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W H AT ’ S N E X T I N C O N V E N I E N C E A N D F U E L R E TA I L I N G



Convenience Store News September 2022

W H AT ’ S N E X T I N C O N V E N I E N C E A N D F U E L R E TA I L I N G

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

Volume 58, Number 9

SEPTEMBER 2022

CSNEWS.COM

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EDITOR’S NOTE

Allies in Advancing Convenience Foodservice The Convenience Foodservice Alliance is recruiting new members 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.

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

in developing strong signature items that they can own. 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. 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. 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. 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. We’re currently recruiting new members. Contact me if you’re interested in joining the Convenience Foodservice Alliance membership community. For comments, please contact Linda Lisanti, Editor-in-Chief, at llisanti@ensembleiq.com.

EDITORIAL EXCELLENCE AWARDS (2016-2022)

EDITORIAL ADVISORY BOARD

2021 Jesse H. Neal National Business Journalism Award Finalist, Best Infographics, June 2021

2018 Jesse H. Neal National Business Journalism Award Finalist, Best Editorial Use of Data, June 2017

2016 American Society of Business Press Editors, National Azbee Awards Gold, Best How-To Article, March 2015 Bronze, Best Original Research, June 2015 2016 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best How-To Article, March 2015 Silver, Best Original Research, June 2015

2020 Trade Association Business Publications Intl. Tabbie Awards Honorable Mention, Best Single Issue, September 2019 2016 Trade Association Business Publications Intl. Tabbie Awards Silver, Front Cover Illustration, June 2015

2020 Eddie Award, Folio: magazine Business to Business, Retail, Series of Articles, September 2019 2018 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Website Business to Business, Retail, Full Issue, October 2017 Business to Business, Editorial Use of Data, June 2017 2017 Eddie Award, Folio: magazine Winner, Business to Business, Retail, Single/Series of Articles, May 2017 Honorable Mention, Business to Business, Retail, Single/Series of Articles, June 2016 2016 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2015 Business to Business, Retail, Single/Series of Articles, August 2015

Laura Aufleger OnCue Express

Ray Johnson Speedee Mart

Chad Beck Core-Mark

Ruth Ann Lilly GPM Investments LLC

Edward Davidson Ed Davidson & Associates (7-Eleven Inc., retired) Robert Falciani ExtraMile Convenience Stores Jim Hachtel Eby-Brown Co. Chris Hartman Rutter’s

S E P T E MBE R

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Vito Maurici McLane Co. Inc. Matt Paduano Lakeport Markets Jonathan Polansky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Roy Strasburger StrasGlobal

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VIEWPOINT

Recession? It’s Here, Now What Are You Going to Do About It? An economic downturn requires a different business strategy 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.”

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.

The knee-jerk reaction might be to cut spending across the board, but that would be wrong.

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.

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?) 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. 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. 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.

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

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CONTENTS SEPT 22

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56

COVER STORY PAGE 38

66 FEATURES

DEPARTMENTS

COVER STORY

EDITOR’S NOTE

WHAT’S NEXT

3 Allies in Advancing Convenience Foodservice The Convenience Foodservice Alliance is recruiting new members.

146 Flipping the Script NextUp’s Kat Ortiz talks changing cultures and feeding hope.

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

56 Supply Chain Solutions Labor shortages continue to cause supply chain issues, but savvy c-store retailers are finding workarounds as experts predict struggles will continue past 2022. TOP 100

66 Less Deals, More Money The pace of M&A activity has slowed as buyers find limited inventory available. FEATURE

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

VIEWPOINT

4 Recession? It’s Here, Now What Are You Going to Do About It? An economic downturn requires a different business strategy. 10 CSNews Online 26 New Products SMALL OPERATOR

STORE SPOTLIGHT

148 Between a Hard Rock & a Casino Rocktane Gas + Smoke arrives on the West Coast boasting an iconic music vibe. INSIDE THE CONSUMER MIND

174 Keeping Customers Close Convenience store loyalty programs are expanding and enhancing.

26

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

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CONTENTS SEPT 22

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8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631 (773) 992-4450 Fax: (773) 992-4455 www.csnews.com

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

12 INDUSTRY ROUNDUP

CATEGORY MANAGEMENT

12 BP Brings ampm Brand to the East Coast

FOODSERVICE

14 Sheetz Targets Western Pennsylvania for Expansion Push 16 Eye on Growth 16 Fast Facts

94 Building a Bigger & Better Future for Foodservice The 2022 Convenience Foodservice Exchange highlighted evolving best practices, ways to cope with challenges, and actionable suggestions to stand out from the crowd.

18 Retailer Tidbits 20 Supplier Tidbits TECHNOLOGY 132 The New Bedrock of Success C-store operators view new and improved technology as critical to their future.

118

FOODSERVICE STUDY

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

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

Editor-in-Chief

Linda Lisanti llisanti@ensembleiq.com

Executive Editor

Melissa Kress mkress@ensembleiq.com

Senior Editor

Angela Hanson ahanson@ensembleiq.com

Managing Editor

Danielle Romano dromano@ensembleiq.com

Associate Editor

Sanestina Hunter shunter@ensembleiq.com

Editorial Director Emeritus

Don Longo dlongo@ensembleiq.com

Contributing Editor

Renée M. Covino reneek@aol.com

Contributing Editor

Tammy Mastroberte tmastroberte@gmail.com

ADVERTISING SALES & BUSINESS Associate Brand Director & Northeast Sales Manager (774) 212-6455

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Ron Lowy rlowy@ensembleiq.com

Associate Publisher & Midwest Sales Manager Kelly Fischer (773) 992-4464 kfischer@ensembleiq.com Account Executive & Classified Advertising Terry Kanganis (201) 855-7615 tkanganis@ensembleiq.com Classified Production Manager Mary Beth Medley (856) 809-0050 marybeth@marybethmedley.com AUDIENCE List Rental (914) 309-3378

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ALCOHOLIC BEVERAGES

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

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

CORPORATE OFFICERS 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

CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631. Subscription rates: Subscription rate in the United States: $125 one year; $230 two year; $14 single issue copy; Canada and Mexico: $150 one year; $270 two year; $16 single issue copy; Foreign: $170 one year; $325 two year; $16 single issue copy; Digital One year, digital $87; two year, $161. Periodical postage paid at Chicago, IL 60631, and additional mailing addresses. Copyright 2022 by EnsembleIQ. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or information storage and retrieval system, without permission in writing from the publisher. POSTMASTER: send address changes to Convenience Store News, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631.

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CSNEWS ONLINE

CSNEWS WEBINAR TOP VIEWED STORIES

1

7-Eleven & Speedway Deal Leads to Corporate Restructuring

7-Eleven Inc. downsized its corporate workforce by eliminating approximately 880 jobs, a move that was part of finalizing its organizational structure more than a year after the company completed its acquisition of Enon, Ohio-based Speedway LLC. The job cuts were primarily positions at the convenience retailer’s support centers and field support operations in Enon and 7-Eleven’s hometown of Irving, Texas.

2

QuikTrip Opens Checkout-Free Store

3

7-Eleven Reportedly Expands Delivery With Startup Deal

4

Wawa Ends 24-Hour Operations at Select C-stores

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

Seven out of 12 Wawa locations in Philadelphia’s Center City neighborhood now close before midnight. The adjusted hours will be in place until further notice, according to the company, which did not provide specific reasons for the recent changes.

5

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 synchronized to maximize quality and payload, and minimize time and expense.

EXPERT VIEWPOINT

Returning to the Corner Market 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.

Three Steps to Attract & Retain Hourly Employees According to a recent Convenience Store News webinar, the pandemic-era trend known as “The Great Resignation,” where favorable conditions encourage employees 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 managers and employees; and attract and retain Gen Z employees with instant access to earned wages. For more webinars, visit the Events & Webcasts section of csnews.com.

MOST VIEWED NEW PRODUCT

Island Brands CRUSH 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.

Island Brands USA Charleston, S.C. islandbrandsusa.com

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BP Brings ampm Brand to the East Coast The company models the New York convenience store after Thorntons CONVENIENCE STORE competition on the East Coast heated up this summer. BP introduced its ampm banner to New York consumers with a convenience store in The Bronx.

Boston-based ArcLight Capital Partners LLC to reach an acquisition agreement for Thorntons. The deal closed in February 2019. In 2021, BP acquired the majority share it did not already own.

The opening expanded the retail chain from its West Coast roots to the East Coast for the first time.

The move signaled BP’s re-entry into companyowned, company-operated retail stores. Thorntons includes more than 200 locations across six states, including Kentucky, Illinois, Indiana, Ohio, Tennessee and Florida.

The store features BP branding throughout the fuel experience and ampm’s food menu, including a hot deli and grocery with fresh fruit and extensive dry goods. The entire customer-centric experience is modeled after Thorntons LLC, the Louisville, Ky.-based fuel and convenience store chain that BP took full ownership of in 2021. “As BP transitions toward becoming a net zero company, convenience will play a huge role in delivering our integrated strategy. The experience customers feel at our retail sites will be key to attracting them in and ensuring they return. Because New Yorkers are always on the go, the Empire State is a perfect fit for this expansion,” said Dave Lawler, chairman and president of BP America. In late 2018, Houston-based BP joined with

“This store sets the stage for us to maximize the large BP footprint along the East Coast,” said Greg Franks, senior vice president of mobility and convenience, Americas. “We know that residents of The Big Apple will love the craveable food, snacks and drinks that make ampm the destination of Too Much Good Stuff. We also know our dealers will be excited to share the ampm brand with their consumers in the future.” The expansion advances BP’s convenience and mobility strategy, which aims to nearly double global earnings from about $5 billion in 2019 to $9 billion to $10 billion by 2030 and deliver 15 percent to 20 percent returns. The company aims to increase the number of strategic convenience sites in its global network from around 2,000 to more than 3,000 by 2030.

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INDUSTRY ROUNDUP

Sheetz Targets Western Pennsylvania for Expansion Push The retailer plans to open 30 new locations in the region over the next several years SHEETZ INC. is gearing up to hold its ground in western Pennsylvania. The convenience store operator plans to double its area footprint with a goal of opening as many as 30 new locations in the region in the next three to five years.

Western Pennsylvania is already a stronghold for Altoona, Pa.-based Sheetz, but the company believes there is room for more locations. “Even though Sheetz has a long history in western Pennsylvania, there are many areas that could benefit from the 24/7 convenience that our company provides,” said Brian Dinges, director of real estate for Sheetz. The convenience store operator selected Dallas-based real estate broker CBRE to assist its developer, Pittsburgh’s RBG Development, with site selection, according to reports. To date, Sheetz operates 294 convenience stores within the state. The announcement comes just more than a month after fellow Pennsylvania-based convenience store retailer Wawa Inc., which has a

stronger presence in eastern Pennsylvania, shared its plans to move farther west into central Pennsylvania. Wawa plans to expand the number of locations it operates in central Pennsylvania by adding more locations along the Susquehanna River. The convenience retailer’s plans call for doubling its store count over the next three to five years, with the first new central Pennsylvania store likely to open as early as 2024. There is the potential to add up to 40 additional stores in the area, Wawa said. “With a commitment to fulfilling lives, we’re thrilled to continue our growth and expansion in our existing markets to provide quality fresh food, beverages and support to the community,” said John Poplawski, vice president of real estate for Wawa. “In addition, Wawa’s continued expansion will mean even more convenience and new jobs in the central Pennsylvania community.” Sheetz and Wawa currently overlap footprints in the middle of Pennsylvania.

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INDUSTRY ROUNDUP

Eye on Growth

Buc-ee’s broke ground on its first travel center in Missouri on Aug. 23. The site will occupy more than 53,000 square feet, offer 120 fueling positions and add 200 full-time jobs to the area.

Yesway debuted a new Allsup’s concept convenience store in Lubbock, near Texas Tech University. The 3,000-squarefoot bodega-style store will cater to the university community. Maverik — Adventure’s First Stop welcomed customers to its second California c-store. The West Sacramento location features certified truck scales, truck and RV lanes, and self-checkout registers.

The deal marks Smoker Friendly’s largest acquisition to date, bringing its store count to 260 in 12 states.

Smoker Friendly acquired Forrest City, Ark.-based Tobacco Superstores. The deal comprises 79 stores spread across Arkansas, Tennessee, Mississippi, Missouri and Kentucky. Love’s Travel Stops opened its first travel stop in Connecticut. The Willington location measures more than 8,000 square feet and adds 56 truck parking spaces to its network. ARKO Corp. closed a deal for Quarles Petroleum Inc. The acquisition included 121 proprietary cardlock sites, management of 63 third-party cardlock sites for fleet fueling operations, and 46 independent dealer locations.

