CSN_0922 by ensembleiq

WHAT’S NEXT IN CONVENIENCE AND FUEL RETAILING

WHAT’S NEXT IN CONVENIENCE AND FUEL RETAILING SEPTEMBER CSNEWS.COM2022Althoughthere’s no o cial designation of a recession yet, U.S. consumers increasingly feel like they’re in NATIONINATIONINFLATIONone.NFLATION

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The Convenience Foodservice Alliance is recruiting new members

For comments, please contact Linda Lisanti, Editor-in-Chief, at llisanti@ensembleiq.com.

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Small Ideas Can Have Big Value — C-stores can boost their foodservice programs without making sweeping changes. Dave Grimes, vice president of foodservice at Carmi, Ill.based Martin & Bayley Inc./Huck’s Market, discussed the importance of “theater” around foodservice and dispensed beverages in order to draw attention. New graphics, significant additional signage and other methods of guiding customers to the roller grill and coffee station contributed to sales boosts at Huck’s, while the rollout of a “guaranteed to love it or it’s free” promise generated buzz.

Allies in Advancing Convenience Foodservice

Among the takeaways from this year’s event that especially resonated with me are:

Paduano Lakeport Markets

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GPM Investments LLC

Davidson Ed Davidson

in developing strong signature items that they can own.

Through access to valuable benefits, shared research and powerful connections, members help shape best practices that can assist all industry participants in growing their sales and profits in the critically important foodservice category in the convenience channel.

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Edward &

Jim Hachtel

Over the years, though, I have watched this void fill in, as more and more retailers in the industry tap into the power of foodservice. And with this expansion has come a broadening of what consumers today will consider as acceptable convenience store fare. While sandwiches, pizza and fried chicken are still commonplace, you’ll also find tacos, pasta dishes, artisan flatbreads, create-yourown bowls and more on menus nationwide.

The Importance of Differentiation — Keynote speaker Ernie Harker, former marketing guru at Salt Lake Citybased Maverik — Adventure’s First Stop, noted that many c-store brands want to stay in “the safety zone” of not being too different from their competitors, but this also means they are unlikely to be noticed. The branding expert urged the retailers in attendance to be different, particularly

Vito Maurici

Plaid Pantries Inc.

Scriver Kwik Trip Inc.

Roy

Robert Falciani

Hartman Rutter’s

Jonathan Polansky

Strasburger StrasGlobal EDITOR’S NOTE SEPTEMBER 2022 Convenience Store News 3

In this issue, we present highlights from our 2022 Convenience Foodservice Exchange event (see page 94). This year’s program included a variety of presentations, panel discussions and Q&A sessions covering the most pressing foodservice issues and evolving best practices of today, while providing attendees with actionable suggestions to stand out from the crowd.

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Greg

Over the course of two days in Savannah, Ga., a record 70-plus convenience store retailers also joined suppliers and other category thought leaders in visiting two of the city’s best convenience stores, Enmarket and Parker’s; and participated in valuable networking opportunities.

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Convenience Store News has long been an ally in advancing convenience store foodservice and in addition to our annual Convenience Foodservice Exchange event, we have put out a call to the industry at large to join the effort. The Convenience Foodservice Alliance (CFA) is a membership community dedicated solely to foodservice professionals in the convenience store industry. The CFA aspires to help c-store foodservice professionals, suppliers and solution providers work collaboratively to solve problems and inspire bold ideas for the future.

McLane Co. Inc.

We’re currently recruiting new members. Contact me if you’re interested in joining the Convenience Foodservice Alliance membership community.

GROWING UP IN NEW JERSEY, land of Wawas and QuickCheks, I have long been aware of the quality and value of convenience store foodservice. When I joined Convenience Store News as a staff writer 17 years ago, I had no idea that other parts of the country were without such robust and delicious c-store foodservice offerings.

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Embrace Continuous Improvement — Zone-specific innovation and improvement teams should continuously focus on identifying improvement opportunities and solving them, according to Howland Blackiston, co-principal of restaurant and retail consultancy King-Casey.

Recession? It’s Here, Now What Are You Going to Do About It?

Besides driving less (cited by 83 percent of those surveyed), consumers are counteracting high pump prices by combining errands (74 percent), reducing shopping or dining out (56 percent), delaying major purchases (30 percent), postponing vacations (29 percent) and saving less (24 percent). Another study noted that those consumers who are still spending are trading down from premium brands to lower-priced alternatives and private label products.

I’ve been covering retailing for a long time, from the dot.com/9-11 crash in 2001, through the subprime mortgage crisis of 2008-2009, to the 2020 COVID contraction. Convenience channel retailers have always managed to fare a bit better than other retail channels and, indeed, most other businesses in the country. While not recessionproof, c-stores will continue to outperform other retailers if they react quickly to the market dynamics under which they are operating.

VIEWPOINT

For comments, please contact Don Longo, Editorial Director Emeritus, at dlongo@ensembleiq.com.

4 Convenience Store News CSNEWS.com

The second consecutive quarterly decline in real gross domestic product (GDP) marked the start of the fourth official recession since 2000. The current administration, for obvious political reasons, doesn’t want to call this a recession, but semantic arguments aside, the U.S. economy is running on fumes. The Federal Reserve has already raised interest rates four times this year. The hikes increase consumers’ and businesses’ borrowing costs for such things as credit cards, mortgages, auto loans and business loans.

In addition to the drop in GDP, real consumer spending slowed from 1.8 percent to just 1 percent in the second quarter of 2022. Residential construction dropped at an annual 14 percent rate, and business spending on structures, equipment and technology collapsed from 10 percent in the first quarter to a 0.1 percent annual rate in the second quarter.

The bebutacrossbereactionknee-jerkmighttocutspendingtheboard,thatwouldwrong.

A COUPLE OF WEEKS AGO, the big question was whether the U.S. economy was heading into a recession. With inflation rising at the fastest pace in 40 years, convenience store retailers were already seeing customers cut back their spending. A survey by AAA found that almost two-thirds of U.S. adults have changed their driving habits or lifestyle since March. Nearly a quarter described those changes as “major.”

Facing this inevitable recession (or whatever term the administration wants to call it), retailers need to “pivot” once again. (Wow, that word is becoming a bit overused, eh?)

In a previous economic downturn, Wawa Inc. enjoyed great success employing what the retailer called a “Blue Ocean” strategy. Based on a book written in 2005 by professors W. Chan Kim and Renee Mauborne, the strategy involves focusing resources on competing in “blue oceans” or new, uncontested markets rather than “red oceans,” which are highly competitive markets. That thinking turned Wawa into a foodservice powerhouse.

The knee-jerk reaction might be to cut spending across the board, but that would be wrong. According to the Harvard Business Review (HBR), retailers in a recession should go after “bad costs.” These costs add nothing to what customers are ultimately willing to pay for. Even the best-run companies incur a lot of bad costs, according to HBR. These might result from investments to meet changing consumer needs or to match competitors’ innovations. Costs can creep in through operational complexity resulting from growth. Examples could be too much seating in stores where takeout is the primary business, or unnecessarily extended operating hours in certain markets.

An economic downturn requires a different business strategy

Travel

FEATURES

The pace of M&A activity has slowed as buyers find limited inventory available.

COVER STORY Inflation Nation

TOP 100 Less Deals, More Money

Supply

56COVER STORY PAGE 38 26 66

4VIEWPOINTRecession? It’s Here, Now What Are You Going to Do About It? An economic downturn requires a different business strategy. CSNews Online New Products

SMALL OPERATOR Back to the Future retailers who meet the needs of their local market and customers will survive.

NextUp’s Kat Ortiz talks changing cultures and feeding hope.

56FEATURE Chain Solutions

CONTENTS SEPT 22 VOLUME 58 NUMBER 9

and

The

Transformation Innovation

6 Convenience Store News CSNEWS.com

DEPARTMENTS

WHAT’S NEXT 146 Flipping the Script

INSIDE THE CONSUMER MIND 174 Keeping Customers Close Convenience store loyalty programs are expanding and enhancing.

Although there’s no official designation of a recession yet, U.S. consumers increasingly feel like they’re in one.

Labor shortages continue to cause supply chain issues, but savvy c-store retailers are finding workarounds as experts predict struggles will continue past 2022.

STORE SPOTLIGHT 148 Between a Hard Rock & a Casino Rocktane Gas + Smoke arrives on the West Coast boasting an iconic music vibe.

EDITOR’S NOTE Allies in ConvenienceAdvancingFoodservice The FoodserviceConvenienceAlliance is recruiting new members.

86FEATURE Center abounds in the travel center truck stop industry from both new and existing players.

The 2022 Convenience Foodservice Exchange highlighted evolving best practices, ways to cope with challenges, and actionable suggestions to stand out from the crowd.

Associate Brand Director & Western Sales Manager Ron Lowy (330) 840-9557 rlowy@ensembleiq.com

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Getting Some Polish Technology and new equipment are driving sales in the underutilized, high-profit business of convenience store car washes. 12 times per year, monthly, by EnsembleIQ, 8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631.

Contributing Editor Renée M. Covino reneek@aol.com

124SERVICES

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132 The New Bedrock of Success C-store operators view new and improved as

critical to their future. 12 118

Vice President/Group Brand Director Paula Lashinsky (917) 446-4117 plashinsky@ensembleiq.com

Contributing Editor Tammy Mastroberte tmastroberte@gmail.com

for Expansion Push 16 Eye on Growth 16 Fast Facts 18 Retailer Tidbits 20 Supplier Tidbits

94FOODSERVICE Building a Bigger & Better Future for Foodservice

The Ramifications of Reduced Nicotine

ALCOHOLIC BEVERAGES 118 Keeping Spirits High Retailers are redesigning their stores to accommodate expanded wine and liquor sections.

technology

FOODSERVICE STUDY 104 A Balancing Act Convenience foodservice retailers are carefully weighing innovative plans for the future against maintaining longtime customer favorites.

Associate Brand Director & Northeast Sales Manager Rachel McGaffigan (774) 212-6455 rmcgaffigan@ensembleiq.com

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CATEGORY MANAGEMENT

Chief Executive Officer Jennifer Litterick Chief Financial Officer Jane Volland Chief People Officer Ann Jadown Executive Vice President, Production Derek Estey Executive Vice President, Content & Communications Joe Territo

Editorial Director Emeritus Don Longo dlongo@ensembleiq.com

Editor-in-Chief Linda Lisanti llisanti@ensembleiq.com

The FDA’s plan to establish a nicotine standard has industry insiders speculating about the future of c-store tobacco.

Associate Editor Sanestina Hunter shunter@ensembleiq.com

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112TOBACCO

EDITORIAL

Managing Editor Danielle Romano dromano@ensembleiq.com

8 Convenience Store News CONTENTSCSNEWS.com SEPT 22 VOLUME 58 NUMBER 9

Senior Editor Angela Hanson ahanson@ensembleiq.com

12 BP Brings ampm Brand to the East Coast 14 Sheetz Targets Western

Classified Production Manager Mary Beth Medley (856) 809-0050 marybeth@marybethmedley.com

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In response to consumer demand for more options in the flavored malt beverage category, Island Brands USA introduced two new products: CRUSH Tropical Punch and CRUSH Lime Margarita. Both offerings are made with natural flavors and have a 10 percent ABV. The 16-ounce cans are available in singles, four-packs, and 24-can cases. The CRUSH line marks the second significant expansion of Island Brands’ portfolio in 2022, following the first quarter debut of the Get Active Pack, which features three new flavors of low-calorie, super-premium Island Active beer, including Island Active Mango, Island Active Lime and Island Active Watermelon.

Located inside the BOK Tower at One Williams Center in Tulsa, Okla., the new QuikTrip Corp. store is powered by Amazon’s Just Walk Out technology, which leverages a combination of computer vision, sensor fusion and deep learning to determine what items shoppers take from or return to shelves.

7-Eleven & Speedway Deal Leads to Corporate Restructuring

For more webinars, visit the Events & Webcasts section of csnews.com.

It is likely that many convenience store visitors will respond to economic uncertainty by trading down from higher-priced restaurants and choosing convenience retailers, writes Joseph Bona, founding partner and president of Bona Design Lab, and James Owens, vice president and shareholder at HFA. To encourage customers to “go local” and lean into a local identity, they recommend that retailers bring in local options, offer opportunities to touch and feel the merchandise, localize interior design, and get more creative with outdoor spaces.

STORIES

Island Brands CRUSH

islandbrandsusa.comCharleston,USAS.C.

CSNEWS ONLINE CSNEWS WEBINAR 43152 10 Convenience Store News CSNEWS.com TOP

Circle K Invests in Ghost Kitchen Startup Alimentation Couche-Tard Inc., parent company to the Circle K and Couche-Tard convenience store banners, is part of the latest funding for Kitchen United, a ghost kitchen and restaurant hub technology company. Kitchen United’s proprietary technology enables customers to order from multiple prepared food and consumer goods brands on the same ticket and with the same delivery driver, all syn chronized to maximize quality and payload, and minimize time and expense. VIEWED

QuikTrip Opens Checkout-Free Store

7-Eleven Reportedly Expands Delivery With Startup Deal

Wawa Ends 24-Hour Operations at Select C-stores

According to a recent Convenience Store News webinar, the pandemic-era trend known as “The Great Resignation,” where favorable conditions encourage employ ees to quit their jobs in search of better and ample opportunities elsewhere, is showing signs of slowing down. Legion’s 2022 State of the Hourly Workforce study identified concrete ways to improve the labor pool and improve managers’ lives: provide the schedule flexibility and control hourly employees want and are increasingly demanding; invest in tools to improve communication between manag ers and employees; and attract and retain Gen Z employees with instant access to earned wages.

EXPERT VIEWPOINT

7-Eleven Inc. reportedly acquired white-label delivery pro vider Skipcart, which offers to “deliver anything in 45 minutes or less” at a starting rate of $6.99. The acquisition would allow the conve nience store operator to compete directly with delivery providers such as DoorDash and Gopuff.

Three Steps to Attract & Retain Hourly Employees

Returning to the Corner Market

Sponsored by

Technology and innovation are the biggest opportunity drivers for the category moving forward, the way Barwick sees it. Together, they have the opportunity to provide adults with the information, the access and the ability to understand nicotine products and support possible migration to potentially reduced risk products.

“It is reasonable to assume that there will be some con solidation,” Haynes stated.

Haynes goes on to explain that the FDA must consider stakeholder comments and the economic impact of any proposed regulations. And the law mandates that these standards cannot take effect for at least one year after they are Furthermore,finalized.theFDA’s

For convenience store retailers that want to prepare for upcoming legislation in the category, Haynes’ chief piece of advice is: “Don’t panic.”

This will open up the market for new, innovative harmreduction items, according to Burke. “It will also increase the U.S. competitive landscape for other manufacturers.”

The Opportunities

Haynes sees the requirement to obtain FDA authoriza tion for new products as the industry’s biggest challenge, along with the FDA’s evolving standards for evaluating new product applications. At the same time, the FDA is not adequately enforcing the law with respect to compa nies that have introduced new products without submit ting the necessary applications, according to Haynes.

but we all need to take a hand in proper enforcement of youth access prevention measures to ensure adults are able to purchase these products.”

Cadent Consulting’s Stuart believes the biggest category challenges ahead are primarily related to teen market ing and teen usage. He pointed out that recent lawsuits involving teen targeting claims were settled and “there was no admission of any wrongdoing” on the part of vape suppliers. “This will continue to be a hot button issue,” he said.

Additionally, there are industry naysayers who believe tobacco harm reduction is not good enough and the only acceptable solution to reduce harm for consumers is the total elimination of tobacco/nicotine items. “This is unrealistic,” Stuart asserted.

Regardless of your shopping needs, you will be able to find what you are looking for, or a high-quality substitute, and you will walk out with items you didn’t know you needed.

C-STORE RESCUE

By Roy Strasburger, CEO, StrasGlobal

34 Convenience Store News CSNEWS.com

The store sits in the middle of a residential block on a street that is barely wide enough for one car. There are no parking places. Large-pane glass windows and their fresh flower display frame the doorway, allowing you to peer into the neat and tidy space. It’s a neighborhood shop that caters to the people who live in the surrounding houses and the students at the local public school (private high school).

SMALL OPERATOR

the shop, you can define his customers just from the range of his offer. For the local residents, there are baking and cooking products, fresh eggs and produce, and daily staples such as milk, cereal and household cleaners. For the students, there’s a nice range of sweet and salty snacks that are priced to be easily accessible to someone who is spending their pocket money on a treat after school. For those who are looking for something a little more sophisticated, there is a selection of international beer, wine and spirits (including stylishly presented single-serve cocktails from France), and cheeses that would complement any table — from the rare find to your daily cheddar.

carefully curated his selection of items to maximize customer engagement. It’s a small shop, probably about 650 square feet of retail space, but the selection of goods is impressive. He manages to address almost all shopping occasions with a very limited number of SKUs. There is always a sense of excitement when you walk in — you want to see what is new and Walkingdifferent.around

Back to the Future

I was recently asked to nominate my favorite store for a research paper being done by Scott Annan. My choice is Kingsgate Wine and Provisions in Winchester, England. If you are ever there, pay them a visit.

I CAN’T DECIDE if it is the straw boater hats on the wall or the scrumptious cakes on the sales counter that are most compelling…

The retailers who meet the needs of their local market and customers will survive

Located across the street from one of my top pubs, the Kingsgate is a local shop that has the feeling of late-1800s retailing. In my head, whenever I enter the store, I am transported back to the turn of the last century where the local grocer knew everyone’s name and kept the products they wanted on the shelf.

The thing that impresses me the most about the store is that the owner has

To round things off, the customer service is polite, helpful and knowledgeable, but never intrusive. If you have a question, it can be answered. If you have a request, it can be fulfilled. The person behind the counter is always dignified and appreciative of your custom, offers a smattering of small talk if you’re interested, and thanks you for shopping with them. Whenever I go in, I feel noticed, appreciated and very satisfied with my purchases.

The reason I am dwelling on this site is that it is a perfect example of what I think the future of convenience retailing will be. Over the next 20 years, our convenience stores must adjust to a changing environment and customer. Not every c-store that currently depends on gasoline sales to be profitable will be a practical EV charging location. Not every store that currently operates without gasoline will be able to compete with online ordering and quick delivery services (those that survive).

Finally, promote your store and what you’re doing by being involved in the community. Find groups and associations to interact with and support, sponsor local groups and sports teams, and work with local charities and assistance organizations. The more people know about you, your store and your story, the greater the interaction. Get your story out!

The combination of products, customer service and location are the factors driving this business. There is no gasoline or electric vehicle (EV) charging station. There is no foodservice counter or beer cave to draw the customer in as attractions. It all comes down to basic retailing, executed well and delivered to the customer.

Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.

The future of convenience retailing will be based on our past. The local markets and corner stores that our great-grandparents shopped will provide the business plan for the years to come.

What I find more interesting than the selection of products is the sourcing. The cheeses and milks are from local dairies. The pastries and bread products come from bakeries in the area. Locally brewed craft beers are included in the beer category, and gin (this is England, of course) that is distilled within 20 miles of the store sits on the shelf. Freshly made samosas and sausage rolls from a woman down the street are on display at the Thiscounter.islocalsourcing at its finest.

Roy Strasburger is CEO of StrasGlobal, a privately held retail consulting, operations and management provider serving the small-format retail industry nationwide. StrasGlobal operates retail locations for companies that don’t have the desire, expertise or infrastructure to operate them. Learn more at strasglobal.com.

36 Convenience Store News CSNEWS.com SMALL OPERATOR

Third, differentiate yourself from your competitors — especially the big multistore chains. Find products that are sourced locally or adhere to some type of theme, whether it is sustainability, environmentalism, ethnic diversity, or supporting small businesses. Customers love to have a reason to shop with you, and you need to provide them with a story that gives them that reason.

First, make sure that you have the products your customers want and will be looking for. You can’t base your store on a standard product mix that’s created from national averages and sales trends. Every state, every town, every neighborhood will have different needs based upon the ethnic and economic mix of its residents. You must know who your neighbors are and understand what is happening within a five-mile radius of your Second,store.your

Location, of course, is important, but it is not everything. If the store was dirty, poorly stocked and uninteresting, I don’t think people would shop there unless it was an absolute emergency — and being an emergency supplier is not the way to create a sustainable business.

Now, I know that people on the street are not doing their weekly shopping at the store. But what I believe, based on my observations, is that they are doing their “top up” shopping, daily needs shopping, indulgence shopping and emergency re-supply shopping at the store.

store needs to be clean, well organized and well lit. It must be an attractive place to shop and one that draws the customer in. It is much too easy to provide customers with reasons not to shop with you and go to a competitor or online instead. You don’t have to be fancy and theatrical, but you do have to be clean and inviting.

As the convenience retail sector continues to consolidate, it will be the retailers who meet the needs of their local market and customers that will survive. As is often mentioned in Convenience Store News, knowing your market, and knowing your customer, will be the crucial tools for the future. So, how do we build upon what you’re currently doing?

One final note: as you have heard, Don Longo moved from editorial director of CSNews to editorial director emeritus on July 1. Don has been a great supporter of the c-store industry, and has provided me many stories, insights and opportunities for which I am grateful. I look forward to continuing to work with Linda Lisanti and the rest of the CSNews/ EnsembleIQ team. Thank you Don for all you have done, and all the best in your upcoming projects. CSN

The shop is in the middle of an urban residential area where everybody walks and if you were to stroll 10 minutes into town, you would find outposts of some of the country’s major grocery chains whose prices, admittedly, are cheaper. So, why would people shop at Kingsgate rather than walking into town or, for that matter, ordering their groceries online?

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COVER STORY 38 Convenience Store News CSNEWS.com

responding to rising prices by shopping promotions, prioritizing value options, and trading down to avoid going without,” said Krishnakumar Davey, president of thought leadership for CPG and retail at IRI. “Retailers must have the tools to quickly adjust to changes in consumer preferences to ensure they are offering the right assortment at price points that appeal to price-sensitive shoppers, as well as their most valuable

Sincecustomers.”thebeginning of this year, the world has changed and factors that could not be anticipated earlier, including the persistence of COVID-19, continuing supply chain challenges, the ongoing war in Ukraine and other issues, have driven the highest inflation rates in 40 years, notes National Retail Federation (NRF) Chief Economist Jack Kleinhenz.

WHILE GAS PRICES have dropped in recent months, the prices of food and beverages continue to rise.

