the brand was “reinvigorated” with a new 12-ounce can and marketing campaign.

16.56% % of In-Store Sales

17.20%

$34,056 Avg. Monthly Sales/Store

$37,496

99.5% % of Stores Selling

99.9%

Source: NACS State of the Industry Report of 2022 Data

CATEGORY CLOSE-UP PACKAGED BEVERAGES

NACS CSX Benchmarking Database, Per Store, Per Month Sales

$43,823

The C4 energy brand is also likely to gain a greater presence in c-stores, thanks to Keurig Dr Pepper’s recent stake in its parent company. Kevin Martello, vice president of foodservice solutions and industry relations, convenience retail at Keurig Dr Pepper, said transitioning C4 to the company’s distribution network began earlier this year, and “c-stores continue to be priority outlets and should expect continued rapid expansion of C4 across the market,” as well as additional innovation for the product. Keurig Dr Pepper’s Core Hydration enhanced water, meanwhile, is resonating with Gen Z consumers, Martello added, helping the company strengthen its share position in the segment.

Energy drinks are going from strength to strength, c-store operators said. “Every day more and more people are doing energy drinks,” stated Chris Reitman, owner of Mighty Moose convenience store in Keene, New Hampshire, where the energy segment leads all other packaged beverages in gross revenue and is within striking distance of overtaking carbonated soft drinks on a volume basis. Increasingly, Mighty Moose customers are opting for energy drinks over coffee. “We sell energy drinks throughout the day, but most are sold before noon,” Reitman said.

Nathan Arnold, director of marketing at Englefield Oil Company, operator of 120 Duchess c-stores in Ohio and West Virginia, where packaged beverage sales jumped 13% last year, agreed that “more consumers are seeking caffeine in their drinks.” Marketers have responded with products like Fast Twitch, Gatorade’s first-ever caffeinated energy drink, with each bottle containing 200 milligrams of caffeine, plus electrolytes and B vitamins. According to Kate Garner, senior vice president, demand accelerator, at PepsiCo, Fast Twitch, introduced earlier this year, is already seeing “great success.”

HEALTH AND WELLNESS SPILLOVER

In addition to the blurring of subcategory lines, other trends within packaged beverages today include spillover from health and wellness considerations, new flavors and other innovations. “Health and wellness are macrotrends that were really solidified during the pandemic as consumers committed to self-care in a way that penetrated all aspects of their lives, including food and beverage,” said Jones. “Due to this, we’re seeing Zoa and other better-for-you energy drinks expanding the category and bringing in new consumers.” PepsiCo, meanwhile, is leaning into

Source: NACS CSX Benchmarking Database

CATEGORY CLOSE-UP PACKAGED BEVERAGES

Subcategory Data

Same-Firm Sample, Per Store, Per Month

the zero-sugar segment, and earlier this year rolled out a revised Pepsi Zero Sugar. “Zero sugar is a key growth area for our brands as demand grows for great-tasting zero-sugar cola options,” said Garner. Compelling new flavors always have a place in the cold box, retailers and suppliers said. “We see consumers seeking variety in packaged beverages, from new flavors that deliver unique experiences to new twists on classic favorites,” said Martello. Flavor innovations such as Dr Pepper Strawberries & Cream and Sunkist Watermelon Lemonade launched in the first quarter of 2023 and already have had a positive reception from consumers, the beverage executive noted.

Meanwhile, at PepsiCo, “our innovations are rooted in consumer insights,” Garner said, “and one trend we’re having fun with is an increased desire for products rooted in nostalgia.” This summer, MTN DEW launched the limited-edition Summer Freeze, a combination of the soda’s classic taste and red, white and blue ice pop flavors.

Major packaged beverage brands pulled back on innovation during the pandemic, Arnold from Duchess stores notes, “but

we’re seeing that is starting to change.” He and Gough applaud the innovations. “Packaged beverages are one of the biggest sales and profit centers for c-stores,” Gough remarked. “It’s important to stay on the lookout for innovation and any fun they can bring to the category.”

BASKET BUILDER

According to the 2022 NACS Convenience Voices survey, packaged beverages are the most common impulse purchase among in-store categories, with a 19.5% share. Moreover, packaged beverage purchases often include other items in the basket, most frequently salty snacks and candy. With the category offering big profit and basket-building opportunities, convenience stores often turn to effective merchandising tactics to further drive sales of packaged beverages. Pit Stop Express, Miltons and Mighty Moose rely on two-for deals to increase volume sales, particularly with consumers still reeling from inflation on a constant search for deals. “It’s our most successful weapon,” said Mighty Moose owner Reitman.

Arnold credits Duchess’s “deep dive into our consumers’ behavior by

Source: NACS State of the Industry Report of 2022 Data

Major packaged beverage brands pulled back on innovation during the pandemic.

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CATEGORY CLOSE-UP PACKAGED BEVERAGES

analyzing loyalty data” for enabling the chain to offer promotions that “our customers want.” For example, “we always strive to be first to market with a product,” he explained, and the chain promotes those products through features such as an “innovation shelf.”

Martello, Jones and Garner encourage retailers to tie in packaged beverages to bundled offers. “Marketing programs that incentivize food bundling are a great way to engage shoppers across dayparts, with not only packaged beverages but also salty snacks, candy and freshly prepared categories,” remarked Martello, the Keurig Dr Pepper executive. Second-

ary placements of packaged beverages can also serve as points of inspiration for shoppers, he said.

With continued concerns that the current inflationary environment will remain throughout the year, the packaged beverage category contribution to c-store basket building and profitability can’t be overlooked.

The High Cost of Hires

In convenience, one of the biggest human resource challenges is hiring great team members who will grow (and grow with) the business. With issues like ghosting—failing to appear for a first scheduled shift with no explanation—now spooking managers everywhere, hiring can be a daunting task. To help convenience retailers navigate this market, the NACS State of the Industry Compensation Report collects recruitment and retention metrics of full- and part-time sales associates as well as managers.

In 2022, the average cost to hire full-time associates was $1,196 and part-time associates $1,022, a slight decrease compared to 2021, when the costs were $1,424 for full-time sales associates and $1,049 for part-time associates.*

Cost to hire only accounts for costs incurred prior to an employee’s first shift, meaning they don’t take into account issues like ghosting. In 2021, 72.8% of full-time associates accepted an offer and 70.6% of part-time associates accepted an offer. However, the ghost rate was 23.3% for full-time associates and 20.3% for part-time associates, meaning about one out of every five people offered a position did not show up for their first shift. In 2022, 76.4% of full-time sales associates and 74.0% of part-time sales associates accepted an offer, potentially indicating more favorable conditions for employers, while the ghost rate also improved slightly overall: 18.7% for full-time sales associates and 22.8% for part-time sales associates.

*Note: the NACS Compensation Survey is not a same-firm sample.

OFFER ACCEPTANCE RATE

GHOST RATE

Hiring costs rise even higher when ghosting is taken into account.

COST** TO HIRE

**Costs incurred prior to employee’s first shift

Considered an essential guide for HR professionals for more than 40 years, the NACS State of the Industry Compensation Report ® is the industry’s premier compensation benchmarking report for the convenience channel. The digital report provides the latest data, trends and best practices on compensation, benefits, recruitment and turnover as reported by retail companies. The report can be purchased at www.convenience.org/store

Be bold robust &