CSN-1020 by ensembleiq

W H AT â&#x20AC;&#x2122; 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

EXCLUSIVE SHOPPER STUDY ON FOOT TRAFFIC TRENDS

STEPPING ON THE

GAS WITH STORE TRAFFIC STAGNATING FOR MANY C-STORE RETAILERS, THE CHANNEL NEEDS TO FOCUS ON SAFETY AND GIVING CUSTOMERS NEW WAYS OF MAKING PURCHASES.

OCTOBER 2020 CSNEWS.COM

Local, State and Federal tobacco taxes and restrictions on the sale of tobacco products can hurt your business. Governments often pass new laws quickly, so you need to stay informed about what is happening in your area. You and your business matter and making your voice heard is crucial to our success in fighting for fair tobacco policies.

Take this survey to learn more about how you can get involved

TAKE SURVEY CLICK HERE

TobaccoIssues.com is operated on behalf of Philip Morris USA, U.S. Smokeless Tobacco Co., John Middleton, and Helix Innovations. ÂŠ2020 Altria Group Distribution Company | For Trade Purposes Only

VIEWPOINT

We All Adjust to Unprecedented Times Industry leaders adapt with interactive virtual platforms I would be writing about how the convenience store industry is preparing to gather in Las Vegas for the annual NACS Show. I’m as disappointed as most retailer and supplier community members that the COVID-19 pandemic has caused the cancellation of the industry’s premier showcase.

NORMALLY, THIS TIME OF YEAR,

We will miss attending the education sessions, viewing new products, and forging and reinforcing relationships with all of the industry’s most prominent stakeholders. I know it will be impossible to replicate the show’s live, in-person experience, but I’m looking forward to checking out next month’s virtual NACS Show program. I hope it’s a success. The cancellation has forced every industry player to adjust to an unprecedented situation. For Convenience Store News, no NACS Show this year means we cannot hold two of our signature events in Las Vegas: the Top Women in Convenience (TWIC) Awards Gala and the Technology Leadership Roundtable & Dinner. Both programs are usually held during the show. TWIC will become a terrific Virtual Watch Party on Monday, Oct. 12 from 4 p.m. to 6 p.m. This online event will feature the chief executives of three of the industry’s largest retailers — Joe DePinto of 7-Eleven, Brian Hannasch of Alimentation Couche-Tard/Circle K (ACT), and Darren Rebelez of Casey’s General Stores. We are thrilled to be recognizing an accomplished group of women, including our five Women of the Year honorees: Anne Flint of EG Group, Ramona Giderof of Anheuser-Busch, Julie Jackowski of Casey’s, Natalie

Morhous of RaceTrac Petroleum, and Ina Strand of ACT. While the seventh-annual TWIC awards ceremony will be held virtually, it will still be a dynamic, fun, must-attend industry event. The 2020 Technology Leadership Roundtable & Dinner will be replaced with a two-part Virtual Technology Leadership Series in which we will once again share best practices and discuss the future technology needs of the industry. The series kicked off Oct. 1 with a fireside chat with Art Sebastian of Casey’s about that company’s digital journey, and was followed by a retailer panel discussion. The second session, on Oct. 8, will begin with our presentation of the 2020 Technology Leader of the Year award and a Q&A with this year’s honoree, Gus Olympidis of Family Express. That will be followed by a retailer panel discussion. CSNews also has launched a new way for retailers to connect with suppliers when they can’t physically meet in person. The CSNews Interactive Product Showcase is a digital re-creation of a convenience store that allows users to visit different categories both at the forecourt and inside the store to gain valuable insights and trend information. The digital store allows retailers to interact with individual exhibitors that are showcasing their products and services. Please call or email me if you’d like more information on our TWIC Virtual Watch Party, Technology Leadership Series, or Interactive Product Showcase. For comments, please contact Don Longo, Editorial Director, at (201) 855-7606 or dlongo@ensembleiq.com.

EDITORIAL EXCELLENCE AWARDS (2013-2020)

EDITORIAL ADVISORY BOARD Brett Atherton Bolla Management

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

2013 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2012

2013 Jesse H. Neal National Business Journalism Award Finalist, Best Profile, August 2012

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

Rick Crawford Green Valley Grocery

2017 Eddie Awards, 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

Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired)

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 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

2015 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2014

2013 American Society of Business Press Editors, Midwest Regional Azbee Awards Bronze, Best Editorial/Commentary, July 2012

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

Jim Hachtel Eby-Brown Co.

2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2013 Business to Business, Retail, Single Article, February 2013

Chris Hartman Rutter’s

2013 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2012

Ray Johnson Speedee Mart

2015 American Society of Business Press Editors, National Azbee Awards Silver, Best Profile (long form), February 2014 2015 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best Special Supplement, November 2014 Silver, Best Profile (long form), February 2014

Laura Aufleger OnCue Express

Jack Lewis GPM Midwest

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

Joe Lewis ExtraMile Convenience Stores Ruth Ann Lilly GPM Investments Danielle Mattiussi Maverik Inc. Vito Maurici McLane Co. Inc. Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Bill Stein Core-Mark Roy Strasburger StrasGlobal

CONTENTS OCT 20

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COVER STORY

STEPPING

ON THE

GAS

FEATURES

DEPARTMENTS

COVER STORY

VIEWPOINT

42 Stepping on the Gas With store traffic stagnating for many c-store retailers, the channel needs to focus on safety and giving customers new ways of making purchases. COVER STORY

48 Studying the Shifts in C-store Traffic Exclusive shopper research examines pandemic-related traffic trends in the industry. FEATURE

58 The Mega-Deal of 2020 Two years after closing on its largest acquisition to date, 7-Eleven ups the ante with a $21B agreement to buy Speedway and its 3,900 stores.

30 6 Convenience Store News C S N E W S . c o m

4 We All Adjust to Unprecedented Times Industry leaders adapt with interactive virtual platforms. 10 CSNews Online 30 New Products SMALL OPERATOR

34 Finding Your Niche From community involvement to selling local products to proprietary foodservice offerings, small operators are finding unique ways to stay competitive in their markets. TWIC TALK

102 JoAnn Saverino, Saverino & Associates Inc. The 2019 TWIC Woman of the Year is encouraged to see intelligent young women getting leadership opportunities now early on in their careers.

107 STORE SPOTLIGHT

107 Building for the Future Enmarket’s new prototype accelerates the retailer’s speed to market for new builds. INSIDE THE CONSUMER MIND

130 Charged Up Electric vehicle ownership is increasing among convenience store shoppers.

130

7 OUT OF 10 USERS SAY NICORETTE GUM TASTES BETTER THAN STORE BRAND* *Overall taste preference between coated gum ﬂavors based on initial taste (1 minute of use).

Now Available At The consumer profile of convenience stores continues to shift to a younger demographic (Millennials (22%) and Gen X (22%) now make 44% of C-store shoppers), and those consumers are increasingly seeking healthier options at convenience stores from food and beverage to products to improve their health and well being. As a convenience retailer that prides itself on having a variety of products for everyone, Wawa has been expanding options for customers, now including access to a full-line of smoking cessation products. Since early July, Wawa now stocks a robust lineup of Nicorette smoking cessation products in 900 stores, including Nicorette Gum (4mg) in Cinnamon Surge, Fruit Chill and White Ice Mint and Nicorette Coated Ice Mint Lozenges (2mg and 4mg). Wawa is the first convenience store to provide a full chain launch with five Nicorette SKUs. For more than 20 years, Nicorette has been a leader in helping smokers fight cravings so they can successfully quit. Studies show that nicotine replacement therapy (NRT) products combined with behavioral support can double one’s chances of quitting smoking and the availability of Nicorette products at Wawa may help consumers finally start on their quit journey.

CONTACT YOUR LOCAL NICORETTE SALES REPRESENTATIVE ON HOW TO ORDER OR EMAIL SCOTT.F.BREISINGER@GSK.COM

CONTENTS OCT 20

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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 Editorial Director (201) 855-7606

Don Longo dlongo@ensembleiq.com

Editor-in-Chief (201) 855-7608

Linda Lisanti llisanti@ensembleiq.com

Senior News Editor (201) 855-7618

INDUSTRY ROUNDUP

CATEGORY MANAGEMENT

12 New GPM Business Combination to Go Public

FOODSERVICE

14 Parkland Goes ‘On the Run’ in the U.S.

70 Pandemic Pivots Comfort foods have been top-of-mind for consumers during this stressful year.

14 Fast Facts 18 Eye on Growth 22 Retailer Tidbits 26 Seen on Social

TOBACCO

72 Riding the Highs & Lows Convenience store retailers overcome the many challenges facing the tobacco business.

28 Supplier Tidbits HOW TO 64 Get Customers Onboard With Safety Measures Whether it’s social distancing or mask mandates, c-store operators are using a variety of methods to attain customer compliance with COVID-19 policies. TECHNOLOGY 96 Connecting to the Future Technology Leader of the Year Gus Olympidis leads Family Express to the forefront of frictionless in a world where everything is connected.