BY MELISSA KRESS, LINDA LISANTI

& DANIELLE ROMANO

Although there’s no o cial designation of a recession yet, U.S. consumers increasingly feel like they’re in one

INFLATIONNATION

According to the latest figures available as of press time, prices for food at-home rose 1.2 percent from the end of June to the end of July, and were up 14.4 percent year over year as of July 31. The previous month, food at-home prices rose 1.2 percent vs. May, and were up 13.7 percent year over year as of June 30, according to Information Resources Inc. (IRI), which recently merged with The NPD Group to create a global technology, analytics and data provider. The figures cover all U.S. food channels, including “Consumerse-commerce.are

SEPTEMBER 2022 Convenience Store News 39

Source: NCSolutions Consumer Sentiment Survey, June 2022

A Consumer Recession

COVER STORY

Rise & Consumers

While there may be no official designation of a recession yet, new analysis from NielsenIQ shows that U.S. consumers increasingly feel like they’re in one. Although consumers are finally finding relief at the gas pump, necessities like food are still forcing shoppers to make difficult spending decisions, fueling a growing sense of unease.

contractions have heightened fear of a recession, but while the economy has lost momentum heading into the second half of the year, economic data is not yet consistent with a typical recession,” he said. “Our view is that while the economy is functioning at a slower pace, it is likely to avoid a recession this year. Despite ongoing uncertainties, we believe the underlying strength of the economy is strong enough to deal with inflation and keep a recession at bay — or short-lived even if we are wrong.”

monetary policy, it faces the dangers of continued inflation if it doesn’t do enough and a recession if it goes too far.”

“Back-to-back2.

In its July 2022 Consumer Tracker report, Cowen Inc. surveyed roughly 2,500 U.S. consumers and found that 77 percent indicate their prices for day-to-day purchases are up vs. a year ago. The percentage grew from June when 73 percent gave the same response. Of those reporting higher prices, 30 percent said prices are up “significantly,” compared to 32 percent in June.

Of those NielsenIQ surveyed, 53 percent said they feel they are in a recession right now.

NielsenIQ analysts refer to this as a “consumer recession” — when the core habits of traditional consumption have shifted, forcing shoppers to behave as though a recession is already here. They consume less, shift their spend to value retailers and brands, and buy more items on promotion.

40 Convenience Store News CSNEWS.com

Prices Shift Choices

Increased Prices Drive Americans to: CHANGE THE WAY THEY BUY GROCERIES 76% 60% BUY LESS ALTERNATIVESEXPENSIVEWHENTHEYCAN’TAFFORDTHEIRFAVORITEBRAND 71% FEEL THE STRAIN ON THEIR SAVINGS 43% SEEK OUT SALES AND PROMOTIONS TO AFFORD THEIR FAVORITE BRANDS

To contend with the higher prices, 64 percent of respondents say they have either cut spending or expect to cut spending in certain areas. This compares to 50 percent in June — of which, 75 percent of households with less than $50,000 in annual income were cutting spending.

However, while the economic numbers may not look good — gross domestic product (GDP) declined 1.6 percent year over year in the first quarter of 2022, and 0.9 percent in the second quarter — the world’s largest retail trade association does not see a recession looming around the next corner. Despite the two consecutive quarters of decline, the U.S. economy still does not appear to be in a recession and remains unlikely to enter one this year, Kleinhenz said on Aug.

“At this juncture, the key concern remains inflation and the Fed’s policy moves to contain it,” Kleinhenz said. “As the central bank attempts to adjust

NRF notes that two consecutive quarters of decline is a common informal indicator of a recession, but the official declaration is up to the National Bureau of Economic Research, which defines a recession as a significant decline in economic activity that is spread across the economy and lasts more than a few months. Its criteria are depth, diffusion and duration. The bureau has yet to rule on whether the current downturn meets that definition. Some economists note, though, that the bureau doesn’t usually make the designation until after a year.

• 45 percent are seeking out less expensive brands;

• 76 percent say their family has changed how they buy food;

The C-store Picture

The COVID-19 pandemic accelerated the decline. In-store transactions year to date through June 2022 were 8.1 percent lower than in 2019, the last full pre-pandemic year. But even when comparing to 2021, in-store transaction counts were still down about 1 percent.

Despite gas prices that have been slowly inching down since late June, with the national average finally dipping below $4 in mid-August, nearly half of Americans (45 percent) feel like they cannot afford their previous lifestyle, according to a consumer sentiment survey on inflation commissioned by NCSolutions (NCS), which helps companies improve their advertising effectiveness. The online survey was fielded among 2,141 respondents in June.

immediate consumption, as well as more pantry items, which increases basket value. That increase has been relatively unchanged throughout 2022,” said Lori Stillman, vice president of research and education for the convenience and fuel retailing Sheassociation.notes,though,

that not all basket growth has been units sold. In-store sales also have increased because of inflation. “Growing inside sales and decreasing inside transactions result in a larger basket value, somewhat of a false flag in terms of the health of the industry when we know retailers are struggling to get shoppers to shop inside the store,” Stillman added.

The return to normalcy for convenience store foodservice programs has taken considerably longer than merchandise and fuel because many retailers, especially in the West and Northeast, were required to be limited or closed well into 2021, Stillman pointed out.

— Lori Stillman, NACS

On the forecourt, drivers are purchasing roughly the same amount of fuel, but they are doing so in smaller increments and more often. “This makes the focus on forecourt signage and marketing to drive conversion to in-store sales an important priority for operators,” she Onenoted.ofthe

“For the second time in a little over two years, consumers are pivoting to new purchasing behaviors at the grocery store,” commented Alan Miles, CEO of New York-based NCS. “Since the start of the pandemic, they’ve been swapping their favorite brands for what’s available. Today, though, value is the centerpiece more often than availability; consumers are selecting brands and products to stretch their budgets as far as possible.”

42 Convenience Store News CSNEWS.com COVER STORY

Other notable findings from the survey include:

• 46 percent say they’re buying fewer non-essentials;

“NACS defines the basket as inside sales divided by inside transactions. One of the bright spots of the past two years is the growth of the basket. Customers are relying on convenience stores for

key categories inside the store, foodservice, is still struggling to regain its footing postpandemic and being impacted by inflation and higher gas prices on top of that.

“In comparing NACS CSX foodservice gross margin data so far in 2022 to 2021, you can see the toll

In the convenience channel, in-store transaction counts were in decline pre-pandemic at a yearly rate of about 1 percent to 2 percent, according to the NACS CSX Benchmarking Database.

• 43 percent are seeking out sales and promotions to afford their favorite brands; and

“Price inflation in 2022 is different than what we have seen in the past. There are true supply issues causing prices to increase, not just increased demand for readily available products.”

• 24 percent are shopping closer to home.

Lower gas prices are providing some relief, according to Cowen, as 70 percent of respondents reported spend impact from increased fuel costs in July, down from 74.5 percent in June.

Additionally, 85 percent of respondents indicated they are very concerned or extremely concerned about inflation, and 93 percent said we’re in an inflationary time. One in four Americans believes a recession will occur in 2023.

46 Convenience Store News CSNEWS.com Percent Inﬂation Change Year Over Year Average Inflation Rate for CPG 2017-2022

“With the expectation of decreased inside traffic, cost control will always separate top performers from the rest of the pack during a recession,” the NACS executive said. “On the other hand, growthminded retailers should remain vigilant. The coming months will likely present opportunities for growth by acquisition of companies that aren’t able to weather bumpy economic conditions, or feel the time is right to exit the industry.”

“While a recession may bring minimal temporary relief to the rising costs of labor in convenience, other costs such as utilities, insurance, maintenance and, especially, swipe fees will likely continue to remain elevated,” she said. “Price inflation in 2022 is different than what we have seen in the past. There are true supply issues causing prices to increase, not just increased demand for readily available products.”

Source: NCSolutions Purchase Data, 2017-2022

that inflation and higher gas prices are having on consumers’ wallets. All five foodservice categories experienced a decline in gross margin in 2022, while all but two generated double-digit sales increases,” she reported. “The data suggests that increased promotional activity and wholesale price increases were not fully passed along to customers.”

Credit card fees also increased 22.5 percent, or $4.1 million, due to higher retail prices.

Interest rates will likely be raised again, resulting in greater pressure on those carrying debt, and many Americans may not be able to keep up their standard of living. Even if the United States does not enter a classically defined recession, Stillman argues the country will feel like it is in one.

If the country does go into a recession, it will be different than The Great Recession in 2009, Stillman predicts. Fuel supply is a much bigger concern today due the uncertainty of Russian oil, she says, and the lack of foreseeable relief in fuel prices alone is enough to impact prices for everyday products, essentially making American consumers more financially insecure.

COVER STORY

According to Stillman, the conditions will require convenience store retailers to become more engaged with suppliers in pricing discussions, more discerning in terms of reviewing invoices, and more agile when it comes to enabling price changes. Retailers that are food focused will have to ramp up their menu costing and rationalization efforts to ensure their food programs remain profitable.

ARKO Corp., the parent company of GPM Investments LLC, is experiencing heightened price increases across the board, from in-store products to personnel expenditures to credit card fees. As of June 30, ARKO operated 1,308 retail sites and 1,620 wholesale sites.

12.8% JAN-DEC2019 JAN-DEC2021JAN-DEC2020 JAN-JUN2022JAN-DEC2017 10%0%5%15%-5% JAN-DEC2018

Absorbing the Impact of Inﬂation

Waste is also affecting c-store foodservice programs. NACS data shows that the cost of foodservice waste increased 34 percent in 2022 vs. 2021, meaning the channel had overproduction of foodservice compared to expectations, despite increased promotions.

“There’s a lot of increased costs due to inflation just to run the site, which are different than we had before. You also have increased labor costs. These

During the company’s recent earnings call for the second quarter of its 2022 fiscal year, Chief Financial Officer Don Bassell noted that its convenience store operating expenses increased 15.1 percent year over year, primarily driven by a 15.8 percent rise in personnel costs.

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“That’s the reason we saw an increase in loyal customers,” Kotler said. “And, as we continue during inflation, we see the difference between a loyal customer and a non-loyal customer. Loyal customers are spending over $90 more than non-loyal customers. I think that’s going to continue to basically be the trend as we continue to go through inflation.”

is: “Keep a close eye on purchase cost, adjust prices quickly and often, don’t be afraid to lead the market up in pricing if necessary, and look for ways to reduce operating costs until the cost increases stabilize.”

than the larger chains, cautioned Roy Strasburger, CEO of StrasGlobal, a privately held retail consulting, operations and management provider serving the small-format retail industry based in Temple, Texas. Small operators may not be fully aware of the increases in their costs, and may not have the mechanisms in place to raise retail prices on a timely basis, thereby losing gross profit dollars, he “Largerexplained.retailers will raise their prices quickly, if competition allows, so that they are making the same gross profit percentage on the ‘new,’ more costly items and a large gross profit percentage on ‘old’ less costly items,” Strasburger pointed out.

Six-Year Inﬂation Trend Yearly Inflation Increase Source: NCSolutions Purchase Data, 2017-2022

“Keep a close eye on purchase cost, adjust prices quickly and often, don’t be afraid to lead the market up in pricing if necessary, and look for ways to reduce operating costs until the cost increases stabilize.”

JAN JULMAR SEPMAY NOVFEB AUGAPR OCTJUN DEC 20%10%5%15%0% 20202021201820172019JUNETHROUGH2022JUNETHROUGH2022

The convenience store industry’s small operators (those with 20 stores or less) are likely feeling the effects of inflation more

COVER STORY

Small operators may not have as many variables to work with as larger chains do to move their profitability around in the store or at other locations, he continued, noting that larger operators also have more negotiation ability with suppliers and can have prices either locked in for the near future or be able to slow the increase in cost with larger purchase Strasburger’sorders.advice

to small operators

— Roy Strasburger, StrasGlobal

are things that our competitors are also talking about,” Bassell said. “No one knows what the future is going to hold, but there’s a lot of cost drivers that support some of what we’ve been seeing, like increased costs between labor and credit cards, and lower business that has happened since the pandemic started.”

Despite these challenges, the Richmond, Va.-based retailer had a successful second quarter thanks to increased promotions across its convenience stores, according to ARKO President, Chairman and CEO Arie Kotler. The company saw growth in same-store merchandise sales and increased margins. Category standouts were frozen foods, center-store items including sweet and salty snacks, alcohol, and other tobacco products.

48 Convenience Store News CSNEWS.com

Retailers have to strike a delicate balance when it comes to raising prices enough to offset higher costs without making products too expensive for consumers. NielsenIQ suggests retailers follow these essential approaches to pricing products in volatile times:

“There’soperator.beena

While Lakeport Markets has implemented price increases three times over the past 12 months to keep up with the cost of goods, the retailer hasn’t had to sacrifice any of the items on its menu.

Address hypersensitivity to price head-on: Communicating with shoppers is critical to overcome any price misperceptions. Retailers need to be frank and share the exact reasons for the increase.

Bolster marketing programs with coupons & loyalty rewards: Shoppers are still looking for overall value. Consider promotional tactics that soften the blow of price increases, so your best customers always feel appreciated. Programs should be digital-first — meaning they engage the consumer via a mobile app or online — to ensure quick measurement of effectiveness.

One area in particular where small operators can cater to their customers during times of inflation, he said, is foodservice. Paduano points out that his Lakeport Market stores, among other local independents, have gained customers from larger chains that have opted to offer only roller grill items and frozen sandwiches. The fresh food menu at his stores includes pizza, subs, wraps, fried fish, chicken wings, quesadillas, melts, salads, fruit cups, and cookies.

Even though there has been some relief in pump prices lately, which is a huge contributor to inflation, Paduano believes

Lakeportsaid.

COVER STORY 50 Convenience Store News CSNEWS.com

Focus on the trade-up & trade-down shopper: Store brands always grow during challenging economic times, but so do premier lines. Consumers will search for better prices in some categories, while spending a little extra on others. The key is to price each category in a way that exhibits value.

Outside of foodservice, the former Nice N Easy Grocery Shoppes executive notes that some customers are trading down on items like beer, while others are willing to pay a premium. At the same time, there are certain brands and items, such as milk and bread, that customers purchase regardless of price because “they’re items that they need,” he

“If we used to make retail changes in menu items once per year, we would get comments. Now, even though we have taken three wholesale price increases in foodservice items, customers are not complaining,” Paduano relayed. “It feels almost like a full-time job just keeping track of what’s going on with the cost of food.”

Markets, which typically see a lot of traffic during the summertime, are selling fewer gallons of gasoline and non-ethanol fuel for boats this year, but its basket rings — particularly on the weekends — are still holding strong for the small

Matt Paduano, owner of two Lakeport Market stores in Lakeport and Chittenango, N.Y., acknowledges that larger convenience store chains may be able to absorb the impact of inflation better than the industry’s singlestore owners and small operators, but he said all retailers sooner or later are faced with the same standard operating procedure: adjust prices and offers to reflect the increased cost of doing business.

change in leisure. People are still going on picnics and going to the beach, but they’re spending less money than they usually would,” Paduano said. “Fortunately, we’re more than just gas and cigarettes. We have a good range of food and groceries, so people are coming in for more than fuel. Our weekend market basket rings are pretty healthy.”

How to TimesInﬂProductsPriceinationary

Local, local, local: There is an understanding that local products may cost more to produce, but there is also the expectation by shoppers that local products should now be closer in price to similar products made overseas because of increased shipping costs. Retailers need to be transparent with customers about the price differential, or risk alienating them.

He believes small operators are at an advantage because they know their customers and can cater to them even during times of inflation. “The large chains try to create cookie-cutter stores to be all the same and not take into account the local differences in their markets. Urban stores may carry the same items and offer the same services as suburban/rural stores, even though they may not apply,” Paduano cited.

Shift to value retailers

COVER STORY 52 Convenience Store News CSNEWS.com

Paduano recounted that during the last recession, discretionary income was tight, but consumers were still coming in to purchase their staple items. Other categories, such as general merchandise, were hit hard “because all of the trinkets and small-ticket items someone like a mom might come in and buy for her kids wasn’t happening,” he recalled.

Buying on promotion

Recession sentiment

consumerNon-recessionarybehavior

Buying fewer items

Source: NielsenIQ

— Matt Paduano, Lakeport Markets

Consumer Behavior Recessionary Signals

Shift to private label

“Hopefully, it doesn’t get as bad as the last one. I don’t want to say we’re customerbasketprobablybuttogroceries,needgoingbecauserecession-proofpeoplearestilldrivetoworkandtobuygasandandstillgoingeatandbuydrinks,we’regoingtoseelowerringsandcounts.”

CSN

1. Keep up on the cost of goods: “A c-store might carry 5,000 SKUs and might see price increases or price changes across 100-200 items a week, so you have to stay on top of what’s coming and adjust accordingly. Retailers will always know what the cost of their fuel is because it’s their largest profit maker, but they need to be looking inside the store and know what their food margins are.”

3. Be cognizant of where you’re spending your money: “You aren’t going to make big purchases right now to, say, repave your parking lot. Allocate the resources you have accordingly.”

consumerRecessionarybehavior

there is a 60 percent to 70 percent likelihood that a recession is imminent based on the current economic “Hopefully,climate.itdoesn’t get as bad as the last one. I don’t want to say we’re recession-proof because people are still going drive to work and need to buy gas and groceries, and still going to eat and buy drinks, but we’re going to probably see lower basket rings and customer counts,” he said.

Rising CPG prices

Low impact High impact

To overcome the current challenges of inflation and prepare for a potential recession, the c-store industry veteran shared three key pieces of advice for his fellow operators:

2. Monitor the competition: “Even if they’re selling

sub sandwiches for less than a dollar than you, you need to do what’s best for your business.”

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vation around foodservice and fresh is an aggressive focus on technology solutions, which provide convenience retailers the insights to drive their business and the tools to engage digitally with the consumer.

These branded programs typically are designed to require a minimal investment in equipment, limited incremental labor, and a small amount of dedicated space. “You can be selling food for breakfast, lunch and dinner — all dayparts — even if you don’t have space for a full kitchen,” Murray says. “Everything we do has convenience at its core, and is reﬁned with those unique challenges in mind.”

“Our focus on leveraging data, delivering meaningful insights and providing tools for our customers to engage digitally with consumers all are part of our effort to support our retailers,” Murray says. “The retail landscape is dynamic, and we are motivated to make our convenience retailers relevant well into the future.”

“Our commitment to meeting the emerging needs of the convenience channel has led us to advance our capabilities around foodservice, fresh and technology and is what will keep us — and our customers — at the forefront of the industry.”

–CHRIS MURRAY, Executive VP of Merchandising and Marketing

Nowhere are these strengths better deﬁned than in foodservice, where the company now boasts the advantages of one of the largest broadline food distributors in the nation, its parent company, Performance Food Group.

extensive Performance Food Group family of brands, we can create signature items, designed to regional tastes, styles, or particular preferences,” Murray says. “It can be a game-changer in the marketplace.” Complementing the accelerated inno-

“Today, we are bringing together the capabilities of two convenience leaders to give our customers a single source of expertise, quality, innovation and service that goes unmatched in the industry,” says Chris Murray, Core-Mark’s Executive VP of Merchandising and Marketing.

captivating components to complete, franchise-like programs without the added fees and constraints.”

Additionally, by leveraging the company’s family of brands — Roma Italian, Bacio cheese, Braveheart meats and numerous others — the culinary teams are creating distinct ﬂavor proﬁles and customized menu items for stores that wish to differentiate their offerings from the “Withcompetition.accesstothe

“PFG brings unmatched capabilities and compelling foodservice solutions to our convenience organization. An entire team of corporate chefs are collaborating to create high-quality, ﬂavorful options with convenience operators and customers in mind,” Murray says. “We can bring our customers anything from

The company currently offers ﬁve distinct and complete branded foodservice programs, including The Red Seal Pizzeria, Contigo Taqueria, Perfectly Southern Fresh Fried Chicken, Tru-Q BBQ and Deli 55. In addition, the company recently rebranded its exclusive fresh food offer — Fresh Take — which continues to realize considerable growth within the customer base. An expansive beverage program and a wide and varied array of other graban-go items round out the food offerings.

“Our commitment to meeting the emerging needs of the convenience channel has led us to advance our capabilities around foodservice, fresh and technology. It is what will keep us — and our customers — at the forefront of the industry,” Murray says. “More than ever, we are in a position to leverage our unique abilities in support of our customers and continue at the forefront of the industry. I am bullish on the future.”

The Next Level of Convenience CORE-MARK, EBY-BROWN CONVERGE TO HELP C-STORES SOAR

Given the alignment of Core-Mark and Eby-Brown under the Performance Food Group umbrella, Murray says he is excited about the opportunities that lie ahead, for the company and the industry.

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Two convenience wholesale leaders — Core-Mark and Eby-Brown — have joined to make up what is now the largest convenience distributor in North America. And together they have developed for their customers a portfolio of programs and solutions that will help deﬁne the future of convenience.

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Labor shortages

By Tammy Mastroberte

in Albany, N.Y., that was sitting on them. I knew they supplied Wegmans and we are selling 3 million slices per year, so we needed them.”

job to source and buy now,” he noted. “It wasn’t as bad during COVID because a lot of places that needed the same items were not open. But once people got the green light to go back to work, labor issues and

“It’sstocked.halfmy

At Wesco Inc., headquartered in Muskegon, Mich., Dan Sloboda also expanded his job responsibilities during and after the height of the pandemic. While his title is fresh research and development lead at the company, which operates 55 stores, he said his role morphed into “emergency purchasing” when items couldn’t be

SUPPLY CHAIN SOLUTIONS continue to cause but savvy c-store retailers are finding workarounds as experts predict struggles will continue past

supply chain issues,

SUPPLY CHAIN ISSUES are hitting every industry in the United States, and convenience store retailers are no exception. Whether it’s paper cups and boxes for foodservice items, candy staples or fresh food ingredients like turkey and cheese, c-store retailers are having to get creative to keep their shelves stocked and their customers happy.

“I’m the foodservice director, but over the pandemic, I essentially became a buyer,” Jeff Russell, foodservice director at Lockport, N.Y.-based Reid Stores, operating 87 Crosby’s locations, told Convenience Store News. “I couldn’t get pizza clamshell boxes from my distributor, and I found them at a company

56 Convenience Store News CSNEWS.com FEATURE

2022

Additionally, prior to the pandemic, the natural aging of the population created an imbalance of older Americans compared to younger working generations and this, coupled with the pandemic, produced more labor issues, Segal pointed out.

“The categories being affected move around month to month and week to week,” he said. “This week, it might be bagged candy, and last month it was coffee.”

“You have to find people who can produce items and partner with them,” he said. “I’ve had times where I’ve had to drive myself to Sysco, another foodservice distributor, and pick up 60 cases of items because we were not getting our normal deliveries. We now have at least three different distributors for an item, and at least six different items as backups.”

Most retailers agree that consumer demand has leveled off and is not the core issue when it comes to the supply chain struggles, although products being out of stock are forcing consumers to switch to products that might not be their first choice, said Jonathan Polonsky, chairman and CEO of Plaid Pantry, a Beaverton, Ore.-based chain of 106 stores.

the high demand started affecting the supply.”

