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VIEWPOINT By Don Longo, Editorial Director
7-Innovation 7-Eleven maintains store count lead, but advances in innovation really set it apart
ince at least the 1950s, 7-Eleven has epitomized the convenience store industry as its largest player in the United States. The nearly 90-year-old convenience store retailer is still the No. 1 U.S. convenience store chain in store count, according to the exclusive 2016 Convenience Store News Top 100 (see story and charts, page 32). The CSNews Top 100 is still the most respected, longest-running and most comprehensive listing of the c-store industry’s largest chains. You can be forgiven if you’ve thought Irving, Texasbased 7-Eleven’s commanding unit count lead in the U.S. has been slipping in recent years, especially as For comments, please contact Don Longo, Editorial Director, Circle K, the now global at (201) 855-7606 or c-store brand for Canada-based firstname.lastname@example.org. Alimentation Couche-Tard, has added more than 1,800 U.S. stores in the past six years. In 2011, Circle K trailed the No. 1 c-store chain by more than 3,200 stores, ranking sixth on the Top 100, behind 7-Eleven and a handful of oil companies with licensed and franchised stores. In 2013, Circle K was still in fifth place, more than 4,000 stores behind the No. 1 retailer. But by 2015, Circle K had leap-frogged into the No. 2 slot, adding stores mostly by acquisition. You think 7-Eleven is worried about losing its
No. 1 ranking? For all its considerable growth, Circle K still trails 7-Eleven by 3,009 stores. To close that gap, Circle K would have to make two acquisitions in the U.S. of a similar size to its 1,500-store purchase of The Pantry in 2015. For all its commanding lead in store count, 7-Eleven hasn’t often been viewed as a particularly innovative retailer in the c-store industry. In the past few years, though, 7-Eleven has quietly transformed itself into one of the most progressive retailers in the convenience channel. The winner of CSNews’ 2015 Technology Implementation of the Year award for its popular mobile app, 7-Eleven has made innovation a focus of its business since at least 2013 when it created a 20-person innovation team to help the retailer become a convenient store defined more by the problems it solves both inside and outside the store than by the products it sells. Among the cutting-edge ideas we have seen from the retailer are: • KeyMe self-service key copying kiosks; • Belly loyalty rewards app; • DoorDash and Postmates delivery services; and • Partnerships with Zipcar and Amazon Locker. For a fuller look at how 7-Eleven is transforming itself from a traditional convenience store chain into a convenient solutions provider, turn to our exclusive 2016 Top 100 report.
CSNews has been recognized with more editorial awards, including the prestigious Jesse H. Neal Award for business journalism, in the past six years than any other industry publication. 2013 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2012 2013 Jesse H. Neal National Business Journalism Award Finalist, Best Profile, August 2012 2008 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2007 2010 Trade Association Business Publications Intl. Tabbie Awards Honorable Mention, Front Cover Illustration, October 2009 2009 Trade Association Business Publications Intl. Tabbie Awards Gold, Front Cover Illustration, February 2008 Honorable Mention, Best Single Issue, October 2008
2015 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2014 2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2013 2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2013 2013 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2012 2011 Silver Eddie Award, Folio: magazine Business to Business, Retail, Full Issue, October 2010 2011 Silver Eddie Award, Folio: magazine Business to Business, Retail, Best Single Article, October 2010 2009 Gold Ozzie Award, Folio: magazine Best Use of Illustration, October 2008 2009 Silver Eddie Award, Folio: magazine Business to Business, Retail, Full Issue, October 2008 2009 Bronze Eddie Award, Folio: magazine Business to Business, Retail, Website
4 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
2015 American Society of Business Publication Editors, National Silver Azbee Award Best Profile (long form), February 2014 2015 American Society of Business Publication Editors, Midwest Regional Gold Azbee Award Best Special Supplement, November 2014 2015 American Society of Business Publication Editors, Midwest Regional Silver Azbee Award Best Profile (long form), February 2014 2013 American Society of Business Publication Editors, Midwest Regional Bronze Azbee Award Best Editorial/Commentary, July 2012 2010 American Society of Business Publication Editors, Northeast Regional Silver Azbee Award Feature Article Design, November 2010
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A TOUCHDOWN BUD LIGHT is headed to the football field! • Over 60 million viewers tuned in to NFL games during the 2015 season.* • Among NFL viewers, Bud Light attracts 85% more shoppers than the next best selling brand.**
Grow your NFL season sales with BUD LIGHT. • 35% of Bud Light shoppers noticed a sports themed display on their most recent convenience visit.** • Bud Light had 2.7X more incremental sales than the next best selling brand during the 2015 NFL Season Kickoff.*** • Bud Light convenience shoppers’ total spend is 10% larger than the average beer shopper.** Sources *NFL& Nielsen Media Research **ABI Shopper Poll, 2013-2015 ***IRI, TUS Convenience, Week Ending 9/13/15
© 2016 A-B, Bud Light® Beer, St. Louis, MO
CONTENTS JULY 2016
VOLUME 52/NUMBER 7
Parker’s rallies for the most aggressive growth in the company’s 40-year history.
Greg Parker, president and CEO of Parker’s.
14 | Suitors Line Up for CST Brands
32 | Little Rumbles Consolidation continues, but this year’s CSNews Top 100 shows no seismic shifts. 40 | Redefining Convenience 42 | On the Move 44 | The Next Seismic Shift? OPERATIONS
46 | Help Wanted Staffing has become a hurdle for c-stores due to competition, pay and long hours.
16 | Good & Bad News for Retailers From Capitol Hill 18 | Eye on Growth 19 | Retailer Tidbits 20 | Supplier Tidbits 20 | People on the Move 21 | Competitive Watch
Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by Stagnito Business Information, 570 Lake Cook Rd. Deerfield, IL 60015. Copyright © 2016 by Stagnito Business Information. All rights reserved. Subscriptions: One year, $93; two years, $152. One year, Canada, $110; two years, Canada, $175. One year, foreign, $150. Payable in advance with a bank draft drawn on a U.S. bank in U.S. funds. Single copies, $10, except foreign, where postage will be added. Printed in U.S.A. Periodicals postage paid at Deerfield, IL, and at additional mailing offices. POSTMASTER: Send address changes to Convenience Store News, P.O. Box 1842, Lowell, MA 01853.
6 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
WHAT’S FRESH FROM McLANE KITCHEN?
Introducing McLane’s Fresh Produce+, the ﬁrst nationally-distributed produce solution for convenience stores. The Fresh Produce+ solution leverages industryleading cold chain capabilities to deliver a consistent fresh product mix to all customers, regardless of location. With easy-to-order shipments and customerdetermined markup, Fresh Produce+ makes produce simple and proﬁtable. For more information, visit mclaneco.com/goto/contactme
© 2016 McLane Company, Inc. All rights reserved.
Proud Partner of
CONTENTS 570 Lake Cook Road, Ste. 310, Deerfield, IL. 60015 (224) 632-8200 Fax: (224) 632-8266 www.csnews.com
Group Brand Director (330) 840-9557
50 | Putting a New Twist on Combo Meals Consumers are responding positively to the newly reinvented deals of late. FOODSERVICE
57 | Friendly Foodservice The friendliness of your staff is critical to the success of your store. CANDY & SNACKS
58 | Healthy Snacks, Healthy Profits From bars to fresh fruit to meat snacks, better-for-you snack sales keep growing and manufacturers are pumping out new products to keep up.
Ron Lowy email@example.com
EDITORIAL Editorial Director (201) 855-7606 Editor-in-Chief (201) 855-7608 Managing Editor (201) 855-7614 Senior Editor (201) 855-7618 Associate Editor (201) 855-7619 Assistant Editor (201) 855-7604 Contributing Editor (303) 741-3377 Contributing Editor (201) 280-2614 Art Director (224) 632-8245
Don Longo firstname.lastname@example.org Linda Lisanti email@example.com Brian Berk firstname.lastname@example.org Melissa Kress email@example.com Angela Hanson firstname.lastname@example.org Danielle Romano email@example.com Renée M. Covino firstname.lastname@example.org Tammy Mastroberte email@example.com Michael Escobedo firstname.lastname@example.org
DEPARTMENTS EVENTS • MARKETING • DIGITAL • RESEARCH • CIRCULATION
4 | 7-Innovation 7-Eleven maintains store count lead, but advances in innovation really set it apart. 12 | CSNews Online
22 | New Products
64 | Inspired Design Weigel’s drew inspiration from industry “friends” to develop its newest store.
Vice President/Custom Media Division Pierce Hollingsworth (224) 632-8229 email@example.com Production Manager Anngail Norris Strategic Marketing Director Bruce Hendrickson (224) 632-8214 firstname.lastname@example.org Director of Events Pat Benkar (973) 607-1330 email@example.com Director of Market Research Debra Chanil (201) 855-7605 firstname.lastname@example.org Audience Development Manager Shelly Patton (646) 217-1045 email@example.com List Rental The Information Refinery (800) 529-9020 Brian Clotworthy Reprints and Licensing Wright’s Media (877) 652-5295 firstname.lastname@example.org Subscriber Services/Single-Copy Purchases (978) 671-0449 Stagnito@e-circ.net
OUT & ABOUT
68 | NATO Show Takes Final Bow National Association of Tobacco Outlets hones in on legislative issues at last event.
OUT & ABOUT
Chief Revenue Officer
70 | A More Tech-Savvy, Convenient Future Eby-Brown previewed its new mobile app during Eby-Expo 2016.
Chief Brand Officer
Alan Glass email@example.com Kollin Stagnito firstname.lastname@example.org Chris Stark email@example.com Ned Bardic firstname.lastname@example.org Korry Stagnito email@example.com Joel Hughes firstname.lastname@example.org
President & CEO Chief Financial Officer
Chief Digital Officer
OUT & ABOUT
72 | Changes & Challenges in Technology Conexxus Annual Conference takes up EMV, skimming, automation and more.
CONVENIENCE STORE NEWS AFFILIATIONS
Premier Trade Press Exhibitor EDITORIAL ADVISORY BOARD
OUT & ABOUT
74 | TMA Conference Comes at the Right Time FDA’s final deeming rule, released just days earlier, took center stage. 90 | Getting to the Core
8 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
Brett L. Atherton Bolla Management Rick Crawford Green Valley Grocery Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired) Ray Johnson Speedee Mart
Jack Lewis Village Pantry LLC
Jonathan Polonsky Plaid Pantries Inc.
Kyle McKeen Alon Brands Inc.
Roy Strasburger Convenience Management Services Inc.
Richard Mione GPM Southeast Matt Paduano Nice N Easy Grocery Shoppes
Jon Urbanik CST Brands Inc.
The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.
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CSNEWS.COM TOP 5 Daily News Headlines The most viewed articles online.
1 | Hy-Miler Owners Sell C-stores, Exit Business More than 20 convenience stores in the Midwest are changing hands. An affiliate of Dunne Manning Inc. is acquiring District Petroleum Products Inc. & Related Entities, the Huron, Ohiobased parent company of 22 Hy-Miler convenience stores. 2 | CSNews to Honor First Convenience Foodservice Executives of the Year Kelly Buckley, vice president of fresh food innovation at Irving, Texas-based 7-Eleven Inc., and Rich Green, director of foodservice for Salt Lake City-based Maverik Inc., are winners of the inaugural Convenience Foodservice Executive of the Year awards. The pair of convenience foodservice leaders will be honored at the Convenience Foodservice Exchange, a new conference being presented by Convenience Store News Sept. 15-16 in Schaumburg, Ill. 3 | California Bill Would Remove Tobacco From C-stores California convenience stores would have one less sales category under a measure that’s currently moving through the state legislature. On June 2, the state Senate passed a bill that would restrict tobacco sales to cigar shops. This piece of legislation, known as SB 1400, was introduced by state Sen. Bob Wieckowski (D-Fremont). 4 | McDonald’s Tests No-Seating Store Model McDonald’s newest test model has only a walk-up window for ordering and picking up food, and two drive-thru lanes for cars. There is no indoor seating areas or ordering counters. The model is currently being tested in five states.
5 | Love’s Co-Founder Ranks Among Richest Self-Made Women Judy Love, who founded the Oklahoma City-based Love’s retail chain with her husband Tom, is tied in the No. 9 slot on Forbes magazine’s 2016 America’s Richest Self-Made Women list. She reportedly has a net worth of $1.9 billion. The second-annual ranking of America’s wealthiest, most successful self-made women includes 60 trailblazers.
Which of these emerging food trends has the most potential to be a c-store industry game changer?
ONLINE EXCLUSIVE Want to Know the Latest Food Trends? Visit a C-store
Consumer demand for convenience and immediacy will continue to deepen this year, and convenience stores seem poised to deliver elevated instant gratification. Along these lines, we are seeing a lot of success stories with new products in the channel. Looking for the latest product innovation? Just stop in at your local chain of convenience stores. Business has never been healthier, with new products showing up all over the place. Product launches have accelerated in the last year and new product development is robust. For more exclusive stories, visit the Special Features section of www.csnews.com.
The most viewed New Product online.
Farmer’s Pantry Meal Snacks
Farmer’s Pantry Meal Snacks were developed with proprietary natural spices and a proprietary slow-cooking method for the beef, chicken and turkey, which is blended together with slow-roasted, hearty and crunchy vegetables in an innovative double-pouched bag. Each meal snack is inspired by a traditional American recipe, according to the company. Varieties include: Herb Roasted Turkey with veggies, cranberries and stuffing; Flame Grilled Chicken with slow-roasted corn; Garden Harvest Chicken with vegetables; and Mesquite BBQ Beef with roasted corn and tomatoes. Farmer’s Pantry New York (888) 799-3072 www.farmerspantry.farm
12 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
INDUSTRYROUNDUP FAST FACT
Suitors Line Up for CST Brands 7-Eleven Inc. remains the No. 1 U.S. convenience store chain in store count, widening its margin this year to 3,009 more stores than No. 2 Alimentation Couche-Tard Inc. The previous year’s difference was 2,751 stores. Source: Convenience Store News Top 100 (page 32)
“There’s a lot more to smart growth than just building new stores, remodeling existing stores and acquisitions. We have to continue to recruit, train and incent the most talented people in our industry.” — Greg Parker, The Parker Cos. (page 24)
TravelCenters of America also finds itself with a takeover offer
ome of the biggest names in the convenience store industry are attracting the attention of buyers, with CST Brands Inc. drawing the most interest from bidders in recent weeks. Alimentation Couche-Tard Inc. and 7-Eleven Inc. parent Seven & i Holdings Co. Ltd. reportedly have submitted offers to acquire San Antonio-based CST. Couche-Tard, parent of the global Circle K brand, and 7-Eleven’s Japanese parent (who denied any interest) are not the only ones competing to purchase CST’s assets, however, according to news reports. Private equity firms Blackstone Group LP and Apollo Global Management LLC have also reportedly placed bids to purchase the parent of Corner Stores, as have Sunoco LP, Speedway LLC parent Marathon Petroleum Corp., and OXXO Mexico. In recent months, CST has been undergoing an “exploration of strategic alternatives to further enhance shareholder value.” Bonnie Herzog, managing director of beverage, tobacco and convenience store research at Wells Fargo Securities LLC, believes an outright sale of CST’s business is the most likely outcome of this strategic review process. Given there could be several suitors, “we expect a bidding war could ensue. We believe CST is a strategic asset that would be attractive to CoucheTard, Seven & i, and potentially others. A key opportunity
14 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
for a potential buyer would be to improve CST’s merchandise performance both in [same-store sales] and margins, which could be accomplished by a best-in-class acquirer to drive operational improvements and synergies, in our view,” Herzog said. Apart from CST, another company attracting private equity firm interest is TravelCenters of America LLC (TA). The retailer recently acknowledged it received a non-binding letter from a private equity firm in December asking to have confidential discussions about the possibility of the firm buying the travel center and Minit Mart convenience store operator. The Westlake, Ohio-based company’s board of directors responded to the firm — widely reported to be San Franciscobased Golden Gate Capital — stating that TravelCenters’ interests were best served by pursuing its existing business plans. “In its response, the TA board agreed with the private equity firm that TA’s assets, business model and competitive position have tremendous potential,” TravelCenters said in a statement addressing the takeover rumors. “The TA board further articulated its belief that TA has the management team and other resources appropriate to realize such potential. The TA board did not agree that the bulk of TA’s potential should be transferred to the private equity firm through a buyout.”