Melissa Kress mkress@ensembleiq.com

Associate Editor (201) 855-7619

Angela Hanson ahanson@ensembleiq.com

Associate Managing Editor (201) 855-7604

Danielle Romano dromano@ensembleiq.com

Contributing Editor (303) 741-3377

Renée M. Covino reneek@aol.com

Contributing Editor (201) 280-2614

Tammy Mastroberte tmastroberte@gmail.com

ADVERTISING SALES & BUSINESS Associate Brand Director & Northeast Sales Manager (508) 385-2524

Rachel McGaffigan rmcgaffigan@ensembleiq.com

Associate Brand Director & Western Sales Manager (330) 840-9557

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

ALCOHOLIC BEVERAGES

EVENTS

78 A Newly Spirited Rutter’s The retailer recently unveiled an assortment of 800-plus adult beverages at one location.

Executive Vice President, Events & Conferences Ed Several (860) 830-8321 eseveral@ensembleiq.com

HEALTH & BEAUTY CARE

82 Self-Care: The New Wellness Essential HBC was largely under the radar for c-stores, but that was before COVID-19. GENERAL MERCHANDISE

86 The Element of Surprise Seasonal merchandise sales are up in c-stores as consumers seek to mitigate the monotony of stay-at-home living. SERVICES

90 The Need for Clean As COVID-19 restrictions ease, car washes are proving to be a lucrative service for c-stores.

AUDIENCE List Rental (914) 309-3378

MeritDirect Marie Briganti

Subscriber Services/Customer Care TOLL-FREE: (877) 687-7321 FAX: (888) 520-3608

contact@csnews.com

PROJECT MANAGEMENT/PRODUCTION/ART Vice President, Production (877) 687-7321 Creative Director (973) 607-1320

Derek Estey destey@ensembleiq.com Colette Magliaro cmagliaro@ensembleiq.com

Advertising/Production Manager (773) 992-4418

Ed Ward eward@ensembleiq.com

Art Director (973) 607-1321

Lauren DiMeo ldimeo@ensembleiq.com

CORPORATE OFFICERS Chief Executive Officer Jennifer Litterick Chief Financial Officer Jane Volland Chief Innovation Officer Tanner Van Dusen Chief Human Resources Officer Ann Jadown Executive Vice President, Events & Conferences Ed Several Senior Vice President, Content 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. Periodical postage paid at Chicago, IL 60631, and additional mailing addresses. Copyright 2020 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. Reprints, permissions and licensing, please contact Wright’s Media at ensembleiq@wrightsmedia.com or (877) 652-5295. POSTMASTER: send address changes to Convenience Store News, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631.

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

HELP GROW YOUR CATEGORY WITH THE MARKET SHARE LEADER! Dispenser and Small Convenient Packs are Now Available for Tums Chewy Bites

Order These New Convenient Travel Size Packages Through Your Local Re-Packers

Convenience Valet Navajo Incorporated Select Corporation

New Smaller 8ct Bottle Also Available Contact your local Tums sales representative on how to order the New 8ct Bottle or email Scott.F.Breisinger@gsk.com Read and follow label directions. Â©2020 GSK group of companies or its licensor.

CSNEWS ONLINE

MOST VIEWED NEW PRODUCT

Coca-Cola With Coffee

EXPERT VIEWPOINT

Will C-store Industry M&A Activity Resume Post COVID-19? The convenience store/retail fueling industry has consolidated greatly over the last decade and while it has paused since the onset of COVID-19, all indications are that it will return postpandemic to a healthy rate, writes Joe Petrowski, founder and managing partner of Mercantor Partners. While the industry has consolidated to a point where the largest 18 chains control 21 percent of the entire 153,000 convenience stores in the United States, several large entities have the capital and desire to enter or expand in the space. They include private equity, major integrated oil, state oil companies and sovereign wealth funds, and existing large chains. 10 Convenience Store News C S N E W S . c o m

Coca-Cola With Coffee fuses the familiar, authentic taste of Coca-Cola with the rich, luxurious flavor of 100 percent Brazilian coffee. The hybrid beverage is slated to join the ready-todrink (RTD) coffee section in January 2021. Three signature flavors will be available in 12-ounce cans: Dark Blend, Vanilla and Caramel. Each can contains 69 milligrams of caffeine. Coca-Cola With Coffee is part of the brand’s “lift and shift” strategy to scale successful beverage innovations from market to market via an experimental, test-andlearn approach. The Coca-Cola Co. Atlanta (800) 438-2653 coca-colacompany.com

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INDUSTRY ROUNDUP

New GPM Business Combination to Go Public A $360-million store remodeling initiative is also part of the strategy By Melissa Kress the convenience channel for its aggressive acquisition strategy, GPM Investments LLC is taking steps to move its stores forward with one consistent look. This is just one of the changes that will come forth from its parent company’s pending strategic tie-up.

KNOWN ACROSS

On Sept. 9, GPM parent Arko Holdings Ltd. entered into a definitive agreement with Haymaker Acquisition Corp. II, a publicly traded special purpose acquisition company, to form a business combination, pending shareholder approval. Upon closing, which is slated for the fourth quarter of 2020, Arko Holdings will delist from the Tel Aviv Stock Exchange. The new combined company, to be known as Arko Holdings Corp., will begin trading on the NASDAQ. With its existing line of credit and the infusion of capital that the Haymaker combination is expected to add to its balance sheet, Richmond, Va.-based GPM not only plans to continue its strategy to grow through acquisitions, but also to launch a remodel program. “We are going to invest in our stores; this is the plan. We are going to invest in at least 360 stores out of 700 that we

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

identified ... to give them a facelift, build a prototype and have some similarity through the entire chain,” Arie Kotler, CEO of Arko Holdings Ltd. and GPM, told Convenience Store News. Over the next three to five years, GPM plans to spend approximately $360 million on the remodeling initiative, with the expectation that it will generate EBITDA of approximately $72 million over that same time period. With 17 acquisitions under its belt over the past seven years, GPM is a network of numerous brands — some of which date back decades. One brand, Kotler pointed out, traces its roots to 1905. With this in mind, the newly combined company is also unveiling a new slogan: Arko, A Family of Community Brands. “When I say, ‘A Family of Community Brands,’ it’s not just a slogan. Take E-Z Mart, for example, is almost 50 years; Scotchman is almost 50 years; or Admiral, that is almost 60, 70 years. You are talking about brands that have been in their markets for so many years and they mean a lot to those customers,” Kotler said. “We are not on the highway; we are in a lot of secondary markets and rural towns and at the end of the day, these brands are what they see every day. Their grandfathers probably went to these stores.”

Perfetti_Fruit-tella_ad_EnsembleIQ_FA_OL.pdf

5/6/20

3:22 PM

INDUSTRY ROUNDUP

Parkland Goes ‘On the Run’ in the U.S. The company will bring its North American convenience stores under one banner acquired the license for exclusive use of the On the Run trademark in the majority of U.S. states. With this license, the company plans to expand the brand across the country to create a unified North American convenience store brand.

PARKLAND CORP.

“We are excited to expand the On the Run convenience store brand across the U.S. and harness the advantages of our scale,” said Ian White, senior vice president, strategic marketing and innovation at Calgary, Canada-based Parkland. “As we continue to advance our ambitious growth strategy, the time is right to create a unified North American retail and convenience store brand. On the Run is an established retail brand that we can quickly and efficiently scale by leveraging the capabilities we have established in the Canadian market.” Under the plan, Parkland intends to: • Rebrand its existing U.S. c-stores and incorporate the On the Run brand into newly developed sites; • Capture efficiencies through common brand collateral, product assortments, private label product ranges, and operational continuity; • Take advantage of future merger and acquisition activities in the U.S.; and • Support the organic growth of its dealer business. “The On the Run retail brand provides a solid platform for our continued U.S. growth,” added Doug Haugh, pres-

ident of Parkland USA. “Building on our existing On the Run brand image, product assortments and private label goods in Canada, we look forward to meeting the convenience needs of our U.S. customers under the On the Run banner. Our U.S. customers will enjoy enhanced interior and exterior rebranding elements, larger and brighter canopies, and a variety of new product offerings, all backed by their same local and friendly service teams.” The acquisition deal includes the perpetual license for exclusive use of the On the Run trademark in the majority of U.S. states for a one-time fee. There is also an option to purchase the On the Run U.S. trademark together with the license owner’s On the Run franchise business.

FAST FACTS

Tobacco and its segments are demonstrating strong growth over 2019, with dollars per basket growing by an average of 28 percent and units per basket growing by an average of 12 percent.

The COVID-19 pandemic has driven consumers to put dieting on the backburner as participation in total diet or nutrition programs dropped from 48.3 percent last April to 43.8 percent this April.

— Koupon Media, Koupon Insights

— The NPD Group, Health Aspirations & Behavioral Tracking Service

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

In a recent survey, 61 percent of Americans said they are now more interested in taking a local road trip to explore areas close to home. — The Harris Poll, on behalf of Shell

Together, we can help combat underage access to age-restricted products by adopting Juul Labs’ RACS™ RACS™ (Retail Access Control Standards) is a set of standards that retailers can adopt within their point-of-sale (POS) system technology to enable store clerks to enforce age restrictions and quantity purchase limits for JUUL products.