Cubby’s finalized the acquisition of KT Restaurants’ traditional Godfather’s Pizza locations in Omaha, Neb. The company also looks forward to testing new foodservice concepts, according to Mike Wilson, chief operating officer of Cubby’s. Quicklee’s Convenience Stores opened its first Batavia, N.Y., store. The new Genesee County store brings the total number of family-owned and -operated stores to 27. Rutter’s opened an 8,400-square-foot store in Martinsburg, W.Va. It features 14 fueling positions and four high-speed diesel fueling lanes. This marks the chain’s third store opening this year.

FAST FACTS

2% 32% 1.2% The National Retail Federation expects gross domestic product to grow 2 percent for the year rather than 3.5 percent.

U.S. convenience stores saw revenues per store per month increase 32 percent in the first quarter of 2022 vs. the same period in 2021, largely a result of higher gas prices.

— Monthly Economic Review, NRF

Prices for food at-home rose 1.2 percent from the end of June to the end of July, and 14.4 percent year over year as of July 31. — Information Resources Inc.

— Global Convenience Store Report, NielsenIQ & NACS

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INDUSTRY ROUNDUP

Retailer Tidbits

affected its network. The settlement will be divided between Pennsylvania, New Jersey, Delaware, Florida, Maryland, Virginia and Washington, D.C. Sheetz Inc. and the Pennsylvania Lottery are teaming up on a “Free Gas for a Year” contest. Each customer can only enter the drawing once. The grand prize winner will be selected in October.

The company’s chef and food innovation team spent two years testing and fine-tuning the “make it your way” menu before the launch.

Pilot Co. debuted a new Tex-Mex deli concept, Burrito Junction, at its latest remodeled Pilot travel center in Corbin, Ky. Marathon Petroleum Corp. (MPC) is launching Marathon Insight, a mystery shopping program that is designed to monitor and enhance the retail customer experience. MPC is partnering with Ipsos Channel PerforRebel Convenience Stores signed a national mance on the initiative. agreement with Waitr Holdings Inc. The pact expedites delivery and pickup services 7-Eleven Inc. released limited-edition apparel collections this summer. The c-store to customers across the retailer’s 430-plus store network. retailer partnered with Overtime and Easy Otabor on basketball-themed fashion, and GPM Investments LLC opened two new rolled out snack- and beverage-inspired Sbarro restaurants inside E-Z Mart stores items with multiple artists. located in Texarkana and Kilgore, Texas. The retailer expects to open 50 additional Sbarro Wawa Inc. is paying $8 million to end an locations this year. investigation into the 2019 data breach that

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INDUSTRY ROUNDUP

Supplier Tidbits

Information Resources Inc. and The NPD Group completed their merger to form a global analytics and data provider. A unified name and brand for the combined company will be announced at a later date. Paytronix Systems Inc. partnered with PDI on digital ordering integration. The move provides retailers with tools to track real-time inventory, maintain pricing, and manage financial information.

The company is also testing offers to increase trial and repeat purchase among existing smokers.

Hathway completed its rebranding as Bounteous, a digital growth partner for top restaurant and convenience store brands. In 2021, Bounteous acquired Hathway to accelerate its strategic roadmap.

22nd Century Group Inc. is bringing its lower-nicotine cigarettes to Colorado in September, ahead of schedule. VLN cigarettes first launched in select Chicagoarea Circle K stores in April. PepsiCo Inc. and Celsius Holdings Inc. entered into a long-term strategic distribution arrangement. The pact initially transitions Celsius’ current U.S. distribution to PepsiCo’s capabilities.

GSTV launched a new slate of content specifically curated for Spanish-speaking audiences with a new programming partner, kiwilimón. The programming is expected to reach more than 10 million viewers per month. Old Trapper will serve as the Official Beef Jerky of the Big 12 Conference. The multiyear agreement calls for Old Trapper to serve as presenting sponsor of Big 12 Football Media Days and Big 12 Basketball Media Days.

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Elevating the Customer Experience Numerous factors are driving the need for more customer-centric experiences By Kathleen Furore

“CUSTOMER EXPERIENCE” has become an industry buzz phrase over the past year — and it has led many leading convenience store chains to enhance, and sometimes even reinvent, the experience their customers have when shopping their stores.

Data shows a move to improve is a smart one. According to an October 2020 study from Salesforce entitled the “State of the Connected Customer,” 66 percent of customers expect companies to understand their needs and expectations. “Understanding customers’ needs — and exceeding their expectations — are becoming table stakes for businesses to compete,” the study stated. Other recent studies have found that customer-centric companies are more profitable compared to companies

that are not focused on the customer, and companies with a customer-focused CEO at the helm are more profitable than their counterparts. “Customer experience is everything,” said Bonnie Woods, convenience store loyalty strategist at Newton, Mass.based Paytronix Systems Inc., a provider of software-asa-service customer experience management solutions for convenience stores and restaurants. “From interactions with associates and checkout speed, to online ordering, curbside pickup, skip the line and mobile pay at the pump, modern consumers expect each experience to be hassle-free and consistent,” she continued. “As c-stores expand into QSR [quick-service restaurant] and coffee-shop territory, they have

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Sponsored by

“Customer experience is everything. From interactions with associates and checkout speed, to online ordering, curbside pickup, skip the line and mobile pay at the pump, modern consumers expect each experience to be hassle-free and consistent.” — Bonnie Woods, Paytronix

the opportunity to serve their diverse customer set by creating a cohesive customer-centric experience that focuses on quality, convenience and lifestyle more than ever before.” Retailers are eager for a return to normal when it comes to customer counts, noted Denise Jenkins, vice president of marketing, insights and loyalty at Cincinnati-based United Dairy Farmers (UDF), which operates nearly 200 convenience stores in three states. “Customer satisfaction research has solidly proven that basic attention to guest interactions increases OSAT [overall satisfaction] scores and the guests’ likelihood of returning to your store,” she said. “Over time, this creates loyalty and a brand advantage over the competition.”

What’s Fueling the Focus? Myriad factors are driving the need for more customercentric experiences in the post-COVID marketplace, according to Cameron Watt, CEO of Intouch Insight, a leader in mystery shopping. “The first is increased competition between c-stores and other types of retailers. Years ago, convenience and fuel retailers were mostly competing among other similar brands for patrons, primarily focused on location, price, and ensuring staple packaged goods were in-stock,” Watt explained. “Now, c-stores have become so much more than a pit stop and are actively competing with other industries like quick-service restaurants for prepared foods, coffee shops for morning joe, and even grocery stores for pantry items.” As consumers’ options continue to expand, c-stores must enhance their customer experience to come out on top of the growing list of competitors, he added. Jenkins, too, believes an abundance of options is fueling

a focus on the customer experience, especially where foodservice is concerned. “Consumers expect more from a customer experience when dealing with hot food than they would if they were just coming in for cigarettes or a beverage,” she said. “Our entire channel is changing to focus on food, and we want our guests to compare us more to QSR and fast-casual options.” According to Watt, the fact that the pandemic caused alternative last-mile services to go from the boardroom to the street almost overnight is another factor. “At the height of COVID-19, consumers needed to feel safe while shopping, so having access to a variety of methods to buy and pick up merchandise became paramount,” he said. “Even as we exit the pandemic, alternatives like delivery and curbside pickup remain, and are picking up speed. When your brand promise is being delivered in so many ways, understanding your customer journey in each of them becomes a new and daunting task for many.” Add rising inflation in-store and at the pump, supply chain disruptions and inventory inconsistency, and the need to improve the customer experience becomes clear. “C-store brands need to be proactively innovating around and alleviating challenges to keep shoppers coming back,” Watt said. “In short, in a world with unlimited options and an ever-changing landscape, customer experience is not just a buzz phrase, but it is often the primary differentiator between brands. They can’t afford not to focus on it.”

Digital Interactions Increase Loyalty Focusing on the customer experience can take many forms. Adding opportunities to interact with customers via digital platforms is an increasingly important one, industry experts maintain. “Digital guest interactions are becoming of more significance, with retailers relying on apps and loyalty programs to serve as major marketing channels and [to provide the] opportunity to meet guests where they are,” said UDF’s Jenkins. She also notes that shoppers look for a product or type of retailer via apps or the internet before they make a trip or purchase decision. “Their experiences in this pre-shop step will also determine their experience at the brand level and can be a differentiator,” she added. Whatever digital experience a c-store creates, consistency across platforms is key. “Because there are more ways in which customers can interact with a brand today, consistency is king,” stressed Woods of Paytronix. She suggests c-store operators consider these questions: Are the web and app experiences similar? Do my email communications match my social media voice? Am I balancing my digital investment with associate training and support?

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SPECIAL SERIES ON NEXT-GEN LOYALTY

“C-stores must be consistently aware of how customers are experiencing their forecourts, stores, apps, and purchases via third-party vendors to ensure they know where and how they’re stacking up against the competition,” Watt added. “Too often, brands focus on making a big splash or quickly rolling out a new offering, but fail to quantify how it may affect their customer experience across all offerings.” For better or worse, Woods notes that the “digital age” brings with it an increased opportunity for customers to interact with brands. “It opens the door to both successes and blunders,” she cautioned. “For example, if a customer places an online order, but submits a review saying the wrong product was delivered, rectifying this by immediately offering the guest an apology and replacement or refund turns what would be a negative interaction into a positive one.”

Improving Interactions to Succeed Enhancing the customer experience might sound like an overwhelming task, especially considering everything else that is on a c-store operator’s plate. But as Woods points out, creating a positive customer experience doesn’t have to be complex. “Start with the basics in-store: clear, consistent and deliberate communication from both signage and associates. Then, make it simple and appealing for the guest to join your loyalty program: QR codes for app download, textto-join, simplified loyalty registration forms,” she suggested. The next step, she says, is knowing where each guest is in their customer journey and tailoring communications to meet their individual needs. Woods and Watt offer the following tips on how to create a customer-centric experience:

Create or enhance a loyalty program

A recent Intouch Insight survey revealed that 94 percent of consumers have some kind of loyalty program, but only just over half have one with a c-store. “The study also indicated that having a loyalty program was third behind location and price for selecting a store to visit, which means there is an opportunity here,” Watt said. “Once you have a loyalty program in place, it allows you to combine it with your customer surveys to drive ongoing two-way communication with your customers, which is a very powerful tool.” Woods calls a strong loyalty program “the cornerstone on which the digital customer experience is built,” and explains that 1:1 AI-driven marketing allows c-stores to personalize communication in ways that are optimal for each guest. “Not only is this beneficial for both the guest and the brand by improving relevancy, but many consumers also have come to expect it,” she says. “Just like any relationship, it’s the little things that matter. This can be a thoughtful birthday treat in the customer’s best category,

a message delivered on their best day of the week, or a badge showcasing their achievement of a particular milestone.”

Talk to your customers

“Chances are your customers have a lot to say. Whether it’s thoughts on an LTO [limited-time] offering or general satisfaction with the loyalty program or the launch of a new technology, you should be talking to your customers through surveys and other digital channels,” Woods urged. “Survey results should be actionable, so be deliberate with each question and tell the guest why their participation matters. … [Also,] let guests choose how they want to be communicated with and how they want to be rewarded.” Brands need to proactively seek direct customer feedback to understand how individual locations are delivering against customer standards, Watt echoed. “Typically, a simple web-based survey is utilized through which you can also incent your customers to provide their contact information for additional follow-up. Providing that you do not abuse the access and use the communication to motivate a response, the interactions can be not only positive, but also loyalty building,” he said. “Motivating someone to give their opinion can be as simple as being clear that their opinion will shape the future of the store. Motivation also can be more direct, such as providing loyalty points or an in-store discount.”

Understand your customers

Segment customers based on frequency, likelihood to lapse, category preference and spend. Knowing what makes each guest unique can help a retailer tailor its communications, and offers the opportunity to thank customers for their loyalty and incent behavior change. “RFM and k-means clustering are two common segmentation methods we frequently use at Paytronix,” Woods said. “But the power of segmentation really comes in when layering segments to create meaningful and actionable customer profiles.”