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Good & Bad News for Retailers From Capitol Hill Lawmakers propose blocking new overtime rule, repealing debit card swipe fee reform
hree weeks after the new federal overtime rule was approved, Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Labor Committee, and Sen. Ron Johnson (R-Wis.), chairman of the Homeland Security and Governmental Affairs Committee, introduced legislation to block implementation of the rule, which the lawmakers referred to as the “time card rule.” The new rule would lead to workers punching the clock when they come and go from work, and being unable to negotiate a flexible work arrangement, according to the senators, who were joined by 44 other legislators as co-sponsors of the legislation. The Department of Labor released a proposal in 2015 to increase the salary threshold under which employees qualify for overtime pay. The department’s final rule, released last month, more than doubles that salary threshold from $23,660 to $47,476. If passed, the Congressional Review Act legislation introduced by Sens. Alexander and Johnson would nullify the administration’s final rule and prohibit the administration from issuing a substantially similar rule without congressional approval. “There is no question this rule also hurts those American workers it’s intended to help, through reductions in their hours and diminished workplace flexibility,” Alexander said. “Workers who today are midmanagement or professional employees are not going to like it one bit when their employer tells them that
16 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
under this new rule, they’re going to be punching the time-clock when they go in and out of work.” The National Retail Federation (NRF) applauded the senators’ move. “Retailers are happy to see that our allies in Congress aren’t taking their foot off the gas when it comes to trying to stop [the Department of Labor’s] reckless overtime rules from going into effect,” said NRF’s Senior Vice President of Government Relations David French. Not so good news for retailers, though, is U.S. Rep. Randy Neugebauer’s (R-Texas) introduction of a bill, H.R. 5465, to repeal the section of the Consumer Financial Protection Act of 2010 related to rules for payment card transactions, including what he calls “the misguided debit swipe fee reforms introduced by the DoddFrank Act.” Debit swipe fee reform, also known as the Durbin Amendment, “represents an egregious example of the federal government picking winners and losers. Simply put, it represents crony capitalism at its worst,” according to Neugebauer. NACS, the Association for Convenience & Fuel Retailing, spoke out against the proposed bill. “NACS is deeply disappointed that Rep. Neugebauer has introduced a proposal to repeal debit swipe fee reform. The proposal would allow credit card Goliaths to resume price-fixing of debit card fees and add new costs for consumers and small retailers,” said Lyle Beckwith, senior vice president of government relations for NACS.
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eye on growth n Private equity firm Sun Capital Partners
Inc. acquired Admiral Petroleum Co. and Lemmen Oil Co. The deal consisted of 130 Admiral-branded gas stations and convenience stores, as well as nine Lemmen-branded c-stores with gas.
n Wawa Inc. plans to open 25
to 35 new stores in the greater Jacksonville, Fla., area. Work is slated to begin in spring 2017, with store openings taking place in late 2017. Ten more Jacksonville-area Wawa stores are expected to follow in 2018.
n TravelCenters of America LLC
acquired five Apollo Market convenience stores in Illinois from Illico Inc. This transaction marked Illico’s exit from the c-store business. The stores will be rebranded under TravelCenters’ Minit Mart convenience store banner and undergo improvements.
n Casey’s General Stores Inc. will soon
expand into Ohio. The move into the Buckeye State follows the retailer’s opening of its second distribution center, in Terre Haute, Ind. n Truman Arnold Cos. (TAC Energy) purchased Mutual
n Mirabito Holdings Inc. will pick up 31 c-stores and
gas stations in New York and Pennsylvania from Global Partners LP. The deal is expected to close in the third quarter.
18 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
Oil Co. Inc.’s unbranded wholesale refined fuels business. The acquisition allows TAC Energy to expand its fuel supply, logistics capabilities and support services.
retailer tidbits n Global Partners LP reached
a pact with an institutional real estate investor for the sale-leaseback of 33 gasoline stations and convenience stores for approximately $67 million. The sites are located throughout New England. n GPM Investments LLC
began rebranding Road Ranger convenience stores to its Fas Mart banner. GPM acquired 42 Road Ranger sites in the Midwest in March 2015.
the products it sells at stores in Pennsylvania after Gov. Tom Wolf signed the ability into law. The retailer spearheaded a grassroots campaign, “Free My Beer,” in 2010. n Rutter’s Farm Stores claimed first-place
honors for Best Coffee, Best Milk and Best Convenience Store in the “Best of York” contest. The central Pennsylvania chain also received third place for Best Quick-Service Restaurant and Best Wings.
n Love’s Travel Stops & Country
Stores opened its first franchised IHOP Express restaurant. The IHOP joins the offering at Love’s location in Sidney, Neb. n Sheetz Inc. is preparing to add beer and wine to
n QuikTrip Corp. inked a five-year fuel
management contract extension with Wex Inc. Under the extended agreement, the retailer can continue to market its co-branded and proprietary commercial credit card and debit card programs.
supplier tidbits n Convenience distributor Core-
Mark Holding Co. Inc. completed its acquisition of Pine State Convenience, a division of Pine State Trading Co. The purchase price was approximately $88 million.
n Altria Group Inc. filed a lawsuit against
the Food and Drug Administration over the agency’s latest regulation prohibiting use of the term “mild” for tobacco products. Altria’s operating company John Middleton Co. has the Black & Mild cigar brand.
n McLane Co. Inc.
launched Fresh Produce +, a supply chain solution that can provide fresh produce nationwide. The program works with McLane’s Premium Management Ordering Suite and Smart Handheld technology.
n Mondelez International Inc. launched a new advertis-
ing model. Mondelez will focus on forming new media partnerships to acquire, develop and distribute content properties that will build its power brands and generate revenue. n Professional
n Dover Corp. is buying Wayne Fueling
Systems Ltd. from its parent company, Riverstone Holdings LLC, for $780 million in cash. The transaction is expected to close in the second half of this year.
Datasolutions Inc. (PDI) received a majority investment from TA Associates, a private equity firm. Financial terms of the transaction were not disclosed. The first goal is to accelerate PDI’s growth.
people on the move n Jonathan Polonsky assumed the role of
president and chief operating officer of Plaid Pantries Inc. He previously served as chief operating officer and executive vice president. Polonsky joined the chain as executive vice president in July 2012. n BW Gas & Convenience Holdings LLC added several
new members to its team. Lisa Dodson will serve as pricebook manager; Kolby Jones and Greg Penman will serve as regional directors of acquisitions; Tony Sparks will serve as vice president of merchandising; and Rebecca Teiken will serve as senior information technology manager. n Parker’s hired Andrew R. Udinsky as
construction project manager, responsible for overseeing the construction of new Parker’s stores and the renovation of existing stores. He previously worked as a project manager for NorSouth Constructs. n Illico Inc. President Dave Golwitzer is leaving the con-
venience store industry after selling the Apollo Market
20 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
banner to TravelCenters of America LLC. Illico acquired Apollo Oil Co. and its Apollo Market c-stores in 1986. n Kimberly Bolin has been named president
and CEO of the Convenience Distribution Association (CDA). She has been acting in the roles on an interim basis since Feb. 19. Bolin is in her seventh year with CDA and was previously executive vice president. n Sunoco LP appointed Thomas R. Miller as
chief financial officer of Sunoco GP LLC, the general partner of Sunoco. Miller most recently served as senior vice president, CFO and treasurer of Cleco Corp., a position he was appointed to in 2013. n Eby-Brown Co. LLC added three sales and market-
ing executives to enhance its bench strength in the convenience distribution and foodservice markets: Scott Kolat as senior vice president of business development; Paul Pierce as vice president of national accounts; and Christina Dokos as vice president of marketing and communications.
competitive watch n 365 by Whole Foods Market
welcomed customers to its first store, which opened in Los Angeles on May 25. The next store is slated to open July 14 in Lake Oswego, Ore., and a third location will open this fall in Bellevue, Wash. As many as 10 additional 365 by Whole Foods Market stores are expected to open in 2017. n Brookshire Grocery Co. is
developing a new retail concept called Spring Market, which will compete against the convenience channel. The banner is set to debut this summer with stores from southern Louisiana to west Texas.
of coffee and espresso products. The new line follows the 2015 launch of cold brew coffee at all companyowned U.S. stores. n Subway is the 2016 Sandwich
Shop Brand of the Year for the sixth consecutive year, according to the Harris Poll 2016 EquiTrend Study. Dunkin’ Donuts secured the Brand of the Year title in the Coffee & Quick-Service Restaurant category. n On-demand delivery service startup goPuff
n Starbucks Corp. launched a new line of cold beverages
that will serve as the foundation for a new “cold bar”
received $8.25 million in venture funding. The 24-hour service operates in nine major cities and will use the new capital, in part, to launch in Portland, Ore.; Houston; Minneapolis; and Nashville, Tenn.
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WWW.CSNEWS.COM | JULY 2016 | Convenience Store News 21
NEWPRODUCTS Pierre Classic Grilled Cheese Sandwich
AdvancePierre Foods added the Classic Grilled Cheese Sandwich to its Pierre brand product offerings. The sandwich features three full slices of American cheese between two slices of thick, grilled bread — using both yellow and white American cheese for an upscale appeal, according to the maker. The sandwich is wrapped in a simple, brown, paper package that features a susceptor lining for microwave crisping. A full-length window allows for customer viewing. The Pierre Classic Grilled Cheese Sandwich is sold 12 to a case and has a 14-day refrigerated and ninemonth frozen shelf life. AdvancePierre Foods Inc. Cincinnati (800) 969-2747 advancepierre.com
5-hour Energy Protein Shots
As part of its continued effort to keep consumers energized, Living Essentials introduced 5-hour Energy Protein shots. Each 6-ounce bottle contains 21 grams of whey isolate and vegetable proteins, is 100 calories and has less than one gram of sugar. 5-hour Energy Protein is available in four flavors: Berry, Peach Mango, Grape Extra Strength and Berry Extra Strength. The regular strength varieties have a suggested retail price of $3.99, while extra strength varieties retail for $4.29. Living Essentials LLC Farmington Hills, Mich. (866) 960-1700 5hourenergy.com
Touchscreen ICEE Machine
Lindt Hello Emoji Coins
Individually wrapped, milk chocolate Lindt Hello Emoji Coins are the perfect way to show your emotions offline, according to the company. Each emoji coin features one of five different sayings accompanied by a fun smiley face — “My heart goes boom” with a heart-eyes smiley, or “Be happy” with a happy smiley. The coins have a suggested retail price of $1.29 each. Lindt & Sprüngli Inc. (USA) Stratham, N.H. (603) 778-8100 lindt.com
Brookside Yogurt Flavored Fruit & Nut Bars
The Hershey Co. expanded its Brookside portfolio with the addition of Brookside Yogurt Flavored Fruit & Nut Bars. The bars are made with real fruit, natural flavors, nuts and seeds, and are accented with a yogurt-flavored cream. This new product is gluten-free, non-GMO and contains no artificial flavors. The bars come in three varieties: Cranberry Blueberry with Citrus, Vanilla Fig, and Mango Pineapple. Brookside Yogurt Flavored Fruit & Nut Bars have a suggested retail price of $1.59. The Hershey Co. Hershey, Pa. (800) 468-1714 thehersheycompany.com
With The ICEE Co.’s new touchscreen ICEE machine, consumers can create up to 16 different flavor combinations by simply touching their favorite flavor icons on a bright LCD screen and then pushing a button from one freezing barrel. The frozen beverage machine additionally features a sanitary sealed product system using simple-to-install bag in box concentrates. ICEE is also introducing Handcrafted Chill flavor profiles that are made with cane sugar and “artisan” flavors like pomegranate and mandarin orange. The ICEE Co. Ontario, Calif. (800) 426-4233 icee.com
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Parker’s rallies for the most aggressive growth in the company’s 40-year history By Danielle Romano
reg Parker may have the title of president and CEO of The Parker Cos., operator of Parker’s convenience stores, but you can also call him “the field marshal.” “My job is to serve as the field marshal, to marshal the troops and to ensure that we have the financial wherewithal to sustain growth,” he told Convenience Store News in an exclusive interview timed around the company’s 40th anniversary celebration. Over the past four decades, Parker has led his troops from a one-store operation in Midway, Ga., to a highly regarded chain of 44 locations across Georgia and South Carolina. “In our part of the world, you stop at Parker’s,” the executive explained.
24 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
As the company celebrates its 40th year in the convenience retailing industry, Parker is now rallying his troops for the most aggressive growth in the company’s history, as it embarks on a five-year strategic plan that includes opening 17 new stores in just 13 months. “I am the perfect person to be in the convenience store industry because I’m impatient. … We’re growing organically, and we’re opening like crazy,” Parker said. Parker’s five-year plan is centered on growing sales and profits by 20 percent annually. Over the next four years, the company is looking at a 20-percent to 24-percent growth rate, though it has been trending ahead of its goals consistently for the past 14 years. Ultimately, Parker’s is poised to grow from a $500-million company to a $1-billion company. To get there, Parker is arming his troops with the
right mindset and tools for success. “Our plan involves being extremely strategic and intentional about growth. We’ve worked hard to get our infrastructure in place in order to support this aggressive growth. We’ve scaled up in our real estate, human resources, operations and marketing departments,” he said. Headquartered in Savannah, Ga., the small yet mighty Parker’s currently has 600-plus employees serving its 44 convenience stores across Georgia and coastal South Carolina. Part of Parker’s strategic plan is to continue to grow the brand in areas adjacent to its core market of Savannah, including in southern South Carolina, where Parker’s now operates 10 stores. Over the next 18 months, Parker’s plans to open six new stores in The Palmetto State. If you ask Parker what it takes to be successful, he’ll tell you it takes a “whole village,” and that the key to Parker’s success is its team — from store cashiers to corporate executives. “There’s a lot more to smart growth than just building new stores, remodeling existing stores and acquisitions. We have to continue to recruit, train and incent the most talented people in our industry,” he articulated. Parker’s executive team distinguishes itself from others in the
convenience channel based on one core characteristic: longevity. Among its earliest members: Teresa Hannigan, chief information officer, who joined Parker’s in September 1977 — about a year after the first Parker’s store opened. Amy Lane, chief operating officer, followed by joining Parker’s in July 1983 at age 15. Then, there’s Terri Heidman, chief financial officer, who came onboard in March 1995, and Brandon Hofmann, chief marketing officer, who joined the team in February 1997 at age 19. However, Parker knows combining longevity with fresh newcomers is what will give his business a competitive edge, so hiring new team members is an integral part of Parker’s growth strategy. Case in point: In recent months, Parker’s has welcomed an inventory control lead, construction project manager, director of finance and administration, and fuel administrator. “All of our team members have to work in harmony to facilitate our growth. … We’re focused on hiring the best and brightest people and training them to be successful. We want people who are hungry, nimble, wicked smart, curious and adaptable self-starters,” Parker told CSNews. To accommodate the still-growing Parker’s team, the retailer moved its corporate headquarters in February 2015 to the historic Philbrick-Eastman House
WWW.CSNEWS.COM | JULY 2016 | Convenience Store News 25
Across Georgia and South Carolina, Parker’s stores are known for their clean restrooms, fountain drink stations, gourmet coffee, and more.
overlooking Chippewa Square in downtown Savannah. The renovation of the historic mansion earned Parker’s a Georgia Trust for Historic Preservation Award for Excellence in Rehabilitation earlier this year, as well as a Historic Savannah Foundation Preservation Award in May 2015. “We want our team to feel excited about going to work every day,” Parker said. “We want to give them the technological solutions and the best opportunities to create a culture of excellence.” THE EVOLUTION OF PARKER’S
The first career path choice for Parker wasn’t the convenience store industry, but rather being a lawyer, he recalled. He attended the University of Georgia’s
How Parker’s Is Celebrating 40 Years
In its continuing quest to delight the consumer, Parker’s is commemorating the milestone of its 40th year in the only way it knows how: savings for its loyal customers. From May through August, the celebration includes: • In-store, customers can enjoy unlimited 40-cent refills on cold dispensed beverages, as well as pick up a special-edition insulated refill cup for $1.99, while supplies last. • The top 40 PumpPal customers will receive 40 cents off at the pump for one month. That’s a total of 160 customers over the four months. • One PumpPal member will be selected at random as the winner of a wrapped Jeep Renegade. No purchase is necessary, but every PumpPal transaction in-store and at the pump counts as another entry to win.