For more information on how to become RACS compliant, please visit: racscompliance.org

For ID scanning We Card recommends: • Adopt the age verification process that is right for you. • ID scanning technology is one of the best ways to go. Explore the options for the right tools. ID scanning technology: ID scanners work with your POS to scan ID barcodes. With varying features based upon different POS systems and an evolving technology, they help reduce employee “carding” errors. If you’re ready to start scanning, find a POS system at age-verification.wecard.org.

Following manufacturer purchase limits: One of the ways underage youth report getting access to age-restricted products is adult-for-underage purchases. See research at underageaccess.wecard.org/facts. We Card recommends that retailers follow manufacturer purchase limits as they may help reduce adult-for-underage purchases as well as related illicit re-selling and underageto-under-age giving of age-restricted products. See wecard.org/purchase-limits. © 2020 The We Card Program, Inc. All rights reserved. We Card educational materials and content are incorporated herein and used by permission of The We Card Program, Inc., a tax exempt non-profit org.

WE CARD MAKES A DIFFERENCE! FDA

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Refresh your retail locations with updated, effective We Card materials.

Easy online ordering at wecard.org or, call 1-800-934-3968

INDUSTRY ROUNDUP

Eye on Growth

Sheetz Inc. plans to open 50 convenience stores in central Ohio by 2025. More than a dozen are slated to open by the end of 2021, followed by a dozen more annually from 2022 through 2025.

Peopleâ&#x20AC;&#x2122;s Democratic Republic. The first 7-Eleven store in Laos is expected to open in the capital city of Vientiane. Energy North Group, which has retail operations throughout New England and New York, purchased the Tradewinds Markets business in Maine. The deal included eight c-stores and a car wash.

The new Sheetz stores will be located along interstates and major state routes.

U.S. Oil acquired 45 sites through its purchase of the branded wholesale fuel supply businesses of Sasafrasnet LLC and Esquire Petroleum LLC. The mix of Mobil- and BP-branded sites are located in Chicago. 7-Eleven Inc. signed a master franchise agreement with CP ALL Co. Ltd. to develop and operate stores in The Lao

CEFCO Convenience Stores celebrated the grand opening of its second ground-up build of 2020. Located in Nolanville, Texas, this is the second store to include CEFCO Kitchen, offering madeto-order burritos, bowls and tacos. Enmarket opened its third newto-industry convenience store this calendar year in Thunderbolt, Ga. The 5,800-square-foot location includes The Eatery, Enmarketâ&#x20AC;&#x2122;s signature kitchen concept.

Pooler Parkway, GA

2019 WINNER BEST ORIGINAL DESIGN EnMark is a wonderful example of a very successful company in our industry that had outgrown its brand and its store design. The first thing Paragon did was to transition them from EnMark to EnMarket. Everything about the new name screamed fresh and relevant. The starting point was a unique color palette that featured a signature green. The contemporary materials included stone, brick, metal and wood that blended together to present a warm and inviting architecture that featured clerestory windows, a drive-thru and multiple entrances. It is obvious from the moment you drive on the site that there is a new brand in town and that brand is EnMarket.

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

SWISHER’S BOLD NEW FUTURE EMPOWERS CONVENIENCE RETAILERS With more than 200 million adult consumers in the U.S., there is no doubt that this segment is the largest and most important for today’s convenience John J. Miller retailer. It should President be no surprise that business growth is intrinsically tied to how a company pivots and evolves along with (and ahead of) the changing preferences of those adult consumers. While Swisher has always been centered on relationships with valued trade partners, particularly in the C-store space, today Swisher is more focused than ever on being the source those partners turn to for the insights and products that create direct connections with adult consumers. Innovative products are one important way to build the future, but they have to be matched with adult consumer insights, superior customer relationships and action to truly achieve the goal of becoming a leading adult consumer lifestyle brand.

SUCCESS SIMPLIFIED: A SERVICE MODEL BUILT AROUND YOU An important component of Swisher’s evolution is – Success Simplified – a platform that makes success easier and more profitable for trade partners. The platform is based on the tenets of

innovation, insights, action, reliability and shared success. These are delivered through a one-stop-shop offering of products, creative packaging, advanced manufacturing technologies, product guarantees and shared performance programs. This is just one example of how Swisher makes doing business easier. Ultimately, the Success Simplified approach is a win for Swisher’s valued partners.

INNOVATION

leader. Expertise, product knowledge and growth opportunities are delivered in one relationship through the recent alignment of the company’s offerings

“ The business partnerships that trade customers have formed with Swisher’s knowledgeable sales team will only be amplified further by this expanded effort.”

INSIGHTS ACTION RELIABILITY SHARED SUCCESS

BRANDS YOU TRUST, BACKED BY CATEGORY FOCUS & EXPERTISE Since 1861, Swisher has always been driven by an entrepreneurial spirit and a passion to create. Throughout the decades, strategic acquisitions, technology improvements and product innovations have enabled Swisher to maintain its position as an industry

into five focused strategic businesses: Swisher Sweets Cigar Company (Cigars & Cigarillos); Fat Lip Brands (Smokeless); Drew Estate (Premium Cigars); Hempire (Hemp Products); and Rogue (Modern Oral Nicotine). In each category, trade partners have access to the strategies, product innovations and relationships that drive success.

THE WAYS SWISHER WORKS WITH YOU ARE UNCHANGED The business relationships that trade partners have formed with Swisher’s knowledgeable sales team will only be amplified further by this expanded effort. The evolution will enhance the category expertise, product knowledge and data-driven strategies that benefit customers. A renewed purpose celebrating human connection, fostering creative expression and strengthening community, along with the unwavering commitment to evolve with the tastes of adult consumers, will guide even deeper connections with partners and their customers. Swisher continues to evolve in order to keep you ahead. Learn more at Swisher.com/SuccessSimplified.

THEY NEVER STOP EVOLVING.

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SWISHER SWEETS CIGAR COMPANY | FAT LIP BRANDS | DREW ESTATE | HEMPIRE | ROGUE

INDUSTRY ROUNDUP

Retailer Tidbits

7-Eleven Inc. became the first c-store retailer to partner with Instacart to offer same-day delivery in as fast as 30 minutes. The multi-phased launch is currently live at more than 750 stores.

The 28 EV chargers will be available for public use by early 2021.

ExxonMobil is connecting its branded wholesalers to third-party delivery services including DoorDash, Grubhub, Instacart and Uber Eats. Branded wholesalers can sign up to partner with the leading delivery service provider in their area or several depending on their needs. Wawa Inc. is piloting several new dinner menu items at select stores. Options such as entrée platters, rotisserie-style chicken and penne or fettucine pasta become available after 4 p.m. on the retailer’s touchscreen ordering system.

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

Love’s Travel Stops & Country Stores is teaming up with Electrify America to add public ultra-fast electric vehicle charging stations to seven locations in Oklahoma, New Mexico, Utah, Florida, New York and Arizona.

Casey’s General Stores Inc. now offers curbside pickup through its mobile app. The c-store chain tested the service in Kansas City, Mo., and Des Moines, Iowa, before expanding it to more than 80 locations. Liberty Travel Plazas is unveiling a new name and brand identity: Onvo. The move brings a new logo, a refreshed loyalty program, and an updated store design.

BUDDERFLY MAKES YOUR STORES GREENER, BRIGHTER, AND BETTER USING OUR MONEY, NOT YOURS

The higher-spending customers you need to attract and retain don’t like to shop just anywhere. They choose stores that are more inviting and more environmentally friendly. Budderfly is a revolutionary new approach to managing your energy and going green: improving your store environment and shopper experience while cutting your energy use and costs. And best of all: Budderfly provides 100% of the capital, the installed technology, the long-term maintenance, and the ongoing monitoring, all at no out-of-pocket cost to you. Budderfly pays to improve your store environment with upgrades you and your customers will appreciate:

• Bright, clean, indoor and outdoor LED lighting •

• More efficient, safe, and effective refrigeration units CON G R AT U L AT E A L L T H E AWA R D W I N•NHVAC E R Ssystems A Nimproved D O Uand T maintained for superior performance and efficiency

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Budderfly can completely retrofit and upgrade your existing stores AND be part of new construction as you expand. Your savings of energy and costs are guaranteed, starting on day one. You simply enjoy the results, while your customers enjoy the premium environment and superior shopping experience.

Talk to us today about what Budderfly can do for you. Call 855.249.9962 or visit budderfly.com/convenience

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INDUSTRY ROUNDUP

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

Carry our most popular flavors and rack up the sales Top sellers by rank

3-box rack: Essentials

12-box rack: Flavor Seekers 9-box facing

15-box rack: Super Sellers 12-box facing

FLAVOR

UNIT UPC

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Claim your FREE 3-box rack and merchandising kit at 5hourenergyretailer.com Mailings and promo items are subject to change. You may opt out of mailings and messaging at any time. Most popular flavors based on Nielsen AOD, 52 Weeks Ending 08/08/2020, Convenience, $/$MM ACV. ÂŠ2020 Living Essentials Marketing, LLC. All rights reserved.

INDUSTRY ROUNDUP Core-Mark International’s Center of Excellence (CoE) shifted to a digital experience. With its highspeed videoconferencing and data analytics services, the CoE provides a collaboration space for channel partners.