Test before implementing technology

Before rolling out any new technology, Woods suggests running through customer use cases extensively. “If you can, test in a limited market to smooth out any technology or operational issues to ensure stores are equipped to support the roll out,” she suggested. “Survey customers to understand what’s working and what’s not.”

Actively monitor execution against standards

Retailers should closely monitor how well their stores are executing against their standards, said Watt. “Only when you understand both sides of this equation are you equipped to both adjust your standards and to know where to focus your improvements from within your operations.” CSN

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Sponsored by

Devising a Successful Digital Ordering Strategy FROM THE EARLY days

By Charles Gray, Paytronix

of e-commerce to today’s rapid delivery services, consumers expect fast, personalized experiences. And it’s no longer just a small subset of customers. According to the Paytronix Order and Delivery Report 2022, digital sales make up a third of all food orders, so it’s clearly something that consumers want.

Beyond just opening up a key line of revenue, digital ordering enables convenience stores to attract and retain customers, and build customer lifetime value. The catch is that it’s not just about putting in a digital front end, it’s also about establishing the operational steps necessary to meet customer demands. This include optimizing customer journeys, addressing technological needs, working with thirdparty aggregators, and designing the core customer experience to maximize returns. Before launching a digital ordering strategy, brands must think through every customer journey. The average food and drink establishment receives orders on up to 2.7 channels at any given time, and then that order needs to flow into the store, be routed to either the kitchen or the center store, and then packaged. Once the order is packaged, there are multiple ways customers can have it delivered, including either in-store or curbside pickup. Or at-home delivery via third-party or first-party. There are three key elements that any convenience store brand must consider: managing third-party ordering, establishing a first-party solution, and creating an operation that can manage it all.

Third-Party Digital Ordering Third-party delivery aggregators are a great way to acquire customers and test digital ordering solutions. According to a NACS study, among c-stores that offer off-premises delivery, 50 percent use multiple aggregators to serve alternative locations.

A third-party partnership enables brands to expand their audience by providing exposure through curated shopping lists and SEO. For smaller brands especially, third-party apps are an equalizer because they often display brands based on location, rather than size or influence. The drawback, however, can be a counter cluttered with tablets, each displaying information from a single marketplace. A better solution collects data from all those and displays it through the POS system. What’s more, that system should enable a store to have control over turning marketplace orders on or off during high-volume times.

Moving to First-Party Ordering The only way for a brand to truly engage with their customers is to have a first-party ordering solution that offers a better experience than the third party. It needs to be easy to use, personalized, and enable guests to earn and redeem loyalty rewards. Here is where convenience store brands can learn the lessons of restaurants. Many restaurant brands have taken control of the third-party relationship in multiple ways, including strong loyalty offerings and building menu items that are only available through their own app. Even in cases with a strong first-party app, the third-party marketplaces play a key role. Not only do they offer access to new customers, but they also offer a ready fleet of delivery personnel waiting to be activated. By working with the third parties and utilizing their delivery teams, convenience stores can extend their reach without having to build from scratch.

Operations to Handle It All Technology, however, is only part of the solution. Sure, a guest can order something online, but how does that item make it from the shelf into the customer’s hands? Convenience store brands must think through concepts like staffing, packaging, and even curbside locations before undertaking a digital strategy. A brand that keeps a skeleton staff on overnight shifts may choose to turn off online ordering during that time, or it can increase staff to handle the shelf-picking and packaging necessary to fulfill orders. Even pumpside or curbside delivery must be carefully considered, as brands need to think through the process of how a customer notifies personnel once they’ve arrived. Of course, at the heart of all of this is the customer experience, which means that some little personal actions go a long way. A last check on a bag to ensure all items are in it, or a well-packaged offering, go a long way in cementing the truly branded customer experience. CSN

Charles Gray is chief revenue officer at Paytronix Systems Inc. S E P T E MB E R

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NEW PRODUCTS

Dietz & Dats Deli Snack Packs Dietz & Watson introduces Dietz & Dats, a snack line featuring four protein-packed, grab-and-go snack packs filled with heart-healthy items. The snack packs include items such as cashews, almonds, dried cranberries and mangos paired with premium Dietz & Watson meats and artisan cheeses. Every pack comes with crunchy melba toast. Available nationwide, the line includes Hot Salami & Fontina, Milano Salami & Asiago, Chorizo & Pepper Jack, and Dried Salami & Provolone. The suggested retail price is $4.99 per pack. DIETZ & WATSON • PHILADELPHIA • DIETZANDWATSON.COM

Sparkling Ice +Caffeine Watermelon Lemonade Watermelon Lemonade joins the Sparkling Ice +Caffeine lineup. The new variety offers a burst of classic citrus blended with refreshing water for a sweet, yet tangy midday pick-me-up, according to the maker. The zero-sugar beverage contains 70 milligrams of caffeine with only five calories per serving. It is available nationwide in 16-ounce cans. Sparkling Ice +Caffeine Watermelon Lemonade is the seventh flavor added to the roster of +Caffeine beverages. TALKING RAIN BEVERAGE CO. • PRESTON, WASH. • SPARKLINGICE.COM

Lily’s Sweets Gummies The Hershey Co.’s Lily’s brand presents two new products: Lily’s Sweet Fruity Gummy Bear Friends and Lily’s Tart and Tasty Sour Gummy Worms. The naturally flavored gummy bears deliver a whimsical hint of nostalgia in raspberry, strawberry, orange and lemon flavors. The sour gummy worms feature a mix of lemon-raspberry and apple-peach flavors. Sold in 1.8-ounce bags, both products contain less than one gram of sugar. All Lily’s products are gluten free, fair trade certified, and made with non-GMO ingredients. THE HERSHEY CO. • HERSHEY, PA. • LILYS.COM

Red Diamond Simple Sweet Teas Red Diamond expands its Simple Sweet Tea line with new Peach and Watermelon varieties. The Simple Sweet Peach Tea tastes as though you’ve bitten into a juicy, ripe peach, while the Simple Sweet Watermelon Tea is both perfectly sweet and refreshing, according to the maker. Packaged in a filter bag with premixed sugar, the product eliminates the need to measure sugar, train staff on sugar-to-tea ratios, or stir undissolved sugar in the urn. The new varieties are available in 16-count cases with easy 1.5-gallon brewing instructions. RED DIAMOND COFFEE & TEA • BIRMINGHAM, ALA. • REDDIAMOND.COM

Vynamic Digital Receipt Diebold Nixdorf launches Vynamic Digital Receipt, a sustainable solution to reduce the amount of thermal paper receipts. Consumers can receive digital receipts via QR codes at the pointof-sale (POS) without the need to register or via the retailer’s app. Additionally, convenience store retailers can easily add accessible promotions and offers to strengthen customer loyalty, while significantly saving costs and reducing environmental impact. Diebold Nixdorf integrated Vynamic Digital Receipt into the POS solution ecosystem of its cloud-native Vynamic Retail Platform. DIEBOLD NIXDORF • HUDSON, OHIO • DIEBOLDNIXDORF.COM/EN-US 26 Convenience Store News C S N E W S . c o m

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“Our main goal, like so many other convenience stores, is to move customers from pump to store. With Paytronix we can offer the rewards and online ordering that creates a great customer experience and helps move people from filling up with gas to filling up with our amazing Subs-N-Pizza. It’s about giving people the ability to choose how they want to interact with us.”

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For more information, visit www.paytronix.com or call 617-649-3300, ext. 5.

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Rich’s Fully Finished Iced Donuts Rich Products introduces Fully Finished Iced Donuts that offer the taste and quality of freshly made donuts. The four iced donuts are easy to handle, ready to serve, and maintain fresh quality over an extended shelf life. The offering includes Chocolate Iced Yeast Ring Donut, Chocolate Iced Sprinkled Cake Ring Donut, White Iced Raspberry Jelly Donut, and Bavarian Creme Long John Donut. The product comes in a recyclable tray of six, with eight trays per case. RICH PRODUCTS CORP. • BUFFALO, N.Y. • RICHS.COM

Hilco Popping Candy Hilco is expanding its line of popping candy with two iconic brands: Kool-Aid and Warheads. Each peg bag contains three 0.24-ounce pouches in top brand flavors. Kool-Aid flavors include Tropical Punch, Grape and Cherry; Warheads sour flavors are Green Apple, Blue Raspberry and Watermelon. The three-packs carry a suggested retail price of $1.99 and ship in a 48-count master case. Single packs contain 0.33 ounces and are available in the same flavors. They carry a suggested retail price of 99 cents and ship in an 80-count master case. HILCO• LOUISVILLE, KY. • HILCOUSA.COM

Vita Coco Coconut Juice Vita Coco expands its beverage lineup with its first juice offering, Vita Coco Coconut Juice. Available in two varieties, Original with Pulp and Mango, Vita Coco Coconut Juice is gluten free and non-GMO. The hydrating and nutritious beverage offers a refreshing blend of coconut water and a burst of tropical flavors, according to the brand. The Original with Pulp variety contains 10 grams of sugar and 50 calories per 8 ounces. The Mango variety contains 17 grams of sugar and 80 calories per 8 ounces. Both come in 16.9-ounce aluminum cans. THE VITA COCO CO. INC. • NEW YORK • VITACOCO.COM

Hi-Chew Infrusions Orchard Mix Hi-Chew kicks its chewlets up a notch with the new Infrusions Orchard Mix. Infused with pockets of flavor, the treats come in three fruity offerings: Juicy Blood Orange, Juicy Peach and Juicy Strawberry. While maintaining Hi-Chew’s signature texture, Infrusions add more juiciness with infused concentrated apple puree and pieces of pectin jelly to mimic true-to-life fruity flavors. The Hi-Chew Infrusions Orchard Mix is offered in a 4-ounce standup pouch for a suggested retail price of $4.29 (varies per market). MORINAGA AMERICA INC. • IRVINE, CALIF. • HI-CHEW.COM

ICE Cobotics Autonomous Scrubber Launched by ICE Cobotics, the Cobi 18 is a small, autonomous floor scrubber that is available for less than $20 per day through an all-inclusive subscription. The user interface includes a “teach and repeat” feature that allows users to train a route once and then deploy it with the click of a button. Additional key features include: one charge, one fill for 90 to 120 minutes of scrubbing; compact and nimble, optimized for tight spaces and close-to-the-edge cleaning; squeegee and optional dry mop attachment; minimal daily maintenance with a dual tank; and side brushes to collect light debris. ICE COBOTICS • ZEELAND, MICH. • ICECOBOTICS.COM 28 Convenience Store News C S N E W S . c o m

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SPECIAL REPORT: REAL TALK, REAL ISSUES

Sponsored by

What’s Next for Vapor & Harm Reduction Products? Tobacco thought leaders weigh in on key category issues impacting the near future By Renée M. Covino

WHEN IT COMES to

what awaits on the harm reduction horizon, there’s not much tobacco experts know for sure, except this: the industry must keep fighting the good fight to ensure consumers have access to combustible alternatives. The U.S. regulatory system has been viewed as tobacco harm reduction’s greatest challenge and its best opportunity. This duality is expected to continue for the foreseeable future, according to a somewhat mixed bag of viewpoints expressed to Convenience Store News. On the one hand, “the regulatory climate for vapor and harm reduction will continue to heat up,” foresees Bryan Haynes, a partner with the Troutman Pepper law firm and head of its tobacco law practice. This is best evidenced,

he said, by recent happenings surrounding other areas of tobacco, including the Food and Drug Administration’s (FDA) proposed product standards that would ban menthol in cigarettes and ban “characterizing flavors” in cigars. It is also evidenced by recent reports that the FDA is working on a rule mandating that all cigarettes have minimal or nonaddictive levels of nicotine. The FDA’s ongoing actions around premarket applications for deemed tobacco products — which does directly involve vapor and harm reduction — will continue to be an area of interest, as will the courts’ decisions in litigation challenging the FDA’s determinations, according to Haynes. Meanwhile, the Biden Administration’s expanded definition S E P T E MBE R

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SPECIAL REPORT: REAL TALK, REAL ISSUES

of tobacco products to include nicotine from any source grants the FDA “a great deal of regulatory power over the industry, and the potential to remove e-cigarettes,” noted Cadent Consulting Group Managing Director Don Stuart, who also believes the tobacco regulatory climate will continue to heat up. “Unfortunately, there will likely always be regulatory challenges with misinformation surrounding any nicotine product line, but we are always working to educate elected officials and regulators,” said Mary Elizabeth Barwick, vice president of strategic engagement for Reynolds Marketing Services Co. “In addition, many third parties and think tanks are educating people on all harm reduction policies that include nicotine.”