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undergraduate law program where he graduated with honors. But with a LSAT score just shy of the 600 needed for acceptance into the University of Virginia’s law school, Parker went back to the drawing board. At the time, his father was working in gas distribution for Amoco and had started construction on a c-store in Midway, Ga. With construction running longer than anticipated, Parker immersed himself in the completion of the project. In 1976, the first Parker’s store was born. “[My father and I] understand retail in a profound way,” commented Parker. “I knew instinctively at 21, I wanted something nicer than my competitors.” Forty years ago, gas was full-service, and there were no computers and no fountain drink machines available in the c-store industry, he reminisced. “Today, our stores are bigger, nicer, cleaner and brighter, with better architecture and landscaping.” Modern-day Parker’s is known for clean restrooms; signature items like Chewy Ice and fried chicken; fountain drink stations that offer 24 flavors, as well as freshbrewed iced tea and lemonade; and gourmet coffee customizable with an array of sweeteners and whiteners. All of this is to “delight the consumer,” according to Parker. “Today’s customer is more demanding and more discriminating. We’re focused on providing choices for the customer, to meet their changing needs.” FAST, FRESH & FRIENDLY
At the core of Parker’s evolution to meet the changing needs of customers is the brand’s promise of “Fast, Fresh & Friendly.” One way Parker’s is embodying this is with drive-thru locations. The company opened
For more information on Natural American Spirit visit EngageTradePartners.com or contact your local SFNTC representative. CIGARETTES Â©2016 SFNTC (3)
* BASED ON STR 2008 - 2015 FOR BRANDS WITH A GREATER THAN .05 SOM
Parker’s opened its first convenience store with a drive-thru in 2014. There are now four in the chain, with plans to add more.
the first of this concept in 2014 and there are now four in the chain. These locations offer drive-thru service for the majority of the products offered in-store. Taking the drive-thru concept a step further, Parker’s opened its first drive-thru with foodservice in Claxton, Ga., earlier this year. According to Parker, opening a site with drive-thru foodservice is a necessary part of its growth strategy in order to compete with quick-service restaurants (QSRs). Also, “Operation Foodservice” — one of the company’s “Wildly Important Goals” — is integral to the company’s profitability, outside of the usual commodities
“We’re focused on hiring the best and brightest people and training them to be successful. We want people who are hungry, nimble, wicked smart, curious and adaptable self-starters.” — Greg Parker, The Parker Cos.
of gasoline and cigarettes. “Everyone wants to get into our market segment, from Walmart to McDonald’s. What’s most impressive about QSRs is that a huge percentage of their sales go through drive-thrus,” Parker explained. “The two biggest gross profit dollar generators have been gasoline and cigarettes. Over time, gas consumption and cigarette consumption are diminishing. We’ve had to look for other ways to generate profit and create con-
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venience, so our focus has moved more into the area of foodservice. And drive-thru is a necessary step if we are going to compete with QSRs.” The Parker’s drive-thru with foodservice has a hot deli that serves breakfast, lunch and dinner daily. Some menu highlights are a full breakfast bar with eggs, bacon, sausage, cheese grits, breakfast casseroles and biscuits; Southern fried chicken fingers; homemade mac ‘n’ cheese; fresh vegetables; and daily specials. Sitdown dining is also available on-site. Parker’s plans on opening many more drive-thrus in the future, though the chief executive declined to give an exact number. Another way the retailer is embodying its “Fast, Fresh & Friendly” brand promise is the use of technology. Particularly in the “fast” department, technology enables the chain to do more in less time and has revolutionized the c-store industry, according to Parker. The newest way Parker’s is leveraging technology is a rollout of mobile payment, exclusive to Parker’s PumpPal members via the brand’s mobile app. PumpPal is Parker’s proprietary loyalty program that gives members an everyday 10-cents-per-gallon discount on fuel. The GPS-enabled mobile payment program saves customers up to 14 seconds on every transaction, compared to the current chip-and-PIN technology in credit cards. When using mobile pay at the fuel pump, PumpPal members pull up to a Parker’s store, open the app, enter the gas pump number, type in a personal PIN number, fuel up and go. The pump can even be turned on before getting out of the car. PumpPal members can also use Parker’s mobile pay on in-store items. The GPS technology automatically
identifies the store where customers are. They simply scan their barcode at the cash register, enter a PIN number and press “enter.” “This is the new frontier in mobile technology,” Parker said. “Our customers want to save time and money. At Parker’s, we’re helping them do both with our new mobile pay option. We complete more than 100,000 transactions every day, and this technology will help our customers pay faster than ever.” To develop mobile pay, Parker’s strategically united five different vendors, including Parker’s mobile app developer Zingon. Its mobile app, which launched in 2015, offers real-time information on the chain’s daily deals, gas prices, store locations and more. Jeff Bush, Parker’s director of fuel management, spearheaded the
Who Is Greg Parker?
Greg Parker, founder and CEO of The Parker Cos., is one of the convenience store industry’s most well-respected executives for his commitment to technology, innovation and giving back. He has been recognized as the Savannah Morning News Entrepreneur of the Year, Savannah Area Chamber of Commerce’s Entrepreneur of the Year, Convenience Store News Technology Executive of the Year, and recipient of the Distinguished Citizenship Award from the Grand Lodge Order of Elks in Savannah. Lo A father of three, Parker serves as chairman of the Mayor’s Business Roundtable and contributes to M tthe Mayor’s Crime Task Force. Through the years, he has served on the board of directors for the h Savannah Economic Development Authority, the S Savannah Area Chamber of Commerce and the Savannah Development and Renewal Authority. He’s also served as chairman of the Savannah Master Plan Task Force; on the Research and Development Committee for NACS, the Association for Convenience & Fuel Retailing; the BP Amoco Marketers Association; the foundation board at Memorial University Health Center of Savannah; and as a Retail Advisory Council member for PepsiCo Inc. and The Coca-Cola Co. Additionally, Parker is active in the Petroleum Marketers Study Group, contributes to the World President’s Organization, and serves on the Strategy Board for Amyris Biotech.
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Parker’s launched a mobile payment platform in late June.
development of Parker’s mobile pay. The company piloted mobile payment internally at all its store locations before making it available to PumpPal members in a full rollout to ensure that every Parker’s location could deliver on the brand’s “Fast, Fresh & Friendly” promise. THE LEGACY OF PARKER’S
As merger and acquisition activity in the convenience channel continues to be red hot, Parker remains calm, cool and collected with how this may affect the future of Parker’s. “M&A in the past two years doesn’t worry me,” he expressed. “It makes Parker’s more nimble.” Still, the retailer constantly assesses its outlook because the past two years have proven that timing means everything, according to the CEO. Today, Parker’s is interested in buying smaller one- to threestore operators. At the same time, the c-store retailer has two stores on the sales block that do not fit the brand’s model anymore. Looking ahead, Parker is certainly bullish about his business. In fact, “extraordinary” is the word he chooses to describe the future of Parker’s. “We keep getting better and better at what we do,” he told CSNews. “We are in strong financial shape. Our growth will include new-to-industry sites, as well as remodels and acquisitions. We have an incredible team and are excited about the future.” When people think of Parker’s convenience stores, the company’s leader wants the brand’s legacy to reflect its No. 1 priority: the customers. “The Parker’s legacy is that we gave back to our customers, fought for consumer rights, helped lower the price of gas in every market where we do business, and reshaped the industry in terms of technology as well as a superior customer experience,” he said. CSN
Little Rumbles Consolidation continues, but this year’s CSNews Top 100 shows no seismic shifts
A Convenience Store News Staff Report
look at this year’s Convenience Store News Top 100 ranking shows that consolidation in the convenience and fuel retailing industry is still very much alive and well. However, unlike last year when mega mergers — Alimentation Couche-Tard Inc. acquiring The Pantry Inc. and Speedway LLC acquiring Hess Corp.’s retail network — caused seismic shifts in the industry landscape, this year saw no such dramatic changes. 7-Eleven Inc. remains the No. 1 U.S. convenience store chain in store count and widened its margin this year to 3,009 more stores than CoucheTard, which climbed into the No. 2 spot last year and remains there now. The previous difference between the two was 2,751 stores. With 8,313 U.S. locations, 7-Eleven has significant influence over the entire c-store industry and how it is perceived by consumers. Some might say the retailer, in fact, has been redefining “convenience” in recent years with a breadth of new products and services added (see page 40). A 7-Eleven executive recently said instead of being
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TOP 20 COMPANY-OPERATED CHAINS Company
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Alimentation Couche-Tard Inc. Marathon Petroleum Corp. Casey’s General Stores Inc. 7-Eleven Inc. Sunoco LP CST Brands Inc. The Kroger Co. QuikTrip Corp. Wawa Inc. GPM Investments LLC Military Pilot Flying J Cumberland Farms Inc. Kwik Trip Inc. Sheetz Inc. TravelCenters of America LLC Kum & Go LC RaceTrac Petroleum Inc. Love’s Travel Stops & Country Stores Inc. Holiday Cos.
4,746 2,770 1,920 1,642 1,229 1,224 797 731 724 722 707 571 561 540 523 459 434 415 376 367
% oF totaL
89.5% 100.0% 100.0% 19.8% 42.4% 57.2% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 97.0% 100.0% 59.4% 100.0% 72.0%
Source: Company information; Nielsen TDLinx, April 2016; Convenience Store News Market Research, 2016
TOP 20 FRANCHISE/LICENSEE CHAINS Company
1 2 3 4 5 6 7 8 9 10 11 12 13 14t 14t 16 17 18 19 20
7-Eleven Inc. Shell Oil/Motiva Enterprises LLC BP North America Chevron Corp. Exxon Mobil Corp. Sunoco LP CITGO Petroleum Corp. CHS Inc. Phillips 66 Alimentation Couche-Tard Inc. RaceTrac Petroleum Inc. Tesoro Petroleum Corp. Clark Brands LLC Getty Realty Co./Lukoil NA LLC Sinclair Oil Corp. Krauszer’s Food Store Holiday Cos. Kwik Stop Northern Tier Energy LP Dunne Manning Inc.
6,671 4,830 3,766 3,508 3,365 1,667 1,553 1,423 1,222 558 284 278 153 148 148 144 143 141 112 93
% oF totaL
80.2% 99.6% 100.0% 92.2% 100.0% 57.6% 100.0% 95.3% 100.0% 10.5% 40.6% 100.0% 100.0% 80.4% 100.0% 100.0% 28.0% 100.0% 39.4% 24.9%
Source: Company information; Nielsen TDLinx, April 2016; Convenience Store News Market Research, 2016
a convenience store defined by the products and services in-store, 7-Eleven is evolving to being a convenient store defined by problems it solves — inside the store, outside the store, even meeting customers where they are. The CSNews Top 100 is the industry’s longest-running accounting of the largest convenience store chains by store count. The annual report is compiled in partnership with TDLinx, a service of Nielsen. TDLinx defines a convenience store as a small-format store of at least 800 square feet; with 500 to 1,500 SKUs; that operates at least 13 hours a day; and carries a limited selection of grocery items, including at least two of the following: toilet paper, soap, disposable diapers, pet food, breakfast cereal, tuna fish, toothpaste, ketchup and canned goods. Of course, there are some familiar names missing from this year’s Top 100 list. The past 12 months saw well-established regional convenience store chains, like Tedeschi Food Shops Inc. in New England and Flash Foods Inc. in the Southeast, bought by much larger chains. In the case of Tedeschi, it was 7-Eleven. For Flash Foods, it was CST Brands Inc. Interestingly, CST Brands (No. 12 on this year’s Top 100) is now in a state of flux with a strong possibility of the company going from buyer to seller. As of press time, there were multiple news reports about bidders lining up to buy CST’s assets as the company conducts a strategic review. Reported suitors include 7-Eleven, Couche-Tard, Speedway LLC and Sunoco LP. At 1,224 stores, a sale of CST could be the next seismic shift to change the industry landscape (see page 44). According to TDLinx store count figures, this year’s Top 100 chains operate 61,108 stores overall. These chains represent 39.5 percent of the industry’s total stores,
New Additions to the List 7-Eleven Hawaii Inc. Alliance Energy Corp. C.A.R. Enterprises Inc. Family Express Corp. Northern Tier Energy LP Southwest Georgia Oil Co.
Drop-Offs From Last Year Energy Transfer Partners LP Dropped down all its retail assets to Sunoco LP Gas Mart USA Inc. Acquired by GPM Investments LLC Tedeschi Food Shops Inc. Acquired by 7-Eleven Inc. The Jones Co. Acquired by CST Brands Inc. Warren Equities Inc. Acquired by Global Partners LP Weigel’s Stores Inc. Dropped in rank this year to No. 101
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and the top 10 chains alone represent 24.9 percent of the industry’s stores with 38,541 units. Once again, this year’s Top 100 offers several breakouts analyzing the rankings, including a spotlight on the Biggest Movers — companies that saw the most significant changes in rank year over year. The distinction of Biggest Mover
TOP 100 2016 2015 Rank Rank
Company, City, State
7-Eleven Inc., Irving, Texas
Total U.S. Store Count
for 2016 goes to regional chain Tri Star Energy LLC, the Nashville, Tenn.-based operator of Tri Star and Twice Daily stores. By opening 15 new stores in the past year, an impressive feat for a now 85-unit chain, Tri Star jumped up 19 spots in rank. The company is eyeing 100 stores in the not-too-distant future (see page 42).
Company-Operated Franchise/ Latest Year-End Sales* Primary Stores Licensee Stores ($000) Store Names
Circle K, Dairy Mart, Gas Express, Kangaroo Express, Petro Express, Presto, Quick Stop
TOP FRANCHISE/LICENSEE: Alon Brands LLC 2
Alimentation Couche-Tard Inc., Laval, Quebec, Canada 1
Shell Oil/Motiva Enterprises LLC, Houston
Chevron Corp., San Ramon, Calif.
Chevron, Chevron ExtraMile, Texaco
BP North America, Houston
Amoco, ampm, Arco, Arco Thrifty, BP, BP Connect, BP Shop
TOP FRANCHISE/LICENSEE: ampm
Exxon Mobil Corp., Irving, Texas
Exxon, Exxon On The Run, Exxon Tiger Mart, Mobil, Mobil Mart, Mobil On The Run
Sunoco LP, Dallas
APlus, Aloha Island Mart, Coastal, Menehune Food Mart, Optima, Sac-N-Pac, Stripes, Sunoco, Tigermarket
Marathon Petroleum Corp., Findlay, Ohio
Casey’s General Stores Inc., Ankeny, Iowa
Rich Oil, Speedway Casey’s General Store
CITGO Petroleum Corp., Houston
CHS Inc., St. Paul, Minn.
Cenex, Cenex Zip Trip, Cenex Ampride
CST Brands Inc., San Antonio 2
Corner Store, Flash Foods, Nice N Easy Grocery Shoppe
Kwik Shop, Tom Thumb, Turkey Hill Minit Mart, Loaf ‘N Jug
Phillips 66, Houston
The Kroger Co., Cincinnati
QuikTrip Corp., Tulsa, Okla.
Wawa Inc., Wawa, Pa.
GPM Investments LLC, Richmond, Va.
Apple Market, Breadbox, FasMart, Li’l Cricket, Next Door Stores, Scotchman, Shore Stop, Village Pantry, Young’s
Military, Arlington, Va.