Supplier Tidbits

Einstein Bros. Bagels will open its first-ever convenience store locations through a five-store development deal recently signed with King Fuel. All of the planned stores will open in the Houston metro area. Molson Coors Beverage Co. is partnering with L.A. Libations to launch a slate of non-alcoholic drinks. The new products are scheduled to hit shelves this fall, beginning with the introduction of HUZZAH! probiotic seltzer.

Through the Halloween portal, users can “knock” on the doors of friends and family across the country.

Mars Wrigley launched Treat Town, an app-based digital experience that enables families to virtually trick-or-treat and earn credits to redeem for real candy.

KÖE Kombucha has inked new pacts doubling its distribution footprint to c-store and grocery chains. Among its new locations are select Speedway stores, and 7-Eleven locations in the greater Los Angeles and San Diego areas.

Swisher International Inc. is changing its corporate identity to Swisher to signify the expansion of the company’s vision, offerings and focus on the adult consumer lifestyle. It is also introducing Success Simplified, a new platform for trade partners.

Van’s Kitchen is teaming up with three new brokers to increase its convenience channel service. KC Krafts will handle the western U.S.; Total Convenience Marketing will oversee the East, Southeast and South; and CSM Sales will cover the upper Midwest.

20_1852_Conv Store News_OCT Mod: August 19, 2020 11:18 AM Print: 09/21/20 9:54:09 AM page 1 v7

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NEW PRODUCTS

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Consumers can now take home the mouth-watering flavor of Krispy Krunchy Chicken to use in their own family recipes. Perfectly Cajun Seasoning delivers the unique flavor profile and signature coloring exclusive to Krispy Krunchy Chicken in a convenient take-home package. Consumers can shake the seasoning onto their favorite dish or mix it with water and inject it into their favorite meat, poultry or seafood for a Cajuninfused creation.

Reed’s Inc. launches its firstever alcoholic beverage: Reed’s Zero Sugar Classic Mule. The naturally brewed, ready-to-drink ginger mule is made in partnership with Full Sail Brewing Co., an award-winning craft brewer in Oregon. Sugar free and keto friendly, Reed’s Zero Sugar Classic Mule is packed with real, fresh ginger root and made through a unique, handcrafted brewing and fermentation process. Available nationwide in a four-pack, with a suggested retail price of $10.99, the beverage contains 7 percent alcohol; features a light-spice flavor profile; and has no artificial colors, gluten, GMOs or caffeine.

The Multi-Purpose Sanitizing Island is a permanent indoor/outdoor island that enables retailers to no longer turn away or confront customers. Instead, store employees can simply direct customers to the unit, which provides immediate access to face masks, wipes and hand-sanitizing gel. The refuse bin prevents trash from being discarded on sidewalks and parking lots, and includes a separate inner bin that can be removed easily for cleaning. A locked compartment stores stock for quick replenishment.

The BIC EZ Reach Lighter is designed to be the ultimate lighter for all lighting occasions, able to light hard-to-reach places while putting distance between fingers and flame. The new design combines the iconic BIC Pocket Lighter with the longer-reaching BIC MultiPurpose Lighter. The BIC EZ Reach Lighter has a 1.45-inch extended wand with a body the size of a pocket lighter, making it a comfortable fit in users’ hands. The product has a suggested retail price of $2.99 for the one-pack Classic, $3.49 for the one-pack Home Décor, and $4 for the Bob Marley lighters.

Krispy Krunchy Chicken New Orleans (318) 483-4343 krispykrunchy.com

Reed’s Inc. Norwalk, Conn. reedsmule.com/ classic-mule

MasonWays Indestructible Plastics LLC West Palm Beach, Fla. (800) 837-2881 info@masonways.com masonways.com

BIC Shelton, Conn. bicworld.com/en

5. Vollrath Double-Sided Hand Washing Station The Vollrath Co. expands its offering of cleaning and safety equipment with the Double-Sided Hand Washing Station. The unit can provide both customers and employees an easy and convenient space to wash their hands anywhere sanitation is of concern in a building. Outfitted with a pair of sinks separated by a safety guard, each side of the unit features a faucet with foot pedal for hands-free operation, a soap dispenser and a towel dispenser. The double-sided wash station can be stationary or mobile, and is equipped with a 10-gallon freshwater tank and a 13-gallon wastewater tank. The Vollrath Co. LLC Sheboygan, Wis. vollrathfoodservice.com 30 Convenience Store News C S N E W S . c o m

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6. Vital Farms Egg Bites Vital Farms introduces its newest pasture-raised, ready-to-eat product: Egg Bites. One single-serve pack includes two gluten-free, 2.3-ounce bites that have 16-18 grams of protein each. Four unique flavor combinations are available: Uncured Bacon & Cheddar Cheese; Roasted Red Pepper & Mozzarella Cheese; Uncured Ham, Bell Peppers, Onions & Cheddar Cheese; and SunDried Tomato, Basil & Mozzarella Cheese. Egg Bites can be microwaved directly in their recyclable, BPAfree trays. Vital Farms Austin, Texas vitalfarms.com

7. Stop & Win Marketing Cooperative Program Robust Promotions introduces the Stop and Win marketing cooperative program, exclusively for independently owned fuel retail and convenience stores. The program is designed to help operators solve their most pressing problem — increasing sales, while building a loyal customer base with program exclusivity in their immediate trade area — at a cost that is affordable for any-size marketing budget. The Stop and Win program drives in-store product sales while creating a customer database that includes opt-in emails and phone numbers for future marketing efforts.

8. OCB Bamboo Rolling Papers OCB Bamboo Rolling Papers and Papers + Tips are vegan, GMO-free, unbleached and made from moist, sustainable bamboo fiber. No harsh fertilizers, pesticides or herbicides are used in the growing process and the bamboo is responsibly harvested, leaving the roots in the ground to regrow. The rolling papers come in 1-1/4 and Slim sizes with and without tips. Counter and modular displays are available for merchandising. Republic Tobacco LP Glenview, Ill. (800) 288-8888 info@rpbtob.com

Robust Promotions LLC Villa Park, Ill. (800) 925-5732 info@robust promotions.com robustpromotions.com

9. fuelWRAp Real-Time Web Application Warren Rogers enhanced its fuelWRAp web application to now provide users with a comprehensive look at real-time tank gauge alarms, directly on the online dashboard. Accessible via desktop, tablet or mobile — all in a highly secure, cloudbased environment — the newly enhanced program features real-time alarm reporting, as well as archived and historical alarms by location. After secure-user login to fuelWRAp, the tank gauge and sensor alarms can be filtered and sorted for ease of review and exported to meet the retailer’s internal reporting needs. Notifications can be delivered by email, text or phone call. Warren Rogers Associates Middletown, R.I. tcaputo@warrenrogers.com warrenrogers.com

10. Touchless SensorSAFE Dispensing Kit The Touchless SensorSAFE Dispensing Kit from Follett Products is a sanitary, hands-free kit designed for new and current 7 Series or 15 Series ice and water dispensers. Available for both new and existing countertop and freestanding dispensers with minimal assembly, the Touchless SensorSAFE Dispensing Kit can be easily installed by connecting its wire harness to the control board and attaching the new lid. Follett Products LLC Easton, Pa. follettice.com

10 32 Convenience Store News C S N E W S . c o m

TRENDS YOU NEED TO KNOW THE MULTIBILLION-DOLLAR CBD INDUSTRY IS EXPERIENCING EXPLOSIVE GROWTH. In order to compete, C-Stores need to offer a wide range of the top selling CBD form factors which follow the biggest market trends. Get informed and discover the right partner to drive your CBD sales and profitability.

1 C-STORE CBD IS GROWING CBD sales in Convenience Stores & Gas Stations are expected to increase by

+55%

INGESTIBLES ON THE RISE

By 2021, Ingestibles are expected to account for

60%

of sales in Convenience Stores & Gas Stations.

Gummies, Capsules, and Drinks alone are expected to drive over

of CBD sales in Convenience Stores & Gas Stations.

in sales.

OTHER CANNABINOIDS TO KNOW C-Store consumers are becoming more interested in purchasing products which contain other cannabinoids too, like CBG for example.

CBN

CBGCBC

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SMALL OPERATOR

Finding Your Niche From community involvement to selling local products to proprietary foodservice offerings, small operators are finding unique ways to stay competitive in their markets By Tammy Mastroberte WHETHER OPERATING a single store or a small chain, surviving and thriving against the larger convenience store chains is always top of mind for the industry’s small operators, and it can be challenging at times. The big chains have more buying power to get better deals and can pass those deals onto the customer. The big chains can also flex their buying power when it comes to securing the best real estate. However, there are advantages to being small, particularly the ability to move faster in stocking new items or changing up offerings.

reason you are giving customers to come to you vs. someone down the street.”

Know Your Customer For operators unsure of how to find their niche and create an offering or specialty that makes their store stand out from the crowd, Roy Strasburger, president and CEO of StrasGlobal, a retail management services firm, recommends starting out by developing an understanding of the neighborhood and customer profile of each location. “Know your customer and know what they need. Then, you can know what you need to sell,” he said. “The more accurately you do that, the stronger your niche is in the community. Also, try to raise awareness within the immediate community where you are; focus on a six-block to three-quartersof-a-mile radius around the store to make sure everybody knows who you are.”