The Optimism Even more promising, according to Barwick, is the growing recognition across media sources and among scientific experts on the value of tobacco harm reduction, as well as the idea that vapor, modern oral and other noncombustible tobacco/nicotine products may present significantly less risk than smoking. “There is still a long way to go, but we believe this is the best option for adult consumers and migration away from combustibles to potentially less harmful products,” she said. Moving forward, Don Burke, senior vice president of Management Science Associates Inc. (MSA), a Pittsburgh-based company focused on analytics and informatics, foresees the regulatory climate easing up for tobacco harm reduction and vapor. “This may be a little too optimistic,” he admitted, “but I believe a more commonsense tobacco regulatory approach may ‘win the day’ in a year or two as regulators

come to the realization that innovation in these two areas is critical to reducing harm.” Furthermore, Burke believes the growing acceptance at the federal level of cannabis as a legal but controlled product category will have somewhat of a “halo effect” on tobacco regulation. “I think it may lead to a more logical reconsideration of other regulated products, particularly harm reduction and vapor items,” he said.

The Threats What are the biggest threats to vapor and harm reduction products moving forward? According to Barwick, “bans are the biggest threat and that comes from misinformation on the products and what they offer adult consumers. There is also a misunderstanding on how youth most commonly access nicotine products, which we know to be social sources,

“This may be a little too optimistic, but I believe a more commonsense tobacco regulatory approach may ‘win the day’ in a year or two as regulators come to the realization that innovation in these two areas is critical to reducing harm.” — Don Burke, Management Science Associates Inc.

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Sponsored by

“Unfortunately, there will likely always be regulatory challenges with misinformation surrounding any nicotine product line, but we are always working to educate elected officials and regulators.” — Mary Elizabeth Barwick, Reynolds Marketing Services Co.

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.” Haynes sees the requirement to obtain FDA authorization 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 companies that have introduced new products without submitting the necessary applications, according to Haynes. “This operates as an unfortunate disincentive to innovate,” he said. “Complying with FDA premarket authorization requirements entails substantial time and expense. But if the FDA does not enforce those requirements against companies that choose to ignore them, it disincentivizes law-abiding companies from investing resources in the process.” Cadent Consulting’s Stuart believes the biggest category challenges ahead are primarily related to teen marketing 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. There’s also the linkage of nicotine vapes to marijuana vapes posing a threat. “The inclusion of vitamin E acetate in vape pens was identified as an earlier issue and can further complicate the problem,” Stuart cautioned. 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.

The Opportunities Pending and future acquisitions of cigarette companies by vapor and harm reduction companies, as well as the increased focus on non-combustible tobacco alternatives that both suppliers and retailers are taking, present good opportunities for the category moving forward, industry experts agree.

“It is reasonable to assume that there will be some consolidation,” Haynes stated. 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.” 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. “Gone are the days when we could expect consumers to learn about products through static paper point-of-sale marketing,” she said, adding that retailers and suppliers both have the opportunity to evolve their marketing to be more digitally savvy, as customers evolve in the same capacity. The innovative nature of the category lends itself to digitally dynamic marketing efforts. Because regulation is so aligned with vapor and harm reduction products moving forward, it’s important for retailers to remain as engaged legislatively as possible — aligning themselves with suppliers — so they can help form the regulatory framework by providing industry perspectives, Barwick advised. “This type of engagement is the best way to ensure that legislators and regulators have a comprehensive understanding of the issues, which should result in laws and regulations that are appropriately tailored and not necessarily burdensome on retailers or unnecessarily restrictive for adult nicotine consumers,” she said. Reynolds is one supplier that has created a platform that provides a suite of tools and resources for retailers to remain informed and interact with elected officials. For convenience store retailers that want to prepare for upcoming legislation in the category, Haynes’ chief piece of advice is: “Don’t panic.” “Although the FDA has proposed — and apparently intends to propose — product standards that would have a significant impact on the industry, the rulemaking process takes a long time. It is reasonable to assume that it would be at least three years before any of these standards takes effect,” he noted. 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 finalized. Furthermore, the FDA’s ability to finalize these rules is, by no means, certain. Depending on how the agency evaluates stakeholder comments, the rules could be withdrawn, changed or subject to litigation. CSN S E P T E MB E R

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

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. By Roy Strasburger, CEO, StrasGlobal

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

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 different. Walking around 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. 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.

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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 counter. This is local sourcing at its finest. 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 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? 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. 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. 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).

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? 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 store. Second, your 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. 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. 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 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. 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

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. Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News. 36 Convenience Store News C S N E W S . c o m

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

BY MELISSA KRESS, LINDA LISANTI & DANIELLE ROMANO

WHILE GAS PRICES have dropped in recent months, the prices of food and beverages continue to rise. 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 e-commerce. “Consumers are 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 customers.” Since the beginning 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.

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Prices Rise & Consumers Shift Choices Increased Prices Drive Americans to:

76%

CHANGE THE WAY THEY BUY GROCERIES

71%

FEEL THE STRAIN ON THEIR SAVINGS

60%

BUY LESS EXPENSIVE ALTERNATIVES WHEN THEY CAN’T AFFORD THEIR FAVORITE BRAND Source: NCSolutions Consumer Sentiment Survey, June 2022

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. 2. “Back-to-back 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.” 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. “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

43%

SEEK OUT SALES AND PROMOTIONS TO AFFORD THEIR FAVORITE BRANDS

monetary policy, it faces the dangers of continued inflation if it doesn’t do enough and a recession if it goes too far.” A Consumer Recession 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. 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. Of those NielsenIQ surveyed, 53 percent said they feel they are in a recession right now. 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. 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.

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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. 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. 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. Other notable findings from the survey include: • 76 percent say their family has changed how they buy food; • 46 percent say they’re buying fewer non-essentials; • 45 percent are seeking out less expensive brands; • 43 percent are seeking out sales and promotions to afford their favorite brands; and • 24 percent are shopping closer to home. “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.” The C-store Picture 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. 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. “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

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 association. She 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.

“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.” — 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 noted. One of the 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. 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. “In comparing NACS CSX foodservice gross margin data so far in 2022 to 2021, you can see the toll

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Percent Inflation Change Year Over Year Average Inflation Rate for CPG 2017-2022 15%

12.8%

10% 5% 0% -5%

2017 JAN-DEC

2018 JAN-DEC

2019 JAN-DEC

2020 JAN-DEC

2021 JAN-DEC

2022 JAN-JUN

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.” 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. 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. 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. “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.”

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. “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.” Absorbing the Impact of Inflation 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. 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. Credit card fees also increased 22.5 percent, or $4.1 million, due to higher retail prices. “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

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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.

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 explained. “Larger 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.

“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.” — Roy Strasburger, StrasGlobal “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.” The convenience store industry’s small operators (those with 20 stores or less) are likely feeling the effects of inflation more

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 orders. Strasburger’s advice to small operators 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.”

Six-Year Inflation Trend Yearly Inflation Increase 20% 15%

2021

2022 THROUGH JUNE

10%

2020 2017

5%

2019 2018

0% JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

Source: NCSolutions Purchase Data, 2017-2022 48 Convenience Store News C S N E W S . c o m

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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. 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. 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. 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. “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.” 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 said. Lakeport 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 operator. “There’s been a 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.” Even though there has been some relief in pump prices lately, which is a huge contributor to inflation, Paduano believes

How to Price Products in Inflationary Times 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: 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. 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. 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.

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COVER STORY

Consumer Behavior Recessionary Signals Low impact

High impact

Recession sentiment

Rising CPG prices

Buying fewer items

Shift to private label

Shift to value retailers

Buying on promotion Non-recessionary consumer behavior

Recessionary consumer behavior

Source: NielsenIQ

there is a 60 percent to 70 percent likelihood that a recession is imminent based on the current economic climate. “Hopefully, it doesn’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. 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. 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: 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.” 2. Monitor the competition: “Even if they’re selling

“Hopefully, it doesn’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.” — Matt Paduano, Lakeport Markets sub sandwiches for less than a dollar than you, you need to do what’s best for your business.” 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.” CSN

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The Next Level of Convenience

CORE-MARK, EBY-BROWN CONVERGE TO HELP C-STORES SOAR 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. “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. 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. “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

“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

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

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. By establishing partnerships with Blue Yonder and Microsoft, the company engages with customers to optimize product assortment, build leading-edge planograms and deliver real-time, customized dashboards to monitor the health of their business. Moreover, exclusive arrangements with PDI and Skip provide customers with top-tier loyalty applications and frictionless checkout solutions. “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.” 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. “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.”

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FEATURE

SUPPLY CHAIN SOLUTIONS

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

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

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.” 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 stocked. “It’s half my 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

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FEATURE

“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.” — Dan Sloboda, Wesco Inc.

the high demand started affecting the supply.”

Finding Workarounds

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.

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.

“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.” 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. 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 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.”

“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. “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.” 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. “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.”

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FEATURE

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.

“It’s about being proactive and staying ahead of the game. You want to be proactive and not reactive.” — Jeff Russell, Reid Stores

“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.” 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. “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.” 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 Polonsky. Retailers also can streamline some of the products they offer from manufacturers or distributors. For

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FEATURE

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

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

“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.” — Jonathan Polonsky, Plaid Pantry

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

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TOP 100

FEATURE

Less Deals, More Money The pace of M&A activity has slowed as buyers find limited inventory available By Melissa Kress

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.

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. 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 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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TOP 100

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Inc., adding nearly 1,300 c-stores to its network in the United States and Canada.

transaction with Dallas-based Sunoco LP.

TOP 100 2022 Rank

1

In 2017, Laval, Quebec-based Alimentation Couche-Tard Inc. wrapped up its $4.4-billion deal for San Antonio-based CST Brands

Company, City, State

Total U.S. Store Count

7-Eleven Inc.

CompanyOperated Stores

These are just a few notable examples dating back five years, but by no means

Franchise/ Licensee Stores

Alimentation Couche-Tard Inc.

7-Eleven, Speedway, Stripes, APlus, Shell, Rich Oil, 2Go Tesoro, Western Refining, Arco

12,702

5,282

7,691

5,714

5,714

0

Circle K, Holiday, Purple Cow

2,448

2,448

0

Casey’s General Store, Goodstop, Bucky’s Convenience Store

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

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

1,058

1,058

0

Murphy USA, QuickChek

957

957

0

Wawa

934

934

0

QuikTrip

784

784

0

Kwik Trip, Kwik Star, Stop N Go, Tobacco Outlet Plus Grocery

660

659

1

Pilot Travel Center, Flying J, Mr. Fuel, EZ Trip, Pilot Express, Arco

645

645

0

Sheetz

587

587

0

Love’s Travel Stop, Love’s Country Store

564

564

0

RaceTrac

531

531

0

AAFES Exchange Store, Shoppette, NEXCOM Mini Mart, Marine Corps Shoppette, Troop Store, Coast Guard Mini Mart

410

410

0

Kum & Go

401

401

0

Allsup’s, Yesway

384

384

0

Maverik

354

354

0

Stewart’s Shops

Irving, Texas 2

Primary Store Names

Laval, Quebec 3

Casey’s General Stores Inc. Ankeny, Iowa

4

EG America Westborough, Mass.

5

GPM Investments LLC Richmond, Va.

6

Murphy USA Inc. El Dorado, Ark.

7

Wawa Inc. Media, Pa.

8

QuikTrip Corp. Tulsa, Okla.

9

Kwik Trip Inc. La Crosse, Wis.

10

Pilot Co. Knoxville, Tenn.

11

Sheetz Inc. Altoona, Pa.

12

Love’s Country Stores Inc. Oklahoma City

13

RaceTrac Inc. Atlanta

14

Military Arlington, Va.

15

Kum & Go LC Des Moines, Iowa

16

Yesway Fort Worth, Texas

17

Maverik — Adventure’s First Stop Salt Lake City

18

Stewart’s Shops Corp. Ballston Spa, N.Y.

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

333

333

0

My Goods Market, Rocket

313

313

0

MAPCO Mart, MAPCO, MAPCO Express, Delta Express

311

234

77

Chevron ExtraMile, Jacksons Food Store

Long Beach, Calif. 21

COPEC Inc. Franklin, Tenn.

22

Jacksons Food Stores Inc. Meridian, Idaho

23

ExtraMile Convenience Stores LLC Pleasanton, Calif.