Coast Guard Mini Mart, Marine Corps Shoppette, NEXCOM Mini Mart, Shoppette, Troop Store
RaceTrac Petroleum Inc., Atlanta
Pilot Flying J, Knoxville, Tenn.
Flying J, Mr. Fuel, Pilot Food Mart, Pilot Travel Center
Cumberland Farms Inc., Framingham, Mass.
Kwik Trip Inc., La Crosse, Wis.
Kwik Star, Kwik Trip, Tobacco Outlet Plus, Kwik Trip Express
Sheetz Inc., Altoona, Pa.
Holiday Cos., Minneapolis
TravelCenters of America LLC, Westlake, Ohio
Minit Mart, Petro Stopping Center, TravelCenters of America
Kum & Go LC, West Des Moines, Iowa
Kum & Go
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2016 2015 Rank Rank
Total U.S. Store Count
Company, City, State
Company-Operated Franchise/ Latest Year-End Sales* Primary Stores Licensee Stores ($000) Store Names
Love’s Travel Stops & Country Stores Inc., Oklahoma City, Okla.
Love’s Country Store, Love’s Travel Stop
Dunne Manning Inc., Allentown, Pa.
Choice, Express Lane, Freedom Valu Center, Joe’s Kwik Mart, One Stop, Rocky Top Market, Stop In, Uni-Mart, Zoomerz
Delek US Holdings Inc., Brentwood, Tenn.
Delta Express, Discount Food Mart, East Coast, Fast Food & Fuel, Favorite Market, Mapco Express, Mapco Mart
Stewart’s Shops Corp., Ballston Spa, N.Y.
Allsup’s Convenience Stores Inc., Clovis, N.M.
E-Z Mart Stores Inc., Texarkana, Texas
Northern Tier Energy LP, Tempe, Ariz.
Murphy USA Inc., El Dorado, Ark.
United Refining Corp. of Pennsylvania, Warren, Pa.
Country Fair, Kwik Fill, Kwik Fill & Smokers Outlet, Red Apple
Tesoro Petroleum Corp., San Antonio
Tesoro, USA Fuel Center, USA Gas, USA Mini Mart, USA Petroleum
SuperAmerica Murphy Express, Murphy USA
Maverik Inc., Salt Lake City
United Pacific, Los Angeles
Apro, C Stop, My Goods Market, Rapid
Western Refining Inc., El Paso, Texas 3
Giant, Howdy’s Foodmart
Alliance Energy Corp., Waltham, Mass. 4
Alltown, Fast Freddie’s, Mr. Mike’s, Xtra Mart
Jacksons Food Stores Inc., Meridian, Idaho
Jacksons Food Store
Fikes Wholesale Inc., Temple, Texas
CEFCO Food Store, Food Fast Store
Landmark Industries Inc., Houston
Timewise Food Store
Getty Realty Co./Lukoil NA LLC, Jericho, N.Y.
Getty, Kwik Farms, Lukoil
Thorntons Inc., Louisville, Ky.
United Dairy Farmers, Cincinnati
United Dairy Farmers
Meijer Inc., Grand Rapids, Mich.
Two Farms Inc., Baltimore
Meijer Gas Station
Giant Eagle Inc., Pittsburgh
Clark Brands LLC, Naperville, Ill.
Sinclair Oil Corp., Salt Lake City
Royal Farms GetGo
QuickChek Corp., Whitehouse Station, N.J.
Krauszer’s Food Store, Edison, N.J.
Krauszer’s Food Store
Convenient Food Mart Inc., Mentor, Ohio
Convenient Food Mart
Kwik Stop Inc., Plantation, Fla.
Hy-Vee Food Stores Inc., West Des Moines, Iowa
Hy-Vee Gas Station
Go Mart Inc., Gassaway, W.Va.
Go Mart Food Store
Englefield Oil Co., Heath, Ohio
Blarney Castle Oil Co., Bear Lake, Mich.
E Z Mart
Martin & Bayley Inc., Carmi, Ill.
7-Eleven Stores of Oklahoma, Oklahoma City, Okla.
Plaid Pantries Inc., Beaverton, Ore.
Little General Stores Inc., Beckley, W.Va.
Terrible Herbst Inc., Las Vegas
Town Pump Inc., Butte, Mont.
Town Pump Food Store
C.A.R Enterprises Inc./Anabi Oil, Upland, Calif.
2 Go Mart, Rebel Plus
True North Energy, Brecksville, Ohio
Sam’s Food Stores, Rocky Hill, Conn.
Chucky’s Food Store, Hess/Aldin Associates, Sam’s Food Store
Mountain Empire Oil Co., Johnson City, Tenn.
36 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
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Tillamook Country Smoker, Inc., P.O. Box 3120 Bay City, Tillamook County, OR 97107 - 800-325-2220 email@example.com
2016 2015 Rank Rank
Total U.S. Store Count
Company, City, State
Company-Operated Franchise/ Latest Year-End Sales* Primary Stores Licensee Stores ($000) Store Names
Panjwani Enterprises Inc., Houston
Admiral Petroleum Co., Coopersville, Mich.
Tri Star Energy LLC, Nashville, Tenn.
Twice Daily, Tri Star
Victory Marketing LLC, Ridgeland, Miss.
M.M. Fowler Inc., Durham, N.C.
Gulshan Enterprises, Sugarland, Texas
Handi Plus, Handi Stop
C.N. Brown Co., South Paris, Maine
FKG Oil Co., Belleville, Ill.
Spinx Oil Co. Inc., Greenville, S.C.
Mirabito Energy Products, Binghamton, N.Y.
Convenience Express, Mirabito
Buchanan Oil Co., Omaha, Neb.
Sampson Bladen Oil Co. Inc., Clinton, N.C.
Sunmart Inc., Spring, Texas
Express Mart Franchising Corp., Syracuse, N.Y.
Toot ‘n Totum Food Stores, Amarillo, Texas
Toot ‘n Totum
MFA Oil Co., Columbia, Mo.
Break Time, MFA Oil, Petro Card 24
Johnson Oil Co., Rock Falls, Ill.
Newcomb Oil Co., Bardstown, Ky.
Five Star Food Mart
Jet Pep Inc., Holly Pond, Ala.
Farm Stores Grocery Inc., Miami
Fast Stop, Bloomington, Ill.
Seven-Eleven Hawaii Inc., Honolulu
Gate Petroleum Co., Jacksonville, Fla.
100 Enmark Stations Inc., Savannah, Ga.
Southwest Georgia Oil Co., Bainbridge, Ga.
Inland Sun Stop, S&S Food Store, Sun Valley Market & Deli
Certified Oil Co., Columbus, Ohio
Family Express Corp., Valparaiso, Ind.
Flash Market Inc., West Memphis, Ark.
Stinker Stores, Boise, Idaho
Dandy Mini Marts Inc., Athens, Pa.
Dandy Mini Mart
MNS Ltd., Honolulu
Source: Company information; Convenience Store News Market Research 2016; Nielsen TDLinx, April 2016 *Latest year-end sales are stated where available from company information or public record. In all other cases, All Commodity Volume (ACV) is provided by Nielsen TDLinx. ACV is an annualized range of the estimated retail sales volume of all items sold in a store that pass through the retailer’s cash registers. Lottery sales are not included; gas sales are included where applicable. The Nielsen TDLinx ACV is an estimate — a directional measure to be used as an indicator of company size. 1 Only
Alimentation Couche-Tard’s U.S. stores are included in this ranking. Only CST Brands’ U.S. stores are included in this ranking. 3 Northern Tier Energy was acquired by Western Refining Inc. on June 23, 2016. 4 Alliance Energy is a wholly owned subsidiary of Global Partners LP. 2
ON THE CUSP (Nos. 101-110) 2016 ranK
101 102 103t 103t 105 106 107 108t 108t 110t 110t
totaL U.S Store CoUnt
63 62 61 61 60 58 57 56 56 55 55
63 62 53 61 60 47 57 56 56 55 55
Weigel’s Stores Inc., Powell, Tenn. CHR Corp., York, Pa. Sam’s Mart, Matthews, N.C. BFS Foods Inc., Morgantown, W.Va. The Wills Group, La Plata, Md. Southeast Petro Distributors Inc., Cocoa, Fla. Pester Marketing Co., Denver BellStores Inc., Massillon, Ohio Hollingsworth Oil Co., Springfield, Tenn. Byrne Dairy Inc., Montgomery, N.Y. Ricker Oil Co., Anderson, Ind.
Source: Company information; Nielsen TDLinx, April 2016; Convenience Store News Market Research, 2016
38 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
FranCHISe/ LICenSee StoreS
0 0 8 0 0 11 0 0 0 0 0
LateSt year-end SaLeS* ($000)
$167,700 $101,920 $170,820 $171,340 $185,900 $146,640 $178,880 $127,400 $102,440 $110,760 $203,840
prImary Store nameS
Weigel’s, Jug O Milk Store Rutter’s Farm Store Sam’s Mart, Xpress Mart BFS Foods Dash In Food Store Sunshine Express, Sunshine Food Mart Alta Convenience BellStores Sudden Service Byrne Dairy Ricker’s
ReDeFiNiNg CONveNieNCe 7-Eleven is transforming from convenience store chain to convenient solutions provider
-Eleven Inc. has advanced its business model so far that calling it a convenience store chain is really no longer the proper term. Perhaps, “convenient solutions provider” would be a better way to describe the operator, franchisor and licensor of 8,313 U.S. 7-Eleven stores that once again ranks No. 1 on this year’s Convenience Store News Top 100 list. Irving, Texas-based 7-Eleven sets out to not just serve customers, but to become an important part of the mosaic of their everyday lives. With this in mind, the retailer has a venture capital arm called 7-Ventures, as well a 20-person innovation team that was founded in 2013. The innovation team is responsible for integrating potential solutions into a testing environment and then scaling the viable ones into the larger overall organization. This process makes the team more flexible and improves its ability to identify potential solutions. “We have been meeting needs for 88 years by being a convenience store defined by products and services in-store,” a 7-Eleven executive said last year regarding the innovation team. “We now need to evolve to being a convenient store defined by the problems it solves — inside the store, outside the store, we meet people where they are.” The venture capital arm, 7-Ventures, has led to investments in several startups and other fledgling but more established companies. Examples include: KeyMe Inc., a self-service kiosk and digital solution intended to accurately and conveniently copy nearly every type of key; loyalty rewards app Belly Inc.; and delivery service providers DoorDash Inc. and Postmates Inc. 7-Eleven has implemented all of these company’s services in at least some of its stores. “Part of business development is to learn about new products, new retail models and new technologies that help improve retail traffic and engagement,” noted one 7-Eleven executive. “And a lot of that innovation is coming from startups.” Work by 7-Eleven’s innovation team also has resulted in partnerships with Zipcar and Amazon Locker. Regarding the Zipcar agreement, 7-Eleven customers
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in the nation’s capital can reserve vehicles by the hour or by the day at a rate that includes gas, insurance and 180 miles of driving per day. Eighteen vehicles, including a Volkswagen Gulf, Nissan Sentra and Ford Escape, are currently serving the Washington, D.C., community. “7-Eleven works with established and startup companies to provide new ways to bring convenient solutions to time-pressed consumers’ everyday needs right in their neighborhoods,” according to a 7-Eleven executive. “Our partnership with Zipcar will help customers who want easy access to vehicles, when, where and for how long they prefer.” The partnership with Amazon Inc. allows customers to have online orders delivered to Amazon Locker locations at more than 200 7-Eleven stores. Once delivered, customers can open the locker by scanning barcodes sent via email to their smartphones. This partnership benefits 7-Eleven and its store franchisees in two main ways: the rental fees it charges to have Amazon Locker take up real estate in the store, and increased foot traffic by customers who may opt to purchase in-store products while picking up their Amazon orders. “We’re going from thinking about the transaction to thinking about the journey,” 7-Eleven Chief Marketing Officer Laura Gordon said. “Customers are expecting us to fit into their lives.” — Brian Berk
ON the MOve
Tri Star Energy is focused on growth and improvement in its existing market
ri Star Energy LLC may not be the largest convenience store chain in the United States, but the 15 stores it added in the last year marked tremendous growth for a relatively small chain. Going from No. 91 on last year’s Top 100 ranking with 70 stores to No. 72 this year with 85 locations — a jump of 19 spots — makes the Nashville, Tenn.-based retailer the Biggest Mover of 2016. The growth of Tri Star, which operates the Tri Star and Twice Daily brands, stems from a combination of factors, including: the growth of the Nashville marketplace; strong leadership within the company; and its ongoing conversion of stores to the Twice Daily brand. The Twice Daily banner focuses on fresh food offerings, particularly hot and cold beverages, pastries, and hot and cold deli products. It also works to use locally sourced ingredients. “We will continue to grow, and the growth is very intentional,” Tom Woodard, director of communications for Tri Star, told Convenience Store News. “A true rebrand is taking place while this growth is going on, and the marketplace is responding very nicely.” The rebrand is not just a name change. Rather, it’s a call to action that invites customers to visit a Twice Daily store once in the morning for coffee and a breakfast item and then in the afternoon for a sandwich, afterschool snack or anything else fresh and fulfilling.
BIGGEST MOVERS 2016 ranK
72 39 80 38 25 59 93 80 80 84
91 23 90 28 34 67 100 87 87 77
Tri Star Energy LLC, Nashville, Tenn. Western Refining Inc., El Paso, Texas Buchanan Oil Co., Omaha, Neb. United Pacific, Los Angeles TravelCenters of America LLC, Westlake, Ohio Blarney Castle Oil Co., Bear Lake, Mich. Enmark Stations Inc., Savannah, Ga. Express Mart Franchising Corp., Syracuse, N.Y. Sampson Bladen Oil Co. Inc., Clinton, N.C. MFA Oil Co., Columbia, Mo.
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Tri Star began converting stores to the Twice Daily banner several years ago and is approximately at the halfway point in the process. Rebranding an existing store can take up to 90 days, while adding a new-toindustry location or razing/rebuilding takes six months to a year. The company is taking an “aggressively conservative” approach to converting stores, balancing speed with intelligent practices, according to Woodard. “As quickly as we can get them changed over, we are doing that,” he said, noting the public’s reaction has been “overwhelmingly positive,” with individual customers inquiring as to when a Twice Daily store will open up in their neighborhoods. Fueled by the confidence in its current store and business models, Tri Star has a goal of growing to 100 Twice Daily stores over the next three years. While the company won’t rule out breaking into new markets as it continues to expand, SpotS moved it is now working to be the best it can be +19 -16 within its current footprint. Not only does +10 Tri Star have “really great” distribution -10 points in middle Tennessee, but the retailer +9 also has “great relationships” in its com+8 munities, said Woodard. +7 “We love where we are. We’re very +7 committed to being a local operator in this +7 -7 area,” he concluded. — Angela Hanson
16 Alexis Drive Houston, TX
Reg Mid Prem
the Next SeiSMiC ShiFt? CST Brands’ 1,224 U.S. stores may be up for grabs
ince CST Brands Inc. spun off from Valero Energy Corp. in May 2013, it has been a force in the Convenience Store News Top 100, consistently knocking at the Top 10’s door. After holding steady at No. 14 for the past two years, the San Antonio-based retailer jumped two spots in rank this year to claim the No. 12 spot. A driving force behind this jump was CST’s purchase of Flash Foods Inc. and related assets from The Jones Co. The acquisition of the Waycross, Ga.based convenience store chain (ranked No. 48 on last year’s Top 100) marked the largest deal in CST’s relatively brief history.