“Small operators can make things happen right away. [They] can make a decision to bring in a new product and have it in the store the next day or week,” said Mark Wells, president and CEO of LJT Management Services Inc., a provider of training and consulting services. “For chain stores, it’s a process that could take from three to six months to go through corporate. Small operators can make a change in their business with the snap of a finger.” With the ability to move quickly, single stores and small chains can find ways to stand out and create a niche in their markets easier than the larger chains can. Savvy operators are focusing on unique product mixes, offering one-of-kind foodservice products, getting involved in their local community, and much more. “If you don’t create a differentiator, you will lose out to the big guys,” said Mike LaVitola, co-founder and CEO of Foxtrot Markets, based in Chicago and operating 10 stores. “The larger players have economy of scale, pay out for better real estate, and can be more involved when it comes to a loyalty program. You have to know what

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

It’s also important for an operator to know the competition and what is already being offered in the area of each store, so they can create something truly unique for that demographic and location, advised Wells. This can include products, as well as services. Case in point: Q Squares, based in Baxtor, Minn., and operating four stores in rural areas, offers both hunting and fishing licenses, and has large fish tanks in the stores to sell live bait. “One of the stores is right next to a racetrack, so we sell a significant amount of high-octane racing fuel there as well,” noted Q Squares owner Matt Seymour.

Going Local One way to create a unique niche in the market is to offer local products grown or manufactured in the neighborhood either by other small companies or those headquartered in the area. Today’s customers are looking for local products because of the perceived freshness and community value. Small operators can add such items to their locations quicker than their bigchain counterparts. “You can create a strong niche with localization, and we are working with

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local providers in the stores we operate to get more local products,” said Strasburger, whose company currently operates roughly 25 stores around the country. Most of its clients are one to 10-store owners.

operators can differentiate themselves from the larger chains. Amidst the COVID-19 pandemic, many small operators have stepped up to the plate, finding avenues to help their neighbors.

“This can be farm to table from a farmer’s market where we can pick up boxes of vegetables, or working with local craftsman and artisans to sell their products so that we can help promote them and also let people know we are attached to the community,” he continued.

Strasburger, whose company operates stores for those who own them but do not want to operate them on their own, implemented a number of measures, from working with the local chamber of commerce to offer job opportunities to those affected by shutdowns, to seeking out restaurants that were forced to close and having them prep and sell meals through the c-stores.

At Foxtrot Markets, the 10-store chain works with 100 small vendors based in Chicago to offer their products to the local community. Similarly, single-store owner Matt Paduano, who operates Lakeport Market in Lakeport, N.Y, offers local milk from a plant not far from the store’s location, as well as locally produced snacks, beef jerky and maple syrup. “People love to come in and find things they can’t find anywhere else,” said Paduano, a former long-time executive for a midsized c-store chain. “We carry local products and grocery items and unlike a big chain that might have cooler doors locked up by Pepsi or Coke, we have the flexibility to create a whole section of our cooler with gourmet sodas.”

With children out of school due to the pandemic, Lakeport Market provided 4,500 lunches for elementary and middle school children Monday through Friday. “A big part of what makes us stand out is the community involvement, and a lot of the bigger chains are missing that,” Paduano said. “We had customers coming in and donating product and dollars that allowed us to keep [the free lunches] going.”

Good Neighbor

Lakeport Market also supported the local Girl Scouts by selling nearly 800 boxes of cookies in the store and then handing over the profit to them. The store set up a display explaining that the Girl Scouts could not be out selling the cookies, so they were doing it for them.

Finding ways to get involved, help the local community or hold neighborhood events is another way small

“Get involved in the community and let them put a face

Making the Jump From Online to Brick & Mortar Although today Foxtrot Markets operates 10 brick-and-mortar locations in Chicago and Dallas — each measuring approximately 3,000 square feet — the company didn’t start out that way. In 2013, it launched as a digital c-store offering on-demand delivery. It didn’t open its first physical location until 2015. Today, 50 percent of the business comes from online orders, while the other 50 percent is customers shopping at its locations, according to Mike LaVitola, co-founder and CEO. “We opened the physical locations because it allowed us to be closer to the customer, and they also serve as a distribution center for our e-commerce,” he explained. The stores are in downtown, urban environments and handle all their own delivery for orders that come in via the app or website. The company actually started out as an app-only c-store and then expanded to a website. Now, the app can also be used in-store to make payments and track the chain’s loyalty program. About half of all in-store revenue goes through the app. Inside the Foxtrot Market stores, one-third of the space is a traditional c-store market, onethird is devoted to coffee and foodservice, and 36 Convenience Store News C S N E W S . c o m

the remaining one-third is seating, although with COVID-19, the chain pulled out the seating and temporarily shut down its coffee and café. That space was repurposed into more grocery and market items. “In the early part, we shut everything down, but now the café and coffee is back up and running at full capacity, although we didn’t put seating back yet,” LaVitola explained. “E-commerce really exploded during the pandemic; it went up about four times the amount prior. Customers who have been with us were placing more online orders and customers who only shopped at retail started placing orders.” Most customers tend to spend more online than in the store, he noted. The chain offers a Perks loyalty program that tracks both online and in-store spending. When a customer spends $100 per month, they get access to perks such as free delivery, free coffee in-store, happy hour pricing in the afternoon, and price cuts on beer and wine. “Half of our revenue is from customers who are in the program,” LaVitola said. “We can provide a much better in-app experience because it’s all tracked there. We can see what the customer likes in the store and show it to them online.”

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to the independent operator,” said Wells. “Get involved in events, reach out to the chamber of commerce, and support local schools.” Q Squares’ Seymour is actually chairman of the board for the local chamber of commerce and makes sure his company supports local charities by both making donations and collecting donations from the community. During the pandemic, the small chain partnered with Deli Express, Old Dutch Foods and drink manufacturer Celsius to give away meals free of charge to any first responder or frontline worker for a six-week timeframe. Another example of community involvement can be found at Stop n Shop, a single store in Loudon, Tenn. Owner Dipa Patel started hosting music nights at the location every other Thursday featuring an in-house band. People come to sit inside the store, listen to the music and eat homemade food served from the store’s Over the Hill Grill. “One of our employees suggested this local band who plays bluegrass music, and they only play here,” Patel explained. “We feed the band while they are here, and local people come to eat and listen to the music.”

Standout Foodservice To be successful in the c-store industry, high-margin items are a must, and high-quality foodservice items can deliver

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Stop n Shop, a single store in Loudon, Tenn., features the Over the Hill Grill, which is known for its catfish, biscuits and gravy, and fried bologna sandwiches.

this for operators, whether it’s fountain drinks, coffee, prepared food or grab and go. Not only can creating a proprietary foodservice offering help any store stand out from the crowd, but it also brings in a loyal following who keep coming back. “A great coffee program can offer 55- to 65-percent profit margins and anyone can create one,” Wells noted. “There are new bean-to-cup machines that are perfect for a smaller operator because there is no timer or maintenance to keep the coffee fresh all day long. The technology has come so far, and they can offer this besides a fresh-brewed urn as well.” When Patel bought the Stop n Shop store from its previous owner, the location was already known for proprietary foodservice though its deli called the Over the Hill Grill. She chose to keep the menu, with all of the food cooked and prepared onsite. The deli is known for its catfish, cheeseburgers, biscuits and gravy, and fried bologna sandwiches.

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SMALL OPERATOR

“We even grind our own meat here so it’s fresh, and we offer vegetable soup as a special, as well as chicken casserole, and open-faced roast beef with mashed potatoes and gravy,” Patel noted, pointing out that its other food offerings include sloppy joe, meatloaf, and a variety of breakfast options such as sandwiches, made-toorder omelets, and a breakfast plate for $5.99 that includes two eggs, three pieces of bacon, and toast. When Paduano opened Lakeport Market, he researched the area and found there was not many food options in close proximity to the store. The closest Dunkin’ was more than four miles away in one direction and seven miles in the other direction. There was only a mom-and-pop pizza shop. Paduano set out to capitalize on this with a strong foodservice offering, as well as an expanded grocery section with four cooler doors of frozen food and four doors of dairy. “We sell breakfast pizzas, egg sandwiches, sub sandwiches, wraps and pizza melts for sunrise and lunch. And then into dinner, we do fried food, fish fry, chicken wings and more,” Paduano said. “If people ask for something and I can source it, I’ll get it. Also, we mix up our food items so we can offer a quesadilla that is the same ingredients as a wrap, but it’s prepared differently. We like having different menu items to get people into the store and offer them a variety.” KinterCSN_PrintAdFINAL.pdf

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

9:13 AM

Foxtrot Markets also has a full line of proprietary foodservice mostly centered on breakfast and quick lunches. The stores serve avocado toast, sandwiches, salads, grain bowls, smoothies, and a variety of grab-and-go items that people can take home and make in the oven. It’s all done in-house. “Anything out of our grab and go is a Foxtrot local item,” LaVitola pointed out. Another option is to partner with a fellow local business to offer foodservice at one or more stores. Q Squares produces its own deli sandwiches, wraps and sliders at one store and then distributes to its three other locations, but the chain also partners with a local pizza maker. “We sell their pizza and other hot sandwich offerings out of our stores,” explained Seymour. Whether it’s neighborhood events, community outreach, local or location-specific products and services, or a unique foodservice offer, the goal of every small operator should be finding something that makes them stand out and brings customers back again and again. “If you are not known for something, you will be remembered for nothing,” Wells concluded. “Regardless of what you do, you have to stay focused on it and market it to the people.” CSN

COVER STORY

STEPPING

ON THE

GAS WITH STORE TRAFFIC STAGNATING FOR MANY C-STORE RETAILERS, THE CHANNEL NEEDS TO FOCUS ON SAFETY AND GIVING CUSTOMERS NEW WAYS OF MAKING PURCHASES BY ANGELA HANSON

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

AS AN ESSENTIAL BUSINESS, convenience stores were able to continue operating and serving their communities during even the strictest days of the lockdowns and stay-at-home orders meant to slow the spread of the novel coronavirus. However, that didn’t mean they were overrun with customers clamoring to get through the doors.