303

0

303

24

CrossAmerica Partners LP

269

259

10

Joe’s Kwik Mart, Stop In, One Stop WV, Uni Mart, Rocky Top Market, Hy-Miler, Zoomerz, Mobil, Choice, BP, Shell

265

196

69

Rebel, Shell, USA Gas, 2 Go Mart, Mobil, Arco, Aisle 1, Tesoro

Allentown, Pa. 25

Anabi Oil Co.

Chevron, Chevron ExtraMile

Upland, Calif.

68 Convenience Store News C S N E W S . c o m

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TOP 100

FEATURE

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?

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.

Taking the top spot once again this year

TOP 100 2022 Rank

Company, City, State

26

Two Farms Inc.

Total U.S. Store Count

Primary Store Names

CompanyOperated Stores

Franchise/ Licensee Stores

258

258

0

Royal Farms

253

70

183

7-Eleven, DK, Alon

246

246

0

TravelCenters of America, Petro Stopping Center, TA Express

232

232

0

Timewise

229

229

0

Kwik Fill, Country Fair, Kwik Fill & Smokers Outlet

226

226

0

GetGo

212

212

0

Thorntons

211

211

0

CEFCO Food Stores

210

210

0

Stripes

183

183

0

Meijer Gas Station

175

175

0

United Dairy Farmers

173

173

0

Par Mar Stores

173

172

1

167

23

144

164

164

0

True North

163

163

0

Hy-Vee Gas, Hy-Vee Fast & Fresh Express

160

160

0

Sudden Service, Twice Daily, Southern Traders, Hightail, Tri Star Energy, T Fuel

158

154

4

Bolla Market, Shell

152

152

0

Alta Convenience, Petro Mart

152

152

0

Terrible Herbst

145

108

37

Nouria, Shell, F.L. Roberts, Irving, Mobil, Sunoco, Gulf, Lil Mart

143

143

0

EZ Mart

132

114

18

Superpumper Store, KJ’s Super Stores, On The Run, Red Carpet, Harts, KB Express, Conomart Super Store, Mr. Gas, Silver Eagle

124

124

0

Huck's

123

123

0

Go Mart

Baltimore 27

Delek US Holdings Inc. Brentwood, Tenn.

28

TravelCenters of America Inc. Westlake, Ohio

29

Texas Petroleum Group Houston

30

United Refining Co. of Pennsylvania Warren, Pa.

31

Giant Eagle Inc. Pittsburgh

32

BP Houston

33

Fikes Wholesale Inc. Temple, Texas

34

Cal’s Convenience Inc. Frisco, Texas

35

Meijer Grand Rapids, Mich.

36

United Dairy Farmers Cincinnati

37

Croton Holding Co. Pittsburgh

37

Refuel Operating Co. LLC

Refuel, Double Quick, Cruizers Convenience Marketplace, Circle K

Mount Pleasant, S.C. 39

G&M Oil Co. Inc.

Chevron ExtraMile, G&M Food Mart, Chevron

Huntington Beach, Calif. 40

True North Energy LLC Brecksville, Ohio

41

Hy-Vee Food Stores Inc. West Des Moines, Iowa

42

Tri Star Energy LLC Nashville, Tenn.

43

Bolla Management Corp. Garden City, N.Y.

44

CF Altitude LLC Los Angeles

44

Terrible Herbst Inc. Las Vegas

46

Nouria Energy Worcester, Mass.

47

Blarney Castle Oil Co. Bear Lake, Mich.

48

Parkland USA Minot, N.D.

49

Martin & Bayley Inc. Carmi, Ill.

50

Go Mart Inc. Gassaway, W.Va.

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TOP 100

FEATURE

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

TOP 100 2022 Rank

51

Company, City, State

Total U.S. Store Count

Englefield Oil Co.

Primary Store Names

CompanyOperated Stores

Franchise/ Licensee Stores

118

118

0

Duchess Shoppe

118

118

0

Enmarket

116

58

58

Kangaroo Express, Marathon, Hop In, Summit, Star Stop Food Mart, Time Out Market

113

113

0

Star Stop

110

110

0

Little General

109

76

33

Flash Market, Corner Mart, Minit Mart, Market Express, Rose Mart

109

109

0

Mirabito

109

109

0

Han-Dee Hugo’s

107

107

0

Plaid Pantry

106

105

1

105

42

63

Chevron ExtraMile, Power Market, Chevron, Colonial Energy, Shell, Texaco

105

105

0

Sprint Mart

103

103

0

Family Fare

102

102

0

Stinker Stores

99

96

3

Express Lane, Pitt Stop, Applegreen, Freedom Valu Center

Shell, Loop, Chevron, Chevron ExtraMile

Heath, Ohio 51

Enmarket Inc. Savannah, Ga.

53

Majors Management LLC Lawrenceville, Ga.

54

Panjwani Energy LLC Houston

55

Little General Stores Inc. Beckley, W.Va.

56

Flash Oil Co. West Memphis, Ark.

56

Mirabito Energy Products Binghamton, N.Y.

56

Sampson Bladen Oil Co. Inc. Clinton, N.C.

59

Plaid Pantries Inc. Beaverton, Ore.

60

Town Pump Inc.

Town Pump, Flying J

Butte, Mont. 61

H&S Energy Products LLC Orange, Calif.

61

Victory Marketing LLC Ridgeland, Miss

63

M.M. Fowler Inc. Durham, N.C.

64

Stinker Station Inc. Boise, Idaho

65

Petrogas Group SC LLC Lexington, S.C.

66

Vintners Distributors/ AU Energy Fremont, Calif.

98

31

67

67

Break Time Corner Market LLC Houston

96

95

1

67

Gas Express LLC

96

0

96

91

90

1

87

87

0

Five Star Food Mart

85

85

0

Spinx

84

84

0

Toot'n Totum

82

82

0

Crosby’s

81

81

0

Family Express

80

55

25

Atlantis Fresh Market, Food Bag, CITGO, Shell, BP, Irving, Mobil, Exxon

80

80

0

Moto Mart

Corner Market, Break Time, Valero

Circle K, Kangaroo Express

Houston 69

Mountain Express Oil Co. Acworth, Ga.

70

Newcomb Oil Co.

Brothers Food Mart, Quik Chek, Central Station, Fox Fuels, West Hill Ranch, Pilot Travel Center

Bardstown, Ky. 71

The Spinx Co. Inc. Greenville, S.C.

72

Toot'n Totum Food Stores Amarillo, Texas

73

Reid Stores Inc. Lockport, N.Y.

74

Family Express Corp. Valparaiso, Ind.

75

Atlantis Management Group Mount Vernon, N.Y.

75

FKG Oil Co. Belleville, Ill.

74 Convenience Store News C S N E W S . c o m

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TOP 100

FEATURE

position in Tennessee and Kentucky.

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.

Rounding out this year’s top 10 are Westborough-based EG America, Richmond, Va.-

TOP 100 2022 Rank

77

Company, City, State

Total U.S. Store Count

CHR Corp.

Primary Store Names

CompanyOperated Stores

Franchise/ Licensee Stores

79

79

0

Rutter’s

78

74

4

Aloha Island Mart, Sunoco, APlus, Shell, Menehune Food Mart

76

53

23

76

74

2

Express Lane, Shell

76

74

2

Krist Food Mart, CITGO

76

76

0

Quick Track

76

76

0

Sam’s Food Store, Chucky’s Food Store, Hess

75

75

0

BellStores

74

74

0

Big Apple

74

74

0

Sun Stop, S&S Food Store, Sun Valley Market & Deli

73

73

0

Break Time, MFA Oil, Petro Card 24

73

73

0

Stop & Go

73

73

0

Kent Kwik, Bountyland Quik Stop

71

71

0

BFS Foods

71

28

43

Shell, Sunoco, Corner Mart, Crown Express Mart, Mobil, The Wine Rack, Exxon, Washington Express, APlus, CITGO, Gulf

71

71

0

Gate

71

71

0

Green Valley Grocery Store

70

70

0

Weigel’s

69

68

1

69

69

0

Convenient Food Mart

69

69

0

Holiday

69

69

0

Parker’s

67

67

0

OnCue Express

66

66

0

Dandy Mini Mart

66

66

0

Fuel Maxx

York, Pa. 78

Sunoco Inc. Philadelphia

79

First Coast Energy LLP

Daily’s, Shell, Southeast Energy, Mountain Energy, Sunoco

Jacksonville, Fla. 79

Johnson Oil Co. Rock Falls, Ill.

79

Krist Oil Co. Iron River, Mich.

79

Quick Track Inc. Bedford, Texas

79

Sam’s Food Store Rocky Hill, Conn.

84

Campbell Oil Co. Massillon, Ohio

85

C.N. Brown Co. South Paris, Maine

85

Southwest Georgia Oil Co. Bainbridge, Ga.

87

MFA Petroleum Columbia, Mo.

87

S&G Stores Sylvania, Ohio

87

The Kent Cos. Midland, Texas

90

BFS Foods Inc. Morgantown, W.Va.

90

E&C Mid Atlantic Ventures Chantilly, Va.

90

GATE Petroleum Co. Jacksonville, Fla.

90

Midjit Market Inc. Las Vegas

94

Weigel’s Stores Inc. Powell, Tenn.

95

Clark's Pump-N-Shop Inc.

Clark's Pump-N-Shop, Clark

Ashland, Ky. 95

Convenient Food Mart Inc. Mentor, Ohio

95

Holiday Oil Co. West Valley City, Utah

95

The Parker Cos. Savannah, Ga.

99

OnCue Marketing LLC Stillwater, Okla.

100

Dandy Mini Marts Inc. Sayre, Pa.

100

Fuel Maxx Inc. Spring, Texas

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.

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TOP 100

FEATURE

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.

No Surprise Party 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 surprised. “Although there 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. 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 predicts. Larger companies 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.

Slowing Down 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.” 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 while.” Speaking of inventory, it is harder these days to find acquisition candidates that

fit buyers’ preferred store template, said Mark Radosevich, president of PetroActive Real Estate Services LLC. “Acquisition 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.” 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.

“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

Smaller Operators Not Standing Still 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. “It might be a short-term advantage for the smaller buyers during this period,” he said. 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.

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TOP 100

FEATURE

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.

What to Watch For 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. 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. “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.” 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. “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. 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. “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 forward.” Dennis 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. “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.” Mark Radosevich, president of PetroActive Real Estate Services LLC, also anticipates continued interest from private equity firms. “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.” 80 Convenience Store News C S N E W S . c o m

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TOP 100

FEATURE

A Chance for Change? 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. “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.

“As long as private equity groups remain bullish on our industry, the trend will continue whereby smaller operators retire and sell.” — Mark Radosevich, PetroActive Real Estate Services LLC

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.” 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 portfolios. “7-Eleven has critical 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. “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.” But he’s not counting on such transformational changes coming anytime soon. “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 said. “Twenty years ago, it was cigarettes and pop. Then, we morphed into energy drinks. Now, it’s a food industry,” he continued. “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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TOP 100

FEATURE

148,026 43,312 29% Total Number of Stores in the Industry

Number of Stores Operated by the Top 100 Chains

28,336 19% Number of Stores Operated by the Top 10 Chains

Percentage of Stores Operated by the Top 100 Chains

20,864

Percentage of Stores Operated by the Top 10 Chains

14%

Number of Stores Operated by the Top 3 Chains

Notable Climbers

Percentage of Stores Operated by the Top 3 Chains

Sources: 2022 Convenience Store News Industry Report; Nielsen TDLinx

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

Breaking Through in ‘22 Two Georgia companies are new to the Top 100 this year

No.

53

Majors Management Inc. LAWRENCEVILLE, GA.

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.

No.

69

Mountain Express Oil Co. 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.

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FEATURE

TRAVEL CENTER TRANSFORMATION Innovation abounds in the travel center and truck stop industry from both new and existing players By Renée M. Covino 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.

“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 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. “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

changes to the forefront for many companies and locations.” Gary Hall, an industry 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 Great Overhaul 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. 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.” 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. “Completing the first locations of our New Horizons project is exciting, and we look forward to offering our

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FEATURE

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.” 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. 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 toppings. Another major 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 refreshes. Refresh components 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. 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.

Should You Explore the 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. 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. Segment experts recommend traditional c-store operators go through the following best-practice checklist when embarking on a travel center/truck stop enterprise: • Assemble an internal team of stakeholders that is focused on the trucker/travel stop experience. • 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. • 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. • Consider the “extras” for professional drivers, such as tools, hardware, apparel and electronics. • Collect continual feedback to find out what you’re doing right and wrong, and be prepared to adjust accordingly.