“Every week, there is a new challenge and a new supply chain issue. I had to create a backup list for deli, packaging and other categories, so if one thing is out of stock, we go down the backup list to see what we can get.”

“We have a backup for every item, so we should never run out of something unless something bizarre happens,” he said. “This alleviates a lot of stress for myself and the stores.”

— Dan Sloboda, Wesco Inc.

Finding Workarounds

“Supply chain issues began a year ago as the extended PPP [Paycheck Protection Program] enabled workers to stay home,” Segal explained. “This has affected every level of the work chain, including product production, manufacturing, warehouse and delivery. While some manufacturers with whom I’ve spoken to are working on robotic options for repetitive processes, these projects are 12 to 18 months in the making at best.”

At Reid Stores, Russell is taking a similar approach, creating backup lists with its distributors. If they can’t get pizza clamshell boxes with their logo, they will take plain white.

Manufacturers, distributors and retailers are all feeling the pressure to get items on store shelves. Out-ofstocks are affecting so many categories that it’s hard to predict what items will be available and when. In some cases, manufacturers don’t have the labor to produce products and at other times, they are not getting the ingredients they need from those that supply to them directly, according to Wesco’s Sloboda.

It seems labor issues at every level are at the heart of today’s supply chain issues, according to Kay Segal, founding partner at Business Accelerator Team, based in Phoenix. Both manufacturers and distributors are dealing with labor issues, and that also includes the suppliers that deliver ingredients to the manufacturers.

FEATURE 58 Convenience Store News CSNEWS.com

“It’s the ingredient companies sometimes and not the manufacturers,” he said. “Every week, there is a new challenge and a new supply chain issue. I had to create a backup list for deli, packaging and other categories, so if one thing is out of stock, we go down the backup list to see what we can get.”

For example, Wesco gets turkey from Gordon’s Foodservice and now has different types of turkey listed as backups so that the retailer can at least get something delivered. It also helps to have multiple distributors, according to Sloboda.

Invenco’s secure, open and agile pay-at-pump systems and retail software services position each business for ongoing, independently-defined success. Come see what the hype is about. visit invenco.com/s/greengrass for more details. secure payment processing and customer engagement solutions

Sometimes, the grass really is greener.

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DH: Moving to the cloud—virtualizing servers to enable ﬂexibility and agility in systems conﬁguration—is a start.

CSN: What is digital agility and what role does it play here?

So is edge computing—pushing cloud computing capabilities down to edge devices so a c-store’s systems conﬁguration can run the way operators want and more importantly, need it to. However, this isn’t enough.

hange is the watchword for the c-store and retail petroleum segments. Some changes, such as increased competition from operators in other industries, changing customer expectations, and payments evolution, threaten long-established revenue models. However, others create signiﬁcant opportunities for growth through the introduction of new products and services, customer engagement initiatives, and more. This juxtaposition makes it imperative for c-stores to be capable of functioning as efﬁciently as possible while quickly pivoting to capitalize on new revenue streams.

common, standard, open APIs, systems integration is simpliﬁed and systems can easily communicate with each other—no walls and no ‘translating’ between vendors, for starters.

DH: Invenco enables Secure Digital Agility largely through its core products, including iNFX Retail Microservices, Invenco Cloud Services, and the Edge IoT Device. iNFX Retail Microservices is a set of hardware-agnostic, decoupled software microservices built on agile, standards-based APIs. The Cloud Services Platform is a specialized IoT platform for managing PCI-certiﬁed devices, site assets, and applications— including media and loyalty—while the Edge IoT Device acts as a secure, connected, site-level host for retail and commercial applications.

CSN: How does Invenco support c-stores’ moves to attain Secure Digital Agility—quickly adapting and innovating within the disruptive landscape and continuing to capitalize on new opportunities?

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You may assume that traditional systems interfaces do this, but that’s not so. With interfaces, there are still barriers to communication between systems. With

CSN sits down with Dan Harrell , Chief Innovation Ofﬁcer, Invenco, to discuss how digital agility makes it happen.

CSN: What are some of the key enablers of digital agility?’

HOW DIGITAL AGILITY OPENS DOORS TO NEW C-STORE OPPORTUNITIES

open APIs, operators can build their ideal ecosystem of technology providers in tandem with their business needs, without the obstacles that accompany using systems from different vendors and the high cost of vendor intervention.

One key thing to remember here: C-store operators may question where to start on the path to digital agility and worry that getting there is a daunting undertaking. The answer to the ﬁrst question is, there’s no single place to start. Start where the most challenging aspects of your business lie or where your priorities are and ensure that everything is working right before you proceed to the next piece. Working in increments, and on your own time, makes a transition to digital agility tenable, smooth, and successful.

DH: Digital agility is the ability to adapt and innovate to meet changing business needs, using technology as a linchpin.

Tying systems together in a single platform by adopting a microservices solution architecture is critical to digital agility. In such an architecture, massive, monolithic, all-encompassing systems— in c-stores, the forecourt system—are replaced with a set of hardware-agnostic, decoupled software microservices. Instead of a ‘spider web’ of complexity built into one solution that handles all functionalities, you have individual but connected ‘blocks’ of software tied to a speciﬁc function. For c-stores, those functions might include handling payments or monitoring the fuel tank.

All ‘blocks’ use open, standards-based application programming interfaces (APIs) that allow them to communicate with other ‘blocks’ needed for the function to which it’s tied to take place. APIs are important—and are also essential enablers of digital agility—because they break down the ‘walls’ between systems.

“It’s about being proactive and staying ahead of the game. You want to be proactive and not reactive.”

Russell’s team actively walks the stores and looks at analytics to find any holes in product assortment. This made them realize that they were not getting cookies delivered for the bakery because the manufacturer cut them from the lineup. Russell decided the stores would simply start making the cookies themselves and, as a result, cookie sales went up 38 percent.

At Plaid Pantry, the company runs out-of-stock reports to identify items that need attention, but also has had success “pooling resources across stores” to avoid out-of-stocks, since inventory levels and consumer demand can vary significantly by location, said RetailersPolonsky.alsocan

FEATURE

“You will pay more with smaller, local companies, but I’ll do anything to keep the business going,” he said. “You can also try to buy in bulk when you can. For the pizza clamshells, it’s cheaper if I get two trailer loads instead of one.”

“This manufacturer could not get them in stock, so we started baking them fresh,” he said. “Our foodservice sales are up 23 percent and the grab-and go is up 32 percent, so we are bucking the trend.”

streamline some of the products they offer from manufacturers or distributors. For

Russell is also working with smaller companies and other backup distributors and manufacturers as needed to keep items in stock, especially foodservice items needed to make staple items at its stores. When the retailer couldn’t get its Market Express sandwiches because the company didn’t have the labor to produce them, he found premade salads, yogurt parfaits and fruit and vegetable cups from a local company in Buffalo, N.Y., to distribute under a private label.

62 Convenience Store News CSNEWS.com

— Jeff Russell, Reid Stores

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The Outlook

“I email everyone asking when they see things coming back and you get the same standard letter of, ‘We are not sure. We are working on it,’” Russell noted. “Then, all of the sudden, an item will be back. You don’t know when anything will go back to normal, so you just do your best to keep items on the shelf.”

Out-of-stocks can vary day by day and week by week

example, instead of offering five flavors of something, cut it down to three, noted Segal.

FEATURE

“If a store is running low on pizza sauce, they have to let me know, so I can call the distributor or manufacturer to see what’s going on,” he said. “I don’t want to find out from stores product didn’t show up and now they have none. It’s about being proactive and staying ahead of the game. You want to be proactive and not reactive.”

and unfortunately, a significant improvement is not expected by the end of 2022, according to Segal.

— Jonathan Polonsky, Plaid Pantry

Another proactive measure is preplanning for promotions and limited-time offers. At Wesco, Sloboda informs his distributors what he has planned in the future to see what is in stock and create a backup list of items. This transparency and communication are key in today’s world, he said.

On the labor front, job openings dropped to 10.7 million from 11.3 million in June 2022, according to the Job Openings and Labor Turnover Survey, or JOLTS, published in August 2022. This marked the lowest one-month drop since the start of the pandemic.

“If a distributor can fill at 90 percent if you only offer three items vs. 70 percent if you offer five, this could be an option,” she advised. “Retailers should communicate with their manufacturers and distributors to see how they can get creative and solve issues.”

“We are 80 to 85 percent of the way back to prepandemic levels,” said Polonsky. “At the current trajectory, I would say we are still nine to 12 months away from normal.”

64 Convenience Store News CSNEWS.com

It’s also important for retailers to communicate with store management, so the chain becomes aware before something is out of stock. Stores should communicate when something is running low, so there is time to replenish with another option, said Russell.

“We are 80 to 85 percent of the way back to pre-pandemic levels. At the current trajectory, I would say we are still nine to 12 months away from normal.”

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FEATURE 66 Convenience Store News CSNEWS.com

In 2019, U.K.-based EG Group built on its U.S. presence by closing on the purchase of Westborough, Mass.-based Cumberland Farms, a move that added more than 560 stores to its network. EG Group established its EG America network when it acquired Cincinnati-based The Kroger Co.’s convenience store portfolio for $2.15 billion the previous year.

In 2020, El Dorado, Ark.-based Murphy USA Inc. inked an agreement to acquire Whitehouse Station, N.J.-based QuickChek Corp. for $645 million. The sale closed in early 2021.

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OVER THE PAST FEW YEARS, several headline-grabbing deals have shaken up the U.S. convenience channel. In 2021, it was Irving, Texas-based 7-Eleven Inc.’s $21billion deal with Findlay, Ohio-based Marathon Petroleum Corp. (MPC) for Enon, Ohio-based Speedway LLC.

The pace of M&A activity has slowed as buyers find limited inventory available

By Melissa Kress

Less Deals, More Money

In 2018, MPC’s $23-billion tie-up with San Antonio-based Andeavor, formerly known as Tesoro Corp., created a coastto-coast retail powerhouse. That same year, 7-Eleven took ownership of more than 1,000 stores through a $3.3-billion

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FEATURE transaction with Dallas-based Sunoco LP. In 2017, Laval, Quebec-based Alimentation Couche-Tard Inc. wrapped up its $4.4-billion deal for San Antonio-based CST Brands 2022Rank Company, City, State Total U.S. Store Count StoresOperatedCompany- StoresLicenseeFranchise/ Primary Store Names 1 7-Eleven Inc. Irving, Texas 12,702 5,282 7,691 7-Eleven, Speedway, Stripes, APlus, Shell, Rich Oil, 2Go Tesoro, Western Refining, Arco 2 Couche-TardAlimentation Inc. Laval, Quebec 5,714 5,714 0 Circle K, Holiday, Purple Cow 3 Casey’s General Stores Inc. Ankeny, Iowa 2,448 2,448 0 Casey’s General Store, Goodstop, Bucky’s Convenience Store 4 EG America Westborough, Mass. 1,702 1,640 62 Cumberland Farms, Turkey Hill Minit Market, Minit Mart, Loaf ‘N Jug, Kwik Shop, Tom Thumb, Quik Stop, Certified, Fastrac, Sprint Foods 5 GPM Investments LLC Richmond, Va. 1,377 1,362 15 E-Z Mart, Fas Mart, Scotchman, Admiral Petroleum, Roadrunner Markets, Village Pantry, Fast Market, Express Stop, Shore Stop, R Store, Apple Market, Handy Mart, Next Door Food Store, Young’s, Li’l Cricket, Town Star, Bread Box, Jiffi Stop, 1-Stop Food Store, Bread & Butter Shop, Jiffy Stop Food Marts, Lemmen, Valero, Cash & Sons, Jetz Convenience Center, Shell, 7-Eleven, Phillips 66, Chevron, Conoco, Marathon, Texaco 6 Murphy USA Inc. El Dorado, Ark. 1,058 1,058 0 Murphy USA, QuickChek 7 Wawa Inc. Media, Pa. 957 957 0 Wawa 8 QuikTrip Corp. Tulsa, Okla. 934 934 0 QuikTrip 9 Kwik Trip Inc. La Crosse, Wis. 784 784 0 Kwik Trip, Kwik Star, Stop N Go, Tobacco Outlet Plus Grocery 10 Pilot Co. Knoxville, Tenn. 660 659 1 Pilot Travel Center, Flying J, Mr. Fuel, EZ Trip, Pilot Express, Arco 11 Sheetz Inc. Altoona, Pa. 645 645 0 Sheetz 12 Love’s Country Stores Inc. Oklahoma City 587 587 0 Love’s Travel Stop, Love’s Country Store 13 RaceTrac Inc. Atlanta 564 564 0 RaceTrac 14 Military Arlington, Va. 531 531 0 AAFES Exchange Store, Shoppette, NEXCOM Mini Mart, Marine Corps Shoppette, Troop Store, Coast Guard Mini Mart 15 Kum & Go LC Des Moines, Iowa 410 410 0 Kum & Go 16 Yesway Fort Worth, Texas 401 401 0 Allsup’s, Yesway 17 Maverik — Adventure’s First Stop Salt Lake City 384 384 0 Maverik 18 Stewart’s Shops Corp. Ballston Spa, N.Y. 354 354 0 Stewart’s Shops 19 Global Partners LP/Alliance Energy Corp. Waltham, Mass. 345 316 29 Alltown, Xtra Mart, Jiffy Mart, Wheels, Honey Farms, Miller Mart, Gulf, Mr. Mike’s, T-Bird Mini Mart, Convenience Plus, Mobil, Mobil Mart, Shell, Fast Freddie’s 20 United Pacific Long Beach, Calif. 333 333 0 My Goods Market, Rocket 21 COPEC Inc. Franklin, Tenn. 313 313 0 MAPCO Mart, MAPCO, MAPCO Express, Delta Express 22 Jacksons Food Stores Inc. Meridian, Idaho 311 234 77 Chevron ExtraMile, Jacksons Food Store 23 ExtraMile Convenience Stores LLC Pleasanton, Calif. 303 0 303 Chevron, Chevron ExtraMile 24 CrossAmerica Partners LP Allentown, Pa. 269 259 10 Joe’s Kwik Mart, Stop In, One Stop WV, Uni Mart, Rocky Top Market, Hy-Miler, Zoomerz, Mobil, Choice, BP, Shell 25 Anabi Oil Co. Upland, Calif. 265 196 69 Rebel, Shell, USA Gas, 2 Go Mart, Mobil, Arco, Aisle 1, Tesoro TOP 100 Inc., adding nearly 1,300 c-stores to its network in the United States and Canada. These are just a few notable examples dating back five years, but by no means 68 Convenience Store News CSNEWS.com TOP100

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is 7-Eleven with a total U.S. store count of 12,702, followed by Couche-Tard at No. 2 with a total U.S. store count of 5,714. In fact, both retailers have held these spots since 2015, with 7-Eleven’s crown dating back even further.

are they the only ones. Looking at these deals, is it any wonder that the 2022 Convenience Store News Top 100 report looks the way it does? Taking the top spot once again this year FEATURE TOP100 72 Convenience Store News CSNEWS.com 2022Rank Company, City, State Total U.S. Store Count StoresOperatedCompany- StoresLicenseeFranchise/ Primary Store Names 26 Two Farms Inc. Baltimore 258 258 0 Royal Farms 27 Delek US Holdings Inc. Brentwood, Tenn. 253 70 183 7-Eleven, DK, Alon 28 ofTravelCentersAmericaInc. Westlake, Ohio 246 246 0 TravelCenters of America, Petro Stopping Center, TA Express 29 Texas Petroleum Group Houston 232 232 0 Timewise 30 United Refining Co. of Pennsylvania Warren, Pa. 229 229 0 Kwik Fill, Country Fair, Kwik Fill & Smokers Outlet 31 Giant Eagle Inc. Pittsburgh 226 226 0 GetGo 32 BP Houston 212 212 0 Thorntons 33 Fikes Wholesale Inc. Temple, Texas 211 211 0 CEFCO Food Stores 34 Cal’s Convenience Inc. Frisco, Texas 210 210 0 Stripes 35 Meijer Grand Rapids, Mich. 183 183 0 Meijer Gas Station 36 United Dairy Farmers Cincinnati 175 175 0 United Dairy Farmers 37 Croton Holding Co. Pittsburgh 173 173 0 Par Mar Stores 37 Refuel Operating Co. LLC Mount Pleasant, S.C. 173 172 1 Refuel, Double Quick, Cruizers Convenience Marketplace, Circle K 39 G&M Oil Co. Inc. Huntington Beach, Calif. 167 23 144 Chevron ExtraMile, G&M Food Mart, Chevron 40 True North Energy LLC Brecksville, Ohio 164 164 0 True North 41 Hy-Vee Food Stores Inc. West Des Moines, Iowa 163 163 0 Hy-Vee Gas, Hy-Vee Fast & Fresh Express 42 Tri Star Energy LLC Nashville, Tenn. 160 160 0 Sudden Service, Twice Daily, Southern Traders, Hightail, Tri Star Energy, T Fuel 43 Bolla Management Corp. Garden City, N.Y. 158 154 4 Bolla Market, Shell 44 CF Altitude LLC Los Angeles 152 152 0 Alta Convenience, Petro Mart 44 Terrible Herbst Inc. Las Vegas 152 152 0 Terrible Herbst 46 Nouria Energy Worcester, Mass. 145 108 37 Nouria, Shell, F.L. Roberts, Irving, Mobil, Sunoco, Gulf, Lil Mart 47 Blarney Castle Oil Co. Bear Lake, Mich. 143 143 0 EZ Mart 48 Parkland USA Minot, N.D. 132 114 18 Superpumper Store, KJ’s Super Stores, On The Run, Red Carpet, Harts, KB Express, Conomart Super Store, Mr. Gas, Silver Eagle 49 Martin & Bayley Inc. Carmi, Ill. 124 124 0 Huck's 50 Go Mart Inc. Gassaway, W.Va. 123 123 0 Go Mart TOP 100

Ankeny, Iowa-based Casey’s General Stores Inc. ranks No. 3 with a total U.S. store count of 2,448. Casey’s network was boosted by three major transactions in its 2022 fiscal year: the acquisition of Omaha, Neb.-based Buchanan Energy and its Bucky’s Convenience Stores; a $39-million agreement with Couche-Tard for nearly 50 locations in the Oklahoma City market; and a $220-million pact with Knoxville, Tenn.-based Pilot Co. for 40 locations that strengthened its 74 Convenience Store News CSNEWS.com FEATURE 2022Rank Company, City, State Total U.S. Store Count StoresOperatedCompany- StoresLicenseeFranchise/ Primary Store Names 51 Englefield Oil Co. Heath, Ohio 118 118 0 Duchess Shoppe 51 Enmarket Inc. Savannah, Ga. 118 118 0 Enmarket 53 Majors Management LLC Lawrenceville, Ga. 116 58 58 Kangaroo Express, Marathon, Hop In, Summit, Star Stop Food Mart, Time Out Market 54 Panjwani Energy LLC Houston 113 113 0 Star Stop 55 Little General Stores Inc. Beckley, W.Va. 110 110 0 Little General 56 Flash Oil Co. West Memphis, Ark. 109 76 33 Flash Market, Corner Mart, Minit Mart, Market Express, Rose Mart 56 Mirabito Energy Products Binghamton, N.Y. 109 109 0 Mirabito 56 Sampson Bladen Oil Co. Inc. Clinton, N.C. 109 109 0 Han-Dee Hugo’s 59 Plaid Pantries Inc. Beaverton, Ore. 107 107 0 Plaid Pantry 60 Town Pump Inc. Butte, Mont. 106 105 1 Town Pump, Flying J 61 H&S Energy Products LLC Orange, Calif. 105 42 63 Chevron ExtraMile, Power Market, Chevron, Colonial Energy, Shell, Texaco 61 Victory Marketing LLC Ridgeland, Miss 105 105 0 Sprint Mart 63 M.M. Fowler Inc. Durham, N.C. 103 103 0 Family Fare 64 Stinker Station Inc. Boise, Idaho 102 102 0 Stinker Stores 65 Petrogas Group SC LLC Lexington, S.C. 99 96 3 Express Lane, Pitt Stop, Applegreen, Freedom Valu Center 66 Vintners Distributors/ AU Energy Fremont, Calif. 98 31 67 Shell, Loop, Chevron, Chevron ExtraMile 67 Break Time Corner Market LLC Houston 96 95 1 Corner Market, Break Time, Valero 67 Gas Express LLC Houston 96 0 96 Circle K, Kangaroo Express 69 Mountain Express Oil Co. Acworth, Ga. 91 90 1 Brothers Food Mart, Quik Chek, Central Station, Fox Fuels, West Hill Ranch, Pilot Travel Center 70 Newcomb Oil Co. Bardstown, Ky. 87 87 0 Five Star Food Mart 71 The Spinx Co. Inc. Greenville, S.C. 85 85 0 Spinx 72 Toot'n Totum Food Stores Amarillo, Texas 84 84 0 Toot'n Totum 73 Reid Stores Inc. Lockport, N.Y. 82 82 0 Crosby’s 74 Family Express Corp. Valparaiso, Ind. 81 81 0 Family Express 75 Atlantis Management Group Mount Vernon, N.Y. 80 55 25 Atlantis Fresh Market, Food Bag, CITGO, Shell, BP, Irving, Mobil, Exxon 75 FKG Oil Co. Belleville, Ill. 80 80 0 Moto Mart TOP 100 TOP100

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position in Tennessee and Kentucky. Rounding out this year’s top 10 are Westborough-based EG America, Richmond, Va.based GPM Investments LLC, Murphy USA, Media, Pa.-based Wawa Inc., Tulsa, Okla.-based QuikTrip Corp., La Crosse, Wis.-based Kwik Trip Inc., and Pilot. 76 Convenience Store News CSNEWS.com Source: TDLinx, April 2022 Note: Store counts are by Ultimate Parent Owner, the corporate owner of banners/stores that roll up as part of their overall ownership hierarchy, regardless of trade channel associations. FEATURE 2022Rank Company, City, State Total U.S. Store Count StoresOperatedCompany- StoresLicenseeFranchise/ Primary Store Names 77 CHR Corp. York, Pa. 79 79 0 Rutter’s 78 Sunoco Inc. Philadelphia 78 74 4 Aloha Island Mart, Sunoco, APlus, Shell, Menehune Food Mart 79 First Coast Energy LLP Jacksonville, Fla. 76 53 23 Daily’s, Shell, Southeast Energy, Mountain Energy, Sunoco 79 Johnson Oil Co. Rock Falls, Ill. 76 74 2 Express Lane, Shell 79 Krist Oil Co. Iron River, Mich. 76 74 2 Krist Food Mart, CITGO 79 Quick Track Inc. Bedford, Texas 76 76 0 Quick Track 79 Sam’s Food Store Rocky Hill, Conn. 76 76 0 Sam’s Food Store, Chucky’s Food Store, Hess 84 Campbell Oil Co. Massillon, Ohio 75 75 0 BellStores 85 C.N. Brown Co. South Paris, Maine 74 74 0 Big Apple 85 Southwest Georgia Oil Co. Bainbridge, Ga. 74 74 0 Sun Stop, S&S Food Store, Sun Valley Market & Deli 87 MFA Petroleum Columbia, Mo. 73 73 0 Break Time, MFA Oil, Petro Card 24 87 S&G Stores Sylvania, Ohio 73 73 0 Stop & Go 87 The Kent Cos. Midland, Texas 73 73 0 Kent Kwik, Bountyland Quik Stop 90 BFS Foods Inc. Morgantown, W.Va. 71 71 0 BFS Foods 90 E&C Mid Atlantic Ventures Chantilly, Va. 71 28 43 Shell, Sunoco, Corner Mart, Crown Express Mart, Mobil, The Wine Rack, Exxon, Washington Express, APlus, CITGO, Gulf 90 GATE Petroleum Co. Jacksonville, Fla. 71 71 0 Gate 90 Midjit Market Inc. Las Vegas 71 71 0 Green Valley Grocery Store 94 Weigel’s Stores Inc. Powell, Tenn. 70 70 0 Weigel’s 95 Clark's Pump-N-Shop Inc. Ashland, Ky. 69 68 1 Clark's Pump-N-Shop, Clark 95 Convenient Food Mart Inc. Mentor, Ohio 69 69 0 Convenient Food Mart 95 Holiday Oil Co. West Valley City, Utah 69 69 0 Holiday 95 The Parker Cos. Savannah, Ga. 69 69 0 Parker’s 99 OnCue Marketing LLC Stillwater, Okla. 67 67 0 OnCue Express 100 Dandy Mini Marts Inc. Sayre, Pa. 66 66 0 Dandy Mini Mart 100 Fuel Maxx Inc. Spring, Texas 66 66 0 Fuel Maxx TOP 100 TOP100

78 Convenience Store News CSNEWS.com FEATURE

Private equity and public companies are slowing down, too, or at least considering a lower set of potential acquisitions until they see what the financial markets will do over the next year or so, pointed out John C. Flippen Jr., managing director of Petroleum Capital & Real Estate LLC. “Cost of capital will have an outsized effect on highly leveraged institutional companies,” he said.