The companies reached a $425-million agreement in November, and CST officially took ownership of the assets this February. Included in the transaction were 164 Flash Foods convenience stores in Georgia and Florida; 21 branded quick-service restaurants; a land bank of 15 real estate sites to build new-to-industry stores; a merchandise distribution company operating a 90,000-square-foot distribution center in Georgia; and fuel supply operations. “With our largest network purchase to date, we are excited to work with the great people at Flash Foods. The Jones family, along with its accomplished
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leadership team, has built a strong company with a customer-focused culture that aligns perfectly with CST’s core values and strategic vision for growth,” Kim Lubel, CST Brands’ chairman, president and CEO, said at the time. CST Brands sought out Flash Foods specifically because its c-stores are mostly 3,000 square feet or more, allowing the parent of Corner Stores to implement its highly successful made-to-order foodservice program, according to Lubel. The Southeast addition came a year after CST added multiple stores purchased in separate deals from Canastota, N.Y.-based Nice N Easy Grocery Shoppes, Houston-based Landmark Industries Inc., and Hudson, Wis.-based Erickson Oil Products Inc. However, all this growth has come at a price for CST — and we’re not talking the cost of the deals. In December, the company began to come under fire from investors Houston-based JCP Investment Management LLC and New York-based Engine Capital LP. Both expressed concern about its stock market underperformance since it was spun off from Valero. In an effort to ease shareholder concern, CST began a strategic review process in March to look for alternatives to further enhance shareholder value. “We believe there continues to be a disconnect between CST’s intrinsic value and the price of our common stock in public equity markets,” Lubel explained. “For this reason, our board of directors is initiating a process to explore and evaluate a wide range of strategic alternatives to maximize value for our shareholders.” Now, as a result of that review process, CST finds itself in an unfamiliar position — on the other side of a takeover deal. As of press time, the retailer reportedly had a number of suitors including Circle K parent Alimentation Couche-Tard Inc., 7-Eleven Inc. parent Seven & i Holdings Co. Ltd., Sunoco LP, Speedway LLC parent Marathon Petroleum Corp., OXXO Mexico, and private equity firms Blackstone Group LP and Apollo Global Management LLC. CSN — Melissa Kress
Truly eliminates odors and leaves a light fresh scent.
Staffing has become a hurdle for c-stores due to competition, pay and long hours By Melissa Kress
n March, Wawa Inc. announced a spring hiring spree, with plans to add more than 5,000 new associates to its 700-plus Wawa convenience stores in six states. The companywide hiring campaign set out to fill customer-service level positions and was billed as part of the Pennsylvaniabased chain’s overall commitment to provide job opportunities that can lead to fulfilling careers for community members across its operating area. “At Wawa, we exist to fulfill lives every day and part of this commitment means providing fulfilling job opportunities that can lead to fulfilling careers for the more than 26,000 Wawa associates who are part of our team,” said Dave Filano, manager of talent acquisition at Wawa. “As we continue to expand and grow, we’re excited to fill these 5,000-plus positions with people who will quickly become part of the Wawa Way.” While the retailer was specifically looking for individuals to join the team for the busy summer season, it also sought people who might be interested in the start of a career at Wawa. Filling summer positions may sound easy — after all, school is out and students in college and high school
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are itching to have some extra cash in their pockets. However, recruiting for seasonal help has its challenges for convenience stores. The No. 1 challenge: competition. “They are competing with traditional retailers [staffing up from a seasonality perspective] as well,” said Steven Kramer, CEO and co-founder of WorkJam, an employee engagement platform founded two years ago that is currently working on a project with a global c-store chain. “A university student who is looking for a job is either going to look at a restaurant or a retail shop, and sometimes a convenience store may not be as attractive as some of those opportunities — or work that may be outside like gardening or other services,” he explained. With the competitive hiring landscape being an obstacle not only during the peak summer selling season, but year-round, c-store retailers must consider how they can stand out from an employee management perspective. For instance, some c-stores are exploring flexibility in schedules as a way to start managing their hourly workers better. Instead of working a set schedule every week, a company may set aside a percentage of shifts
“People today want to have a quality of life. They want to be on vacation; they want to take the holidays off. In the retail world and in the convenience world, you can’t always do that.” — Mark Millman, Millman Search Group
as an open schedule that people can pick up, according to Kramer. Another way retailers can stand out in the hiring landscape is by reinforcing community ties and rewarding employees for certain values and behaviors. “There are a lot of different ways these retailers are looking to differentiate themselves because it really is challenging, particularly from a convenience store perspective,” Kramer said. “Is it the first place people are going to look for a job? Are they going to look at a retail shop in the mall before they look at a convenience store?” Failing to keep an open dialogue with seasonal employees during the off season also leaves c-store retailers, and all retailers for that matter, behind the curve. “That is a big piece that is missing in all these retail segments — around continuity of a temporary workforce and maintaining that relationship. They are not collecting personal email addresses for a lot of these workers, so it is difficult to maintain that system. But through technology, you are able to continue that dialogue,” Kramer noted.
their own initiatives to raise wages. Earlier this year, Wawa and fellow Pennsylvania-based convenience store chain Sheetz Inc. entered into the wage race. Wawa increased its starting pay to $10 an hour for customer service associates, and all associates received a 5-percent increase — on top of their annual merit increase. Wawa’s shift supervisors start at $13 an hour and its assistant general managers start at $17 an hour. Altoona, Pa.-based Sheetz announced it was investing more than $15 million to raise the wages of store employees across the company, without cutting back on hours for full-time employees. “There is a lot of competitiveness on wages right now in the market. You see a lot of major retailers moving to a $15 hourly wage and you also see different states passing legislation to boost their minimum wage up,” Kramer said. “This is putting tremendous pressure on retailers. Margins are being squeezed, the market is very competitive in finding resources, and they don’t have a pot of gold to start paying people a lot of money.” Along with Wawa and Sheetz, Atlanta-based RaceTrac Petroleum Inc. recently boosted benefits and salaries for its employees based upon the results of an employee survey. Enhanced benefits range from parental and bereavement leaves for Store Support Center employees to increased compensation, staffing restructure and discounted meals for its retail members. “It is changing a lot of discussions we are having with retailers that are looking for ways to deal with these changes. It’s a very scary environment right now with retailers,” Kramer added.
Show Me The Money
The push for a higher minimum wage is also presenting challenges. “Fight for $15” efforts are active in cities and states across the country. California and New York are on the forefront with legislation in place to hike their hourly state minimum wages to $15 over the next few years. Some retailers are being proactive and introducing
The hiring hunT
Wawa is not the only convenience store retailer to go on a hiring spree this year. In June, Enon, Ohio-based Speedway LLC began holding job fairs in a bid to hire more than 500 new employees across several markets. A variety of field wawa recently held a hiring campaign to fill 5,000-plus new positions companywide.
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wawa believes its commitment to “fulfilling lives every day” includes providing fulfilling job opportunities.
positions are available, including customer service representatives and foodservice specialists. Speedway is also seeking to fill entry-level leadership positions, such as shift leader trainees and co-manager trainees. Meanwhile in Indiana, Ricker’s Convenience Stores has its own plans to add roughly 200 new part-time and full-time associates, mostly to support expanded foodservice programs in its 56 stores. Last summer, the Anderson, Ind.-based chain increased its wages for all entry-level positions to $9 an hour, $1.75 above Indiana’s state minimum wage, while employees working the third shift saw an increase to $10 per hour. After one year of employment, the pay of a Ricker’s employee automatically increases another $1 per hour. As for why there seems to be an intensifying hiring hunt in the industry, one reason may be turnover, which is certainly not a new problem for convenience stores. “There are a lot of people dropping out of this industry and there is turnover in this industry, period. And that will probably never change,” said Mark Millman, president and CEO of Millman Search Group, a recruiting firm. “The industry is really a combination of retail and foodservice. A convenience store is really a retailer and fast-food restaurant based on what we see today. As we look at both of these industries separately, those are the two highest turnover industries in the country, by far, for the past 30 years.” As the convenience store industry grows into more of a quick-service restaurant (QSR) industry and the traditional QSR industry is expanding at the same time, there is more demand for this type of worker, added Jon Cohen, senior executive recruiter at Millman Search Group. What’s behind the turnover? Millman cites the hours, as most c-stores are open 24/7, 365 days a year. The pay scale is also on the low end compared to other management positions. “People today want to have a quality of life. They
want to be on vacation; they want to take the holidays off. In the retail world and in the convenience world, you can’t always do that. You’re restricted. If you have a family, you are missing dinner several nights a week,” said Millman. “If they can find an opportunity that pays more with better benefits and a better quality of life, many times they jump ship for the new opportunity.” He also pointed out some employees still do not look at a convenience store job as a career, but rather simply a part-time job as they work their way through college. Of course, that’s not the reality. “The sophistication
“At Wawa, we exist to fulfill lives every day and part of this commitment means providing fulfilling job opportunities that can lead to fulfilling careers.” — Dave Filano, Wawa Inc.
involved is the highest it’s ever been. You now need better-quality people to manage, lead, motivate, train, develop and build a business,” Millman said. “They are starting to show there is a career here. These companies are growing. Many of them do billions of dollars a year. It’s a big business and it’s almost recession proof.” For c-store retailers on the hiring hunt, it’s important for them to recognize that how you go about finding employees is changing, meaning they have to change their processes. “The old school or traditional model of putting a help wanted sign in your window or running an ad on Craigslist is not attracting the caliber of individual that you want,” Cohen said. “How do we go out and source the right individual? It’s more about a proactive, go-out-and-find-them approach than waiting for them to come through the door.” CSN
WWW.CSNEWS.COM | JULY 2016 | Convenience Store News 49
Category Trends + Insights from
Putting a New Twist on Combo Meals Consumers are responding positively to the newly reinvented deals of late
ombo meals are being reinvented in the quickservice restaurant (QSR) and retail channels, and consumers are responding. Combo meals, a relatively new offering at convenience stores compared to traditional quick-service restaurants, increased by 11 percent to 565.5 million servings in the year ending February 2016 compared to the same period a year ago. After several years of declines, combo meal visits rose by 1 percent at quick-service hamburger restaurants in the period and the entire increase was driven by combo meal deals. Historically, QSRs have grown their business by offering lower-priced By Bonnie Riggs eats in the form of combo meals and Restaurant Industry Analyst, The NPD Group value menus. Over the past few years, www.npd.com instead of value meals/menus, the focus was more on quality and higher-priced menu offerings, partially due to menu inflation that was eroding profit margins. With high food inflation lessening in the latter half of 2015, the time was right to revisit value offerings.
QSR chains have added a value proposition of one kind or another to their menus. Starbucks, new to the combo meal game, offered a limited-time $8 Power Lunch deal in late May of this year. NEW COmbO mEal DEalS RESONatINg WIth CONSumERS
These new combo meal deals seem to be resonating with consumers. For the first time in a long while, combo meals ordered at QSR hamburger outlets for lunch/dinner are on the rise. Combo meal visits in the hamburger category for these main meal occasions rose 3 percent for the year ending January
Lunch/Dinner Traffic by Meal Type (QSR Hamburger Category)
YE January 2015
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Non-Deal Combo Meals
COmbO mEalS WIth a NEW SpIN
Combo meals, which previously were three menu items offered at a bundled price, had also been declining in popularity for several years because consumers wanted more choices and the ability to customize. Over the past several months, one chain after another has introduced value-oriented combo meals that offer choices. Wendy’s introduced a 4 for $4 Meal. McDonald’s launched the McPick 2 for $2 offering, then changed the offer to 2 for $5 with a different product offering, and recently unveiled a program that enables its restaurant operators to customize the McPick 2 menu to include items popular with their local customers. Burger King followed McDonald’s initial combo meal launch with a 5 for $4 deal, and a number of other
YE January 2016
Combo Meal Deals
Source: The NPD Group/CREST
Lunch/Dinner Combo Meal Traffic (QSR Hamburger Category)
YE Jan 07
YE Jan 08
YE Jan 09
YE Jan 10
Source: The NPD Group/CREST
YE Jan 11
YE Jan 12
YE Jan 13
YE Jan 14
YE Jan 15
YE Jan 16
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• 14g of protein * Drink Chobani™ Yogurt Drink: 22g sugar; other adult yogurt drinks: average 33g sugar per 10oz serving.
Category Trends + Insights from
2016 compared to the same period a year ago. Simultaneously, visits to the QSR hamburger category for lunch/dinner were down 3 percent. COmbO mEal DEalS DRIVE tRaFFIC
The lift in combo meal visits at QSR burger outlets is being driven by consumers indicating their combo meal purchase was a deal offer. Combo meals purchased on a deal rose from 6 percent for the year ending January 2015 to 7 percent during the same timeframe in 2016. While this may seem like a rather small increase, when we consider the size of the QSR hamburger category, this increase translates into a substantial number of combo meal purchases on a deal. Specifically, 567 million combo meal visits were reported on deal for the year ending January 2015. For the year ending January 2016, that number rose to 670 million servings — an 18-percent increase. Further, combo meal visits that were not reported as part of a deal held fairly steady at 2.8 billion for the
When competing against your local quick-service restaurants, adding combo meals to your menu may provide new perspectives on value. year ending January 2016 vs. the same period of 2015. While not increasing in overall volume, this trend was an improvement from prior years. The strong response to combo meal deals once again suggests that given the right promotional offer at the right time, dealing can generate positive traffic growth. Value will continue to be an important concern for consumers. When competing against your local quick-service restaurants, adding combo meals to your menu may provide new perspectives on value. CSN
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For more information: www.storebrands.info/summit2016 52 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
Why Your Dairy Case Can Be Your Key to Profitability
our dairy case may be underleveraged as a profit performer, according to new research conducted by MilkPEP (Milk Processor Education Program). Not only is milk a trip driver for your current shoppers, milk is one of the key opportunities to drive true profit, maximize sales and even attract new shoppers. Yet, the dairy case has seen dramatic changes in recent years with the proliferation of new product segments competing with milk for space. Milk has lost ground, and this may be negatively affecting your profitability, according to the research. In most categories, profit trails off as space grows, but milk is the exception.1
With strong milk industry momentum, including new product introductions, powerful national marketing programs and elevated scrutiny on the competitive milk alternative market – the time is right to maximize the dairy case.
How Can You Maximize Your Milk Profit TODAY? Shelf space in the dairy aisle is precious. To get it right and reinvigorate your dairy case, it’s critical to make every foot count. That means considering how you optimize the product mix, and especially how you manage fluid milk – typically the largest component of the case. Why there’s an opportunity: Milk far outperforms on space: Generates 18 percent of dairy department profit from only 10 percent of the space.1
potential milk profit since 2008.2 You can capture this opportunity by ensuring milk is in stock, focusing on days-of-supply, increasing milk variety, targeting the right shoppers and merchandising milk with in-store messaging. Read on for more information on how you can make the most of your dairy case.