TravelCenters of America plans to execute more than 100 site refreshes, which include improved signage and a new store flow.

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FEATURE

Discover why Warren Rogers is the supplier of choice for US travel center operators Forty new Love’s 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.

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“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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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.

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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.

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“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 safely.” Beyond announcements 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 Tennessee.

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Next up is Colorado 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

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FEATURE

getting ready to break ground on its first travel center in Missouri. “Springfield 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.”

Making the Jump From C-stores 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 business. Because the truck 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. 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. “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.” 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.” 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. 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,

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

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.”

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

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FOODSERVICE

Building a Bigger & Better Future for Foodservice The 2022 Convenience Foodservice Exchange highlighted evolving best practices, ways to cope with challenges, and actionable suggestions to stand out from the crowd By Angela Hanson 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 Foodservice Exchange (CFX) event, presented by Convenience Store News.

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.

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

Over the course of two days, CFX attendees: • Engaged in a variety of presentations, panel discussions and Q&A sessions about the most pressing issues and best practices of today; • Participated in valuable networking opportunities, including a curated Power Hour that matched retailers and suppliers based on a pre-event questionnaire; • 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.

The event included panel discussions and networking opportunities.

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. 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.

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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 explained. Logos are a starting point, serving as a quick, visual shorthand to the full experience of visiting a particular c-store brand. Other steps to standing out recommended by Harker include: 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. 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. 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. Harker also recommended that c-store operators practice “hierology” to solve their labor shortages, as people want to work for businesses with a good reputation for treating their employees well. Energetic managers, product sampling and the addition of music can make a difference in employee retention. 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.

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

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FOODSERVICE

Planning for a Food-Focused Future 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. 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. Curby’s focused on three design features that are particularly relevant to the vast majority of convenience foodservice programs: • 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. • 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 important for high-volume stores.

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. 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 skills. “Foodservice 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. “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. 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. “They’re the ones that are running your business,” he said, pointing out that store employees drive the customer base through their customer service and attitude. In addition to investing in them as people, Nowyhed suggests retailers 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. “Everyone loves hitting targets and goals,” he said. During the panel discussion, Heritage and Nowyhed touched on other relevant topics, such as: 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. 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.” 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.”

Proactive Program & Menu Planning 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,

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yet soda makes up two-thirds of the in-store offering in the convenience channel. Art Lopez, senior marketing director at Finlays, a leading independent business-to-business supplier of tea, coffee and botanical solutions for foodservice and beverage brand owners worldwide, advised retailers to proactively create a beverage strategy. According to Lopez, retailers should focus on these areas to reimagine beverages in their stores: • Unique offerings: Having stores with high-volume foot traffic means c-store operators have the opportunity to drive up sales with interesting beverages. • Prioritize placement and promotion: By making conscious decisions regarding the placement and promotion of exciting in-store offerings, retailers can influence the consumer behavior shift from packaged beverages. • Challenge the status quo: Beverage success involves looking past the 99-cent cup to more innovative beverage offerings. • 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 restaurants. C-store operators 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. The future of beverages involves refreshing, 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.

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FOODSERVICE

The Value of Thinking Small 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 programs without making sweeping adjustments. Making that decision is key because signage, promotions and store flow all need to be crafted to facilitate the desired outcome, Lopez added.

Eight Must-Take Steps for Success 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-principal of restaurant and retail consultancy King-Casey, told this year’s CFX attendees. 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 revolutionary innovations and improvements. “I don’t think the pain is there yet,” he said. Blackiston pointed to eight “absolutes” for c-stores to get serious about foodservice success: 1. Brand your foodservice business — From décor to equipment to ordering methods, everything should communicate “food” to the customer. 2. Have a proprietary/signature menu — Parker’s fried chicken and Texas Born’s tacos are examples that make those chains memorable. “Developing a signature item is an important step,” he said.

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

3. Create

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.”

4. Offer

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.”

a menu strategy — Business objectives determine strategies and tactics, which are applied to categories and then individual products. 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.

5. Design

a distinctive environment — Foodservice initiatives such as Whole Foods Market’s Ramen Bar intentionally signal that “this is a place to eat.” 6.

Create a foodservice culture — This

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. 7. Embrace

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

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

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FOODSERVICE

A Balancing Act Convenience foodservice retailers are carefully weighing innovative plans for the future against maintaining longtime customer favorites By Angela Hanson

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

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

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

Foodservice Ordering: Currently Offer 2022

2021

Foodservice Ordering: Plan to Add

2020

2022 45% 44%

Contactless payment in-store

2021

2020 31%

Order ahead via app

16% 24%

34%

21%

37% 46%

Order ahead by phone

15%

Order ahead by computer

14%

39% 21%

Curbside pickup

18% 28%

In-store touchscreen ordering

12% 11%

21%

15%

19% 21%

Order ahead by computer

16%

At-pump touchscreen ordering

12%

9% 13%

In-store touchscreen ordering

13%

Curbside pickup

11%

12%

7%

16% 13%

13% 24%

Order ahead via app

11%

Pumpside pickup

14%

14%

10%

10%

Pumpside pickup

16%

Contactless payment in-store

9%

4%

14%

8%

Order ahead by fax

5% 2% 2%

At-pump touchscreen ordering

3% 5%

8% 7%

Order ahead by phone

8% 2%

Order ahead by fax

7% 5%

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FOODSERVICE

Foodservice Amenities: Currently Offer 2022

2021

2020

Microwave ovens for customer use

25%

68%

37% 36%

33% 35% 31%

Take-home/heat & eat dinner solutions

22% 25% 15%

Third-party delivery

6% 11% 9% 11% 6%

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. 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. 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.

7% 8%

In-house delivery 6%

5%

3% 3% 2%

Microwave ovens for customer use

16%

15%

10% 11%

8% 6% 8%

4%

Catering

25%

13% 10% 7%

Meal kits (cook at home)

In-store seating

12%

6%

Take-home/heat & eat dinner solutions

18% 16% 11%

5%

In-house delivery

Drive-thru

Outdoor seating

2020

14% 15%

Third-party delivery

21% 14% 9%

Drive-thru

2021

73%

46% 46% 42%

Outdoor seating

Meal kits (cook at home)

2022 58%

In-store seating

Catering

Foodservice Amenities: Plan to Add

9%

7%

6%

3%

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

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FOODSERVICE

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

Main Foodservice Competitors 2022

2021

2020

Other c-stores

54% 57% 48% 43% 37%

Chain sandwich shops (Subway, Quiznos)

31%

QSRs

40%

(Panera Bread, Chipotle)

33% 25% 22%

Coffee shops

27% 26% 24%

Grocery stores

11% 11%

Drug stores

5% 5% 2%

Other

3% 1% 5%

There are no competitors

What’s On the Menu? 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. 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).

34% 31% 26%

Fast-casual chains

Food trucks

45%

78%

24%

5% 6% 3%

Prepared Foods Offered Breakfast sandwiches Pizza Snacks/appetizers Other sandwiches Hot dogs Bakery Chicken Hamburgers Salads Wraps Hot entrees Other roller grill items Tacos/quesadillas Soup Other

2022

2021

2020

92% 74% 72% 69% 68% 68% 62% 57% 55% 49% 48% 46% 25% 20% 5%

87% 68% 68% 77% 64% 66% 65% 61% 58% 53% 46% 47% 35% 35% 10%

90% 68% 70% 68% 65% 58% 51% 56% 51% 39% 48% 51% 23% 31% 7%

Preparation Location for Prepared Foods 37%

Convenience distributor, delivered ready to heat & serve 31%

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

29%

Supplier/direct-store delivery, delivered ready to heat & serve Prepared at our company commissary, delivered ready to heat & serve

25%

Supplier/direct-store delivery, assembled at store

25%

Convenience distributor, assembled at store

23%

Foodservice distributor, assembled at store

23% 17%

Foodservice distributor, delivered ready to heat & serve Delivered from third-party commissary, assembled at store Delivered from our company commissary, assembled at store

9% 6%

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FOODSERVICE

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).

Franchise/License Branded Concept Offered 2022

19% 33%

2021 2020

29%

Dispensed Beverages Offered 2022

2021

2020

Hot coffee

94%

86%

95%

Fountain carbonated beverages

84%

84%

80%

Hot cappuccino/latte/espresso

78%

71%

77%

Hot chocolate

73%

75%

78%

Frozen drinks (e.g., slushies)

70%

68%

69%

Iced tea

66%

63%

58%

Hot tea

60%

47%

57%

Fountain non-carbonated beverages

48%

53%

51%

Iced coffee

46%

56%

53%

Fountain sports drinks

40%

42%

50%

Cold brew coffee

34%

35%

37%

Iced 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%

Dispensed Beverage Equipment Used 2022

2021

2020

Coffeemakers

81%

79%

81%

Traditional fountain drink dispensers

78%

75%

70%

Self-serve cappuccino/latte/ hot chocolate makers

72%

73%

64%

Frozen drink dispensers

60%

63%

60%

Bean-to-cup coffee machines

39%

35%

24%

Self-serve milkshake/smoothie machines

33%

33%

32%

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

25%

24%

15%

Soft ice cream/yogurt dispensers

18%

17%

17%

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. 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. 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. 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. 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. 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. CSN

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TOBACCO

The Ramifications of Reduced Nicotine The FDA’s plan to establish a nicotine standard has industry insiders speculating about the future of c-store tobacco By Renée M. Covino

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

WILL A REDUCED

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 combustible tobacco products.” As of press time, it was still not clear what would fall under the “other” category. The goal of the rule, according to the agency, is to reduce nicotine content in traditional cigarettes to minimal and potentially non-addictive levels, thereby reducing addiction and death, along with underage cigarette use. If such a policy is implemented and nicotine levels in cigarettes are reduced substantially, several tobacco industry insiders told Convenience

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. 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 categories 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. “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 proposal] is tantamount to a ban.”

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TOBACCO

Prohibition is another term Haynes uses in reference to the FDA’s proposal, which he said has the potential to put entire categories and companies out of business. “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. 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. He also quipped: “Remember ‘Near Beer?’ Now, it’s ‘Almost Tobacco.’” Regarding the proposal’s nicotine terminology of minimal, marginal or non-addictive levels, Stuart questions what that even means. “Doesn’t weight and tolerance matter?” he posed. 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?”

— Don Stuart, Cadent Consulting Group

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

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

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TOBACCO

will be years before any rule takes effect, if ever,” he said. 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 investment 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 nicotine proposal even more complicated. “Risks around illicit and vulnerable populations will be more pronounced, for example, and then the FDA needs certainty around things such as possible compensatory smoking,” the report stated. 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 litigation, 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 comments in an iterative process before it can publish a final rule.” 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 advertising. Both VLN King and VLN Menthol King cigarettes first launched in select Chicagoarea Circle K stores in April as part of a pilot program. In early August, 22nd Century Group CEO James A. Mish announced that the company will bring the VLN brand to Colorado in September — ahead of schedule. “Our 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. The company is also in advanced discus-

“Many cigarette companies will not have the wherewithal to meet the standards. One could argue [the proposal] is tantamount to a ban.” — Bryan Haynes, Troutman Pepper law firm 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 Washington, D.C., an increase from nine states in the first quarter of 2022. Applications are pending in all remaining states.

Proactive Actions Besides not panicking, what else can retailers do right now? “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., headquartered in Winston Salem, N.C. 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.” 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.” 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.” Jefferies analysts believe that if a nicotine standard is implemented, 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

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ALCOHOLIC BEVERAGES

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

Caption tk

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

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

WHAT HAPPENS

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. Elevating product offerings and redesigning stores to accommodate expanded selections of wine and liquor have been among convenience channel retailers’ responses. 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. Savannah, Ga.-based Parker’s, La Crosse,

“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.” — Jon Manuyag, Plaid Pantry 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. Kwik Trip launched Kwik Spirits, a new store format featuring a variety of wine and liquor, while Kum & Go

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ALCOHOLIC BEVERAGES

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 configurations. 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.

Consumer Preferences Are Key to Success 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 overall. Convenience store visits are highly mission-driven, with each trip usually serving a primary need. Alcohol has been identified as one of nine main trip missions, according to VideoMining, a provider of comprehensive insights on in-store shopper behavior. 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.

Merchandising & Marketing Tips 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.” 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.” 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.” 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.