“It might be a short-term advantage for the smaller buyers during this period,” he said.

of inventory, it is harder these days to find acquisition candidates that

A number of recent deals fall in the 10-store to 50-store range, NRC’s Ruben pointed out. “I think those operators have come to the conclusion that purchase price multiples have been at record highs in recent years, and interest rates are rising fairly rapidly and will continue to do so in the foreseeable future,” he observed.

With the top 10 remaining relatively unchanged year over year, save for Murphy USA jumping into the No. 6 spot, merger and acquisition (M&A) experts are not “Althoughsurprised.there

“AcquisitionLLC.of average/marginal store chains don’t measure up. They could fit the bill for the private equity rollup groups, but don’t for ‘quality’ store operators,” he explained. “Marginal chains still make attractive candidates for dealer leasing and long-term fuel supply.”

There is one segment of the c-store industry where M&A is still pretty active: the small operator community. And Petroleum Capital & Real Estate believes this trend will continue for the short term. According to Flippen, larger institutions typically have more sophisticated acquisition teams and more institutional investors to answer to. On the other hand, smaller operators are typically buying local and understand those markets.

fit buyers’ preferred store template, said Mark Radosevich, president of PetroActive Real Estate Services

Slowing Down

Larger chains are “taking a breather,” according to Shriber. “The activity level will continue through 2022, but with smaller deals — 50-store portfolios or less,” he

that contemplated selling have already done so over the past couple of years, added Dennis Ruben, executive managing director of NRC Realty & Capital Advisors LLC. The ones remaining have not shown interest in selling any time soon, he said.

Smaller Operators Not Standing Still

Largerpredicts.companies

“There is not too much to buy; that’s why you are not seeing much announced. There is more money chasing less deals. It still comes down to supply and demand. There is a huge demand from investors and other operators to purchase, and very little supply.”

— Terry Monroe, American Business Brokers & Advisors

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No Surprise Party

All told, the top 10 account for a combined 28,339 stores of the total industry’s 148,026 stores, or 19.1 percent. Broken down even further, the top three alone account for a combined 20,864 stores, or 14 percent.

The cost of money is also keeping deals at bay, although that doesn’t necessarily mean M&A prices have peaked, according to Monroe. “The demand is so great [that] everything we have for sale is either sold or under contract. My colleagues are in the same position — nobody has any inventory,” he noted. “It will cycle, but not for a Speakingwhile.”

The pace of M&A activity this year has slowed, especially following what industry insiders agree was a busy 2021. The difference from last year may be inventory, rather than interest.

“There is not too much to buy; that’s why you are not seeing much announced. There is more money chasing less deals,” said Terry Monroe, president and founder of American Business Brokers & Advisors. “It still comes down to supply and demand. There is a huge demand from investors and other operators to purchase, and very little supply.”

was a flurry of acquisition deals in the fourth quarter of 2021 — I think 14 or so, including two of our own — the store counts were generally smaller and not quantum leaps,” said Ken Shriber, managing director and CEO of Petroleum Equity Group.

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On the seller side, he noted that “more importantly, the smaller operators seem to be getting squeezed by the larger operators and the small guys simply don’t have the efficiencies and economies of scale to compete effectively with the larger operators.”

The 2022 NACS/NielsenIQ Convenience Industry Store Count, released earlier this year, showed that the overall number of convenience stores operating in the United States declined for the fourth consecutive year, primarily driven by a drop in single-store operators.

“The low fuel margin, smaller store format locations are not the preference for the larger chains, but are looked at as an underserved niche that is now being consolidated,” he pointed out. “I believe Yesway is a group that recognized this opportunity earlier on. I also think that since fuel margins have remained firm to account for the additional inflationary costs of labor, food, etc., that has helped spur the M&A activity in those markets.”

“This is going to continue, if not pick up speed,” said Monroe. “The baby boomers want to get out. The industry is transitioning to the bigger boxes, so if you are going to stay in this industry, the customer expects a new presentation. You are either going to have to update or come out with a newer, brighter box, and you have to spend more money if you want to stay competitive going Dennisforward.”Ruben,executive managing director of NRC Realty & Capital Advisors LLC, says he can foresee interest in the industry continuing to come from the private equity space.

TOP100

Big consolidation among the smaller chains, though, is something to watch — especially as smaller operators find themselves with no succession plan to carry the business forward.

80 Convenience Store News CSNEWS.com FEATURE

Mark Radosevich, president of PetroActive Real Estate Services LLC, also anticipates continued interest from private equity firms.

“There have been a number of private equity firms that have expressed keen interest in building a convenience store platform. Many of them are extremely well capitalized and they have established a management team to run the platform,” he said. “In addition, Refuel and Parkland have grown very quickly and have done a number of acquisitions. We believe that this trend will continue with those companies, as well as others who may get access to capital in amounts which are sufficient to do larger transactions.”

“It’s a great space. It’s retail. They like it. It’s a cash business and it’s an easy-to-understand business, but I don’t see any new people coming in,” he predicts.

“As long as private equity groups remain bullish on our industry, the trend will continue whereby smaller operators retire and sell,” he said. “Rising interest rates could be the biggest threat to this situation, as it will cost more to fund the acquisitions, require more equity, and lease rent capitalization rates will also rise hand in hand with mortgage rates, making an exit from the real estate part of the deal less lucrative.”

Looking ahead, John C. Flippen Jr., managing director of Petroleum Capital & Real Estate LLC, points to the Southeast and Middle America as areas to watch for consolidation.

What to Watch For

Terry Monroe, president and founder of American Business Brokers & Advisors, doesn’t think the channel will see as many new players come into the industry as it has in the past.

Over the past few years, the U.S. convenience store industry has seen companies like GPM Investments LLC and Yesway enter the channel and grow through smaller, regional deals. Lately, Parkland USA and Refuel Operating Co. LLC seem to be following the same path, and industry M&A experts expect this trend to continue.

“All motor fuel distributors and operators of any size, whether they have 30 sites or 300, are looking to acquire more, notwithstanding the increases in the cost of capital,” said Ken Shriber, managing director and CEO of Petroleum Equity Group.

“It’s hard to tell what the future holds, but most records are eventually broken,” said Shriber, pointing out that 7-Eleven could sell a large chunk of its assets, or the reported potential deal between Couche-Tard and EG Group could move from the rumor stage to a done deal — significantly growing No. 2 Couche-Tard’s network in the U.S.

With 7-Eleven once again sitting at the top of this year’s Top 100, it may be hard to imagine a day when it gives up the throne. But it could happen, some industry insiders say.

“As long as private equity groups remain bullish on our industry, the trend will continue whereby andoperatorssmallerretiresell.”

A Chance for Change?

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A Couche-Tard and EG Group tie-up would be the only contender to catch 7-Eleven, according to Ruben, and the combined entity “could be a real powerhouse.”

“The convenience store industry has long legs. It will be around for a long, long time. Whether there are electric vehicles [EVs] or gas-powered vehicles, the concept is still the same. A convenience store is a box — a box with products, inventory and services,” he “Twentysaid.

“Similar to world superpowers, these chains have gotten so far ahead that they are impossible to catch. That’s why Facebook is where it is. That’s why Microsoft is where it is. They get so big that they take up so much space,” Monroe explained. “The only way that can change is if the concept changes. If the concept changes, then the players will change.”

years ago, it was cigarettes and pop. Then, we morphed into energy drinks. Now, it’s a food industry,” he continued.

But he’s not counting on such transformational changes coming anytime soon.

— Mark Radosevich, PetroActive Real Estate Services LLC

82 Convenience Store News CSNEWS.com FEATURE

Surpassing the store count totals of 7-Eleven and Couche-Tard “would take a monumental level of merger activity, which would require approval from the Federal Trade Commission,” noted Radosevich. However, he added that he wouldn’t be surprised if store counts begin to decline somewhat as the top retailers right-size their “7-Elevenportfolios.hascritical mass that is hard to match. Newcomers like EG Group started very fast out of the gate and then slowed down. U.S. growth may not be of prime interest anymore given all the merger talk,” Radosevich said. “It doesn’t help having the current Washington, D.C. regime continually throwing mud on our industry. It kind of takes the wind out of the sails, so to speak.”

The way Monroe sees it, 7-Eleven and Couche-Tard are so far ahead of the field that no other player can catch them. Combined, the two retailers account for 12.4 percent of the total stores operating in the U.S. convenience channel.

“If I know I am going to have a customer driving an EV and is going to stop for 15 minutes instead of five minutes, I have to think of another service or product to sell them. The box doesn’t change, other than it may get bigger; what we sell inside the box changes.” CSN

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Percentage of Stores Operated by the Top 100 Chains

Number of Stores Operated by the Top 100 Chains

84 Convenience Store News CSNEWS.com 148,026FEATURE

20,864

Sources: 2022 Convenience Store News Industry Report; Nielsen TDLinx No. 53 No. 69 Majors Management Inc.

Total Number of Stores in the Industry

Breaking Through in ‘22 Two Georgia companies are new to the Top 100 this year ClimbersNotable 2022 RANKING 2021 RANKING Murphy USA Inc. 6 14 CrossAmerica Partners LP 24 35 Anabi Oil Co. 25 42 Refuel Operating Co. LLC 37 50 Parkland USA 48 84 TOP100

28,336

14%

GA.

19%

Number of Stores Operated by the Top 10 Chains

About the company’s growth: Majors Management completed several deals to boost its store count to 116 locations and land a spot on this year’s Top 100. In the past two years, the company has completed 12 acquisitions across 11 states and expanded its geography in the MidAtlantic region and Texas, while strengthening its existing footprint in the Southeast.

ACWORTH, GA.

About the company’s growth: In 2021, Mountain Express Oil acquired New Orleans-based Brothers Food Mart, the largest convenience store chain in the city with 50 locations. The company also picked up all of the retail and wholesale fuel assets of Texon Oil Co., including 24 Sunoco branded retail gas locations in central and southern New Jersey and eastern Pennsylvania.

Percentage of Stores Operated by the Top 10 Chains

29%

LAWRENCEVILLE,

Number of Stores Operated by the Top 3 Chains

43,312

Percentage of Stores Operated by the Top 3 Chains

Mountain Express Oil Co.

Growing customer loyalty while navigating a pandemic is challenging. According to the NACS State of the Industry Report of 2020 Data, the average number of weekly trips has continued to fall, resulting in an erosion of 1.3 trips per shopper per week since 2016. C-Stores have strengthened customer loyalty through an effective coffee program, which leads to greater trip frequency. What if there was a way to upgrade and build excitement around your beverage program?

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By providing a full-scale, top-quality coffee program, you are laying the foundation for enhanced breakfast offerings, as well as reliable hot and cold coffee options all day long!

“Completing the first locations of our New Horizons project is exciting, and we look forward to offering our

“In the early days of COVID-19, we were among those businesses deemed essential to ensure that truck drivers had access to food and fuel and could continue to deliver critical supplies, such as groceries and medicine,” Neuman said. “The pandemic brought to light the critical role that travel centers and truck stops play in the nation’s supply chain. While the industry was already experiencing change prior to the pandemic, the pandemic elevated the importance of our industry — which, in turn, brought planned

In June, Pilot welcomed customers to its first four newly upgraded travel centers. Among the enhancements made were an updated interior, remodeled restrooms, expanded seating area, a new hot deli and soup bar, and the addition of self-checkout.

THE NATION’S TRAVEL CENTERS and truck stops are on the move, with new players joining the industry and existing players expanding and innovating at speeds that rival the highway traffic they cater to.

TRAVEL CENTER TRANSFORMATION

The fact that truck stops and travel plazas never closed during the COVID-19 pandemic has also played a role in the high-speed growth of the channel, she noted.

The Great Overhaul

consultant based in Medford, Ore., also pointed out that the just-in-time (JIT) inventory method for large retail stores that has now escalated to overnight shipping is further driving the segment’s growth.

The largest travel center chain in the United States, Knoxville, Tenn.-based Pilot Co., recently embarked on a three-year, $1 billion initiative to overhaul hundreds of its travel centers across the country. The “New Horizons” project will include full remodels of more than 400 Pilot and Flying J locations, as well as upgrades at many other locations.

By Renée M. Covino

Innovation abounds in the travel center and truck stop industry from both new and existing players

“The industry is currently evolving to meet demand for new fueling technologies, such as electric vehicle charging stations, as well as in-store technologies that enhance speed of service,” said Tiffany Wlazlowski Neuman, vice president of public affairs for NATSO, the national association representing the travel plaza and truck stop industry.

The retailer, which operates more than 750 locations in 44 states and six Canadian provinces, has stated that this will be its largest investment in store modernization yet, and will “improve the Pilot experience for customers and employees alike.”

changes to the forefront for many companies and Garylocations.”Hall,anindustry

86 Convenience Store News CSNEWS.com FEATURE

travel center chain, TravelCenters of America Inc. (TA), debuted a new store design and announced a nationwide site refresh plan in October 2021. The Westlake, Ohio-based company, which operates 276-plus locations in 44 states and Canada, set out to execute more than 100 site

The new food concept is open 24/7 and features everything from customizable breakfast burritos in the morning to a full menu of burritos, tacos, bowls and quesadillas, which can be personalized with house-made guacamole, queso, salsa and an array of

TravelCenters of America plans to execute more than 100 site refreshes, which andimprovedincludesignageanewstoreflow.

• Find a good site in an underserved submarket — consider using site feasibility experts who will run the numbers and conduct a study on the location.

• Collect continual feedback to find out what you’re doing right and wrong, and be prepared to adjust accordingly.

Segment experts recommend traditional c-store operators go through the following best-practice checklist when embarking on a travel center/truck stop enterprise:

A couple months later, in early August, the retailer debuted a new Tex-Mex deli concept, Burrito Junction, at its latest remodeled Pilot travel center in Corbin, Ky. According to Pilot, its chef and food innovation team spent two years testing and finetuning the "make it your way” Burrito Junction menu before its launch.

• Remember the basics: speed of service, robust food programs, ease of entry and exit for commercial vehicles, free Wi-Fi, safety (with more employees), adequate and crime-free truck parking, and clean restrooms.

FEATURE 88 Convenience Store News CSNEWS.com

The October reopening of the TA location in Seymour, Ind., marked the debut of its new store design. At the same time, the retailer announced the launch of The Kitchen, a new fast-casual dining experience to be rolled out to select locations nationwide.

• Assemble an internal team of stakeholders that is focused on the trucker/travel stop experience.

Refreshrefreshes.components

Should ExploreYouthe Travel Center Business?

Operating a traditional convenience store and operating a truck stop or travel center are not one in the same. There is added complexity in running the latter, which consists of multiple profit centers and requires a significant number of employees.

guests the best experiences on the road,” Allison Cornish, the company’s vice president of store modernization, said at the time. “This is just the beginning of our plans for the future as we continue to listen to our guests and strive to make their travel easier and more enjoyable.”

Anothertoppings.major

The needs of the professional truck driver are also not the same as a four-wheel customer. Truck stops need to manage amenities that professional long-haul drivers need, such as showers, truck washes, repair facilities, and overnight parking. Managing diesel fuel and negotiating fuel contracts with fleets can be complex as well.

• Consider the “extras” for professional drivers, such as tools, hardware, apparel and electronics.

include updates to driver lounges, repaved parking lots, renovated restrooms and showers, new lighting fixtures, new flooring and paint, and the addition of self-checkout. Refreshed sites also feature improved signage and a new store flow.

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and Missouri. In June, Buc-ee's began work on its first Colorado travel center in Johnstown. And as of press time, the chain was

Beyondsafely.”announcements

Love’s outlined goals for 2022 include: increasing fueling options across the U.S.; expanding the Love's branded product line; introducing fresh and hot food offerings; opening more than 20 Love's Truck Care and Speedco locations as part of the nation's largest oil change and preventive maintenance network; and continuing to enhance the Love's Connect mobile app with new features.

Forty new Love’s locations are slated to open this year, along with networkwide enhancements.

“This year, we will continue to improve the amenities and services our customers have come to love and expect when they stop at our locations; new features will also be added that we think will wow them,” Love’s President Shane Wharton said in January. “Our customers and team members made last year a great one, and we expect the same for this year, as we continue to get customers back on the road quickly and

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FEATURE 90 Convenience Store News CSNEWS.com

Meanwhile, Oklahoma City-based Love's Travel Stops, which operates more than 580 locations in 41 states, kicked off 2022 with an ambitious growth plan. Forty new locations are slated to open this year, along with networkwide enhancements.

At The Kitchen, guests can receive freshly prepared food for sit-down dining in a fast-casual environment, as well as packaged meals and snacks for grab and go. TA said it is focusing on providing variety with well-balanced and healthy options, regional inspiration, and trending flavors that appeal to both professional drivers and motorists.

from the top trio, Buc-ee’s — which holds the title of having the nation’s largest travel center — is in the midst of a multistate expansion that began in 2019. Since then, the Lake Jackson, Texas-based retailer has opened travel centers in Alabama, Florida, Georgia, Kentucky, South Carolina and NextTennessee.upisColorado

“All of these investments and improvements are designed around improving our guest experience based on a more examined understanding of their needs, and intended to drive efficiency and financial performance,” said CEO Jonathan Pertchik.

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getting ready to break ground on its first travel center in “SpringfieldMissouri.

C-store operators recognize there is an opportunity to expand into additional businesses, such as truck stops and travel centers, to serve their customers, NATSO’s Neuman said.

“We will also continue to see more automated retail in travel center stores, along with equipment that allows travel centers to redeploy — not eliminate — labor,” she added. “For example, truck stops will continue to explore technology that allows staff to work the floor and engage with customers, rather than stand behind a counter. Future store designs will also continue to evolve as age-restricted products become automated.” CSN

The truck stop is being built by WattEV Inc. with the help of a $5 million grant from the California Energy Commission. The company cited the grant as an important milestone in its effort to deploy 12,000 electric heavy-duty trucks on the road by 2030.

QuikTrip currently has 10 travel centers and 11 Remote Travel Centers under construction. By the end of 2022, the retailer expects to have eight additional Remote Travel Center locations up and running.

92 Convenience Store News CSNEWS.com

Newly upgraded Pilot travel centers include an updated interior and the addition of self-checkout.

Innovation in the segment is also coming in the form of technology adoption.

stop industry never slowed, but rather increased during the pandemic, many c-store operators that offer truck diesel fuel saw this as a way to augment petroleum sales that slowed due to the lockdowns, Hall explained.

“There has been a resurgence in road-tripping and recreational vehicle drivers during the pandemic. At the same time, diesel fuel is projected to remain in the fuel supply for many years to come, positioning professional truck drivers as important customers for them,” she noted. “The traditional convenience store is also responding to increasing numbers of customers driving short-haul delivery vehicles. Their diesel gallons have increased as first-mile and last-mile deliveries have increased. All these factors are combining to make it more lucrative to be a travel center.”

FEATURE

More players from the traditional convenience store universe are deciding to join the travel center and truck stop industry and realizing the benefits of this side of the

is the birthplace of Route 66,” said Stan Beard, Buc-ee's director of real estate. “It's perfectly natural that Buc-ee's, the ultimate road-trip destination, is coming to this gorgeous stretch of Americana history. We are delighted to be a part of this community and excited to make Springfield our first stop in Missouri.”

“The best operators are adopting technologies that improve customer speed of service or allow them to redeploy labor in a more efficient manner,” Neuman said, citing self-checkout, scan-and-go programs and digital shelf labels as among the technologies she sees on the rise in the industry.

Making the Jump From C-stores

Traditional c-store operator RaceTrac Inc. is another company making the jump. Based in Atlanta, RaceTrac’s travel center prototype is roughly 2,500 square feet larger than its standard c-store, providing ample room for “impactful offer expansion,” including hot food,

No doubt, technological advancements are contributing to the changes being seen in the modern-day travel center/truck stop, and the best players will showcase them.

Tulsa, Okla.-based QuikTrip Corp. has been in the travel center business since the early 1990s and currently has 71 such locations. Of those, 15 are part of its new Remote Store Network initiative. These locations are created “specifically for highly traveled areas of the country that are also within a reasonable proximity to a QT Distribution Center for access for fresh food,” according to Aisha Jefferson-Smith, corporate communications manager for QuikTrip. “We look at traffic patterns, area growth and several other factors to ensure we will be a great fit in the community.”

A solar-powered truck stop for heavy-duty electric trucks, believed to be the first of its kind in California, is expected to be open by late October in Bakersfield. When complete, this truck stop will reportedly be able to charge up to 200 trucks per day.