About the Research The new, in-depth MilkPEP research included in-home interviews, shop alongs and leveraged national IRI data and Willard Bishop’s SuperStudy™ for Grocery and C-store, which includes the most comprehensive information available on total store performance in the supermarket industry today. The research uncovered key growth opportunities, best practices and insights that have the potential to maximize your dairy case sales and ultimately, drive profit. Contact MilkPEP at info@MilkPEP.org for more information. Watch our webinar here: www.progressivegrocer.com/MilkPEP_June2016
Milk drives trips + profit: Leads the dairy case in sales productivity. Baskets with milk are 23% more profitable than those without.1 Milk has huge merchandising potential: The dairy case and fluid milk often lack the in-store interest of other categories. Yet, milk’s benefits are in-line with consumer demands, and MilkPEP programs offer significant support for program messaging opportunities in-store. Milk has an uncaptured C-store opportunity: Sales have shifted to other channels, and C-stores have lost more than $1 billion in potential milk sales and $321 million in
The Grocery Opportunity:
Four Ways to Optimize Milk Sales, Store Profit
ilk is a key driver of shopping trips. As an item bought by more than 95 percent of households1, its availability (or lack thereof) impacts shoppers’ overall image of your store. Ensuring you have variety in your milk case, proper space allocation and merchandising has the potential to drive greater store profitability. According to MilkPEP’s proprietary research, milk: Drives Shopper Trips: Milk trips to grocery average 21 times per year – far more than other top categories.1 Drives Shopper Basket Rings: Large baskets with milk are 23 percent more profitable than those without milk.3 Drives Your Bottom Line: Out of 227 total store categories, milk ranks No. 2 in true profit1
MILK IS A TRIP DRIVER. IT DRIVES MORE THAN 21 TRIPS TO THE GROCERY STORE PER YEAR
There are four ways you can invigorate your fluid milk business at grocery: 1. Remedy the out-of-stock issue: In many stores, milk’s space reductions have led to out-of-stocks and ultimately, lost sales and decreased shopper satisfaction.4 Because of milk’s fast turns and extremely low days-of-supply, roughly half of the milk category must be restocked every Friday, Saturday and Sunday – resulting in higher labor costs. Midday restocking is required but costly, and not always realized; restocking alone is not the solution.5 The research shows that retailers lose when underspacing milk – and overspacing other parts of the dairy case. When you add in extra stocking labor, retailers lose $1,800 to $3,000 per shelf, per year by converting that last milk shelf to milk alternatives.6 It is time to “reset” the dairy case and balance inventory and days of supply to ensure milk stays in stock. 2. Increase days of supply for more profit: One of the most important ways to ensure milk stays in stock is to focus on days of supply. Conventional milk’s last / worst-performing shelf – captures three times the profit of almond milk’s last shelf. Yet, currently milk’s days-of-supply is lower than almost any other product in store. On average, milk gallons only have 1.5
days of supply and half gallons 2.3 days of supply, compared to almond milk at 5.9 days of supply and soy at 7.8 days of supply.4 To get to the right amount of supply, retailers should ensure there’s adequate shelf space, most importantly, in addition to ensuring back stock is adequate and restocking approach is sound. To meet demands, the research recommends: 3-4 days-of-supply for traditional milk (which translates to 1-2 days on the weekend to ensure consistent availability during heavier shopping days)12 5-7 days for value-added milk due to variability of demand from week-to-week, uniqueness of items (some do not have substitutes) and often limited back stock and supply chain7 While space recommendations should be customized to each store, the research suggests four categories that should be reviewed for potential reduction in favor of more fluid milk facings: dairy alternatives, juice, yogurt and refrigerated baking.3 3. Make space for new product introductions: Shoppers demand options and variety in their food choices – milk is no exception. Milk companies have been focusing on innovation and new product introductions, which means that retailers need to make more space on shelf for more milk SKUs. New product introductions satisfy a variety of shopper needs and wants. Over the past four years, lactose-free milk sales have increased 42 percent, health enhanced products are up 73 percent, single-serve flavors are up 30 percent and organic milk is up 12 percent. Taken together these represent nearly $500 million in sales.7 These value-added products now represent a sizeable part of the category — 21 percent of dollar sales — and an opportunity to increase milk sales.7 New dairy milk product introductions should be evaluated against other new products within the dairy case and not the established milk gallon. Comparing to the established category leader may misrepresent the potential value of a new introduction. The best way to asses profit potential is to compare the new product opportunity to similar value added products.3 4. Optimize milk merchandising: Shopper insights suggest that communicating the benefits of milk — not just price — could drive increased purchase. In particular, focusing on milk’s protein advantage — 8 grams in every 8 ounces — and chocolate milk’s benefits as a post-exercise recovery drink. Leveraging MilkPEP’s nationally supported retail marketing programs and support from your milk suppliers, has the potential to help optimize your dairy case, and drive incremental sales.
The C-Store Opportunity:
Three Ways to Win Back Milk Volume
t’s not just grocery that has potential to optimize milk sales. C-stores have lost ground to other channels for milk sales, resulting in a loss of more than $1 billion in potential sales and $321 million in potential profit since 2008.2 And while milk space is some of the tightest, MilkPEP’s new research shows it is also some of the most profitable in C-stores.2 Key insights show the negative profit trend can be reversed.
There are three sizable opportunities for growth for milk at C-store:
C-stores need eight to 10 SKUs and in some cases, more.8 2. Missing target shoppers like Millennials and those looking for recovery after exercise. C-stores are losing ground with Millennials. Millennials are gravitating to mass-merchandisers and dollar stores for flavor varieties and added value milk (recovery, added protein/calcium, etc.).9 For shoppers who have shifted to other channels, about half say it’s because they can’t find what they want — single serve, right fat level — at their C-store.10
Shoppers who choose chocolate milk for recovery are a valuable 1. Missing variety. Consumers expect variety, particularly for C-store audience. And current chocolate milk drinkers are quick trips when they look to C-stores over grocery stores to likely to actively grab their milk and seek out product at get on their way a C-store. quickly. NineChocolate milk ty-four percent of as a post-workout milk purchases are quick trips and recovery beverIN LOST MILK SALES AND C-stores have a age is growing competitive adin popularity. In vantage over other fact, the sales of IN LOST PROFIT SINCE . retailers, if they flavored milk are stock appropriately up 8 percent from to deliver the valast summer and riety their shoppers are demanding. Milk sold at a C-store isn’t there’s an opportunity to grow that even more.8 Shoppers say one-size-fits all and C-stores are not leveraging their natural understanding the recovery benefits could prompt even more proposition – convenience and variety.3 purchase – beyond just opting for chocolate milk as an occasional treat.2 3 Considerations for milk options include: 3. Minimal space causing out-of-stocks and lost sales Brands: national and local and profit potential. Milk is a strong profit generator in limitSize: single-serve and larger format ed space. In fact, milk delivers the highest profit per linear foot Fat levels: whole, 2 percent, 1 percent, fat-free – specifically single-serve and gallons at neighborhood C-stores and single-serve at on-the-go C-stores.2 Flavors: white, chocolate, vanilla, strawberry and others
$ BILLION $
Value-added: added protein/calcium for athletes, organic or lactose-free Other new product introductions To meet shopper demands, the research recommends that
Findings show that milk generates $21 per linear shelf foot (adjusted gross profit per linear foot in neighborhood C-stores) which is higher than many other categories. However, milk’s allocation is much smaller than those beverage categories which it outperforms.5
Willard Bishop 2015 Grocery SuperStudy™. IRI C-store Channel 2015 and Gross Profit (GP) Margin from Willard Bishop 2013 C-Store SuperStudy™. 3 2015 Willard Bishop, LLC shopper database representing 371 stores, 20 million households, 600 million transactions, across 21 states. 4 IRI Panel, Bishop Shopper Database, Prime Consulting. 5 Costs $10-24/store/week Projected by Willard Bishop and Prime Consulting based on time studies, labor costs of $24.40 an hour, 2015 sales rates, incremental work for extra stocking and range of days involved each week
FMI/GMA Study and Bishop SuperStudy™ values. Source: IRI 2014 New Product Pacesetters. 8 IRI C-store Channel 2015. 9 National Consumer Panel, Nielsen/IRI Latest 52 Weeks Ending 11/29/2015. 10 Proprietary Chocolate Milk Consumer Study, MilkPEP. 11 Excludes chocolate milk. 12 News America retail data 2016. 13 MilkPEP proprietary data from national grocery channel.
RECHARGE MILK SALES
And sTOPPING POWER AT THE DAIRY CASE MilkPEP offers powerful national campaigns and retail opportunities that you can leverage to drive shopper interest and deliver on expectations.
U.S. Olympic Committee Partnership11 The Milk Life Campaign, showcasing nutrient-rich white milk, is proud to support Team USA through the Rio 2016, PyeongChang 2018 and Tokyo 2020 Olympic and Paralympic Games. As an official sponsor, MilkPEP, along with milk brands across the country are creating powerful marketing campaigns and strategic in-store opportunities to engage shoppers and drive to the milk case. You can activate in store by working with your local milk suppliers. National Campaign – includes breakthrough advertising, digital content, marketing support and more. Retail Promotion – Milk’s Raise A Glass shopper promotion is live in 17,000 stores nationwide and online. The promotion gives shoppers the opportunity to enter for a chance to win over 1,000 prizes, including a U.S. Olympic Training Center Experience, when they purchase white milk and submit receipts. On-pack / In-store Milk Brand Plans – milk companies are customizing on-pack creative and in-store plans to feature official Milk Life / U.S. Olympic Team marks.
The Great American Milk Drive The Great American Milk Drive is a first-of-its-kind partnership between Feeding America, milk companies and dairy farmers to deliver gallons of milk to families in need. Including check-out programs, POS and turnkey assets, there are many ways to customize the program to benefit your store. The program is fully optimized for retail and more than 12 million servings of milk have been delivered to food banks. This charitable giving program:12 Supports local families in need
Delivers category sales – 15MM incremental gallons sold in 2014 Drives new shoppers – 14% of voucher redeemers are NEW shoppers and 18% are new milk shoppers Increases basket ring – 73% of voucher redeemers purchased an additional item Builds community connection
My Morning Protein My Morning Protein emphasizes the importance of getting the 25-30 grams of protein before noon that many nutrition experts recommend, and shows how milk’s natural high-quality protein can help shoppers reach that goal. You can use My Morning Protein POS and other materials to cross-merchandise milk with other high-protein foods. MilkPEP research shows that communicating milk’s protein benefits as a morning “pairing” drives demand. In fact, a 2016 test delivered a 1.3% sales lift and 19 incremental gallons per $1 spent on in-store advertising.13
BUILT WITH CHOCOLATE MILK MilkPEP’s BUILT WITH CHOCOLATE MILK campaign inspires athletes to perform at their best and purchase lowfat chocolate milk for post-workout recovery. More than 20 scientific studies support the benefits of recovering with the high-quality protein and nutrients in chocolate milk after a tough workout. The national campaign has driven strong momentum, awareness and is improving perceptions of chocolate milk for recovery among adult exercisers, and is driving more sales across channels. The campaign is generating even more shopper demand by showcasing it as the “Official Recovery Beverage of USA Swimming.” You can take advantage of this excitement by stocking your dairy case with chocolate milk and utilizing MilkPEP assets.
Prepared Food + Hot, Cold, Frozen Dispensed Beverages
Friendly Foodservice The friendliness of your staff is critical to the success of your store
onvenience store customers have historically reported that location, price, store appearance, beverage options and the appearance and “freshness” of food offerings is top of mind when choosing a store. However, one of the most critical factors of c-store selection that is rarely quantified — and a serious drawback in the segment — is the attentiveness and friendliness of shopper-facing staff. A news article last year told of a Starbucks employee working in the Chase building in Manhattan who was asked by a customer to join the bank as a customer service representative because she By Paul Clarke, Q1 Consulting “endeared” herself to many of the regulars. Bank executives were so impressed she always knew their name and beverage when they entered the store that they hired her. While this is not a common occurrence, this feelgood story supports the well-known adage, “Treat your customers the way you want to be treated.” Whether you run four stores or a chain with more than 100 units, the friendliness and attentiveness of your staff often determines if a customer returns. In our latest research, some of the top reasons consumers give for picking a c-store are order accuracy, service speed and in-store cleanliness — all in the 80-percent range. What’s also apparent is that friendly service ranks just as high
Top Five Reasons for Selecting a Convenience Store for Grab-and-Go Foods 85%
Cleanliness of Store Price of Prepared Foods
Source: 1,000 consumers, Q1 Consulting, May 2016
(and notably, rates higher than prepared food prices). Many implications and actions can be drawn from this finding. First, ensure employees dealing directly with customers are helpful, friendly and responsive. This means frontline staff must first feel valued, which trickles down from the top of the organization. Using Starbucks as a best-practice example, the coffeehouse chain provides its full-time employees with health care options, 401ks and college tuition assistance. Secondly, employee friendliness can create a “halo” effect and raise the perception of a number of factors. For example, if you have an employee who builds rapport with regular customers and makes new customers feel special, their perceptions of price, location and store safety increase because customers see a higher value in frequenting a store that welcomes them. Finally, while pursuing a customer-centric culture may be challenging, the results can mean sustained patron loyalty, differentiation and word-of-mouth marketing that is not easy to replicate. CSN Paul Clarke is business development director for Q1 Consulting. He brings more than 20 years of foodservice experience, including 12 years delivering consumer insights to chain restaurants and foodservice suppliers. He can be reached at firstname.lastname@example.org. Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.