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

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

The Latest in Liquor Trends

When it comes to wine, Christian Rogers, Kum & Go’s alcohol category manager, says he sees two trends: the premiumization 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.

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.

“We have geared our assortment to meet the new demand in these subcategories, while still ensuring we are dedicating appropriate space to the mature subcategories 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.” 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 format.” Beaverton, Ore.-based Plaid Pantry Inc. is another c-store chain reaping benefits from upgrading its wine program, according to President and CEO Jonathan Polonsky. “In our market, selling spirits is not an option in the convenience channel, so we have to shine in the beer/wine categories,” he said. Plaid Pantry operates 106 stores in the Northwest. 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 vintages. “With us living in the Willamette Valley, there are a handful of local wines we offer up that resonate with the Northwest shopper and create a tailored local assortment,” Plaid Pantry Director of Marketing Jon Manuyag said. The approach is working. “Wine sales are up, and I believe it is a combination of the ‘COVID effect’ and the addition of the

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. 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 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.

“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.”

— Christian Rogers, Kum & Go

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.” 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 business.” When it comes 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 syndicated data. … If you are not paying attention and constantly innovating, you will fall behind.” CSN

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SERVICES

Car Wash Visits by Season Winter Spring Summer Fall

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

32% 25% 25% 18%

In the United States, approximately 8 million vehicles are washed at car washes every day. Source: OneDesk.com

By Debby Garbato 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 bring.

“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.”

Many new 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 promotions.

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.”

The goal is to 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.

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

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SERVICES

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 merchandise. “There’s 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.

Ongoing Investments 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. 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.” 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.

“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.” 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. 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. 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. 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. 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.

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SERVICES

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.

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.

“Our car washes have never been lackluster,” said Pir. “It’s a profitable business.”

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.

Further 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. 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. 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.

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.

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.

Subscriptions & Promos 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. “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.” The company’s new locations use license plate scanning

Thirty-one Family Express locations operate car washes and 10 feature pet washes. S E P T E MB E R

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SERVICES

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 pumps. Victron 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. Sunshine Gasoline Distributors is adding Belanger Spin Light extended and mini wash tunnels to 22-6156_PROF_TSTF HalfP_Ad_Phoenix_082422_P.pdf some of its Florida locations.

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“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. 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.” 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

car wash packages and in-store spending. 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. Loop Neighborhood also runs successful email promotions tying free car washes to other categories. Emails have been major traffic and revenue drivers, Pir shared. “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.” 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

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TECHNOLOGY

The New Bedrock of Success C-store operators view new and improved technology as critical to their future By Angela Hanson 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. With their technology budgets on the rise, both large and small convenience store operators are

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TECHNOLOGY

Key Technology Investments: Currently Offer 2022

2021

2020

68% 69%

Social media 54% 54%

Consumer-facing website 45% 46%

Mobile app

41%

Digital monitors with ads in-store

38% 37%

Data analytics platform

GPS/geolocation alerts

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 enhancement of existing technology.

61%

45% 40% 47%

Email marketing

Text messaging to customers

77%

45% 46% 49%

Digital loyalty program

CRM software

79%

49% 54%

49%

27% 23% 30% 23%

23% 23%

34%

51%

40%

Investing in technology has become synonymous with investing in the future of the convenience channel itself.

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).

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 participants 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;

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Key Technology Investments: Plan to Add 2022

2021

2020

43% 40%

Text messaging to customers 23% Data analytics platform

23%

39%

29%

31% 33%

Digital loyalty program

36% 37% 35%

GPS/geolocation alerts

CRM software

30% 30%

Digital monitors with ads in-store

12%

9%

20% 12%

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).

20%

37%

30%

21% 20%

Consumer-facing website

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.

34% 34%

19%

Email marketing

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

36%

29% 26%

Mobile app

Social media

38%

29%

Change in Technology Budget 2022 vs. 2021

63% More

25% Same

5% Less 7% Don't know

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TECHNOLOGY

Payment Innovation 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. 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.

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Electronic benefits transfer (EBT)

68%

Prepaid card

63% 41%

Electronic check verification

29%

RFID

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Proprietary mobile payment in app

21%

Contactless self-checkout using kiosk Contactless self-checkout using app

16%

Contactless self-checkout using AI/sensors

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Biometric payment technology

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Contactless self-checkout using AI/sensors

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Proprietary mobile payment in app

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Biometric payment technology

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Third-party mobile payment

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Electronic benefits transfer (EBT)

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Electronic check verification

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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).

Availability of Website Ordering 39% no plans to offer

41% plan to offer

At the pump, third-party mobile payment, in-app proprietary mobile payment and RFID payment are the leading payment technologies c-store retailers are considering. More than a year past the date of the 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

20% offer website ordering

compliance process is higher at the pump, where retailers run the highest risk of encountering card skimmers. Most operators in the process of reaching full compliance intend to do so by the end of 2023.

Ordering & Fulfillment Mobile ordering is another work-in-progress for the convenience channel. Just 23 percent of respondents currently offer ordering via app, and 20

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TECHNOLOGY

Availability of App Ordering

32% no plans to offer

23% offer app ordering

45% plan to offer

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 ordering. Despite this 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.

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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. 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.

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.

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

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Availability of Customer Delivery

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

23% offer delivery

39% no plans to offer

41% plan to offer

Social Media & Customer Feedback 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).

products (56 percent) and community service initiatives (54 percent) are also common.

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

Three-quarters of 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

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WHAT’S NEXT

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

By Angelina Bice, Content Strategy Specialist, NextUp

I/O makes transforming workplace environments into hard science, using data to fuel powerful outcomes to better our workplaces for women. In this interview, we dive into the power of psychology to change perspectives, from the individual level right up to

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

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: Platinum Sponsors:

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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. 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. 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. 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. 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. 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 works? Ortiz: 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

“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.

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. 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

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

S E P T E MBE R

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STORE SPOTLIGHT

Between a Hard Rock & a Casino Rocktane Gas + Smoke arrives on the West Coast boasting an iconic music vibe By Renée M. Covino ROCKTANE GAS + SMOKE

At a Glance Rocktane Gas + Smoke Opened: November 2021 Location: 3317 Forty Mile Road, Wheatland, Calif. Size: 4,100 square feet Unique features: 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 merchandise; 24-hour drive-thru smoke shop

is a business built

on partnerships. Located on tribal 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. 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. “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. Besides the tribal, casino and Hard Rock brand partnerships, Rocktane also established a unique alliance with its supplier,

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 immediately formed between the two. “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.” 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

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

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. Inside the store, Hard Rock brand elements 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. 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 more. “This is Hard Rock-branded merchandise and Rocktane-branded merchandise that customers can’t find anywhere else,” Rudnick said. “People collect these; they’re very iconic.” Now that the store has been in operation for a while, the operator is making tweaks and updates, tailoring its product assortment and merchandising. Since opening, Rocktane has cut down on cleaning supplies and pet supplies, along with limiting its selection of dairy and deli items. “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 presentation 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. “We’re pushing candy and snacks. Anything 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. S E P T E MBE R

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STORE SPOTLIGHT

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

Drive-By Convenience

Community Camaraderie

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.

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 gallon.

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. The drive-thru takes minimal effort to maintain and staff it, according to Rudnick. “It’s such a simple process, it’s just an additional register,” he said. 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 treating them with respect and they’re having a fun time,” he said. “It’s a good group.”

“We know 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, particularly thanks to new loyalty members signing up to receive the discounts. Also with a community 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 emergencies. “This means in 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.” 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

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ADINDEX 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 Johnsonville.............................................142 JTM Foods................................................101 King & Prince Seafood...........................69 Krispy Krunchy Chicken........................97 Legion Technologies..............................133 S E P T E MB E R

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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 Smokey Mountain Chew Inc ................119 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

2022

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INSIDE THE CONSUMER MIND

Keeping Customers Close Convenience store loyalty programs are expanding and enhancing 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:

Does the Convenience Store You Shop at Most Often Have a Loyalty Program?

67%

33%

Yes

No

THE AVAILABILITY OF CONVENIENCE STORE LOYALTY PROGRAMS IS GROWING, as more

shoppers this year vs. last year (64%) report that their preferred c-store offers a program.

Are You Enrolled? 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

Nearly FOUR IN 10 SHOPPERS are actively using a convenience store loyalty program, and most of these shoppers (77%) are extremely/very satisfied with that program.

Those shoppers who say they would not enroll even if their preferred convenience store offered a loyalty program cite the following reasons: 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%

PERHAPS DUE TO INFLATION AND THE RISING COST OF GOODS,

fewer shoppers this year than last year (31%) indicated that the rewards/ points are not valuable to them.

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36"W x 49"H

$578.00

24"W x 45"H

$714.00

DS A-Frame

24"W x 62"H

$774.00

A-Frame Gas Price Sign

U-FA16-2-3

GW

Pole-Mount Gas Price Sign BKW

YG

16" FLIP NUMBER TWO-PRODUCT VERTICAL

$750.00

GW

U-FA16-2-OP

WBL

$345.00

BKY

U-FA10-1-3D POLE-MOUNT

SS Wall Or Pole Mount

36"W x 72"H

$474.00

DS Pole Mount

36"W x 72"H

$948.00

DS A-Frame

36"W x 89"H

$1,008.00

BKY

U-FA16-2-OP A-FRAME

20" FLIP NUMBER TWO-PRODUCT VERTICAL U-FA20-4-3

RW

YG

WBL

w/ Optional Panel

WBK

w/ Optional Panel on Bottom

WBK

$940.00

36"W x 57"H

| Catalog Supplement

DS Pole Mount

16" FLIP NUMBER TWO-PRODUCT VERTICAL

U-FA10-1-3A A-FRAME

20" FLIP NUMBER SINGLE-PRODUCT

4

$357.00

36"W x 81"H

DS A-Frame

$750.00

24"W x 45"H

DS A-Frame

WR

36"W x 57"H

SS Wall Or Pole Mount

WR

$690.00

DS A-Frame

U-FA10-4-3 WALL-MOUNT

WR

36"W x 40"H

$690.00

BKY

$880.00

DS Pole Mount

36"W x 40"H

WBL

$668.00

36"W x 64"H

BKY

$345.00

DS Pole Mount

$608.00

24"W x 53"H

DS Pole Mount

36"W x 40"H

36"W x 40"H

24"W x 36"H

DS A-Frame

YG

RW

SS Wall Or Pole Mount

SS Wall Or Pole Mount

DS Pole Mount

RW

WBL

w/ Optional Panel on Top

U-FA20-3-3

$304.00

$440.00

YG

20" FLIP NUMBER SINGLE-PRODUCT U-FA20-2-3

24"W x 36"H

36"W x 64"H

GW

20" FLIP NUMBER SINGLE-PRODUCT SS Wall Or Pole Mount

GW

SS Wall Or Pole Mount

SS Wall Or Pole Mount

WBK

$267.00

36"W x 40"H

WR

BKW

w/ Optional Panel on Top SS Wall Or Pole Mount

RW

w/ Optional Panel

16" FLIP NUMBER SINGLE-PRODUCT U-FA16-1-OP

WBK

10" FLIP NUMBER TWO-PRODUCT VERTICAL

16" FLIP NUMBER SINGLE-PRODUCT

U-FA16-1-3

BKW

10" FLIP NUMBER TWO-PRODUCT VERTICAL

BKY

U-FA10-2-3 WALL-MOUNT

Wall-Mount Gas Price Sign

Pole-Mount Gas Price Sign BKW

$497.00

SS Wall Or Pole Mount

36"W x 64"H

DS Pole Mount

36"W x 64"H

$994.00

DS A-Frame

36"W x 81"H

$1,054.00

WBK RW WR GW

20" FLIP NUMBER TWO-PRODUCT VERTICAL

YG

w/ Optional Panel

U-FA20-5-3

SS Wall Or Pole Mount

36"W x 72"H

$580.00

DS Pole Mount

36"W x 72"H

$1,160.00

DS A-Frame

36"W x 89"H

$1,220.00

WBL BKY

U-FA20-4-3D POLE-MOUNT

800-821-6530 | www.unitedsign.com

5


C-STORE, GAS STATION & LUBE CENTERS

C-STORE, GAS STATION & LUBE CENTERS Visit

unitedsign.com For A Full Line Of Colors & Options!