Driving Change

trucker merchandise, larger pack sizes, indoor seating, expanded restrooms, truck scales, truck parking, and high-flow diesel.

RaceTrac executives told Convenience Store News that the retailer plans to lean heavily into the travel center channel and has ambitious goals to build sites across the Southeast and beyond, “extending its values to the professional truck-driving population.”

Branding and its ability to convey a chain’s individual qualities is particularly important in the convenience channel, as the vast majority of SKUs are common across most retailers, he said.

“It is imperative that we differentiate in some remark able way,” Harker emphasized, noting that such differ entiation is key in whether a customer comes to visit one c-store or its competitor across the street.

FOODSERVICE

A record 70-plus convenience store retailers joined suppliers and other category thought leaders at this year’s event, held in June at the Marriott Savannah Riverfront in Savannah, Ga., the Hostess City of the South.

FROM IMPROVED branding to equipment upgrades to menu innovation and supply chain challenges, every aspect of today’s rapidly changing convenience foodservice market was addressed at the 2022 Convenience Foodser vice Exchange (CFX) event, presented by Convenience Store News.

The 2022 Convenience Foodservice Exchange highlighted evolving best practices, ways to cope with challenges, and actionable suggestions to stand out from the crowd

While many c-store brands want to stay in “the safety zone” of not being too different from their competitors, this also means they are unlikely to be noticed, accord ing to Harker.

• Participated in valuable networking oppor tunities, including a curated Power Hour that matched retailers and suppliers based on a pre-event questionnaire;

94 Convenience Store News CSNEWS.com

Building a Bigger & Better Future for Foodservice

During his opening keynote speech, Ernie Harker, former marketing guru at Salt Lake Citybased Maverik — Adventure’s First Stop and current consultant and author, shared advice on how to boost the odds of foodservice success despite the current difficulties presented by a struggling supply chain and a tight labor market.

Over the course of two days, CFX attendees:

• Enjoyed a historic tour of downtown Savannah while visiting two of the city’s best convenience stores, Enmarket and Parker’s; and

• Went on a walking food tour guided by Savannah Taste Experience.

By Angela Hanson

The event included panel discussions and networking opportunities.

• Engaged in a variety of presentations, panel discussions and Q&A sessions about the most pressing issues and best prac tices of today;

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Innovate — Innovation doesn’t have to require the stretching of resources, which may be difficult to find these days amid gaps in the supply chain. McDonald’s, for instance, was able to generate excitement by launching the limited-time Land, Air & Sea Sandwich, which required only standard ingredients shared by its main menu items.

Harker also recommended that c-store operators practice “hierology” to solve their labor shortages, as people want to work for businesses with a good repu tation for treating their employees well. Energetic managers, product sampling and the addition of music can make a difference in employee retention.

Spread the word — Retailers should consider creative ways to reach out to influencers. Dropping off a complimentary order of food with a note at a radio station may or may not result in being mentioned on air, but it is a way of extending a brand’s reach in a relatively inexpensive manner.

96 Convenience Store News CSNEWS.com FOODSERVICE

point, serving as a quick, visual shorthand to the full experi ence of visiting a particular c-store brand. Other steps to standing out recommended by Harker include:

Logosexplained. areastarting

Have a signature item/signature sides — For a c-store that focuses on chicken, it’s not just about having chicken, but rather what makes that chicken awesome. The same applies to sides. He pointed to Rutter’s giant grilled cheese sandwich, Casey’s General Stores Inc.’s taco pizza, Wawa Inc.’s seasonal Gobbler and the biscuits at Church’s Chicken as examples of strong signature items.

A retailer’s employer brand strategy should involve choosing something they can own that is in line with their company values. “Make sure to excel in something you can actually fund or finance,” he stressed.

Attendees were encouraged to plan for a food-focused future.

The Building Blocks of Foodservice Marketing, operations and financials are three critical aspects of keeping a

Differentiation alone, however, is not enough. “Great branding isn’t just being different. Great branding allows you to tell the story of your unique brand,” he

“Foodserviceskills.

Healthy products — In general, consumers are starting to transition to more health-conscious food, which means c-store operators should seek to offer a blend of healthy options and indulgent ones. Nowyhed pointed to Foxtrot, whose business platform marries the best of neighborhood retail and e-commerce, as a good example of a chain that balances health and convenience.

is not the final destination of younger employees,” she said. “So, focus on the purpose of why they exist from the beginning.” Heritage pointed to her baker who ultimately wants to be a jazz musician and is happy to work a shift that fits around his practices and gigs.

Proactive Program & Menu Planning

Big Bon Foods’ purpose is simply “to raise up more entrepreneurs,” Heritage said during “The New Convenience Retailer” panel held at CFX. An entrepreneur herself who operates a wood-fired bagel and pizza shop, food truck and ghost kitchen in Savannah, Heritage looks at her employees as individuals and tries to coach them in business and life

convenience store foodservice program running. According to Kay Heritage, founder of Savannah-based Big Bon Foods LLC, they are also the foundation of a three-legged stool, supporting what truly sets a business apart from its competitors: purpose and value.

“Everyone loves hitting targets and goals,” he said.

It benefits retailers to think of employees as their No. 1 asset, no matter the size of the business, said co-panelist Bassem Nowyhed, multifranchise owner of ampm convenience stores and founder and CEO of Studio City, Calif.-based Invig Consulting.

As retailers adapt to the evolving state of convenience foodservice, they need to adapt their menu development processes.

Tony Sparks, head of customer wow! at Curby’s Express Market, a new concept in Lubbock, Texas, that blends the speed of convenience with high-quality food and beverages, and Jessica Williams, founder of Food Forward Thinking LLC, discussed the key steps in that process during the 2022 Convenience Foodservice Exchange event.

In addition to investing in them as people, Nowyhed suggests retail ers look to make the workday more engaging for employees. One method is gamification — for example, the first person to sell a certain amount of a newly introduced product receives a major bonus.

“They’re the ones that are running your business,” he said, pointing out that store employees drive the customer base through their cus tomer service and attitude.

At Curby’s, which Sparks described as a c-store where “anything Panera Bread can do, we can do,” the company set out key targets in its menu development. Among them are: Define, Explore, Design, Refine, Launch and Measure.

Planning for Food-Focuseda Future

During the panel discussion, Heritage and Nowyhed touched on other relevant topics, such as:

Omnichannel — This aspect of technology is vital to maximizing foodservice profits. “If you’re not somehow integrating omnichannel … there’s a lot of money being left on the table,” Nowyhed pointed out. “The new convenience is taking that product of yours and bringing it to the consumer’s hands without them having to drive to your facility.”

Although prepared food frequently gets the most focus, beverages are not the also-ran of the foodservice category. Over the past 10 years, carbonated soft drinks have seen double-digit sales declines,

98 Convenience Store News CSNEWS.com FOODSERVICE

Curby’s focused on three design features that are particularly relevant to the vast majority of convenience foodservice programs:

Inspiration — Retailers can and should imitate and be inspired by those who are doing foodservice well without being copycats. “It’s OK to look at who’s doing a great job,” Heritage said. “We learn from the masters.”

• Built for Innovation — Menu favorites like pizza, breakfast burritos and hot dogs are nothing new, but c-stores can build their menu to allow for the addition of creative and interesting spins on the classics to pique customer interest and make themselves stand out. Curby’s menu features unique items like a chicken caprese pizza, a cilantro lime brisket breakfast burrito, and a hot dog topped with prosciutto, fig and bacon.

• Built for Volume — Some products are easy to make, some are more complex, and some must be fresh. Space and labor considerations should be set to allow for certain items to be made ahead of time when possible, leaving time for employees to focus on making the fresh items to-order without getting behind on other prep tasks or running out of items. This is particularly import ant for high-volume stores.

“If they’re willing to learn, we invest in them,” she said. “We ask them what they really want to do.” As a result, Big Bon Foods has not struggled with labor shortages.

• Built for Speed — Convenience means customers getting in and out quickly. The layout of the preparation area and the store itself should facilitate this, allowing for easy traffic flow that lets shoppers view the menu, order and get their food quickly. Equipment is another critical aspect of smart design. Even those customers who choose made-toorder options won’t want to wait long for their food to be made.

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• Prioritize placement and pro motion: By making conscious decisions regarding the placement and promotion of exciting in-store offerings, retailers can influence the consumer behavior shift from packaged beverages.

100 Convenience Store News CSNEWS.com FOODSERVICE

• Become a destination: C-stores have a major opportunity to become the go-to destination for new beverages, poaching the audience from cafes and fast-food

• Unique offerings: Having stores with high-volume foot traffic means c-store operators have the opportu nity to drive up sales with interest ing beverages.

The future of beverages involves refresh ing, healthy beverages that also taste great, Lopez noted. Retailers can succeed in this segment by recognizing where they stand now and deciding whether they want to focus most on a dispensed, made-to-order beverage experience or grab-and-go.

• Challenge the status quo: Beverage success involves looking past the 99-cent cup to more innovative beverage offerings.

C-storerestaurants.operators

Through expert presentations, market tours and interactive sessions, participants learned how to achieve foodservice success in spite of today's challenges.

yet soda makes up two-thirds of the in-store offering in the convenience Artchannel.Lopez, senior marketing director at Finlays, a leading independent busi ness-to-business supplier of tea, coffee and botanical solutions for foodservice and beverage brand owners worldwide, advised retailers to proactively create a beverage Accordingstrategy.toLopez, retailers should focus on these areas to reimagine beverages in their stores:

must take care to craft the right beverage for the right occasions. The top foods paired with beverages are snacks/side dishes and sandwiches — often during unplanned or impulse visits during the mid-morning and early afternoon — and consumers are most frequently looking to quench their thirst or buy a pick-me-up drink.

3. Create a menu strategy — Business objectives determine strategies and tac tics, which are applied to categories and then individual products.

Foodservice may be big business for the convenience store industry, but multiple retailers took the time to highlight the importance of thinking small, and discussed ways that c-stores can boost their foodservice pro grams without making sweeping adjustments.

102 Convenience Store News CSNEWS.com FOODSERVICE

Adding Enmarket branding to coffee cups, hot dog containers and other packaging also strengthened the retailer’s marketing for minimal invest ment, Krebs pointed out.

Making that decision is key because signage, promotions and store flow all need to be crafted to facilitate the desired outcome, Lopez added.

“I don’t think the pain is there yet,” he Blackistonsaid.

6. Create a foodservice culture — This

He listed multiple smaller initiatives that yielded success for Enmarket, such as locating a produce expert to deliver local, in-season fruits to stores, which grew several hundred percent; swapping out a generic frozen carbonated beverage program for Coke-branded products to leverage strong brand recognition; and adding individually wrapped doughnuts with a 75-day shelf life.

Additionally, catering has been “huge” for Huck’s, Grimes said. Along with the actual sale, catering serves as a marketing opportunity to reach consumers attending the school function or sporting event being catered. “We may not have gotten food in their mouths any other way,” he noted.

8. Innovate through technology — Not every piece of technology will be relevant to every brand, but technology can be used to create a proprietary branded experience. CSN

Eight Must-Take Steps for Success

pointed to eight “absolutes” for c-stores to get serious about foodser vice success:

While the small changes that yield the best results will vary from c-store to c-store, Krebs offered one key piece of advice to identify the right opportunities: “Focus on the things that are small enough to change but big enough to matter.”

Grimes highlighted the importance of “theater” around foodservice and dispensed beverages in order to draw attention. New graphics, significant additional signage and other methods of guiding customers to the roller grill and coffee station contributed to sales boosts at Huck’s, while the rollout of a “guaranteed to love it or it’s free” promise generated buzz.

5. Design a distinctive environment — Foodservice initiatives such as Whole Foods Market’s Ramen Bar intentionally signal that “this is a place to eat.”

7. Embrace continuous improvement — Zone-specific innovation and improvement teams should continuously focus on identifying improvement opportunities and solving them.

must start at the top because nothing at a chain will happen “unless the people at the top say they want it to happen,” he said.

The Value of Thinking Small

In addition to revisiting their purpose and values, c-store operators need to push beyond rhetoric if they want to succeed in foodservice, Howland Blackiston, co-prin cipal of restaurant and retail consultancy King-Casey, told this year’s CFX attendees.

Finally, while consumers have increasingly resumed dining out, Hagans advised retailers not to overlook the value of take-home food. Spinx used the same chicken to make take-home meals as for the fresh case, which provided steady incremental sales growth.

Challenges and limitations presented by the COVID-19 pandemic made it hard to innovate or roll out major new launches, but Enmarket learned how to “pivot, don’t pause,” according to Krebs.

Hagans highlighted the importance of fresh fruit, too. Spinx first began working with a fresh fruit provider to add the offering to smaller stores that didn’t have access to the company’s commissary several years ago, only to see sales “just skyrocket.”

To date, many chains have refrained from making more than evolutionary or incremental changes to their foodservice offerings, rather than bold moves to seize the competitive advantage. This is largely due to a cultural resistance to change, perceptions of disadvantages, and the lack of a stunning crisis to drive revolu tionary innovations and improvements.

2. Have a proprietary/signature menu — Parker’s fried chicken and Texas Born’s tacos are examples that make those chains memorable. “Developing a signa ture item is an important step,” he said.

4. Offer off-premise solutions — This can include digital ordering, delivery and drive-thru, as well as other unconventional means. Blackiston cited Chick-fil-A’s habit of “line-busting” by sending store employees out to the drive-thru line to take orders.

A Convenience Foodservice Exchange panel entitled “Small Changes — Big Returns: How Focused Improvements Can Bring Bountiful Results” brought together Ryan Krebs, foodservice director at Savannah, Ga.based Enmarket; Dave Grimes, vice president of foodservice at Carmi, Ill.-based Martin & Bayley Inc./Huck’s Market; and Jeff Hagans, category manager at Greenville, S.C.-based The Spinx Co.

1. Brand your foodservice business — From décor to equipment to ordering methods, everything should communicate “food” to the customer.

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Ordering: Currently O er Foodservice

Curbside

fax 45% 34%37%44%46%39% 21% 28% 19%21%21% 7%9%13%11%13% 24% 10%14%16% 2%2%4%8%5%3%5% 16%21%24%31% 8%7%8%9%10%11%12%14%15%18%15%16%12%13%12%16%13%11%14%14% 2% 5%7%

Order ahead by

touchscreen ordering

Curbside

Order ahead by

Order ahead via app

Order ahead by

By Angela Hanson

AS THE CONVENIENCE channel continues to navigate the transition between a time when no aspect of the foodservice category went untouched by the COVID-19 pandemic and a time when the category makes a full post-pandemic return, retailers are working hard to prepare for the future while keeping valued lessons of the past in mind, knowing

payment in-store

Convenience foodservice retailers are carefully weighing innovative plans for the future against maintaining longtime customer favorites

ordering

that both are necessary to retain existing customers and catch the interest of new ones.

Plan to Add 2022 2021 2020 2022 2021 2020

A Balancing Act

computer

Contactless

Order ahead by

In-store touchscreen

Foodservice Ordering:

app Pumpside pickup

Order ahead by computer

ordering

phone

ContactlessPumpsidepickuppickuppayment in-store

Whether it involves menu innovation vs. old favorites, new technology for ordering ahead vs. keeping things convenient for in-store shoppers, or any number of old vs. new conflicts, it’s a constant balancing act for convenience

In-store touchscreen

phone

At-pump

At-pump touchscreen

Order ahead by

Order ahead via

ordering

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FOODSERVICE 104 Convenience Store News CSNEWS.com

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This can be seen in the way that c-store operators are eager to embrace the variety of new ordering and payment options that rose in popularity during the pandemic. The old reliable method of ordering ahead by phone is the second most common ordering method in 2022, offered by 37 percent of this year’s study participants. However, other currently available options indicate a growing trend of using technology to reduce the time that prepared food and beverage customers spend on a store visit. Examples include the prevalence of contactless payment in-store (offered by 45 percent), as well as the availability of in-store touchscreen ordering (13 percent), which is much smaller but jumped from 7 percent in 2020.

When evaluating their competition, they foremost point to other players in the convenience channel, with nearly eight in 10 (78 percent) citing other c-stores as their main foodservice competition, a significantly higher figure than in 2021 (54 percent) and 2020 (57 percent). Factors for this change may include consumers’ increasing acceptance of c-stores as foodservice destinations, as well as widespread foodservice investments in the channel.

As they evaluate new and improved ways to get hungry customers what they want when they want it, c-store retailers understand that competition for share of stomach is heating up.

This interest in increasing customer convenience extends to other foodservice amenities as well. The most common foodservice amenities c-stores currently offer are microwave ovens for customer use (offered by 73 percent), in-store seating (46 percent), and outdoor seating (37 percent). Looking ahead, the top amenities c-store operators plan to offer in the near-future are third-party delivery (25 percent), drive-thru (16 percent) and takehome/heat-and-eat dinner solutions (15 percent), all of which grew in popularity during the pandemic.

106 Convenience Store News CSNEWS.com FOODSERVICE

Year over year, other c-stores, food trucks and QSRs

foodservice retailers. According to the results of the exclusive 2022 Convenience Store News Foodservice Study, many of the current trends in foodservice offerings and operations have been seen before, yet retailers are also showing a clear interest in new ways to meet the evolving needs of consumers.

Retailers identify their next biggest competitors as chain sandwich shops (such as Subway), quick-service restaurants (QSRs), and fast-casual chains (such as Chipotle and Panera Bread).

Even more telling are the plans that c-store operators describe when asked to list which ordering options they intend to add in the future. Nearly a third of respondents (31 percent) plan to add the option to order ahead via app, while 21 percent say they will add the option to order ahead via computer. In-store touchscreen ordering (18 percent) and at-pump touchscreen ordering (15 percent) are also on the agenda among retailers that don’t already offer them.

FoodserviceCurrentlyAmenities:Oer202220212020 Microwave ovens for customer use In-store Take-home/heatOutdoorseatingseating & eat dinner In-house(cookMeaDrive-thruCateringThird-partysolutionsdeliverylkitsathome)delivery 33% 22% 35% 25%31% 5%6%9%14%15%21%18%16%11%11%9%11%6% 36%37% 25% 42%46%46% 73% 58% 68% Foodservice Amenities: Plan to Add 2022 2021 2020 14%15% 25% 16% 12% 6% 15% 7%8% 2%3%4%5%6%7%10%13%10%11%8%6%8%9%7%3%6%3% Third-party delivery Take-home/heatDrive-thru & eat dinner solutions Meal (cookkitsat home) In-house delivery Outdoor seating In-store MicrowaveCateringseatingovens for customer use

Hamburgers 57% 61% 56%

C-stores’ prepared food menus feature standard favorites as the most commonly offered items, but there have been some notable shifts in the availability of certain selections.

2020 Other c-stores Chain sandwich shops Fast-casualQSRs chains Coffee ThereOtherDrugFoodGroceryshopsstorestrucksstoresarenocompetitors 78% 22%25%26%31%31%37%43%48%54%57%40%45%34%33%27%26%24% 1%2%5%5%3%5%5%6%3% 24% 11%11%Preparation

Chicken 62% 65% 51%

at our company commissary, delivered ready to heat & serve

Foodservice distributor, delivered ready to

delivery, delivered ready to heat & serve

Snacks/appetizers 72% 68% 70%

Bakery 68% 66% 58%

Main

Wraps 49% 53% 39%

Location for Prepared Foods

Foodservice Competitors

showed the biggest jumps in being identified as formidable competitors, with food trucks jumping 13 percentage points to 24 percent.

Salads 55% 58% 51%

at third-party commissary, delivered ready to heat & serve

Supplier/direct-store

delivery, assembled at store

Convenience distributor, assembled

Breakfast sandwiches 92% 87% 90%

2022 2021

at store

108 Convenience Store News CSNEWS.com FOODSERVICE

Tacos/quesadillas 25% 35% 23%

Foodservice distributor, at

store Delivered from our

commissary, assembled

What’s On the Menu?

Convenience distributor, delivered

Pizza 74% 68% 68%

Prepared

Other roller grill items 46% 47% 51%

Hot dogs 68% 64% 65%

store

Prepared

ready to heat & serve

Other sandwiches 69% 77% 68%

Hot entrees 48% 46% 48%

Supplier/direct-store

Other 5% 10% 7%

Retailers are most likely to offer breakfast sandwiches, which are available at 92 percent of locations, followed by pizza (available at 74 percent of c-stores), snacks/appetizers (72 percent), other sandwiches (69 percent), hot dogs and bakery (both 68 percent).

heat & serve

Prepared Foods O ered

assembled

Delivered from third-party commissary, assembled at company at

store 37% 23%23%25%25%29%31% 9% 17% 6% (Panera Bread, Chipotle) (Subway, Quiznos)

2022 2021 2020

Soup 20% 35% 31%

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Fountain

Hot

Self-serve cappuccino/latte/ hot chocolate makers

Fountain

coffee 94% 86% 95%

Hot

cappuccino/latte/espresso 28% 39% 35% Smoothies 25% 25% 24% Juices 25% 38% 32% Milkshakes 24% 38% 36% Soft-serve frozen yogurt/ice cream 19% 15% 18% Aguas frescas 8% 6% 8% Kombucha 5% 9% 6%

CSN

In the area of dispensed beverages, hot beverages are back to dominating this segment after dropping in availability during the height of the pandemic. Hot coffee has bounced back to its 2020 level of availability at 94 percent, while hot cappuccino/latte/espresso beverages (78 percent) and hot chocolate (73 percent) also rank in the top five dispensed-beverage types.

cappuccino/latte/espresso 78% 71% 77%

72% 73% 64%

brew coffee 34% 35% 37%

78% 75% 70%

60% 63% 60%

Self-serve milkshake/smoothie machines 33%

32%

ered 202020212022 19% 29%33% 2022 2021 2020

25% 24% 15%

Bean-to-cup coffee machines

Soft ice cream/yogurt dispensers 18% 17% 17%

Touchscreen fountain drink dispensers (e.g., Coca-Cola Freestyle, Pepsi Spire)

carbonated beverages 84% 84% 80%

Dispensed Beverages O ered

chocolate 73% 75% 78% Frozen drinks (e.g., slushies) 70% 68% 69% Iced tea 66% 63% 58% Hot tea 60% 47% 57%

Franchise/License Branded Concept O

39% 35% 24%

33%

2022 2021 2020

non-carbonated beverages 48% 53% 51% Iced coffee 46% 56% 53% Fountain sports drinks 40% 42% 50%

Frozen drink dispensers

Iced

Made-to-order, barista-style beverages remain decidedly in the minority. After their availability increased several percentage points in 2021, they are now offered at just 9 percent of c-stores.