Fear of the COVID-19 virus, high unemployment rates and a shift to working from home that’s cut down on the number of daily morning commuters have resulted in a general decrease in store traffic across the convenience channel, affecting single stores to the largest chains. As restrictions are now easing, adjusting to the new normal and hopefully reversing the traffic decline won't be a simple task. There is no single solution that will return things to how they used to be. However, many industry insiders believe there is hope, particularly for c-stores that are willing and able to adapt to rapidly changing consumer demands. 7-Eleven Inc. President and CEO Joe DePinto feels that time itself is contributing to an improvement in the situation, albeit slowly. "As far as store traffic is concerned, we feel it's improving," the leader of the No. 1 chain on the 2020 Convenience Store News Top 100 list said. "When the pandemic started, traffic declined but basket sizes took off. Staying in stock was really difficult. Interestingly enough, as traffic has been coming back, basket size is still up." The increase in basket size isn't unique to 7-Eleven, either. This summer, basket spend was trending about 20 percent higher than the prior year, according to enterprise management software provider PDI, which partners with industry association NACS to produce a biweekly

Wawa recently broke ground on its first-ever freestanding drive-thru store, while Casey's now offers curbside pickup for more than 100 in-store products.

report based on its PDI Insights Cloud platform, which aggregates sales data from c-store chains and independent operators to gain visibility into consumer purchase trends across the United States. "One of the major changes we've seen is that trips are down, but basket spend is up," said Brandon Logsdon, president and general manager, marketing cloud solutions and fuel pricing, for PDI. He noted that as of the end of August, trips were down 11.3 percent compared to the previous year, but spend per transaction was up 19.5 percent year over year. "We've also seen shifts in the time of day consumers are making trips to the store,” he added. “The weekday morning rush daypart was sitting at around 83 percent of the prior year's trips in that same report. However, we’re making progress in other dayparts. For example, the 11 a.m. to 2:59 p.m. timeframe is back to about 91 percent compared to the previous year."

The Significance of Safety Safety is a key component in the recovery of the convenience channel and its ability to reverse the drop in traffic. Although declining numbers of COVID-19 cases in some areas have been enough to make consumers feel more comfortable with in-person shopping, statistics vary greatly by region, and health experts are expressing concern about a potential rise in transmission as the weather gets colder and the nation enters cold and flu season. Consumers want to know which businesses are taking precautionary measures seriously. Quickly enacting stringent and visible safety standards is paying off for Valparaiso, Ind.-based Family Express Corp., which had recently opened a 25,000-square-foot expansion of its bakery distribution center, based on an open case delivery system, when the pandemic hit. The company rapidly retooled the facility so that it could provide pre-packaged bakery for all items. Family Express also placed dispensers of disposable wax tissue in its 75 stores to help customers avoid directly touching PIN pads,

OCT OBE R

20 20

Convenience Store News 43

COVER STORY

Delivery orders are up more than 400 percent for 7-Eleven this year.

door handles, gas pumps and other hard surfaces. Additional measures include the installation of multiple hand sanitizer stations in each store, placing protective shields at its cashier stations, and performing a temperature check on each employee at the start of their shift. Such efforts "touched an emotional component with our customers," said Gus Olympidis, Family Express president and CEO. Customers responded by showing their trust and visiting again. As a result, Family Express is having its best year ever despite the pandemic. "I think it turned out OK for us," Olympidis said. "This industry really has shown its resiliency in times of crisis."

Drive-Thru, Delivery & Curbside Pickup While ensuring consumers feel safe when visiting a c-store is crucial to boosting traffic levels, keeping things clean and implementing social-distancing measures is just the starting point â&#x20AC;&#x201D; and for some consumers, it won't be enough. "Foot traffic at retail in the new normal will continue to be down from pre-pandemic levels. People don't want to get out of the car," said Mike Lawshe, president and CEO of Paragon Solutions Inc., a retail design firm based in Fort Worth, Texas. One Paragon client added a drive-thru but didn't take action to market it, and saw it account for only 7 percent of sales before the pandemic. After COVID-19 hit, the

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

retailer still didn't do any marketing for the drive-thru, but its sales spiked to make up 37 percent of the business. "The past excuses against drive-thrus need to be overcome. I understand the problem with legacy stores whose physical plant can't incorporate a drive-thru, but there's no excuse for a new build," Lawshe said. "Also, some municipal codes forbid drive-thrus in certain places; that's sure to change post-pandemic." Pennsylvania-based Wawa Inc. is testing this theory at two new-build locations. In July, the retailer announced it would add its first drive-thru to an upcoming new store in Westampton, N.J. Additionally, it broke ground in mid-September on its first freestanding drive-thru store in Falls Township, Pa. This store will offer only drive-thru and curbside pickup service. Wawa hopes to learn from the layout, workflow and traffic at the drive-thru store as it explores longer-term applications, according to Terri Micklin, director of construction. Curbside pickup, meanwhile, is an option that c-store operators can more easily implement at existing stores. Retailers such as Wawa, Casey's General Stores Inc., Cumberland Farms and Alltown Fresh have already begun offering curbside service either chainwide or at select stores, garnering positive response from customers. While curbside pickup serves as a safety measure for those who wish to minimize interaction with other people, it is also a new way to offer convenience. The same can be said of delivery, which is another option that is likely to drive incremental sales increases for convenience stores. Third-party delivery services like DoorDash and UberEats make it easy for c-stores that don't have the resources to create an in-house courier team. "For us, it was fortuitous that we had already launched

COVER STORY

delivery prior to the pandemic. It enabled us to take advantage of a difficult situation," said DePinto, discussing the expansion of 7-Eleven's delivery service via the 7NOW app that is currently available at 1,400 stores. Delivery orders are up more than 400 percent for the retailer. "We absolutely accelerated the program this year, so that was a silver lining,” the CEO explained. “Many franchisees told us that if it wasn't for delivery, 'I might not be in business.'" Howland Blackiston, principal at consulting firm King-Casey, recommends that c-store operators look sideways at what quick-service restaurant operators are doing and apply useful ideas to their own operations, including nonfoodservice options. "Learn from them and steal shamelessly," he said. Lawshe also reminds retailers that they should always take their cues from their customers. "The secret is to look at your customers. What do they want?” he posed. “Every c-store chain should be looking at embracing pickup where possible, and delivery on a smaller scale."

Preparing for a Digital Future In tandem with drive-thru, delivery and curbside pickup, mobile ordering is gaining momentum — in some cases, enabling customers to have a completely frictionless experience. "Mobile Checkout is another program we believe will drive traffic after the pandemic," DePinto told Convenience Store News. "We are currently testing it in Utah, New York City and Long Island. With Mobile Checkout, customers scan their goods with their phones, pay with their phones, and walk out of the store without having to contact any associates. We will be expanding that program and going national."

Family Express rapidly retooled its bakery distribution center so that it could provide pre-packaged bakery for all items.

Mobile ordering for curbside pickup and delivery and touchless payment options are all part of a widespread move to digital, which was already in progress prepandemic, albeit at a slower pace. Today, experts agree that to improve traffic levels, c-store retailers must accelerate their plans for change rather than stick with the old ways of doing things. "I would estimate that as an industry, we were somewhere in the Innovator or very Early Adopter phase. Throughout the pandemic, that adoption has significantly accelerated because so many new consumers are being exposed to these platforms," PDI’s Logsdon said, describing the stages of the technology adoption curve. He estimates that the industry is now moving into the Early Adopter and potentially the Early Majority stages. "The demand for things like order ahead for pickup and delivery or contactless payment solutions has been reset, and it's something many consumers are going to expect moving forward," he stated. As they face a tumultuous period of change, Blackiston encourages all c-store operators to strive for innovation, which he doesn't believe is common. Making it easier and faster for customers to get what they want is a good thing, but he sees it as improvement rather than true innovation. "You can tweak current processes all you want, but the real leaders are going to innovate," he said. "Improvement is a better way of doing something we're already doing."

7-Eleven is also piloting a totally cashierless store using computer vision and artificial intelligence (AI). Customers are able to take a product, drop it in their bag and leave.

Innovation, on the other hand, speaks to needs that may never have been expressed by consumers. This could mean new technology, a new offering, or something else that can't even be predicted right now. Blackiston believes that striving for true innovation is important, especially with so many changes on the horizon.

"We are also piloting a digital wallet," DePinto added. "Why? Because millennials and Gen Z are foregoing cash and using different services to pay via their smartphones.”