Visit

Two-Product Horizontal & Four-Product Gas Price Flip Signs

Three-Product Gas Price Flip Signs Wall-Mount Gas Price Sign

BKW WBK RW WR GW

.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

WBL

A-Frame Gas Price Sign

BKW WBK RW WR

Stainless steel clips and rivets attach the number sets

WBK

RW

Double-Sided Pole Mount style price reflects two single-sided units

Pole mounting hardware is sold separately

WR GW

10" FLIP NUMBER TWO-PRODUCT HORIZONTAL

YG

U-FA10-9-H3

$452.00

DS Pole Mount

24"W x 54"H

$904.00

WBL

DS A-Frame

24"W x 71"H

$964.00

BKY

SS Wall Or Pole Mount

24"W x 63"H

$485.00

DS Pole Mount

24"W x 63"H

$970.00

DS A-Frame

24"W x 80"H

$1,030.00

SS Wall Or Pole Mount

48"W x 27"H

$424.00

DS Pole Mount

48"W x 27"H

$848.00

DS A-Frame

48"W x 44"H

$906.00

U-FA10-9-H3 WALL-MOUNT

A-Frame Gas Price Sign

16" FLIP NUMBER TWO-PRODUCT HORIZONTAL 72"W x 40"H

$540.00

BKW

SS Wall Or Pole Mount DS Pole Mount

72"W x 40"H

$1,080.00

WBK

DS A-Frame

72"W x 57"H

$1,140.00

U-FA16-4-H3

RW

16" FLIP NUMBER THREE-PRODUCT U-FA16-3-3

Mitered steel frame has rust-resistant black powder-coat finish

24"W x 54"H

10" FLIP NUMBER THREE-PRODUCT U-FA10-7-3

SS Wall Or Pole Mount

w/ Optional Panel

U-FA10-6-3 Wall-Mount

.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

BKW

10" FLIP NUMBER THREE-PRODUCT U-FA10-6-3

Wall-Mount Gas Price Sign Horizontal

Pole mounting hardware is sold separately

YG

BKY

unitedsign.com For A Full Line Of Colors & Options!

WR

SS Wall Or Pole Mount

36"W x 96"H

$655.00

GW

20" FLIP NUMBER TWO-PRODUCT HORIZONTAL

DS Pole Mount

36"W x 96"H

$1,310.00

YG

U-FA20-9-H3

SS Wall Or Pole Mount

72"W x 40"H

$616.00

GW

WBL

DS Pole Mount

72"W x 40"H

$1,232.00

YG

BKY

DS A-Frame

72"W x 57"H

$1,292.00

WBL BKY

16" FLIP NUMBER THREE-PRODUCT w/ Optional Panel

U-FA16-3-OP

U-FA16-6-3A A-FRAME

Pole-Mount Gas Price Sign BKW WBK

SS Wall Or Pole Mount

36"W x 104"H

$707.00

DS Pole Mount

36"W x 104"H

$1,414.00

U-FA16-4-H3A A-FRAME

Pole-Mount Gas Price Sign BKW

20" FLIP NUMBER THREE-PRODUCT U-FA20-6-3

RW

SS Wall Or Pole Mount

36"W x 96"H

$740.00

DS Pole Mount

36"W x 96"H

$1,480.00

YG WBL BKY

U-FA10-8-3

WBK

GW

20" FLIP NUMBER THREE-PRODUCT

WBL

w/ Optional Panel

SS Wall Or Pole Mount

36"W x 104"H

$843.00

DS Pole Mount

36"W x 104"H

$1,686.00

24"W x 72"H

$592.00

DS Pole Mount

24"W x 72"H

$1,184.00

WR

10" FLIP NUMBER FOUR-PRODUCT w/ Optional Panel

YG

U-FA20-7-3

SS Wall Or Pole Mount

RW

WR GW

10" FLIP NUMBER FOUR-PRODUCT

BKY

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

U-FA10-10-3D POLE-MOUNT

U-FA16-3-OP POLE-MOUNT

6

| Catalog Supplement

800-821-6530 | www.unitedsign.com

7


SIGN FRAMES, INSERTS & HARDWARE

SIGN FRAMES, INSERTS & HARDWARE

unitedsign.com For A Full Line Of Colors & Options!

Visit

Wayne Ovation

Gilbarco Encore S

MINIMUM OCTANE RATING (R+M)/2 METHOD

unitedsign.com For A Full Line Of Colors & Options!

Gilbarco Encore 300

91

89 PUSH HERE

$1.25

U-OR-89-WO

Visit

U-OR-91-GES

Wayne Ovation

$1.25

$.75

U-OR-89-GE3

Wayne Vista

Gilbarco Advantage

MINIMUM OCTANE RATING (R+M)/2 METHOD

MINIMUM OCTANE RATING (R+M)/2 METHOD

U-TI-192-PB U-tI-o

87

P

Push Here

$1.25

U-OR-D-WO

U-OR-87-WV

87

R

E

S

$.75

U-ORP-87

$.75

U-SQAW-001

S

U-PN101-5Y

U-MD-139

U-MD-321

U-SQAW-122

U-PNDW-1

U-PNDB-1

3.375" X 4"

$1.50

$1.50

U-MD-800W

U-PN201-1W

2.75" X 2.25"

$.75

$1.95

12” x 3”

U-MD-201B

U-MD-131 U-MD-802B

U-MD-228 U-ARUBA-5

U-NT-114

$3.40

25” x 4”

NO ETHANOL

10% ETHANOL 90% UNLEADED GASOLINE

CONTAINS MAXIMUM 10% ETHANOL

U-MD-803W

U-MD-339

U-MD-338

U-MD-801W

U-MD-800W

U-PD204R-25

U-PD201B-12

U-PD103B-6

6” x 2”

U-PN101-1Y

U-PD203B-12

U-OR-D-GES U-OR-87-GES

U-OR-92-GES U-OR-89-GES

$1.75

6" X 2"

U-MD-598 NO SMOKING STOP ENGINE

PLEASE

PAY FIRST

You must remain in attendance outside your vehicle while fueling NO DISPENSING FUEL INTO UNAPPROVED CONTAINERS

U-MD-195

U-MD-265

U-MD-191

6" X 6"

8

| Catalog Supplement

U-MD-312

U-MD-319

U-MD-430

U-MD-57

$1.95

800-821-6530 | www.unitedsign.com

9


SIGN FRAMES, INSERTS & HARDWARE Visit

SIGN FRAMES, INSERTS & HARDWARE

unitedsign.com For A Full Line Of Colors & Options!

Wall or Pole Mount Frame

Visit

unitedsign.com For A Full Line Of Colors & Options!

United WindSign Black/Silver Price Burst Insert

Squawker Insert

Name Your Price!

U-WS-194 U-WS-197

U-WS-196

U-WS-14S

U-WS-14B

Squawker Frame

U-SQAW-001

$12.21

$122.95

U-WS-1B

Aluminum Frame

U-TI-1230

Rolling Base Wind Signs

U-TI-90-PB

U-WS-193

$62.95

U-WS-1S

$21.50

$248.95

U-SQAW-95-P

$8.75

$16.95

U-TI-98-P

United WindSign Inserts

PumpTopper Frame

U-TI-O

U-WS-133

U-WS-155

U-WS-182

U-WS-165

U-WS-164

U-WS-184

U-CW-WS-1

U-CW-WS-2

U-WS-177

U-WS-185

U-WS-186

U-WS-187

U-WS-180

U-WS-183

U-WS-160

U-WS-167

U-WS-189

U-WS-174

$24.46

Single/Double Flip Price Inserts

BKW RW BKY WS-210-3M 10” FLIP NUMBERS WS-211-3M 10” FLIP NUMBERS

$129.95 $145.95

*Use with Pole or Wall Mount Frames, sold separately above*

U-WS-4205B WINDMASTER FRAME U-WSR-24

10

WIND SIGN II

| Catalog Supplement

$345.95 $207.95

U-WS-###

28”W X 44”H

$26.95

800-821-6530 | www.unitedsign.com

11


Visit

FACILITY / GROUNDS MAINTENANCE Visit

unitedsign.com For A Full Line Of Colors & Options!

72in. FlexPost Bollard

Bollard Post Covers

unitedsign.com For A Full Line Of Colors & Options!

SAFETY, SECURITY & COMPLIANCE

Visit

unitedsign.com For A Full Line Of Colors & Options!

Tank Collar

Fill Pipe ID Tag

Valve ID Tag

U-FPI-115

U-VIT-115

U-TC-3

U-FPI-12

U-VIT-12

U-TC-128

U-FPI-20

U-VIT-20

U-TC-6

U-FPI-23

U-VIT-23

U-TC-2

U-FPI-27

U-VIT-27

U-TC-4

U-FPI-18

U-VIT-18

U-TC-37

U-FPI-46

U-VIT-46

U-TC-129

U-FPI-21

U-VIT-21

U-TC-7

U-FPI-13

U-VIT-13

––

U-FPI-25

U-VIT-25

U-TC-8

U-FPI-26

U-VIT-26

U-TC-27

U-FPI-58

U-VIT-58

U-TC-42

U-FPI-122

U-VIT-122

U-TC-127

U-FPI-127

U-VIT-127

U-TC-126

U-FPI-126

U-VIT-126

––

U-FLEXPOST-72

$369.95

U-PC-01

4.5”DIA. X 52”H

$41.95

U-PC-02

4.5”DIA. X 64”H

$45.95

U-TC-35

––

––

U-PC-03

7"DIA. X 60"H

$51.95

U-TC-38

––

––

U-PC-04

7"DIA. X 72"H

$56.95

U-TC-41

U-FPI-121

U-VIT-121

U-TC-130

U-FPI-130

U-VIT-130

U-TC-36

U-FPI-45

U-VIT-45

U-TC-40

U-FPI-120

U-VIT-120

U-FPI-44

U-VIT-44

U-TC-13

U-FPI-16

U-VIT-16

U-TC-15

U-FPI-15

U-VIT-15

Height Warning Clearance Bar

––

U-TC-11

U-FPI-14

U-VIT-14

U-TC-12

U-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-131

U-FPI-131

U-VIT-131

U-TC-132

U-FPI-132

U-VIT-132

U-TC-133

U-FPI-133

U-VIT-133

––

––

U-CLT-2

12

| Catalog Supplement

80”W X 4.5”DIA.

$133.85

Storage Tank Collars

U-TC-126

38”W X 3.5”H

$12.95

Fill Pipe ID Tags

U-FPI-122

3.5”W X 2.5”H

$11.95

Valve ID Tags

U-VIT-27

3.5”W X 1.5”H

$3.95

800-821-6530 | www.unitedsign.com

13


C-STORE, GAS STATION & LUBE CENTERS

SIGN FRAMES, INSERTS & HARDWARE Visit

unitedsign.com For A Full Line Of Colors & Options!

Visit

unitedsign.com For A Full Line Of Colors & Options!

Waste Container / Message Center

Fuel Flags- Blade Style

Hex™ Waste & Windshield Center

Help Wanted Banner

U-BA-104

120”W X 36”H

$100.25

Diesel Fuel Banner U-CU-7

BLACK

$125.95

U-CU-8

Aruba 6 Waste & Windshield Center U-BA-193

120”W X 36”H

BLACK

$229.95

Hex™ 30 Gal. Waste Container

$100.25

Propane Tank Banner

U-FBL-6K

U-FBL-7K

U-FBL-8K

U-FBL-9K

U-BA-195

U-FBL

13.5FT

$170.03

120”W X 36”H

$100.25

Rec Fuel Banner

Sail flag kits include sail flag, hardware & ground spike base.

Now Open Banner

120”W X 36”H

$100.25

U-BA-196

120”W X 36”H

| Catalog Supplement

$500.95

U-CU-11

BLACK

$119.95

Waste ‘N Wipe® Service Center

$100.25

Ethanol Free Banner

U-BA-194

120”W X 36”H

$100.25 U-CU-13

14

BLACK

Bermuda 2 35-Gal. Hex Container

Please note:

U-BA-96

U-ARUBA-6

GRAY

$349.95

U-CU-10

BLUE

$414.95

800-821-6530 | www.unitedsign.com

15


A catalogue that can shop for you! • The interactive online catalogue The FlippingBook catalogue is an interactive shopping experience that’s better than the real thing!

• Flip. Click. Done.

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!

U-WS-18

U-ARUBA-6

SOURCE CODE:

FALL2022

U-FSDS16-1

Phone: 800.821.6530 Local Phone: 231.733.1877 Fax: 800.544.0345 Local Fax: 231.725.7314

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