The top three prepared food items also saw the greatest directional growth from 2021 to 2022, indicating they will remain widely available for the foreseeable future. On the other hand, the categories with the greatest directional declines are soup (down 15 percent), tacos/quesadillas (down 11 percent) and other sandwiches (down 7 percent).

Hot

Cold

Fountain carbonated beverages (offered by 84 percent) are holding steady in the No. 2 position in the segment, while frozen drinks round out the top five. Slushies and other frozen beverages saw a slight uptick year over year and are now available at seven out of 10 c-stores.

Directional growth trends, however, indicate that c-store retailers are ready to incorporate newer technologies into their dispensed beverage offerings. Bean-to-cup coffee machines and touchscreen fountain drink dispensers are being utilized by more c-stores today.

DispensedEquipmentBeverageUsed

The majority of convenience foodservice retailers (69 percent) report that they receive their prepared food offerings ready to heat and serve, primarily from a convenience distributor, a third-party commissary, or via supplier/direct store delivery. Fifty-five percent say they assemble their prepared food offerings at the store after receiving the ingredients from a distributor, supplier or commissary.

110 Convenience Store News CSNEWS.com FOODSERVICE

Coffeemakers

81% 79% 81%

C-store operators are leveraging branded foodservice programs to a somewhat lesser degree than in previous years. Nineteen percent of this year’s study participants report having a franchise or licensed branded restaurant concept inside their stores, down from 33 percent in 2021. Concepts such as Subway and Dunkin’ continue to be among the most popular.

Traditional fountain drink dispensers

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TOBACCO

Store News that the impact would be significant. “We would expect cigarette volumes to decline dramatically,” Goldman Sachs tobacco analysts stated in June, when the FDA announced its intent.

WILL A REDUCED nicotine policy be another tobacco regulatory reality for convenience store retailers to contend with?

The Food and Drug Administration (FDA) recently announced plans to publish a proposed rule that would establish a maximum nicotine level in cigarettes and certain “other combusti ble tobacco products.” As of press time, it was still not clear what would fall under the “other” category.

Bryan Haynes, a partner with the Troutman Pepper law firm and head of its tobacco law practice, echoed that such a move would be “hugely impactful.”

“The huge potential impacts include driving consumers out of combusted cigarettes or other combusted cat egories to other tobacco categories or to no tobacco products at all,” he said. On the other hand, some might smoke less, but others might smoke more, trying to get more nicotine, he reasoned.

By Renée M. Covino

The goal of the rule, according to the agency, is to reduce nicotine content in traditional ciga rettes to minimal and potentially non-addictive levels, thereby reducing addiction and death, along with underage cigarette use.

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“Another issue is it will likely lead to a pretty significant consolidation of available products — many cigarette companies will not have the wherewithal to meet the standards,” Haynes said. “One could argue [the pro posal] is tantamount to a ban.”

The FDA’s plan to establish a nicotine standard has industry insiders speculating about the future of c-store tobacco

If such a policy is implemented and nicotine lev els in cigarettes are reduced substantially, sev eral tobacco industry insiders told Convenience

The Ramifications of Reduced Nicotine

He also quipped: “Remember ‘Near Beer?’ Now, it’s ‘Almost Tobacco.’”

If the proposal goes through, he believes convenience store retailers may find fewer customers smoking more to get the nicotine fix they had before. “The average

“This will be an extremely long road, which could create widespread black-market opportunities, criminal control of the tobacco business, and lost tax revenue. Prohibition 2.0 anyone?”

Prohibition is another term Haynes uses in reference to the FDA’s proposal, which he said has the potential to put entire cate gories and companies out of business.

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Before the c-store industry reacts to any potential outcomes, however, timing should be considered. “My first advice is that retailers should not panic,” Haynes said.

cigarette purchase size will go up, even though there will be a lower penetration or fewer cigarette buyers,” he predicts.

Regarding the proposal’s nicotine termi nology of minimal, marginal or non-ad dictive levels, Stuart questions what that even means. “Doesn’t weight and toler ance matter?” he posed.

According to the Spring 2022 Unified Agenda of Regulatory and Deregulatory Actions, the FDA is targeting May 2023 to issue the proposed rule. “But that could always change,” Haynes pointed out.

Cadent Consulting Group Managing Director Don Stuart also mentioned prohibition in relation to the reduced nicotine proposal. “This will be an extremely long road, which could create widespread black market opportunities, criminal control of the tobacco business, and lost tax revenue. Prohibition 2.0 anyone?” he stated.

“Given the impact any final rule would have on the tobacco indus try, it is likely many industry members will be very involved in the process and potentially challenge any final rule in court. Thus, it

— Don Stuart, Cadent Consulting Group

Delays Likely

“We would have to consider the potential for contraband trade. It’s clear to me that until the end of this administration, we are going to see activist prohibition. That doesn’t mean it will be the same under the next administration,” he noted.

And even if the FDA were to issue the proposed rule in May 2023, the public notice, comment period and rule finalization process will take much longer.

sions with additional channel partners to expand the geographic and regional sales reach of VLN. To date, the company secured regulatory authorizations to sell VLN in 40 states and Washing ton, D.C., an increase from nine states in the first quarter of 2022. Applications are pending in all remaining states.

“Many cigarette companies will not have the wherewithal to meet the standards. One could argue [the proposal] is tantamount to a ban.”

That said, she advises all c-store retailers selling tobacco to ensure they are fully compliant with all local, state and federal laws, rules and regulations. “Beyond that, it is critical that retailers begin talking to their customers about potentially less harmful products,” Medeiros added. “By having these conversations early, your customers will be better prepared to meet their nicotine preferences in the event of a market disruption.”

“In general, prior to any new regulation or market restriction, we recommend keeping existing products fully stocked until the regulation or restriction occurs,” said Leila Medeiros, senior vice president of new categories at R.J. Reynolds Vapor Co., head quartered in Winston Salem, N.C.

Jefferies Group analysts predict possible implementation will take “many” years — at least five years, and likely more toward 10 years. In a recent report, the invest ment bank and financial services company likened the nicotine rule to the FDA’s proposed menthol ban (which it doesn’t foresee implementation of until 2026 at the earliest), but called the reduced nico tine proposal even more complicated.

TOBACCO

Barclays analyst Jain Gaurav agrees with the delayed timing. “We think it will take a decade or longer for the FDA to introduce nicotine caps due to the long nine-step process at the FDA, the inevitable litiga tion, and then the one-year time given to retailers to get rid of excess inventory,” he said in an investor note. “The FDA will need to take into consideration inputs from scientific, legal, law enforcement, public health, industry and budgetary stakeholders, and respond to all the com ments in an iterative process before it can publish a final rule.”

“Risks around illicit and vulnerable popula tions will be more pronounced, for exam ple, and then the FDA needs certainty around things such as possible compensa tory smoking,” the report stated.

The company is also in advanced discus

Troutman Pepper’s Haynes agrees that it makes sense for retailers to have more diverse tobacco portfolios today. “It helps meet consumer needs, and it accounts for potential regulatory changes,” he said. “It’s just prudent now.”

Proactive Actions Besides not panicking, what else can retailers do right now?

VLN Menthol King cigarettes first launched in select Chicagoarea Circle K stores in April as part of a pilot program. In early August, 22nd Cen tury Group CEO James A. Mish announced that the company will bring the VLN brand to Colorado in September — ahead of “Ourschedule.VLN pilot in Chicago is exceeding expectations, driving us to accelerate and expand our launch plans. The pilot and consumer studies have made clear that our approach focusing on awareness, education and trial is working with adult smokers," Mish said.

Jefferies analysts believe that if a nicotine standard is imple mented, the majority of smokers will switch (or will have already switched) to reduced-risk tobacco products. Therefore, retailers that are already in the game will win. CSN

Stuart of Cadent Consulting added that “in-store, retailers need to solidify their position as a tobacco-related destination. It’s not just about cigarettes, it’s also about alternatives.”

will be years before any rule takes effect, if ever,” he said.

So far, VLN King and VLN Menthol King 95% reduced nicotine content cigarettes from Buffalo, N.Y.-based 22nd Century Group Inc. are the only cigarettes to secure the FDA’s Modified Risk Tobacco Product (MRTP) designation. As part of that designation, which was granted in December of last year, the agency requires VLN to include “Helps You Smoke Less” on its product packaging and Bothadvertising.VLNKingand

— Bryan Haynes, Troutman Pepper law firm

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By Kathleen Furore

Take Irving, Texas-based 7-Eleven Inc. In June, the nation’s largest convenience store chain announced the opening of its fifth Evolution Store in the Dallas-Fort Worth area and the ninth in the country. A wine cellar with an enhanced and expansive selection of wine is among the offerings customers can find in these stores — described as experiential testing grounds where customers can try and buy 7-Eleven’s latest innovations in a pioneering store format.

— Jon Manuyag, Plaid Pantry

“Wine sales are up as we continually invest in space, promotions [and] upgraded assortment to let our customers continue to know we are serious about our wine business.”

7-Eleven’s Evolution Stores feature a wine cellar with an enhanced and expansive selection of wine and beer.

Elevating product offerings and redesigning stores to accommodate expanded selections of wine and liquor have been among convenience channel retailers’ responses.

WHAT HAPPENS when market forces catapult a category onto the list of top-sellers?

Wis.-based Kwik Trip Inc. and Des Moines, Iowabased Kum & Go LC are other c-store chains upping their game in the wine and liquor space. In February 2021, Parker's debuted Parker's Spirits in Pooler, Ga. The liquor-focused brand offers a large selection of premier wines, craft beers, collectible bourbons, and other packaged beverages. Last year saw moves by Kwik Trip and Kum & Go, too.

Keeping Spirits High Retailers are redesigning their stores to accommodate expanded wine and liquor sections

Savannah, Ga.-based Parker’s, La Crosse,

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That’s exactly what happened in 2020 when wine and liquor became a top 10 category in the convenience channel during the pandemic, and then gained an average of 8.5 percent in sales per store in 2021, according to the Convenience Store News 2022 Industry Report.

Kwik Trip launched Kwik Spirits, a new store format featuring a variety of wine and liquor, while Kum & Go

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BEVERAGESALCOHOLIC

The ways in which wine and liquor drive consumers to c-stores underscores the important role these categories can play for convenience store operators and the channel Convenience storeoverall.

At Kum & Go, for example, spirits- and wine-based RTDs are mixed into the beer space. “You will also see us feature spirits in suction cups in our cold vault space or beer caves to convert add-on purchases to beer purchases,” Rogers noted. “You will see many of our promotions drive the consumer to purchase multiple units, or to purchase an add-on item.”

Plaid Pantry stores offer a broad selection of wine, including local vintages.

120 Convenience Store News CSNEWS.com BEVERAGESALCOHOLIC

When comparing the last three years (first quarter of 2022 vs. first quarter of 2019), the Alcohol trip mission gained 15 percent in share of store trips. Other trip missions that posted strong gains were Refreshment, Meal Building and Snacking, according to VideoMining.

visits are highly mis sion-driven, with each trip usually serving a primary need. Alcohol has been iden tified as one of nine main trip missions, according to VideoMining, a provider of comprehensive insights on in-store shopper behavior.

For Kum & Go, it means focusing on premium product. “We tend to offer a more premium assortment than many competitors with the intent to drive consumers up from the lower price tiers and meet the increasing demand in the premium segments,” Rogers pointed out.

Run seasonal promotions. “Promoting to the seasons helps,” Manuyag advised. He recommends promoting white wines and rosés in the spring/summer timeframe, and reds, pinots and cabs in the fall/ winter timeframe. Incorporating percentage-off category savings drives engagement as well, according to Manuyag.

Merchandising & Marketing Tips

Consumer Preferences Are Key to Success

No matter the size or scope of your wine and liquor categories, the way you merchandise and market the products you sell will ultimately determine their success. Here, Christian Rogers, alcohol category manager for Des Moines, Iowa-based Kum & Go, and Jon Manuyag, director of marketing at Beaverton, Ore.-based Plaid Pantry, share tips on how to effectively merchandise and market wine and liquor to boost sales and profits.

Cross merchandise creatively. “When looking at the alcohol category, there has been a lot of category blurring between beer, wine and liquor,” said Rogers. “Because of this, we pick and choose the right places to cross-merchandise within the total alcohol space to drive incrementality and get the most eyeballs on a product.”

worked with E. & J. Gallo Winery to streamline its wine assortment. Together, the companies identified bestsellers nationally and by state and generated a market-specific core list incorporating multiple store configura tions. By clustering store configurations by state, the supplier was able to provide a consistent assortment at the right price points and introduce new items. The results were impressive: the retailer saw an 8 percent increase in wine sales year over year, and E. & J. Gallo was named one of Convenience Store News’ 2022 Category Captains.

Choose the right assortment. For Plaid Pantry, the right assortment means finding a good mix of value, mid-tier and premium price points, Manuyag said. “Also have a great mix of boxed wines, as customers see those as good perceived value items.”

“We have geared our assortment to meet the new demand in these subcategories, while still ensuring we are dedicating appropriate space to the mature sub categories of the wine segment,” Rogers explained. “Within the wine and liquor categories, we offer a strong assortment of products at a number of different price points, with the goal of meeting our customers’ needs for any occasion.”

Layering a selection of “best” wines on top of what Polonsky calls a pretty broad “good” and “better” offering has brightened that shine. And so have local “Withvintages.usliving in the Willamette Valley, there are a handful of local wines we offer up that resonate with the North west shopper and create a tailored local assortment,” Plaid Pantry Director of Marketing Jon Manuyag said.

Vodka remains the most popular liquor sold in the United States, according to the report. However, agave-based spirits — most notably, tequila and mezcal — are now the second most popular category, with sales reaching $5.2 billion in 2021.

The Latest in Liquor Trends

— Christian Rogers, Kum & Go

The DataWeave report also highlighted that more and more consumers are heading online to buy wine and liquor. According to the data, U.S. online alcohol sales grew from $2.6 billion in 2019 to $6.1 billion in 2021 — a 131 percent increase.

higher-end wines we now offer,” Polonsky explained. “We have indexed higher than our local competitors for a long time, and Jon has kicked it up a notch in the last couple of years.”

Knowing what customers likely will be looking for when they arrive is key.

When it comes to wine, Christian Rogers, Kum & Go’s alcohol category manager, says he sees two trends: the premi umization of the wine consumer, and the continued acceleration of winebased ready-to-drink (RTD) beverages. “Super-premium wines, tetras [Tetra Paks] and tequila are also driving the wine and liquor categories,” he added, noting that tracking trends helps Kum & Go select inventory that ultimately appeals to a broad a base of consumers.

Beaverton,format.”Ore.-based

The approach has paid off, as Rogers reports the company’s 2022 wine and liquor sales are up vs. pre-pandemic numbers, although he says they are “a bit softer than we would like to see YTD. Much of this is due to the convenience channel losing share of large packs to large

“Within the wine and liquor categories, we offer a strong assortment of products at a number of different price points, with the goal of meeting our customers’ needs for any occasion.”

Plaid Pantry Inc. is another c-store chain reaping bene fits from upgrading its wine program, according to President and CEO Jona than Polonsky.

As the report notes, the Distilled Spirits Council of the United States stated that tequila witnessed the highest annual growth rate in 2021 (up 75 percent), followed by American whiskey (46 percent) and cognac (31 percent).

The approach is working. “Wine sales are up, and I believe it is a combination of the ‘COVID effect’ and the addition of the

While not specific to the convenience channel, data from the 2022 Alcohol Report: Digital Visibility Is Reforming the Alcohol Industry from Newark, Calif.-based DataWeave, a leader in e-commerce analytics, can help inform decisions about the kinds of liquor to add to c-store shelves.

Added Manuyag: “Wine sales are up as we continually invest in space, promotions [and] upgraded assortment to let our customers continue to know we are serious about our wine

BEVERAGESALCOHOLIC 122 Convenience Store News CSNEWS.com

Whenbusiness.”itcomes to advice on how to build a successful wine and liquor program, Kum & Go’s Rogers offers this recommendation: “Listen to your customers through your internal sales data. They are the ones shopping your stores and telling you what they want by the purchase and by the choices they make. Lean on your category partners to provide insights and ideas to support growth of the total category. And keep a close eye on syndi cated data. … If you are not paying attention and constantly innovating, you will fall behind.” CSN

“In our market, selling spirits is not an option in the convenience channel, so we have to shine in the beer/wine catego ries,” he said. Plaid Pantry operates 106 stores in the Northwest.

124 Convenience Store News CSNEWS.com

Source: OneDesk.com

In the United States, approx imately 8 million vehicles are washed at car washes

Manybring.new

Car Wash Visits by Season

Many existing car washes are in need of a facelift. Like other companies, The Wills Group, Dash In’s parent, accrued car washes through acquisitions. These automatic operations do not require regular staffing. This has made them afterthoughts for some retailers, with malfunctions and customer problems not always addressed. “Some companies maintained car washes, some didn’t. You see many broken down, old car washes people don’t trust,” Mulhern said. “It takes maintenance to do well, plus landscaping and keeping buildings nice.”

Consolidation and subsequent acquisitions may leave retailers with inconsistent car wash models, making branding and maintenance challenging.

By Debby Garbato

SERVICES

Thepromotions.goalisto

“It created multiplicity of platforms and offerings, making it hard to maintain brand integrity and trust,” said Gus Olympidis, president of Valparaiso, Ind.-based Family Express Corp. “If you’re consistent delivering the experience, you’re a step ahead.”

make car washes more attractive and convenient while driving more traffic and boosting transaction sizes. The latter can reach $25 or so when high-end waxes, tire shines and other extras are included. According to the International Car Wash Association, North American car washes generate about $15 billion annually.

“Car wash technology has improved dramatically,” said Mike Mulhern, director of operations at La Plata, Md.-based Splash In ECO Car Wash, which operates at about 50 Dash In c-stores. “Equipment is better and smarter, with everyone moving away from labor through technology. Companies that have invested in machines and buildings have done well. Most markets are underserved, with many new washes opening. It’s a gold rush.”

Getting Some Polish Technology and new equipment are driving sales in the underutilized, high-profit business of convenience store car washes

car washes are opening, with room for additional growth, particularly in higher volume tunnel washes. C-stores are also upgrading equipment to make existing washes faster and more efficient and to broaden services. Buildings are getting makeovers, with multicolored lights and scented soaps enhancing the experience. Technology is a bigger focus, including RFID-enabled and other subscription services, license plate readers, digital payments, and app- and pump-based

every day.

Winter 32% Spring 25% Summer 25% Fall 18%

DISPARATE AS IT SOUNDS, car washes and fountain drinks have a few things in common: both have liquid and bubbles, and both are among the highest margin categories for convenience stores. But while fountain has benefitted from ongoing innovation, car washes have often been left in the doldrums. Now, more c-stores are capitalizing on the value this business can

TIME TO THROW IN THE TOWEL®877.588.2719EXCELDRYER.COMSALES@EXCELDRYER.COM 1Based on testing performed by LMS Technologies, April 2020.

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126 Convenience Store News CSNEWS.com

Since winter ice is problematic in the Midwest where Family Express operates, hydraulic bi-fold doors were replaced with electric ones. Ten locations also have pet washes.

The retailer increased water pressure from 100 to 300 psi for a “more substantial wash,” and added dryers that “don’t intimidate customers,” said Olympidis. “We used to have dryers that came down over the hood and windshield.”

“There’smerchandise.tremendous advantages because customers are coming for various reasons. But converting them for an additional sale is challenging. How do you get them in the store or car wash? So, c-stores are stepping up car washes, which were historically add-ons,” he said.

By using a chain system, they can accommodate multiple vehicles simultaneously. Tunnels also can accommodate more services. In-bay washes generates about $100 per hour, whereas tunnels can make $1,000 per hour, noted Tim Hogue, CEO and senior designer at Modernwash, based in Bowling Green, Ky. “The chain determines where vehicles are in the process. It’s more efficient,” he said.

Ongoing Investments

Sunshine is adding Belanger Spin Light extended and mini wash tunnels to some of its Florida locations. The equipment uses foam fingers, which “better lift dirt,” and low RPM brushes “don’t whack your car” like high-speed ones, according to Alvarez. Monthly wash packages are $17.99, $28.99 and $36.99. Vacuums are free.

Family Express has made significant car wash investments, replacing 75 percent of its platforms over the last 2.5 years. The convenience store chain operates car washes at 31 of its 81 Indiana stores.

D&S Car Wash's IQ Express can wash 105 vehicles daily compared to 70 for a standard in-bay wash.

Michael Headly, a director in the restaurants, hospitality and leisure practice at New York-based AlixPartners, pointed out that c-stores have some advantages over basic standalone car washes because customers are coming for fuel, food and other

Car wash tunnels are another way c-stores are investing more in this business. While they cost 5 percent to 10 percent more to erect than traditional in-bays and require staffing and space, tunnels wash vehicles in 90 seconds; rollovers require up to seven minutes.

“Car washes are performing outstandingly,” reported Olympidis. “We’re constantly seeking ways to fertilize the essence of a better experience. It’s been a good business for many years. We’d like to install car washes at every location that should have one, but we can’t easily add them.”

Eddy Alvarez, senior operations manager at Miami-based Sunshine Gasoline Distributors, said the investment in tunnels is worth it. “We recoup the cost in revenue and pricing,” he noted.

Olympidis hires his own maintenance personnel, who he believes are more dedicated than outside providers. “Preventative maintenance is very important. These highly trained employees are committed and have ownership. With outside vendors, multiple people monitor things,” he said.

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ANNOUNCING... From the most established brand in the convenience store retailer space comes one of the highest honors in the industry: the Convenience Store News Hall of Fame. This is a must-attend gala event with some of the most inﬂuential retailers and suppliers in the c-store industry in attendance, honoring some of the industry’s most admired retailer and supplier executives. 4 REASONS TO PARTICIPATE IN THE CSNEWS HALL OF FAME EVENT: • Strengthen and develop industry relationships • Be known as a leader in the industry • Gain visibility for your brand and products • Reach retail and supplier executives and key decision-makers Hall of Fame is an intimate awards gala reception, dinner and award ceremony celebrating the induction of outstanding men and women who have exhibited exceptional leadership and provided signiﬁcant contributions to the convenience store industry. HALLRETAILEROFFAME Brian Hannasch President and CEO Couche-TardAlimentation HALLSUPPLIEROFFAME Brent Cotten VP, Customer & Industry Affairs The CompanyHershey OFEXECUTIVERETAILERTHEYEAR Doug Haugh President Parkland USA 2022 HONOREES Join us as we help nurture and celebrate the storeinleadersexceptionaloftomorrowtheconvenienceindustry. The Convenience Store News Future Leaders in Convenience program celebrates and develops the next generation of convenience store industry leaders by providing a forum for talented young business people to hone their leadership talent while recognizing the achievements of emerging leaders under the age of 35 at the time of nomination. For the first time ever, employees of both convenience store retailers and convenience store distributors/suppliers are eligible for nomination this year. The CSNews Future Leaders in Convenience program provides a comprehensive workshop and networking program that teaches young convenience store industry managers and executives how to achieve their full potential as leaders in their organizations and the industry at large. AND FEATURING OUR EXCLUSIVE 36th ANNUAL PRESENTED BY NOVEMBER 21, 2022 CHARLOTTE, NORTH CAROLINA For more sponsorship information please contact Paula Lashinsky, VP/Publisher, plashinsky@ensembleiq.com 2022 SPONSORS

D&S’ data indicates that IQ Express can wash 105 vehicles daily compared to 70 for a standard in-bay wash. Annual revenue averages $362,880 vs. $201,600 for in-bays. D&S offers an ROI tool that helps retailers calculate individualized, potential returns on new car wash ventures.