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CANDY & SNACKS
Chocolate + Non-Chocolate + Gum + Salty Snacks
Healthy Snacks, Healthy Profits From bars to fresh fruit to meat snacks, better-for-you snack sales keep growing and manufacturers are pumping out new products to keep up By Tammy Mastroberte
stores and came up with requirements such as clean ove aside three meals a day. Snacking is taklabels, no artificial colors and flavors, and no presering over. Not only does snacking make up vatives, GMOs, trans fat or high fructose corn syrup, half of all eating occasions, but 92 percent she explained. New products include Krave jerky, of people snack at some point throughout the course Creative Snacks Co. trail mixes, Deep River of an average day, according to food and beverSnacks chips, Annie’s Homegrown bunny age consultancy The Hartman Group. And snacks, Pirate Brands’ Pirate’s Booty, and when it comes to snack choices, the fastestEnvirokids cereal bars. growing segments are those considered “We also have fresh-cut fruit in a to-go healthy and convenient. container and yogurt, and also pairing it with Better-for-you categories in convenience granola,” Hasse said. “This is just the stores are up 8.2 percent in dollar sales vs. “This is just the beginning. We are going through item last year, compared to sweet and savory by item and looking at the ratiocategories at 4.2-percent growth, beginning. We are going nalization of why it’s in the store according to Nielsen scan data for through item by item and if it meets our new criteria. We the 52 weeks ended Dec. 26, 2015. still have a lot in the pipeline and Driving the better-for-you growth in and looking at the are looking at things like Lara bars convenience stores is nutritional bars, up 16.2 percent year over year; fresh rationalization of why it’s and KIND bars.” Since making these changes, the fruit, up 14.1 percent; and yogurt, in the store and if it meets snacks category at Swiss Farms up 8.6 percent, Nielsen data shows. our new criteria.” is doing really well, she reported. “Consumers are much more Customers are very happy, espeeducated and interested in ingredi— Audrey Hasse, Swiss Farms cially with the kid-friendly options. ents, and they are the ones driving the better-for-you options,” said Audrey Hasse, a registered The fresh fruit, Pirate’s Booty and Deep River chips are doing particularly well. dietician and certified personal trainer who works with Swiss Farms, a Delaware-based drive-thru convenience chain with 13 locations. The retailer brought her in WhAt IS heAlthY? three months ago to help the chain bring healthier The word “healthy” is subjective, for sure. So, options to its locations. what do consumers actually consider healthy at this “Consumers want higher protein snacks, bolder fla- moment in time? The definition varies, but accordvors, and sweet and salty combos, and we are trying ing to a recent national consumer study by Packaged to provide what they are asking for,” Hasse said. “I Facts, 35 percent to 40 percent of consumers are was brought in to look at what was currently offered most interested in reduced sugar, followed by lower and move forward with the new philosophy.” or reduced salt, and then minimized fat, said Norman Swiss Farms set new criteria for what is sold in its Deschamps, a market analyst working with Packaged
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CANDY & SNACKS
Chocolate + Non-Chocolate + Gum + Salty Snacks
Facts. After that, consumers are looking for GMO free, gluten free, soy free and allergen free. “Everybody has a different idea of what is healthier and that is the biggest trick. But even a little bit healthier is good enough most of the time because people are still looking to indulge,” Deschamps noted. Within the salty snacks category, popcorn, veggie chips and even beet and sweet potato chips are being marketed as healthier alternatives to traditional potato chips. Meat snacks and nuts also fall into the healthier category for many consumers, according to Deschamps, as do different types of bars, including protein, energy and those with limited ingredients. “Meat snacks, nuts and fruit snacks are growing quite a bit faster within c-stores than any other channel, so even when people are looking for something quick, they are still looking for healthier,” he said. “Also, ready-toeat popcorn is huge and it looks like the growth is going to continue. The analysis on new brands and companies putting out ready-to-eat popcorn is easily twice the number of all other salty snack categories.” General Mills Inc.’s recently released 2016 CrossChannel Health Attitudinal Study — a nationwide online survey of 2,100 people combined with an in-person mobile survey of 100 adults aged 18 to 64 — uncovered that health is a secondary driver of food purchases in convenience stores, but the motivation to buy a healthier snack is strongest and “most pure” in the morning. “The morning is all about wanting healthy snacks that replace a traditional breakfast,” said Kelly Kees, global consumer insights researcher at General Mills. “As the day goes on, people’s motivations tend to shift to more enjoyment/comfort snacks to satisfy cravings or tide one over until the next meal.” Additionally, the study found the top ways c-store shoppers determine the healthiness of a product is its ability to keep them full and satisfied, followed by the amount of protein it has and whether it has recognizable
ingredients. Too many calories and too much sugar top the list of attributes designating the least healthy options. “When it comes to what types of healthier foods consumers are seeking out, we’ve learned that today’s c-store shoppers’ definition of health is more about wanting mainstream healthy products vs. extreme healthy products,” said Kees. “C-store shoppers’ definition of ‘better-for-you’ is basic — freshness, low fat, whole grain, protein, etc. This is more widely accepted than niche ingredients and benefits.” MANufACturerS reSpoND
As better-for-you and healthy snacking continues to grow, manufacturers are responding by creating new products, and expanding their brands. Snyder’s-Lance recently bought Diamond Foods and launched Clearview Foods, a new snack food division with a focus on developing better-for-you snacking options, including the Snack Factory Pretzel Crisps, Eat Smart and Late July Organics brands, according to Deschamps. Meanwhile, The Hershey Co. purchased Brookside chocolate, offering chocolate-covered fruit; and Mars Inc. created its goodnessknows snack bars. Additionally, all of Mars’ chocolate products are no more than 250 calories and, moving forward, the company is shifting focus to provide more options below 200 calories per serving. “Consumers know it’s not just about calories; it’s the quality of those calories that really counts,” explained Larry Lupo, vice president of sales for the grocery, convenience and drug channels at Mars Chocolate North America. “To fit this need, our goodnessknows snack squares are a perfect combination — a better-for-you snack that truly tastes good at 150 calories with no artificial colors or flavors.” Mars also offers an option for consumers seeking a combination of fruit, nuts and dark chocolate with its
Snacks Differ from Meals in Three Distinct Ways
SMALLER SIZE Even if the smaller size happens at a mealtime, it is often thought of as a stand-in until the next “large eating”
BETWEEN TIMES Snacks intuitively fall in the gray areas between socially/culturally assigned”mealtimes”
Source: Hartman Food & Beverage Compass database analysis, The Hartman Group
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LOW PREP & CLEANUP Snacks typically involve little or no construction or preparation; any heating is brief and unattended
CANDY & SNACKS
Chocolate + Non-Chocolate + Gum + Salty Snacks
Dove Chocolate Fruit and Nut and Dove Fruit products. The KIND Snacks company built its brand by offering healthy and convenient products, with a line of bars including: KIND Fruit and Nut, made of fruit and nuts bound with honey; KIND Plus, with an added boost of nutrients, antioxidants and fiber; KIND Nuts and Spices, where each bar has 5 grams or less of sugar; and Strong and KIND, with 10 grams of protein from whole almonds, seeds and pea crisps. “Twelve years ago, our intention was to create a nutritious and convenient product, and it just so happens that all these years later, we are now very much ‘on trend’ as a healthy snack that matches current consumer preferences,” Jon Israelite, vice president of business development, told Convenience Store News. The company continues to innovate, recently adding KIND Breakfast to its portfolio, available in a two-
can see the “simplicity” of the product before they purchase it, said Kees. “The most popular better-for-you segments in c-stores feature products with inherent health benefits like protein and fiber,” she explained. “Nuts, seeds and trail mix lead growth in salty snacks and whole-grain wellness bars remain popular in alternative snacks. As we look to the future, we are focused on expanding our portfolio of bars with simple, recognizable ingredients.” SellINg heAlthY
With so many products on the market and a steady stream of new items being launched, retailers have a lot to choose from for stocking their shelves with better-for-you and healthy snacks — be it bars, fresh fruit, yogurt, meat snacks or salty snacks. Packaged Facts’ Deschamps recommends following
Snacking Occasions Snapshot*
PHYSICAL Snacking that provides sustenance, energy and balanced nutrition
EMOTIONAL Snacking that fulfills desire for variety, comfort and distinction
CULTURAL Snacking that tests and blurs the boundaries of [food] culture
SOCIAL Snacking that facilitates gathering and building relationships
*Which represents your feelings while you were deciding what to have on this occasion? Source: Hartman Food & Beverage Compass database analysis, The Hartman Group
bar pack with flavors such as Blueberry Almond and Raspberry Chia. The manufacturer is also launching a new product responding to the fruit trend called Pressed by KIND, made with only fruit and chia or fruit and veggies. These bars have only five ingredients or less in each variety and contain no added sugar. Flavors include Apricot Pear, Carrot Beet and Pineapple Coconut Chia. “Healthy snack bars have been one of the fastestgrowing segments in the c-store channel, and KIND is the third-largest brand in the c-store channel, having almost tripled our sales since 2013 in the space,” Israelite noted. General Mills is another manufacturer responding to the trend of healthy snacking, especially in the bars category. The company offers Nature Valley bars in an array of options: Nature Valley Crunchy Bars, Nature Valley Energy Bars and Nature Valley Protein Bars. Its newest products include two Food Should Taste Good Real Good Bars, which contain “recognizable ingredients” and feature see-through packaging so consumers
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social media to see what is trending the most and then making those products highly visible in the store. Playing up the fresh and limited ingredient angles is another way to highlight products in-store, whether it’s freshly prepared foodservice or packaged foods, according to Kees. The freshness trend is prevalent in the general population, and that includes c-stores. “Shoppers, especially younger shoppers, want to know what is in their food,” the General Mills researcher said. “In foodservice, retailers should highlight how recently food was prepared and coffee brewed. In packaged food, they should ensure their assortment includes options for shoppers who are seeking short ingredient lists that contain ingredients they understand and can pronounce.” Signage and product placement are also important to call attention to healthier snack options for shoppers. In some cases, creating a defined section in the store for better-for-you snacks could be beneficial, advised Mars Chocolate’s Lupo. CSN
Inspired Design Weigel’s drew inspiration from industry “friends” to develop its newest store By Danielle Romano
Tennessee staple, Powell-based Weigel’s Inc. sees its core purpose as being to “wow” its customers. With its newest state-of-the-art, full-service convenience store in Clinton, Tenn., the retailer delivers on that promise and then some. While its 63rd store is seemingly like other Weigel’s stores, with brightness and cleanliness that showcases the iconic Weigel’s brand, the Clinton store is unique with the addition of a dedicated diesel bay, centrally placed Weigel’s Kitchens foodservice offer, and multiple entrances in the front and back — one of which is dedicated to professional drivers.
ments to fit our needs and aesthetics,” she explained. Keeping it Fresh
Designed with truckers in mind, Weigel’s Clinton location offers wide-turn lanes for easy navigation and ingress/egress; diesel exhaust fluid (DEF) at the pump; and the Smart-Q payment system. The store, however, also reaches out to a broad demographic of commuters, locals and tourists with its signature 16-fuel position gas pumps for cars and small trucks. “The customers at [this store] are a mix of local residents that live in the Clinton, Tenn., area, business owners, recreational commuters, travelers and professional drivers,” Havely said. “Given the diverse nature of [this store’s] customers, we have a diverse product and service offering that includes a separate diesel fueling station with wide diesel lanes and DEF at the pump for professional drivers.” The 5,000-square-foot location, which opened this January, also offers Weigel’s Kitchens, the brand’s new, proprietary made-toorder food and beverage program where customers can order freshly prepared items like paninis, pizzas, burgers and quesadillas. Weigel’s 63rd store is unique in that it features multiple entrances in the front and back. The Weigel’s Kitchens foodservice kiosk area also brews up organic coffee and prepares specialty, barista-style espresso drinks like lattes and To arrive at the new look and feel of this location, Weigel’s owner and CEO Bill Weigel and President Ken cappuccinos. In fact, the cappuccino recipe is Weigel’s own recipe made from Weigel’s milk from its dairy, McMullen visited several “friends” in the industry for real sugar and real coffee, including organic espresso inspiration, Charlotte Havely, the company’s director beans, according to Havely. of marketing, told Convenience Store News. Also unique to Weigel’s Kitchens is fresh fruit and “Our store design incorporates both the ideas and learnings from the industry and our own design require- yogurt smoothies, as well as a proprietary line of iced
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ground-up builds before the end of this year that will feature the foodservice program. A positive experience
Weigel’s Kitchens is the chain’s new made-to-order food and beverage program.
tea, iced coffee, and frozen granitas like mocha latte and piña colada. In the mornings, Weigel’s Kitchens bakes signature, grab-and-go, encased breakfast biscuits stuffed with eggs, cheese and sausage or ham. Other breakfast offerings include breakfast pizza, paninis and the Sweet Glazer, which is similar to a grilled cheese but sandwiched between a Weigel’s glazed doughnut as opposed to bread. In the afternoons, lunch customers can opt for healthier options such as green or chef salads, or indulge a bit with a Polar Blast treat with a candy or cookie mix-in (which resembles a Dairy Queen Blizzard), shakes or soft-serve ice cream. Weigel’s Clinton store offers fresh-baked goods including doughnuts, muffins and cookies, too, delivered daily from Weigel’s Knoxville-based bakery. And fresh milk is delivered locally from Weigel’s Powell, Tenn., dairy, which was established in 1931. “We deliver daily milk from our own dairy and doughnuts, muffins and cookies from our own bakery for all our customers,” Havely pointed out. “We also serve best-in-class beverages like brewed organic coffee and frozen drinks, which is easily paired up with a bag of chips or an energy bar. Our goal is to offer something compelling to everyone.” The chain currently has five locations with the Weigel’s Kitchens concept and plans to open four
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In addition to the grab-and-go and made-toorder food items, fresh bakery goods and specialty drink offerings, Weigel’s clean, spacious and uncluttered Clinton store allows customers to comfortably navigate the aisles. Open 24 hours a day, other store amenities include: • Three entranceways, with one dedicated to professional drivers; • No-fee ATMs; • Prepaid Card Center with reloadable debit cards, long distance wireless cards and gift cards from top brands like Amazon and Sony Playstation; • Lottery tickets; • An auto body section specific to this location that includes the most common trucker accessories and necessities for professional drivers; • Window squeegees, large trash bins and air outside in the forecourt; and • Fuel types like diesel, regular unleaded, 100 percent premium unleaded and DEF. Once again with professional drivers in mind, this new Weigel’s store is the first fully equipped with Comdata Smart-Q, a payment system that enables drivers to fuel up quicker so they can get back out on the road sooner. The solution reads a RFID chip that’s been previously installed in the tractor-trailer. A RFID antenna at the canopy of the fueling bay reads the driver’s tag and before the driver exits the vehicle, he or she must enter prompted data before fueling. “Authorization controls ensure that purchases conform to [the professional driver’s company] standards and policies [and] automatic pump shutoff upon departure boosts security and reduces the risk of fraud,” Havely noted. All customers who download the Weigel’s mobile app from the Apple Store or Google Play can take advantage of promotions and utilize the store locator, but the “really cool feature” is mobile pay at the pump, Havely insists. “If you are part of our fuel discount rewards program, you can use the mobile pay-at-the-pump feature and get your fuel discount. This is yet another offer we give our customers to help them get in and get out as fast as possible — with a positive experience, of course.” CSN
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Spotlighting major industry events
NATO Show Takes Final Bow National Association of Tobacco Outlets hones in on legislative issues at last event By Melissa Kress
he NATO Show went out in style in April as the National Association of Tobacco Outlets (NATO) revealed this year’s event would be its last. The association has decided to turn its focus solely to tackling tobacco legislation. The move comes as across the United States, measures are landing on lawmakers’ agendas to increase the legal buying age for tobacco products, tax electronic cigarettes and enact flavor bans, to name just a few. Speaking at the final NATO Show in Las Vegas, Thomas Briant, executive director of the organization, noted that 117 municipalities in Massachusetts alone have adopted the minimum age push to 21. The New England NATO Show state also leads the way in flaApril 19-21, 2016 vor bans — at 43 municipaliLas Vegas ties. It’s no wonder Briant calls Massachusetts a “hotbed” when it comes to tobacco legislation. With its newly refined focus, Briant said the association plans to build upon the NATO Local Project, which was founded in 2012 and currently has a threemember staff that works directly with retailers to address regulatory issues at the local level. NATO will also continue teaming up with fellow associations to tackle the patchwork of tobacco rules across the country. For example, it is a member of the Coalition for Responsible Retailing in Massachusetts, joining with the New England Convenience Store Association, the Retailers Association of Massachusetts, and the New England Service Stations and Auto Repair Association. The organization is also taking on the issue of youth tobacco use by trying to bring awareness to social sources for tobacco products. With U.S. retailers passing tobacco inspections more than 90 percent of the time, Briant pointed out that youth access to tobacco products is not stemming from the retail com-
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Executive Director Thomas Briant discussed how NATO will sharpen its focus on tackling tobacco legislation.
munity. “We’re going to get to the cities before they get to us,” he said. “Until they deal with social sources, you won’t see a decline in youth tobacco use.” Mitch Zeller, director of the Food and Drug Administration’s (FDA) Center for Tobacco Products, took center stage at the NATO Show and acknowledged that the FDA is aware of the connection between youth tobacco use and social sources, and is exploring appropriate messages to tackle that connection. “It’s not just about retailers when it comes to youth access,” he agreed. “There is room for improvement.” Zeller emphasized the agency is committed to working with, not against, tobacco retailers. “I and my colleagues at the FDA take the dialogue with the industry seriously,” Zeller told the event’s attendees. “The dialogue, and the level of mutual respect that comes with the dialogue, with the retail community has to continue.” To that end, he offered a sneak peek at new retailer education materials and hinted that the agency will debut a new campaign, “This Is Our Watch,” later this year. However, he declined to provide additional details. CSN
Spotlighting major industry events
A More Tech-Savvy, Convenient Future Eby-Brown previewed its new mobile app during Eby-Expo 2016 By Angela Hanson
head of the peak summer selling season, EbyBrown Co. LLC brought convenience store chain operators, single-store owners and supplier partners together at its annual trade show to show off the hottest trends, newest products and biggest areas of opportunity for c-stores. The Naperville, Ill.-based convenience distributor focused particularly on advances in foodservice and technology solutions. Eby-Expo For the more than 1,200 April 28-29, 2016 retailers and suppliers that Michigan City, Ind. attended the two-day 2016 EbyExpo, held April 28-29 at the Blue Chip Casino, Hotel & Spa in Michigan City, Ind., Eby-Brown laid out a path to an even more tech-savvy and convenient future for c-stores. The company previewed its new mobile app, which did not yet have a final name. The app combines the functions of three existing Eby-Brown programs and increases the flexibility with which c-store operators can make product orders and returns. The app also offers in-depth data points and information about specific products, and lets operators see a lifetime review of their order history, according to company executives. Users can set standard order benchmarks for certain items to facilitate proper instock levels. Eby-Brown expects the app to be more heavily used by single stores and small c-store chains, Joe Roenna, executive vice president of merchandising and procurement, told Convenience Store News. Accordingly, the company focused particularly on ease of use and flexibility during the development process, acknowledging that to be effective, the app has to be helpful to less tech-savvy users and an overall time-saver. The company’s goal is to have all of its customers who order via mobile devices using the app within approximately 18 months. Foodservice is also a major priority for Eby-Brown
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and its customers. The distributor’s proprietary foodservice offer, which includes the Aroma Bay Café, Savory Corner Cafe, Wakefield Sandwiches and Crisp Acres initiatives, was prominently displayed at the expo. “Our parents believed in delivering solutions to their customers more than 50 years ago when they had the foresight to begin this Eby-Expo trade show,” remarked Tom Wake, co-president of Eby-Brown. “We are a multi-generational family business that has grown through a focus on delivering excellent service, innovation and solutions to our customers. Eby-Expo conveys these concepts that result in our vendors and customers coming together, all with a focus of helping our customers grow their businesses.” Having recently acquired Liberty USA, a fellow convenience distributor based in West Mifflin, Pa., Eby-Brown is currently focused on self-improvement and integrating the businesses with an eye toward identifying best practices. “We’re in full-blown integration mode,” said Roenna, explaining that Eby-Brown is examining how it can best incorporate what Liberty does well into the newly combined business. The acquisition of Liberty, the largest independently owned c-store supplier in Pennsylvania, strengthened Eby-Brown’s presence in the Keystone State along with extending its distribution network into the Northeast. CSN
Spotlighting major industry events
Changes & Challenges in Technology Conexxus Annual Conference takes up EMV, skimming, automation and more By Brian Berk
to be replaced, Taylor said. here is no shortage of technology issues expectThe EMV transition at the POS has not been a ed to keep convenience store chief technology walk in the park, either. During the conference, panelofficers and information technology leaders ists debated the topic during an educational session. busy for months, if not years. “There are more questions than answers about Where should they start? EMV and credit and debit EMV,” acknowledged Linda Toth, director of standards card skimming, Gray Taylor, executive director of for Conexxus. “It’s like ‘Jeopardy.’” Conexxus, stated during his speech Adding to the confusion, kicking off the 2016 Conexxus media coverage alleging retailers Annual Conference, which took are disinterested in upgrading to place May 1-5 at the Loews Ventana EMV is flat-out wrong, explained Canyon Resort in Tucson, Ariz. Terry Mahoney, a partner at Regarding EMV — an acronym for W. Capra Consulting Group. Europay, MasterCard and Visa, the “There are a lot of articles that three companies that originally created retailers are dragging their feet. the security standard — the liability That’s not true. Retailers want to shift at the point-of-sale (POS) already get EMV done,” he said. passed eight months ago. But a more CHS Inc., parent comdifficult upgrade looms for automated pany of the Cenex network, forecourt dispensers in October 2017. has already undergone the POS By this date, c-store retailers must upgrade to EMV at its locations. upgrade their Drawing from his experience, fuel pumps to Conexxus Annual Futurist Michael Rogers believes a $15 minimum wage is a “tipping point.” Michael Lindberg, CHS’ payment accept EMV Conference solution manager, offered conference chip-and-sigMay 1-5, 2016 attendees seven firsthand observances about the process: nature cards or face the possibility Tucson, Ariz. of being held financially responAccepting a chip card at the POS has quickly sible for fraudulent transactions. been cut down to a one-second process at This upgrade or replacement of dispensers will some big-box retailers, while the process takes 15 carry a hefty price tag, according to Conexxus, the to 20 seconds at other locations. nonprofit, member-driven technology organization The fewer the prompts for consumers at (formerly known as PCATS) dedicated to the developthe POS, the better. For example, based on ment and implementation of standards, technology information that’s on the card, the EMV POS innovation and advocacy for the convenience and fuel device should already know what language the retailing market. It has predicted EMV at the forecourt customer speaks, as opposed to the machine will set the c-store industry back $3.916 billion. There having to ask. are 429,000 dispensers that need to be upgraded by Have the customer remove their debit card October 2017, with another 292,000 dispensers needing or credit card at the POS before the receipt is
1. 2. 3.