"You'll only be as good as your competition unless you can innovate something that's better than anyone is doing," he said. "The next leader in c-stores is going to be the one who innovates solutions for this thing that I don't believe is going to go away."

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

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COVER STORY

Studying the Shifts in C-store Traffic

Exclusive shopper research examines pandemic-related traffic trends in the industry By Don Longo CHANGES IN DAILY routines due to the coronavirus pandemic and related COVID19 business shutdowns and restrictions is the main reason why consumers are shopping less at convenience stores these days. More than half of consumers (52 percent) say they are shopping at c-stores less during the pandemic than previously, while only 14 percent are shopping more, according to a new, exclusive shopper study conducted by Convenience Store News on changes in shopping frequency and behavior in the convenience channel during the pandemic.

Consumers are also shopping less at convenience stores because they are: • Trying to consolidate or make fewer shopping trips overall (40 percent); • Not buying gasoline/fuel as often (38 percent); • Not traveling as much for leisure (34 percent); • Not eating out as often (33 percent); • Don’t feel safe shopping at convenience stores (29 percent); and • Choosing to shop at online store/ sites (24 percent). The survey was fielded from Aug. 20 to Aug. 24, and responses were gathered from 504 convenience store shoppers nationwide. In order to qualify, shoppers were required to be over 18 years old,

Shopping Frequency at Convenience Stores Before Pandemic Daily

Weekly

Once a Month

Total

17%

Males

22%

Females

36%36%

16%

Millennials

26% 26%

1111% ti 5% 5%

24%

8% 5% 5%

28%

15% 5%4%

29%

32%

11%

36%

19%

20%

43%

Never

36%

23%

Gen X

Yearly

36%

12%

Gen Z

Baby Boomers

Every 6 Months

31%

10% 3%

15% 2% 3%

23% 33%

7% 5%

12%

8% 7%

reside in the U.S., and have shopped at c-stores during the COVID-19 pandemic. A mix of those who have shopped c-stores more, same or less were included. Before the virus began spreading globally and throughout the United States, more than half of the shoppers surveyed visited a c-store at least weekly (17 percent daily, 36 percent weekly). Male shoppers were more likely than females to shop a c-store daily. By generation, millennials and Generation X shoppers were more likely to shop daily compared to Generation Z and baby boomers.

Shopping Frequency With the exception of early morning (6 a.m. - 8:59 a.m.), all dayparts have

Shopping Frequency Today vs. Before Pandemic — By Store Type More

About the Same

Less

Do Not Shop

Online grocery stores/sites (e.g., Amazon/Amazon Fresh, Instacart) Supercenters/mass (e.g., Target, Walmart)

40%

22%

10%

38%

Grocery store

20%

43%

Dollar store

18%

35%

28% 38% 31%

36%

11%

Convenience store

14%

Wholesale club

14%

29%

30%

27%

Discount supermarket (e.g., Aldi, Lidl)

14%

27%

32%

27%

Drugstore

12%

Specialty/natural store (e.g., Whole Foods, Sprouts, Trader Joe's)

10%

Note: Respondents who "do not shop" at c-stores were disqualified from the survey. 48 Convenience Store News C S N E W S . c o m

34%

52%

44% 25%

38% 31%

6% 34%

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COVER STORY

experienced a drop in traffic during the pandemic, according to the research. The largest decreases are occurring over the lunch hour (down 7 points), rush hour (down 6 points) and evening (down 6 points) — likely a result of the changes in daily work-related travel routes and schedules. Comparing shopping occasions before the pandemic vs. during the pandemic, the breakfast and morning snack times are seeing the largest increase of shoppers stating that they “rarely” or “never” purchase from c-stores during these occasions. Meanwhile, lunch and dinner are seeing small bumps in the percentage of shoppers stating that they “regularly” purchase from c-stores during these occasions. Changing work routines and limited foodservice options are probable reasons for these shifts. Looking at where else c-store customers are spending their dollars, four out of 10 shoppers are using online grocery stores/ websites such as Amazon/Amazon Fresh, Peapod and Instacart more now than before the pandemic. Just 28 percent of all respondents said they do not shop online grocery stores/websites. The COVID-19 health crisis has sparked an increase in trips as well to supercenters/ mass retailers, traditional grocery stores and dollar stores (about two out of 10 c-store shoppers say they are frequenting these channels more). However, these retailer types also experienced a decrease in visits of 38 percent, 31 percent and 36 percent, respectively, among the consumers surveyed.

Shopping Frequency at Convenience Stores Today vs. Before Pandemic More

Total

Males Females

Gen Z

About the Same

14%

17% 11%

Less

34%

52%

32%

50%

36%

18%

53%

39%

42%

Millennials

15%

33%

52%

Gen X

19%

36%

45%

Baby Boomers

34%

58%

Convenience Store Shopping by Time of Day — Before vs. During Pandemic Before Pandemic

6 a.m. - 8:59 a.m. 9 a.m. - 10:59 a.m.

During Pandemic

17%

27%

22%

11 a.m. - 1:59 p.m.

34%

27%

2 p.m. - 3:59 p.m.

30%

25%

4 p.m. - 6:59 p.m.

33%

27%

7 p.m. - 9:59 p.m.

20%

14%

10 p.m. or later 8% 6%

Product Category Winners & Losers Of the 33 products included in the study, bottled water multipacks and eggs are the only two products that convenience store shoppers report purchasing more often at c-stores during the pandemic than before COVID-19 hit. On the other side of the equation, restrictions on selfserve food and beverages have clearly had a negative impact as dispensed beverages and fresh bakery are experiencing some of the largest drops in purchasing. 50 Convenience Store News C S N E W S . c o m

With shoppers making fewer c-store visits during the pandemic, all beverage types have dropped in purchase, with the exception of bottled water multipacks. Like beverages, prepared foods have also experienced drops in purchase across all types. Made-to-order family meals have fared the best, decreasing just four points from pre-pandemic levels, likely due to households relying on c-stores for lunch and dinner solutions while restaurants were closed or less convenient.

With 52 percent of c-store shoppers frequenting the channel less during the pandemic, purchases of traditional c-store items such as lottery, candy and salty snacks have decreased as well. In the good news column, highdemand pandemic supplies are holding steady to pre-pandemic levels, including paper products, cleaners, and non-perishable canned goods and frozen foods.

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COVER STORY

Aside from convenience stores, the retail channels with the highest percentage of shoppers frequenting them less during the pandemic are supercenters (38 percent) and drugstores (38 percent). Interestingly, Generation Z, millennials and Generation X shoppers are more likely to be shopping convenience stores to a greater extent during the pandemic than baby boomers, and by fairly significant margins. Between 15 percent and 19 percent of these younger age groups are shopping more at c-stores, compared to only 7 percent of boomers. Conversely, a much higher percentage of boomers are shopping less at c-stores (58 percent) than millennials (52 percent), Gen Xers (45 percent) and Gen Z (42 percent).

Reasons for Not Shopping C-stores Most of the reasons for not shopping a c-store during the pandemic are attributed to outside factors, such as changes in daily routine, trying to consolidate shopping trips, making fewer stops to refuel the car, traveling less for leisure, and eating at home more often. However, 29 percent of c-store shoppers donâ&#x20AC;&#x2122;t feel safe shopping in the channel, and 18 percent are not satisfied with the safety and sanitation measures implemented by their preferred c-store. For 7 percent of shoppers, a lack of contactless payment options at their preferred c-store has resulted in them deciding to shop there less frequently. Similarly, for 5 percent of shoppers, the lack of curbside/pumpside pickup has made them shop less often at their preferred c-store. With the need to stem traffic declines, these types of contactless services would appear to be worthwhile investments in the near future. By gender, males and females demonstrate similar behaviors around shopping less at convenience stores. However, males are more likely to indicate they are not eating out as often and that their favorite c-store foodservice items are no longer available. By generation, millennials and boomers are more likely than Gen Xers to say they are cutting back on c-store shopping in an attempt to reduce their shopping trips overall, and because they are not eating out as often.