Splash In is building a second tunnel with free air. A device on the air pump can be used in tandem with the vacuum to clean debris out of a vehicle’s interior crevices, said Mulhern.

Subscriptions & Promos

“The last several years, memberships have changed everything,” said Victron Energy’s Sharaf. “The average person washes their car two to three times monthly. Subscriptions help generate very high volume, more in-store business, and consistent monthly revenue.”

“Our car washes have never been lackluster,” said Pir. “It’s a profitable Furtherbusiness.”south, Waxahachie, Texas-based Victron Energy Inc.’s car wash offerings go beyond those of most c-stores. Six locations provide detailing. Some accommodate buses, boats, RVs and “you name it,” said Mohamed Sharaf, vice president of development.

Subscription car wash packages and apps have become significant drivers of new and repeat traffic, helping retailers grow sales and maximize ROI on equipment investments.

SEPTEMBER 2022 Convenience Store News 129 SERVICES

Thirty-one Family Express locations operate car washes and 10 feature pet washes.

Splash In has 49 in-bay automatic car washes and one tunnel. In-bays use sonar technology to locate cars’ front and back ends. The tunnel wash offers tire shining and automatic floor mat cleaning. A small store inside the tunnel wash sells car accessories. Vacuums are free.

The company’s new locations use license plate scanning

IQ Express takes a 3D scan of every vehicle, so the machine knows when to stop, explained Ken Underhill, director of marketing. “Volume per location is key. It’s an upgraded, express wash,” he said, adding that a swiveling water nozzle “doesn’t miss any dirt.” There is also a spot-free rinse and tire shiner. The concept can be installed in an existing space.

Despite the benefits, c-stores cannot always accommodate tunnel washes in existing footprints since they require 30 to 60 linear feet. But St. Louis-based D&S Car Wash has an alternative. Developed by a c-store and perfected by D&S, its IQ Express accommodates two vehicles in the wash cycle simultaneously and washes 52 percent more vehicles hourly than standard in-bays.

San Francisco-based Loop Neighborhood, part of Vintners Distributors, has both tunnel and rollover car washes. Upgrades began three years ago. “It’s still evolving,” said Pervez Pir, president of retail. Two years ago, the retailer began tests with a vendor that offers “more bells and whistles.” Changes have included installation of organic brushes in Loop’s signature colors.

Victron Energy’s Euless, Texas, flagship store features a 125-foot Wash Masters tunnel wash that provides free vacuums. The retailer is also adding self-service dog washes to some sites.

recognition of members’ vehicles. This lets Victron Energy obtain motor vehicle data on consumers and use it for marketing. Older locations use RFID. The retailer is also developing backend software that will let customers purchase subscriptions at its fuel Victronpumps.Energy

promotes washes via discounts at its pumps and with foodservice. At one location, car wash members receive 25 percent off Sonic beverages all the time. Customers at sites with barbecue restaurants receive discounts, too. “We’ve been doing memberships for 20 years,” said Sharaf. “But we’re pricing and promoting them better.”

Family Express has a robust subscription program that it “wants to take to another level,” according to Olympidis. Working with subscription partner Mosaic, it hopes to bypass car wash kiosks with mobile wallets and geofencing.

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At Loop Neighborhood, Pir wants to add subscriptions to Loop’s app. “We’re figuring this out and are about two months out,” he reported. He also hopes to create silver, gold and platinum memberships based on the pricing of

Loop Neighborhood also runs successful email promotions tying free car washes to other categories. Emails have been major traffic and revenue drivers, Pir shared.

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“The percentage of people who open emails involving free car washes is larger than for emails involving free fountain drinks,” he pointed out. “Fountain and coffee freebies are common. Psychologically, they think they’re getting more with car wash.”

car wash packages and in-store spending.

Splash In has been using RFID for five years at several sites. But it is expensive. “Adding it to all 50 car wash locations would cost $500,000,” said Mulhern. So, Splash In is developing an app including its car washes and Dash In stores. “Going directly to the app is essentially free,” he said. “Consumers can buy everything, and we can collect data to cross-promote.”

Loop Neighborhood recently joined forces with a gamification company to develop traffic-driving promotions. People playing on the gaming platform will be able to buy free car washes or other merchandise with tokens. A link will explain the redemption process. “It will drive gamers to stores,” said Pir. The launch is slated for September.

“Kiosks are becoming obsolete. There will be fewer reasons for consumers to walk up to a box and converse with machines. We’re willing to invest further and should double subscriptions,” he said, adding that he hopes to launch the initiative within two or three months. Family Express also has an app linking its car washes to the chain’s other business segments.

Bit by bit, car washes are gaining the type of brand recognition and clout that characterizes c-store fountain sections and other high-margin areas. As technology advances further and subscriptions keep growing, momentum should continue, with more retailers upgrading this profitable business segment. And with the addition of colored lights and soaps, car washes have even come to bear a slight resemblance to brightly colored dispensed beverage sections. CSN

The New Bedrock of Success

132 Convenience Store News CSNEWS.com

concentrating on three pillars of technology investments, according to the findings of the 2022 Convenience Store News Technology Study They are advancements in ordering technology; backend software that enables more strategic and efficient operations; and methods of building stronger customer connections, both inside and outside the store.

By Angela Hanson

With their technology budgets on the rise, both large and small convenience store operators are

INVESTING IN TECHNOLOGY has become synonymous with investing in the future of the convenience channel itself. Two years ago, the buzz centered on ways the COVID-19 pandemic was speeding up adoption of frictionless and contactless technologies, along with the impending EMV liability shift. Today, convenience store operators are focused on improving their overall technology capabilities — from the forecourt to in-store, to mobile apps, and beyond.

C-store operators view new and improved technology as critical to their future

Meanwhile, COVID-19 continues to have an impact on retailers’ investment strategies, with more than eight in 10 study participants reporting that the pandemic sparked interest in or boosted

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Retailers’ current tech investments aren’t necessarily on the cutting edge. Social media is the top technology investment for c-stores currently (offered by 68 percent of respondents), followed by consumer-facing platforms and programs, such as consumer websites (offered by 54 percent) and mobile apps, email marketing programs and digital loyalty programs (each offered by 45 percent of respondents). On the forecourt, retailers are most likely to invest in advertising/couponing (41 percent) and digital monitors (36 percent).

their tech development in some way: 32 percent say the pandemic sped up implementation of new technology, 27 percent say it sparked interest in exploring technology, and 23 percent say it sped up the expansion or enhance ment of existing technology.

TECHNOLOGY 134 Convenience Store News CSNEWS.com

within the next couple of years, and 38 percent plan to add a digital loyalty program. Merchandise/foodservice ordering at the pump is the top tech investment planned for the forecourt (34 percent).

Customer engagement is an important aspect of future technology investments, as 43 percent of study partici pants say they plan to add text messaging to customers

At the same time, a significant number of c-store retailers are prioritizing their ability to accurately track the success — or lack thereof — of their tech initiatives;

Investing in technology has become synonymous with investing in the future of the convenience channel itself. Key TechnologyCurrentlyInvestments:Offer202220212020 Data analytics platform Email marketing CRM software Text messaging to customers Mobile Consumer-facingapp website 69% 79% 68% Social GPS/geolocationmedia alerts Digital monitors with ads in-store Digital loyalty program 54% 77% 54% 46% 61%37%40%45%46%49%47%45%45%49%54%41%49%38% 23%27%30%34% 51%23%23% 40% 23%

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2022 2021 2020 63%25% SameMore 7%5% Don'tLess know Mobile app Digital loyalty program Data analytics platform Text messaging to customers GPS/geolocation alerts 43% 23% 29% 23% 39% 31%33%35%37%38%36% 26%29% 36% CRM DigitalEmailsoftwaremarketingmonitors with ads in-store Consumer-facing website Social media 34% 19% 34% 30% 37% 30% 20% 9% 20%21%12% 29%30% 12% 20% 40%

nearly 40 percent say they plan to invest in data analyt ics to examine the results of their initiatives.

TECHNOLOGY 136 Convenience Store News CSNEWS.com

2022 vs. 2021 Key

Change

When asked what major business opportunities will drive their investment in customer-facing technologies in the coming year, employee training (63 percent), mobile apps (52 percent) and mobile/online ordering (50 percent) top the list. When asked the same question regarding backend technologies, the leading responses were to reduce theft/shrink (57 percent), address the supply chain (57 percent), provide better management of store inventory/revenue (55 percent), and improve the use of loyalty data (55 percent). in Technology Budget Technology Investments: Plan to Add

To make all of this happen, the majority of companies (63 percent) report they are increasing their technology budgets in 2022 vs. 2021. Only 5 percent say they plan to spend less.

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While the traditional options of credit and debit are the most commonly available in-store and at-the-pump payment technologies, other newer options are on the rise. Seven in 10 c-stores currently offer thirdparty mobile payment as an in-store option. On the forecourt, proprietary mobile payment options via app are growing in availability.

mobile payment in app

Prepaid Electroniccardcheck verification

Contactless self-checkout using kiosk

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38%

Contactless self-checkout using app

Contactless self-checkout using kiosk

Contactless self-checkout using AI/sensors

Proprietary mobile payment in app

Payment Innovation

Contactless self-checkout using app

Third-partyRFID mobile payment

Biometric payment technology

Prepaid Electroniccardcheck verification

In-Store Payment Technology: Currently Implemented

Electronic benefits transfer (EBT)

Contactless self-checkout using AI/sensors

Biometric payment technology

In-Store Payment Technology: Plan to Add

11%11%11%20%23%25%27%36%36% 4%

ProprietaryRFID

Credit/debit

Consistent with 2021 figures, 55 percent of this year’s study participants report that they currently offer some form of mobile payment at their locations.

Third-partyCredit/debitmobile payment

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EMV liability shift, the convenience channel is still not in compliance across the board, but progress made has been significant. More than eight in 10 retailers are now in compliance or have begun the process at the point-of-sale, while three-quarters are in compliance or working on it at the pump. Somewhat concerning is that the percentage of operators that have not begun the

Most operators in the process of reaching full compliance intend to do so by the end of 2023.

Various contactless payment technologies are also increasingly on the radar of c-store operators. While they are available at a minority of stores today, retailers indicate they have plans to add contactless self-checkout using an app (38 percent), contactless self-checkout using a kiosk (36 percent), and contactless self-checkout using AI/sensors (36 percent).

past the date of the

Mobile ordering is another work-in-progress for the convenience channel.

compliance process is higher at the pump, where retailers run the highest risk of encountering card skimmers.

Ordering & Fulfillment

Availability of Website Ordering plans

At the pump, third-party mobile payment, in-app proprietary mobile payment and RFID payment are the leading payment technologies c-store retailers are

offer website ordering 20% no

Just 23 percent of respondents currently offer ordering via app, and 20

to offer 39% plan to offer 41%

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percent offer ordering via website. However, it is very much on the agenda for most retailers, as an additional 45 percent plan to add app ordering in the future and 41 percent plan to offer website

Despiteordering.this

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shift, however, it is worth noting that more than three in 10 operators indicate they have no plans to offer ordering via either app or website at this time.

Loyalty Programs

The availability of loyalty programs saw an uptick in this year’s study, with nearly six in 10 respondents offering one. For the third year in a row, proprietary loyalty programs outnumber those tied to a specific major oil brand.

Loyalty programs associated with a mobile app are more common than those connected to a physical card, but most programs include both.

Availability of App Ordering offer orderingapp 23% no plans to offer 32% toplanoffer 45%

While first-party delivery is a challenging endeavor for most c-stores, retailers indicate growing interest in partnering with third-party delivery companies. Less than a quarter of operators currently offer third-party delivery, but 41 percent plan to do so in the future, marking a notable jump from both 2020 and 2021. Uber Eats and DoorDash are leading the way in this segment, outpacing mentions of other third-party partners like Grubhub and Postmates.

Among c-stores that currently have some form of order-ahead, 48 percent offer in-store pickup only, while 46 percent offer a combination of in-store pickup and some other method, such as curbside pickup, drive-thru, or pumpside pickup. Notably, pumpside pickup has continually declined in availability since it peaked in 2020, almost certainly due to loosened COVID restrictions and customers’ rebounding comfort levels regarding in-store pickup.

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With or without a loyalty program, 54 percent of c-store operators currently offer a mobile app, leaving plenty of room for growth. The most common app features include a store locator, loyalty program tie-in, limited-time specials, mobile payment, and fuel prices. On average, c-store mobile apps include 6.2 different features.

Three-quarterscommon.of

Social media remains a common marketing method among convenience store retailers, with nearly three-quarters of operators utilizing some form of it. Facebook has become ubiquitous (used by 98 percent), followed by Instagram (61 percent) and Twitter (59 percent).

Social Media & Customer Feedback

The majority of programs are points/ rewards based, while around a quarter of programs incorporate a credit card/payment option, too.

TECHNOLOGY 144 Convenience Store News CSNEWS.com

operators track consumer feedback, with many utilizing third-party or internal analytics, as well as customer surveys and online reviews/social media. However, manual tracking/monitoring is also common, which has a greater potential for error. CSN

Magazines Events Digital Media Solutions Research Custom Content EIQ Group HP ad.indd 1 6/26/20 10:52 AM Availability of Customer Delivery offer delivery 23% no plans to offer 39% plan to offer 41%

The vast majority of social media content from c-stores involves promotions (95 percent). Posts about contests (68 percent), events (63 percent), new vendor

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NextUp’s Kat Ortiz talks changing cultures and feeding hope

Flipping the Script

In the world of leadership development, there are people we can call influencers who feel they have something worth teaching, some wisdom they feel like

KAT ORTIZ, M.S., is a boundless resource for NextUp, where she serves as learning and development program manager. Her expertise as an industrial-organizational (I/O) psychologist pierces through the layers of corporate culture to the core — to what must change, and how to change it.

I/O makes transforming workplace environments into hard science, using data to fuel powerful outcomes to better our workplaces for women.

changing whole organizations. This article is excerpted from the full interview, which can be read at nextupisnow.org/blog.

WHAT’S NEXT

In this interview, we dive into the power of psychology to change perspectives, from the individual level right up to Convenience Store News is pleased to continue this series of educational columns by NextUp, coinciding with the annual CSNews Top Women in Convenience awards given out each fall. Ninety-one female managers, executives and directors who work in the convenience store industry will be honored in our 2022 program. In addition to being a presentation sponsor for the Top Women in Convenience program, NextUp and CSNews have partnered to develop this series of columns directed at helping corporate leaders drive more inclusive company cultures.

THE 2022 CONVENIENCE STORE NEWS TOP WOMEN IN CONVENIENCE PROGRAM IS SPONSORED BY: Founding & Presenting Sponsor: Gold Sponsors: Silver Sponsors: Platinum Sponsors: 146 Convenience Store News CSNEWS.com

Bice: What do you look for when you’re looking at a leadership development program? What’s a green flag for individuals to look for that shows a program is actually going to create change, either for the individual or for the Ortiz:organization?

By Angelina Bice, Content Strategy Specialist, NextUp

Acknowledge where you’ve come from, rather than denying it. Look at the good and bad of yourself and use that knowledge to propel you forward. History can repeat itself if you don’t acknowledge it.

to grow and to see hope in themselves — they end up being more creative. They stop feeling like they need to be in fight or flight when stress comes their way.

You’ve put them into a growth mindset that starts creativity and stops fear. It increases that person’s resilience and ability to stand up against stressors.

SEPTEMBER 2022 Convenience Store News 147

When you can help someone understand what it’s like to be comfortable in the uncomfortable, and see themselves for who and what they really are, there are learnings to take away. It keeps that person from putting things into a denial box, shutting them away, and making them too scary to deal with. And it also keeps you from ruminating on it.

: It’s the feeding of hope. When you give any single individual hope, they’re more likely to live creatively and live healthy. So, when a training is given to somebody — when it inspires that person

Bice: When we talk about individual leadership development supporting the retention of women and other marginalized groups at work — even in the midst of historic events like “The Great Resignation” — why do you think it

So, [it’s] … repositioning your perspective into a positive mindset of “I’m going to grow. Good is going to come from this, and I have hope.” CSN

When you root something in science and make sure it is actually going to cause the outcomes you’ve measured for, it becomes so much more than a high-level, easy-to-digest platitude. We’re talking about real change, and you will have to do work to make that happen.

they need to share. I think that’s fair. But because it comes from the gut rather than from a scientific background, there are things that are not sound and sometimes not particularly safe.

Angelina Bice is NextUp’s copywriter and content strategy specialist. As the “voice of NextUp,” she has worked with the organization since 2020 and was a key part of the brand’s transformation in 2022. Her expertise is in brand voice development and transformation.

“When you root something in science and make sure it is actually going to cause the outcomes you’ve measured for, it becomes so much more than a high-level, easy-to-digest platitude.”

— KAT ORTIZ, M.S.

For example, I’ve seen prominent self-help books, New York Times bestsellers, that advocate for just pulling yourself up by your bootstraps and getting over the hard stuff. That’s not psychologically safe. Not for individuals, and not for organizations.

Ortizworks?

Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.

The need for a convenience store/gas station was a priority for Hard Rock Hotel & Casino Sacramento and its owner, Enterprise Rancheria Tribe, not only as a customer amenity for the casino, but also for the property’s employees and the surrounding community.

Between a Hard Rock & a Casino

Opened:Smoke

Location: 3317 Forty Mile Road, Wheatland, Calif.

By Renée M. Covino

Besides the tribal, casino and Hard Rock brand partnerships, Rocktane also estab lished a unique alliance with its supplier,

STORE SPOTLIGHT

“We are literally in the casino parking lot, right in front of the hotel check-in,” said Stephen Rudnick, director of retail for Hard Rock Hotel & Casino Sacramento.

Harbor Wholesale Foods, a Northwest convenience store distributor based in Roseburg, Ore. The collaboration has been strong from the very beginning of the project, as a mutual respect immedi ately formed between the two.

At a Glance Rocktane Gas +

property and opened in November as part of the $75 million expansion of Hard Rock Hotel & Casino Sacramento at Fire Mountain in California, it is the first Rocktane gas station and convenience store on the West Coast. Hard Rock International operates another Rocktane location in Atlantic City, N.J.

Size: 4,100 square feet

Unique features:

“The coolest thing about this store — besides its name and clout — is the quality of the team members, their professionalism, communication, and outstanding ability to collaborate,” Neil Harmon, director of sales for RDC (Roseburg Distribution Center) at Harbor Wholesale Foods, told Convenience Store News. “A lot of times, we’re not viewed as a partner and I’m OK with that. But with Rocktane, our opinions and ideas are really valued; we go back and forth with good collaboration.”

148 Convenience Store News CSNEWS.com

Rocktane Gas + Smoke arrives on the West Coast boasting an iconic music vibe

November 2021

Built on tribal land; located in the parking lot of Hard Rock Hotel & Casino Sacramento; casino loyalty card partnership; Hard Rock brand elements, including exclusive branded merchan dise; 24-hour drive-thru smoke shop

The way Rudnick tells it, “From the very beginning, Neil and his team were involved not just with product selection, but product setup and even store layout. We’re brand new in the convenience/gas industry and it was so helpful to have their expertise. We chose them because they

ROCKTANE GAS + SMOKE is a business built on Locatedpartnerships.ontribal

Inside the store, Hard Rock brand ele ments are a focal point. “We are focused on making this an upscale c-store as part of the Hard Rock atmosphere and vibe,” stated Rudnick.

Brand Power

Rocktane operates 24/7 with 16 fuel pumps offering three levels of gas as well as diesel, a 4,100-square-foot convenience store, and a drive-thru smoke shop.

“A lot of guests are doing grab-and-go food, but they’re not buying to stock up at their house. We tried that angle, and it didn’t work,” Rudnick explained.

Categories where Rocktane has expanded its assortment include vape products, heat-and-eat microwave items, and some auto supplies. “We discovered guests like to top off their oil before they go,” the retail director noted.

Unlike the upscale foodservice presen tation that many convenience stores are moving into the future with, Rocktane has a “very limited food offering,” according to Rudnick. There are multiple restaurants in the casino, so it’s not necessary, he said.

Now that the store has been in operation for a while, the operator is making tweaks and updates, tailoring its product assort ment and merchandising. Since opening, Rocktane has cut down on cleaning sup plies and pet supplies, along with limiting its selection of dairy and deli items.

“We’re pushing candy and snacks. Any thing new there, we want to be the first with innovative items,” he added. “We’re trying to have a very broad assortment of candy, snacks and beverages. We want to stand out and have guests know they can find that new item here. We want to keep our candy and snack assortment fresh, exciting and different.”

Rocktane makes tweaks and updates to tailor its product assortment and merchandising.

Rock-branded merchandise and Rocktane-branded merchandise that customers can’t find anywhere else,” Rud nick said. “People collect these; they’re very iconic.”

SEPTEMBER 2022 Convenience Store News 149

wanted to be true partners, not just to sell us some product.”

Upon entering, shoppers hear rock music playing, and see Hard Rock-branded canopies and graphic guitar picks as aisle markers. There is also an impulse wall to the left of the entrance featuring “garage shirts,” tees, travel mugs, chains, pins, and “Thismore.isHard

The drive-thru smoke shop provides a convenience for the Hard Rock hotel and casino’s guests.

Luckily, the system hasn’t had to be used yet. But it was one of the key community accomplishments behind Rocktane Gas + Smoke, he noted. CSN

Rocktane has been fortunate to not experience any staffing challenges since it opened. In fact, it’s quite the contrary, Rudnick told CSNews. Employees receive free casino meals, a discount on fuel, and access to casino activities. “We’re treat ing them with respect and they’re having a fun time,” he said. “It’s a good group.”

The drive-thru takes minimal effort to maintain and staff it, according to Rud nick. “It’s such a simple process, it’s just an additional register,” he said.

150 Convenience Store News CSNEWS.com STORE SPOTLIGHT

With its drive-thru smoke shop service, Rocktane is still in the teaching phase. “We want guests to know we have that for them, but not a lot are using it yet,” Rudnick admitted.