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printed so they don’t forget to take their card. The POS should also emit a beep to alert the customer that their card is still in the payment acceptance device. No matter how fast an EMV transaction is at the POS, customers will always believe it’s slower than a magnetic swipe transaction. Issuing EMV chip cards is expensive for the credit card purveyor. Lindberg said he’s seen cases when it Credit card and debit card skimming at the pump is a major problem that must be addressed, took five instances of fraud on a parsaid Gray Taylor, executive director of Conexxus. ticular credit card or debit card before a new card was issued. Fraud is definitely occurring. Lindberg revealed BACK TO THE FUTURE one small petroleum retailer he knows has The five-day Conexxus Annual Conference was cer$65,000 in chargebacks per year. “If this is what tainly about more than just EMV and skimming, happens [at POS devices] indoors, imagine what though. A particular highlight was the speech by futurwill happen outdoors [at the pump]?” ist Michael Rogers, who definitely got the attention of attendees by stating he believes a major change could Although some retailers claim they will skip forever alter the retail landscape within the next 10 EMV upgrades altogether and only offer years: the minimum wage. mobile payment in the future, this new technolA minimum wage of $15 per hour — currently ogy has not taken off at Cenex stores. “Nobody’s being proposed and, in some cases, approved by sevbeating down my door for mobile payments,” he eral states and municipalities — would be a “tipping said. “They come for the lowest prices.” point” whereby automation could begin to replace employees in the retail workforce as early as the next THE SKINNY ON SKIMMING decade, he said. Credit card and debit card skimming at the pump is “Employee cost is a big thing we will face due to the another major concern for convenience store retailability to automate jobs in the next 10 years,” Rogers ers, Taylor noted. “Skimming is something we have to explained. “I’ve already seen a hamburger-making robot fix,” he stressed. that makes a good hamburger. [The robot] is expensive, Skimming refers to when criminals insert an illegal but could be worth it when we device at the pump in an effort to steal reach $15 per hour.” customer information. Unfortunately, In fact, automation could as Taylor pointed out, skimming has become such a big threat to received a lot of local press coverage today’s retail workers that the recently, especially in places like the U.S. government may need to upper Midwest and Florida. slap companies with an “autoMedia coverage has been so widemation tax” to prevent the spread that Taylor revealed he met nation’s unemployment rate with the U.S. Secret Service in April from rising. Even with such a to discuss the problem. “They feel we tax, though, workers in all fields haven’t done anything [to fix the probwill need to possess skills that lem],” he said. “We spent an hour and can differentiate themselves a half showing them we did.” from robots, he noted. Larger convenience store retailers “What skills are uniquely have done an excellent job of preventhuman?” posed Rogers. “My ing skimming incidents, he added, but answer is: communication, problem criminals have attacked many smaller solving and collaboration.” CSN chains and individual stores.
4. 5. 6. 7.
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Spotlighting major industry events
TMA Conference Comes at the Right Time FDA’s final deeming rule, released just days earlier, took center stage By Melissa Kress
he Tobacco Merchants Association (TMA) held its 101st Annual Meeting and Conference May 9-11 and the timing could not have been more perfect. Just five days after the agency released its final deeming rule, Mitch Zeller, director of the Food and Drug Administration’s (FDA) Center for Tobacco Products, took the stage as the conference’s guest speaker. His appearance came on the same day the deeming rule was Tobacco Merchants published in the Federal Register, starting the Association 101st A panel discussion assessed the opportunities around new tobacco products. countdown to its Aug. 8 Annual Meeting effective date. & Conference “We are at a historic point May 9-11, 2016 salers joined for a panel discussion on assessing in the evolution of the tobacco Williamsburg, Va. new opportunities. industry,” TMA President Smoker Friendly International Managing Farrell Delman said at the event, held at Kingsmill Partner Terry Gallagher cited MSA data showing cigaResort and Spa in Williamsburg, Va. rettes still dominate the tobacco category, capturing The deeming rule extends the FDA’s authority to all tobacco products, allowing it to now regulate electron- six times the dollar share of other tobacco products (OTP). And as for OTP, 70 cents of every dollar is in ic cigarettes, cigars, hookah tobacco, pipe tobacco and smokeless. So, this leaves a very slim portion for all more, in addition to cigarettes and smokeless tobacco, other products, including new products. which have fallen under its authority since Congress “When you analyze what to bring into our stores, [all passed the Family Smoking Prevention and Tobacco other] is not a big category, so something has to move the Control Act of 2009. needle for us,” Gallagher said. Unlike convenience stores As Zeller explained to TMA Conference attendees, that contend with space constraints, tobacco outlets can the deeming rule includes both automatic and addimore easily be a testing ground for new products. tional provisions. The automatic provisions include Another roadblock to adding new products to the registration and reporting requirements, health warnbackbar in convenience stores is the short amount ings, and a prohibition of descriptions such as “light,” “low” and “mild.” The additional provisions include a of time a customer spends in the store, noted fellow ban on the sale of products to anyone under the age of panelist Anne Flint, senior category manager of tobacco for Cumberland Farms Inc., where the tobacco 18, photo age verification for anyone under the age of category accounts for 45 percent of the convenience 27, a ban on vending machine sales unless in an adultstore chain’s business. “How do we keep up with new only establishment, and a ban on free samples. innovation? We don’t have the time to educate the cusTalk at the TMA event wasn’t all about the deemtomers,” she said. CSN ing rule, however. Tobacco retailers and whole-
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HOTPRODUCTS Special Advertising Section
Countertop Humidified Merchandiser
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HOTPRODUCTS Special Advertising Section
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CLASSIFIED Credit Card Processing / Merchant Services
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CLASSIFIED ADINDEX Allison+Partners........................................75 Regional............ www.cdph.ca.gov/tobacco Alon Brands ...............................................35 ............................ www.alonbrands.com
570 Lake Cook Road, Suite 310, Deerfield IL 60015 Phone (224) 632-8200 Fax (224) 632-8266 www.stagnitobusinessinformation.com
Altria Group Distribution Company ........2-3 .......................... www.insightsc3m.com Anheuser Busch ........................................5 .............................. www.anheuser-busch.com BakeNJoy ....................................................61 ............................ www.bakenjoy.com Boston Beer................................................19 Cash Depot.................................................18 ............................ www.cdlatm.com
Kollin Stagnito President & CEO 224-632-8226 firstname.lastname@example.org
Chobani ......................................................51 Del Monte Fresh Produce NA Inc. ...........17............................. www.freshdelmonte.com Forte Product Solutions ............................21 ............................ www.forteproductsolutions.com
Ned Bardic Chief Revenue Officer 224-632-8244 email@example.com
Growth Energy ..........................................65 ............................ www.ethanolretailer.com Heineken ....................................................13 ............................ www.enjoyheinekenresponsibly.com Iowa Rotocast ............................................39 ............................ www.irpinc.com J&J Snack Foods Corp. .............................29 ............................ www.jjsnackfoodservice.com JTM .............................................................63 ............................ firstname.lastname@example.org Krispy Krunchy Chicken...........................23 ............................ www.krispykrunchy.com KT&G...........................................................69&71 ..................... 877.580.5506 Liggett Vector Brands ...............................31 ............................ 877.415.4100 Logic Technologies ...................................10-11 ...................... www.logicecig.com Lost Art Liquid ...........................................91 ............................ www.LostArtLiquids.com McLane Company......................................7 .............................. www.mclaneco.com MilkPep .......................................................53-56...................... info@MilkPep.org Miller Coors ................................................Outsert Regional National Grid..............................................67 Regional............ ngrid.ca/smallbusiness OpenStore/GasBuddy ...............................43 ............................ www.gasbuddy.com/yourbusiness Path to Purchase .......................................Outsert .................... www.path2purchaseexpo.com Perfetti Van Melle......................................59 ............................ 800.283.5988 Procter & Gamble ......................................45 RJ Reynolds Tobacco Company ..............9 .............................. www.engagetradepartners.com RJ Reynolds Tobacco Co/Santa Fe..........27 Save-A-Lot .................................................47 ............................ www.save-a-lot.com
Korry Stagnito Chief Brand Officer 224-632-8171 email@example.com Ron Lowy Group Brand Director 330-840-9557 firstname.lastname@example.org Michael Hatherill Business Development Manager 201-855-7610 email@example.com Steve Lichtenstein Vice President/Southeast Regional Manager 201-855-7613 firstname.lastname@example.org Terry Kanganis Account Executive & Classified Advertising 201-855-7615 email@example.com Rachel McGaffigan Northeast Regional Sales Manager 508-385-2524 firstname.lastname@example.org Roz Gilman Ad Manager 314-403-4753 email@example.com
Sinclair Oil..................................................92 ............................ www.SinclairOil.cm/Licensee Swedish Match ..........................................15 ............................ firstname.lastname@example.org Tillamook Country Smoker, Inc. ..............37+B22 .................. www.tcsjerky.com
Stagnito Business Information U.S. brands: Tyson Foods ...............................................31,41 ....................... www.tysonconvenience.com Universal Merchant Services ...................Outsert .................... www.nyab.com Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by Stagnito Business Information, 570 Lake Cook Rd. Deerfield, IL 60015. Copyright ÂŠ 2016 by Stagnito Business Information. All rights reserved. Subscriptions: One year, $93; two years, $152. One year, Canada, $110; two years, Canada, $175. One year, foreign, $150. Payable in advance with a bank draft drawn on a U.S. bank in U.S. funds. Single copies, $10, except foreign, where postage will be added. Printed in U.S.A. Periodicals postage paid at Deerfield, IL, and at additional mailing offices. POSTMASTER: Send address changes to Convenience Store News, P.O. Box 1842, Lowell, MA 01853.
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GETTINGTOTHECORE C-STORE CHIC
Serious About Coffee
Convenience stores are second only to coffee shops as the choice venue for those who agree with the statement, “I am particular about the coffee I drink and consider myself a ‘coffee snob.’”
Self-proclaimed “coffee snobs” trust convenience stores for their cup of joe
on’t talk to me until I’ve had my morning coffee.” It is very likely we all know somebody who swears by these words. A recent survey by Carbonview Research, sister company of Convenience Store News, found that among 502 U.S. consumers who purchase ready-to-drink coffee at least once a month from any retail outlet, 45 percent do so at least once a day. And what’s especially good news for convenience store operators is that more than half of the 502 consumers surveyed said they make such purchases at a convenience store.
How often do you purchase a ready-to-drink coffee beverage?* Multiple times a day Once a day Multiple times a week Once a week
20.9% 23.7 39.2 16.1
25.7% 24.1 34.9 15.3
16.2% 23.3 43.5 17.0
18.6% 20.9 48.8 11.6
21.4% 30.6 33.7 14.3
31.3% 24.0 34.4 10.4
16.1% 18.4 40.2 25.3
17.9% 23.8 38.1 20.2
17.6% 23.5 43.1 15.7
*Includes regular brewed coffee, a specialty drink like a latte or cappuccino, a bottled or canned coffee drink Base: 502 consumers who purchase ready-to-drink coffee at least once a month from any retail outlet
Males and consumers aged 35-44 trend higher when it comes to purchasing coffee multiple times a day.
How important are the following in your decision of where to purchase a ready-to-drink coffee beverage? (Extremely/somewhat important)
Quality of the coffee Convenience of location Speed of service Price Ability to customize coffee Availability of specialty drinks (e.g., lattes) Large portion options A loyalty program A drive-thru An inviting seating area Availability of seasonal drinks (e.g., pumpkin spice latte)
92.0% 86.7 77.3 75.7 64.9 62.9 55.4 51.6 48.8 44.0 41.6
Regardless of the purchase venue, consumers care most about the quality of the coffee.
By PurchAse Venue: conVenience FAsT-Food sTores resTAurAnTs
92.9% 88.8 78.8 76.6 69.5 66.5 62.5 55.0 45.7 42.8 46.1
93.1% 87.0 80.8 77.0 67.8 64.4 59.4 52.1 55.6 48.3 46.4
92.2% 87.6 81.4 79.1 65.9 72.9 58.9 58.1 52.7 62.8 55.0
95.6% 89.6 82.4 78.0 70.0 64.8 62.8 56.4 54.4 47.6 49.2
91.7% 88.4 78.6 78.3 67.2 68.0 56.1 54.5 50.4 47.3 46.0
Base: 502 consumers who purchase ready-to-drink coffee at least once a month from any retail outlet
From which of the following venues do you purchase ready-to-drink coffee beverages? ToTAl
Want to collaborate and share expertise with your peers? The Council of Retail Experts (CORE) is an exclusive network of convenience store retail leaders who do just that. For more information on how to join CORE, please visit www.cvcoreinsights.com. 90 Convenience Store News | JULY 2016 | WWW.CSNEWS.COM
Convenience stores Fast-food restaurants Bakery cafes (e.g., Panera) Donut shops (e.g., Dunkin’ Donuts) Coffee shops (e.g., Starbucks) Drugstores Other
53.6% 52.0 25.7 49.8 77.1 15.1 4.4
57.4% 53.9 29.6 56.5 80.9 19.6 3.9
Coffee shops like Starbucks are the foremost venue for ready-to-drink coffee purchases, followed by c-stores and fast-food restaurants.
Multiple responses accepted Base: 502 consumers who purchase ready-to-drink coffee at least once a month from any retail outlet
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