“Thisemergencies.meansin

the event of a power outage, we can supply gas for first responders and people evacuating the area,” Rudnick said. “We can operate 24/7 with or without power, and there is definitely that need with natural disasters going on. We have a lot of fires here.”

While the idea is to get customers inside the store to experience the vibe, Rocktane wanted to offer the drive-thru service as a convenience for the hotel and casino’s guests; to help them fulfill their tobacco needs and not have to face the elements. “Sometimes, it’s over 100 degrees outside. We get some crazy rain here, too,” he pointed out.

partnership in mind, Hard Rock Hotel & Casino Sacramento and the Enterprise Rancheria Tribe invested in generators so that the gas station can continue to operate seamlessly during power outages and other

what they’re going through with the high gas prices,” said Rudnick, reporting that the company has increased its business by roughly 5 to 10 percent, particu larly thanks to new loyalty members signing up to receive the Alsodiscounts.withacommunity

Community Camaraderie Local residents also enjoy discounted prices at the pump. Casino patrons, meanwhile, are offered discounts based on their loyalty card level. Wild Card loyalty members normally receive between a 5-cent and 20-cent discount per gallon. In the month of May, Rocktane doubled that discount, and offered team members and tribal members 40 cents off per “Wegallon.know

Drive-By Convenience

HOT PRODUCTS SPECIAL ADVERTISING SECTION ATMs SEPTEMBER 2022 Convenience Store News 151

HOT SPECIALPRODUCTSADVERTISING SECTION Car Wash Services 152 Convenience Store News CSNEWS.com

HOT PRODUCTS SPECIAL ADVERTISING SECTION Car Wash Services SEPTEMBER 2022 Convenience Store News 153

Gourmet Pet Treats

HOT SPECIALPRODUCTSADVERTISING SECTION

154 Convenience Store News CSNEWS.com

SEPTEMBER 2022 Convenience Store News 155

HOT PRODUCTS SPECIAL ADVERTISING SECTION

Mobile Coupon Services

Food Servcie Oils

HOT SPECIALPRODUCTSADVERTISING SECTION

156 Convenience Store News CSNEWS.com

General Merchandise

Kiosk

Pre- Paid Services

HOT PRODUCTS SPECIAL ADVERTISING SECTIONBeverages Cocktail POS/Equipment/SuppliesMixes SEPTEMBER 2022 Convenience Store News 157

Beef Jerky

158 Convenience Store News CSNEWS.com

Financial Services

HOT SPECIALPRODUCTSADVERTISING SECTION

Age Verifier

CLASSIFIEDS Credit Card Processing / Merchant Services SEPTEMBER 2022 Convenience Store News 159

CLASSIFIEDS Services 160 Convenience Store News CSNEWS.com

CLASSIFIEDS Credit Card Processing / Merchant Services SEPTEMBER 2022 Convenience Store News 161

CLASSIFIEDS Sunglasses 162 Convenience Store News CSNEWS.com

CLASSIFIEDS Credit Card Processing / Merchant Services SEPTEMBER 2022 Convenience Store News 163

CLASSIFIEDS POS/Equipment/Supplies 164 Convenience Store News CSNEWS.com

Vacs SEPTEMBER 2022 Convenience Store News 165

Air

CLASSIFIEDS

CLASSIFIEDS Air Equipment/SuppliesVacs 166 Convenience Store News CSNEWS.com

CLASSIFIEDS Equipment/SuppliesPlastics SEPTEMBER 2022 Convenience Store News 167

CLASSIFIEDS Cigar/CigarillosOTPProducts 168 Convenience Store News CSNEWS.com

CLASSIFIEDS E-Cigs/E-Vapes Products E-Cigs/E-Vapes Products SEPTEMBER 2022 Convenience Store News 169

CLASSIFIEDS ServicesATMs 170 Convenience Store News CSNEWS.com

CLASSIFIEDS C-store Food Service Program Looking for ideas to promote your product or services? We are here to help, whether it be in the classi ed ad section, an ad in the main pages, or online. Call or email with any questions or for pricing. We can handle all aspects of your ad from conception to print in a fraction of the cost that agences charge! CALL TERRY KANGANIS TODAYNeed help creating an ad that ts your needs without spending a for tune with an adver tising agenc y? Our ads get results! tkanganis@ensembleIQ.com917-634-7471 SEPTEMBER 2022 Convenience Store News 171

Card Processing Petroleum/Equiment 172 Convenience Store News CSNEWS.com

CLASSIFIEDS Age Verifier ATM’s

Credit

CLASSIFIEDS Wholesale Refrigeration 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631 Phone 773-992-4450 Fax 773-992-4455 www.ensembleiq.com 22nd Century Group Inc. 175 ADD Systems 137 ADS-TEC Energy .................................... 57 Altria Group Distribution 2 Amazon Just Walk Out 135 Anheuser-Busch LLC 7 BIC USA Inc. 11 Black Buffalo 63 Buzzballz LLC 77 Calico Brands, Inc .................................. 18 CForce Bottling Company 1 Chevron Corporation 37 Cheyenne International 117 Cookies United 43 Core-Mark International 54–55 Curaleaf 83 Diageo 123 Diebold Nixdorf Incorporated ............ 139 DMF Bait Company 65 E-Alternative Solutions......................... 49 E&J Gallo Winery 121 Excel Dryer, Inc 125 Federal Industries Inc 59 Forte Products 140 Furmano Foods ...................................... 103 GlaxoSmithKline Consumer Health Care 5, 67 Horizon Food Group 51 Hunt Brothers Pizza LLC 19 ImageWorks Display 73 Inline Plastics Corp 91 Invenco 60–61 ITG Brands ............................................... 44–45 J&J Snack Foods Corp..........................109 JTM Foods 101 King & Prince Seafood 69 Krispy Krunchy Chicken 97 Legion Technologies ............................. 133 Liggett Vector Brands 111 Lindt & Sprüngli USA, Inc..................... 41 Living Essentials LLC ............................ 47 LSI Industries Inc.................................... 89 Mars Wrigley Confectionery 15 McLane Company 176 Modern Store Equipment 75 Molson Coors 29 MPACT Beverage.................................... 93 Paytronix Systems Inc........................... 27 Perfetti Van Melle USA Inc 79 Phoenix Research Industries 130 Prairie City Bakery 138 Premier Manufacturing 70-71 Relationshop 141 Republic Tobacco 115 Retail Space Solutions 131 Ricola USA ............................................... 20 Reynolds American Trade Marketing Services 30 SEB Professional 85 Sugar Foods Inc ........................................107 Swedish Match North America LLC 9, 53, 87 Swisher International, Inc. 13 The Coca-Cola Company ..................... 17 The J.M. Smucker Company 81 The Wonderful Company/FIJI Water 21 TransAct Technologies Incorporated 143 Tyson Foods 95 United Sign Co. Outsert Universal Merchant Services Outsert Uno Foods ............................................... 99 Visual Marketing, Inc 113 Vita Coco Water 127 VOSS Water 35 Warren Rogers 90 Welbilt 105 ADINDEX who read Convenience Store News do so because they want to ﬁnd out about new products. Reach those important hard to reach retailers by advertising here in the Hot Products Section of Convenience Store News by contacting: 86 % of retailers Terry Kanganis EnsembleIQ at: 917-634-7471 for more details. POS/ Equipment SEPTEMBER 2022 Convenience Store News 173 Smokey Mountain Chew Inc 119 Johnsonville.............................................142

loyalty

67%Yes Those shoppers

Often Have a Loyalty Program? Are You Enrolled? THE

topointsindicatedthanfewerCOSTANDDUEPERHAPSprogram.c-storethatlastshoppersGROWING,PROGRAMSSTORECONVENIENCELOYALTYISasmorethisyearvs.year(64%)reporttheirpreferredoersaTOINFLATIONTHERISINGOFGOODS,shoppersthisyearlastyear(31%)thattherewards/arenotvaluablethem.

33%NoNearlyFOURIN 10

INSIDE THE CONSUMER MIND

Convenience store loyalty programs are expanding and enhancing 174 Convenience Store News CSNEWS.com 39% I am enrolled & actively use 12% I am enrolled, but do not use 16% I am not enrolled 18% I would enroll if they had a program 15% I would not enroll even if they had a program Requires too many purchases to earn rewards 32% Asks for too much information 27% Rewards/points are not valuable to me 26% Enrollment process takes too long 17% Belong to too many loyalty programs 15% Cost associated with joining 13% Belonged to similar program & didn’t like it 11% Does the Convenience Store

are

Keeping Customers Close You Shop at Most AVAILABILITY OF

Research has found that it is nine to 11 times more expensive to recruit a new customer vs. maintain an existing one. As more Americans embrace digital tools as part of their shopping journeys, convenience store loyalty programs — especially, digital-forward ones — are becoming more important than ever to enhance communication, engage customers, and build basket sizes. The 2022 Convenience Store News Realities of the Aisle Study, which surveyed 1,500-plus consumers who shop a c-store at least once a month, uncovered the following insights around c-store loyalty programs: who say they would not enroll even if their preferred convenience store o ered a loyalty program cite the following reasons: SHOPPERS actively using a convenience store program, and most of these shoppers (77%) are extremely/very satisﬁed with that program.

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FALL | Supplement unitedsign.com | 800.821.6530 20 22 follow the link to your new favorite online catalog

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| Catalog Supplement4 C-STORE, GAS STATION & LUBE CENTERS Visit unitedsign.com For A Full Line Of Colors & Options! Single-Product Gas Price Flip Signs WBKBKWRWGWWBLWRYGBKY Wall-Mount Gas Price Sign U-FA10-2-3 WALL-MOUNT A-Frame Gas Price SignBKWRWGWWBLWBKWRYGBKY U-FA10-1-3A A-FRAME Pole-Mount Gas Price SignBKWRWGWWBLWBKWRYGBKY U-FA10-1-3D POLE-MOUNT • .040 aluminum back plate, three sets of .025 aluminum flip numbers (flip 0-9), product panel and your choice of "9/10" or "9 ALL TAX INCL" 10ths panels are included • Mitered steel frame has rust-resistant black powder-coat finish • Stainless steel clips and rivets attach the number sets • Double-Sided Pole Mount style price reflects two single-sided units • Pole mounting hardware is sold separately 10" FLIP NUMBER SINGLE-PRODUCT 16" FLIP NUMBER SINGLE-PRODUCT 20" FLIP NUMBER SINGLE-PRODUCT 10" FLIP NUMBER SINGLE-PRODUCT w/ Optional Panel 16" FLIP NUMBER SINGLE-PRODUCT w/ Optional Panel on Top 20" FLIP NUMBER SINGLE-PRODUCT w/ Optional Panel on Top 20" FLIP NUMBER SINGLE-PRODUCT w/ Optional Panel on Bottom U-FA10-1-3 SS Wall Or Pole Mount 24"W x 18"W $157.00 DS Pole Mount 24"W x 18"H $314.00 DS A-Frame24"W x 35"H $374.00 U-FA10-2-3 SS Wall Or Pole Mount 24"W x 27"H $218.00 DS Pole Mount 24"W x 27"H $436.00 DS A-Frame24"W x 44"H $496.00 U-FA16-1-3 SS Wall Or Pole Mount 36"W x 32"H $230.00 DS Pole Mount 36"W x 32"H $460.00 DS A-Frame36"W x 49"H $520.00 U-FA16-1-OP SS Wall Or Pole Mount 36"W x 40"H $267.00 DS Pole Mount 36"W x 40"H $534.00 DS A-Frame36"W x 57"H $594.00 U-FA20-2-3 SS Wall Or Pole Mount 36"W x 40"H $345.00 DS Pole Mount 36"W x 40"H $690.00 DS A-Frame36"W x 57"H $750.00 U-FA20-3-3 SS Wall Or Pole Mount 36"W x 40"H $345.00 DS Pole Mount 36"W x 40"H $690.00 DS A-Frame36"W x 57"H $750.00 U-FA20-1-3 SS Wall Or Pole Mount 36"W x 32"H $259.00 DS Pole Mount 36"W x 32"H $518.00 DS A-Frame36"W x 49"H $578.00 800-821-6530 | www.unitedsign.com 5 Visit unitedsign.com For A Full Line Of Colors & Options! C-STORE, GAS STATION & LUBE CENTERS • .040 aluminium back plate, three sets of .025 aluminium flip numbers (flip 0-9), product panel and your choice of "9/10" or "9 ALL TAX INCL" 10ths panels are included • Mitered steel frame has rust-resistant black powder-coat finish • Stainless steel clips and rivets attach the number sets • Double-Sided Pole Mount style price reflects two single-sided units • Pole mounting hardware is sold separately 10" FLIP NUMBER TWO-PRODUCT VERTICAL 16" FLIP NUMBER TWO-PRODUCT VERTICAL 20" FLIP NUMBER TWO-PRODUCT VERTICAL 10" FLIP NUMBER TWO-PRODUCT VERTICAL w/ Optional Panel 16" FLIP NUMBER TWO-PRODUCT VERTICAL w/ Optional Panel 20" FLIP NUMBER TWO-PRODUCT VERTICAL w/ Optional Panel U-FA10-4-3 SS Wall Or Pole Mount 24"W x 36"H $304.00

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U-FA16-2-OP Wall Or Mount 36"W x 72"H $474.00 Pole Mount 36"W x 72"H $948.00 A-Frame36"W x 89"H $1,008.00

U-FA20-4-3 Wall Or Mount x 64"H $497.00 Mount x 64"H $994.00 A-Frame36"W x 81"H $1,054.00

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| Catalog Supplement6 C-STORE, GAS STATION & LUBE CENTERS Visit unitedsign.com For A Full Line Of Colors & Options! A-Frame Gas Price SignBKWRWGWWBLWBKWRYGBKY U-FA16-6-3A A-FRAME Wall-Mount Gas Price SignBKWRWGWWBLWBKWRYGBKY U-FA10-6-3 Wall-Mount Pole-Mount Gas Price SignBKWRWGWWBLWBKWRYGBKY U-FA16-3-OP POLE-MOUNT 10" FLIP NUMBER THREE-PRODUCT U-FA10-6-3 SS Wall Or Pole Mount 24"W x 54"H $452.00 DS Pole Mount 24"W x 54"H $904.00 DS A-Frame24"W x 71"H $964.00 16" FLIP NUMBER THREE-PRODUCT U-FA16-3-3 SS Wall Or Pole Mount 36"W x 96"H $655.00 DS Pole Mount 36"W x 96"H $1,310.00 20" FLIP NUMBER THREE-PRODUCT U-FA20-6-3 SS Wall Or Pole Mount 36"W x 96"H $740.00 DS Pole Mount 36"W x 96"H $1,480.00 U-FA10-7-3 SS Wall Or Pole Mount 24"W x 63"H $485.00 DS Pole Mount 24"W x 63"H $970.00 DS A-Frame24"W x 80"H $1,030.00 10" FLIP NUMBER THREE-PRODUCT w/ Optional Panel U-FA16-3-OP SS Wall Or Pole Mount 36"W x 104"H $707.00 DS Pole Mount 36"W x 104"H $1,414.00 16" FLIP NUMBER THREE-PRODUCT w/ Optional Panel U-FA20-7-3 SS Wall Or Pole Mount 36"W x 104"H $843.00 DS Pole Mount 36"W x 104"H $1,686.00 20" FLIP NUMBER THREE-PRODUCT w/ Optional Panel Three-Product Gas Price Flip Signs • .040 aluminium back plate, three sets of .025 aluminium flip numbers (flip 0-9), product panel and your choice of "9/10" or "9 ALL TAX INCL" 10ths panels are included • Mitered steel frame has rust-resistant black powder-coat finish • Stainless steel clips and rivets attach the number sets • Double-Sided Pole Mount style price reflects two single-sided units • Pole mounting hardware is sold separately 800-821-6530 | www.unitedsign.com 7 Visit unitedsign.com For A Full Line Of Colors & Options! C-STORE, GAS STATION & LUBE CENTERS • .040 aluminium back plate, three sets of .025 aluminium flip numbers (flip 0-9), product panel and your choice of "9/10" or "9 ALL TAX INCL" 10ths panels are included • Mitered steel frame has rust-resistant black powder-coat finish • Stainless steel clips and rivets attach the number sets • Double-Sided Pole Mount style price reflects two single-sided units • Pole mounting hardware is sold separately A-Frame Gas Price SignBKWRWGWWBLWBKWRYGBKY U-FA16-4-H3A A-FRAME Pole-Mount Gas Price SignBKWRWGWWBLWBKWRYGBKY U-FA10-10-3D POLE-MOUNT Wall-Mount Gas Price Sign HorizontalBKWRWGWWBLWBKWRYGBKY U-FA10-9-H3 WALL-MOUNT 10" FLIP NUMBER TWO-PRODUCT HORIZONTAL U-FA10-9-H3 SS Wall Or Pole Mount 48"W x 27"H $424.00 DS Pole Mount 48"W x 27"H $848.00 DS A-Frame48"W x 44"H $906.00 10" FLIP NUMBER FOUR-PRODUCT U-FA10-8-3 SS Wall Or Pole Mount 24"W x 72"H $592.00 DS Pole Mount 24"W x 72"H $1,184.00 16" FLIP NUMBER TWO-PRODUCT HORIZONTAL U-FA16-4-H3 SS Wall Or Pole Mount 72"W x 40"H $540.00 DS Pole Mount 72"W x 40"H $1,080.00 DS A-Frame72"W x 57"H $1,140.00 20" FLIP NUMBER TWO-PRODUCT HORIZONTAL U-FA20-9-H3 SS Wall Or Pole Mount 72"W x 40"H $616.00 DS Pole Mount 72"W x 40"H $1,232.00 DS A-Frame72"W x 57"H $1,292.00 Two-Product Horizontal & Four-Product Gas Price Flip Signs U-FA10-10-3 SS Wall Or Pole Mount 24"W x 81"H $656.00 DS Pole Mount 24"W x 81"H $1,312.00 10" FLIP NUMBER FOUR-PRODUCT w/ Optional Panel

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U-TC-13 U-FPI-16 U-VIT-16

U-TC-15 U-FPI-15 U-VIT-15

| Catalog Supplement12 Visit unitedsign.com For A Full Line Of Colors & Options! FACILITY / GROUNDS MAINTENANCE Bollard Post Covers U-PC-01 4.5”DIA. X 52”H $41.95 U-PC-02 4.5”DIA. X 64”H $45.95 U-PC-03 7"DIA. X 60"H $51.95 U-PC-04 7"DIA. X 72"H $56.95 72in. FlexPost Bollard U-FLEXPOST-72 $369.95 U-CLT-2 80”W X 4.5”DIA. $133.85 Height Warning Clearance Bar 800-821-6530 | www.unitedsign.com 13 Visit unitedsign.com For A Full Line Of Colors & Options! SAFETY, SECURITY & COMPLIANCE U-VIT-27 3.5”W X 1.5”H $3.95 Valve ID Tags U-TC-126 38”W X 3.5”H $12.95 Storage Tank Collars U-FPI-122 3.5”W X 2.5”H $11.95 Fill Pipe ID Tags U-TC-11 U-FPI-14 U-VIT-14 U-TC-12U-FPI-24 U-VIT-24 –– U-FPI-28 U-VIT-28 U-TC-31 U-FPI-65 U-VIT-65 U-TC-30 U-FPI-66 U-VIT-66 –– U-FPI-125 U-VIT-125 U-TC-1 U-FPI-43 U-VIT-43 –– U-FPI-37 U-VIT-37 U-TC-21 U-FPI-22 U-VIT-22 U-TC-10 U-FPI-42 U-VIT-42 U-TC-131U-FPI-131 U-VIT-131

U-TC-129U-FPI-21 U-VIT-21

–– ––

U-TC-127 U-FPI-127 U-VIT-127 U-TC-126U-FPI-126 U-VIT-126

U-TC-3U-FPI-12 U-VIT-12

U-TC-41U-FPI-121 U-VIT-121 U-TC-130U-FPI-130 U-VIT-130

–– U-FPI-44 U-VIT-44

U-TC-132U-FPI-132 U-VIT-132

–– U-FPI-115 U-VIT-115

U-TC-37 U-FPI-46 U-VIT-46

U-TC-35

–– U-FPI-25 U-VIT-25

| Catalog Supplement14 Visit unitedsign.com For A Full Line Of Colors & Options! SIGN FRAMES, INSERTS & HARDWARE Fuel Flags- Blade Style U-FBL13.5 FT $170.03 Please note: Sail flag kits include sail flag, hardware & ground spike base. U-BA-96 120”W X 36”H $100.25 Now Open Banner U-FBL-6K U-FBL-7K U-FBL-8KU-FBL-9K U-BA-104 120”W X 36”H $100.25 Help Wanted Banner U-BA-193 120”W X 36”H $100.25 Diesel Fuel Banner U-BA-195 120”W X 36”H $100.25 Propane Tank Banner U-BA-194 120”W X 36”H $100.25 Ethanol Free Banner U-BA-196 120”W X 36”H $100.25 Rec Fuel Banner 800-821-6530 | www.unitedsign.com 15 Visit unitedsign.com For A Full Line Of Colors & Options! C-STORE, GAS STATION & LUBE CENTERS Waste Container / Message Center U-CU-7 BLACK $125.95 U-CU-8 BLACK $229.95 Hex™ Waste & Windshield Center U-CU-11 BLACK $119.95U-ARUBA-6 BLACK $500.95 Aruba 6 Waste & Windshield Center Hex™ 30 Gal. Waste Container U-CU-10 BLUE $414.95U-CU-13 GRAY $349.95 Waste ‘N Wipe® Service CenterBermuda 2 35-Gal. Hex Container

A catalogue that can shop for you! • The interactive online catalogue • Flip. Click. Done. The FlippingBook catalogue is an interactive shopping experience that’s better than the real thing! Turn the catalogue pages to find what you’re looking for, or use the search bar. (We’d like to see a paper catalogue do that!) Click the product, and we’ll do the rest! CODE:SOURCE FALL 2022 unitedsign.com mailstop@unitedsign.com Phone: 800.821.6530 Local Phone: 231.733.1877 Fax: 800.544.0345 Local Fax: 231.725.7314 FIND US ON FACEBOOK! facebook.com/unitedsigngraphics U-FSDS16-1 U-WS-18 U-ARUBA-6

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Between a Hard Rock & a Casino

Flipping the Script

Keeping Spirits High

The Ramifications of Reduced Nicotine

Building a Bigger & Better Future for Foodservice

Back to the Future

BP Brings ampm Brand to the East Coast

Sheetz Targets Western Pennsylvania for Expansion Push

New Products

Travel Center Transformation

Recession? It’s Here, Now What Are You Going to Do About It?

Retailer Tidbits

CSNews Online