Reasons for Shopping C-stores Of the 14 percent of consumers who are shopping at convenience stores more

xx Convenience Store News C S N E W S . c o m 52

Reasons for Decrease in Convenience Store Shopping Frequency Changes in daily routine due to COVID-19

51%

Trying to consolidate or make fewer shopping trips overall

40%

Not buying gasoline/fuel as often

38%

Not traveling as much for leisure

34%

Not eating out as often

33%

Don't feel safe shopping at convenience stores

29%

Choosing to shop at online stores/sites

24%

I'm struggling financially/trying to save money

21%

Not satisfied with the safety and sanitation measures implemented at my preferred convenience store(s)

18%

Working from home completely/100%

15%

Choosing to shop at other types of stores

10%

Working from home a few days a week

My preferred convenience store does not offer contactless payment options

My preferred convenience store does not offer curbside or pumpside pickup

Preferred food and beverage items are no longer available at my preferred convenience store(s)

Reasons for Increase in Convenience Store Shopping Frequency Changes in daily routine due to COVID-19

38%

Choosing to shop for groceries at a convenience store instead of a larger store

38%

Feel shopping at convenience stores is safe

31%

Trying to consolidate or make fewer shopping trips overall

30%

Convenience stores are one of the only stores open or available in my area

28%

Shopping convenience stores more for carryout or delivered foodservice items

25%

Satisfied with the safety and sanitation measures implemented at my preferred convenience store(s)

25%

My preferred convenience store offers curbside or pumpside pickup

18%

My preferred convenience store offers contactless payment options

18%

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COVER STORY

C-store Shopping Frequency Expectations MORE OFTEN

Increased Delivery Service Usage During Pandemic â&#x20AC;&#x201D; By Generation

LESS OFTEN

38%

34%

68% 67%

24%

60%

22%

34%

In the next six months

Once pandemic is resolved

In the next six months

Once pandemic is resolved Gen Z

Millennials

Gen X

Baby Boomers

*Top 2 Box: % Strongly Agree/Agree

during the pandemic, more than one-third (38 percent) attribute their increased trips to changes in their daily routine due to COVID-19 and/or their choice to shop for groceries at a smaller store. Also, among those who have increased their shopping at c-stores during the pandemic, curbside/pumpside pickup and contactless payment options are a big draw â&#x20AC;&#x201D; 18 percent increased their c-store shopping because their preferred store offers curbside/pumpside pickup, and the same percentage increased visits because

their store offers contactless payment options. Gen X shoppers are more likely than the other age groups to have increased shopping at c-stores because they are the only store open where they live, and because their preferred store offers pickup services. Boomers are more likely to have increased shopping at c-stores because they feel shopping there is safe. Millennials are more likely to cite that they are consolidating their shopping trips, while Gen Z shoppers are more likely to cite that they are shopping convenience stores more for carryout or delivered foodservice items.

Usage of Delivery Services More than half of convenience store shoppers (56 percent)

Usage Frequency of Available Delivery Services During Pandemic Regularly

Amazon/Amazon Fresh

Occasionally

29%

30%

Local independent restaurant

20%

Local grocery store

19%

32%

Online grocery site

18%

31%

DoorDash

18%

32%

Local chain restaurant

17%

41%

Uber Eats

16%

Grubhub

14%

41%

33%

47% 49% 51% 50% 42%

33%

51% 51%

35%

Local convenience store

12%

24%

Postmates

12%

23%

64% 65%

Favor

17%

74%

goPuff

16%

76%

*Excludes respondents who report service is "not available where I live" 54 Convenience Store News C S N E W S . c o m

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COVER STORY

Expected Change in Delivery Service Usage After Pandemic (where shopper used service during pandemic) More

About Same

Amazon/Amazon Fresh

Less

Will Not Use

Local grocery store

24%

37%

32%

19%

43%

37%

Local chain restaurant

32%

Online grocery site

32%

DoorDash

32%

Grubhub

30%

Uber Eats

30%

41%

23%

Local convenience store

28%

44%

21%

Local independent restaurant

28%

Postmates Favor goPuff

have increased their usage of delivery services during the pandemic. Where such services are available, about one in three shoppers (36 percent) has relied on delivery from a local c-store either regularly or occasionally. Services like Amazon/Amazon Fresh, Instacart and delivery from a local grocery store are more regularly used by c-store shoppers, likely for the quantity and variety of essential products available, as well as budget considerations. Significantly more male than female shoppers have increased their use of delivery services during the pandemic. Generationally, Gen Z, millennials and Gen X are more likely to have increased their use of delivery and, as a result, are significantly more likely to have used many of the services available, including c-store delivery and app-based services. As part of the study, shoppers were asked to project their continued usage of delivery services after the pandemic is resolved. Delivery from Amazon, local grocery stores, chain restaurants, online grocery sites and DoorDash are projected to increase post-pandemic for nearly onethird of the shoppers currently using these services. Delivery from a local c-store is not far behind with 28 percent of shoppers projecting they will use this service more post-pandemic. Potential reasons could be expectations that daily routines will require it, or an increase in disposable income. 56 Convenience Store News C S N E W S . c o m

27%

31%

23% 24%

37%

42%

24%

43% 43%

25%

43%

21%

4% 10%

41%

25%

14%

25%

39%

25% 31%

9% 11% 13%

Getting Shoppers Back In-Store The study also provides some insights on how c-store retailers can rebuild traffic. Of those surveyed, a significant majority (76 percent) do not expect to increase their shopping frequency at convenience stores in the next six months. However, a higher proportion (38 percent) expect to increase their trips once the pandemic is resolved. Shoppers were asked how convenience stores could better support them during the pandemic. Requiring masks for both shoppers and staff leads the list, followed by lowering prices and more thorough and overt cleaning protocols. Verbatim comments included: • “Enforce masks and clean more often. Store doesn’t smell clean.” • “Make sure everything is cleaned regularly, bring back the marked up and down aisles, and make sure people are wearing masks while in the store.” • “They need to pack their store of sanitizers to make sure that their customers can avoid acquiring the virus. Both customers and staff should be required to wear masks. And they need to enforce 6-foot social distancing for customers.” • “For starters, I would like for them to be more aware that the pumps also need to be cleaned. Also, they could offer curbside or the window option so that customers feel more comfortable knowing only the workers are touching their product before bringing it to them. They could also have hand sanitizer available at all times if possible.” • “Don’t wait till the shelves are fully empty to restock your inventory!” • “Have more deals — understand we are suffering, too.” Addressing these issues could increase the likelihood that customers will return to shopping at their preferred c-store and make more trips in the future. CSN

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FEATURE

THE MEGA-DEAL OF 2020

Two years after closing on its largest acquisition to date, 7-Eleven ups the ante with a $21B agreement to buy Speedway and its 3,900 stores By Melissa Kress

mergers and acquisitions (M&A) experts told Convenience Store News that the consolidation trend that has been defining the convenience channel over the past few years would continue — but with a slightly different focus. Many predicted that while 2018 and 2019 were marked by blockbuster deals, 2020 would be the year that midsized transactions ruled the M&A landscape.

IN EARLY 2020,

Considering the year that has materialized thus far, from the outbreak of the COVID19 pandemic to the racial justice protests to the hurricanes and wildfires wreaking havoc in different parts of the country, it should come as no surprise that 2020 said, "Not so fast." Very early on in the year, there were reports that Findlay, Ohio-based Marathon Petroleum Corp. (MPC), which was moving forward with a plan to spin off its retail arm, Speedway LLC, was instead entertaining offers to sell the nearly 4,000-store chain. Well-known names began circulating as companies that were kicking Enon, 58 Convenience Store News C S N E W S . c o m

Ohio-based Speedway's tires, followed by reports that 7-Eleven Inc.'s parent, Seven & i Holdings Co., had struck a deal with MPC. Although there were subsequent reports that talks came to a standstill once the pandemic struck, the two companies announced in early August that they entered into a $21-billion, all-cash agreement whereby 7-Eleven will acquire Speedway. The transaction is expected to close in the first quarter of 2021.

From 7-Eleven’s Perspective Irving, Texas-based 7-Eleven has not shied away from M&A activity. Through the years, the nation’s alreadylargest convenience store chain has made several growth plays, including its $3-billion acquisition of Sunoco LP. That transaction, which closed in January 2018, was 7-Eleven's largest to date and included 1,030 Sunoco convenience stores in 17 states. "We've been very open about our goal to grow both organically and through acquisitions. Over the past 15 years, we've made 42 acquisitions of different sizes, with the Sunoco deal the biggest," 7-Eleven President and CEO Joe DePinto told Convenience Store News. "We feel we've been building our organizational knowledge and infrastructure to the point that when Speedway became available, we felt we had good experience, prepared well, and were in a good position to take advantage of the opportunity."

FEATURE

DePinto said he’s always been a big fan of Speedway. "I've respected and admired them for years, back to the days when I was at Thorntons and competed against them," he shared. For 7-Eleven, the deal makes sense for several reasons. As the chief executive pointed out, Speedway stores geographically fill in many areas where 7-Eleven doesn't operate that many stores currently, and Speedway “brings an incredible overall [brand] and fuel brand, and a great rewards program to us." In addition to Speedway’s 3,900 c-stores, the transaction also includes a 15-year fuel supply agreement for approximately 7.7 billion gallons per year associated with the Speedway business. MPC also expects incremental opportunities over time to supply 7-Eleven's remaining business as existing arrangements mature and as 7-Eleven adds new locations in connection with its North American growth strategy.

"Speedway brings an incredible overall [brand] and fuel brand, and a great rewards program to us." — Joe DePinto, 7-Eleven Inc. With the closing still a few months away, 7-Eleven has not yet detailed its game plan for the Speedway assets. The next step is a brand analysis, according to DePinto. "It's too early to say if the stores will be rebranded or franchised or companyoperated, but you know when we bought Sunoco, we kept the Stripes brand in south central Texas," he noted. "Similarly, we will do an analysis of the strength of the Speedway brand in different areas and make decisions based on that analysis. We feel the Speedway stores are very complementary to our footprint.”

the quick-service restaurant space. Speedway was the closest to a national player, he said. “With Speedway and 7-Eleven combining, they will almost have the entire United States covered,” he said, dubbing the acquisition a smart move by 7-Eleven. While the Federal Trade Commission may force the divesture of some locations for competitive reasons, Monroe doesn't expect 7-Eleven to sell many stores. "Speedway was a good chain. It bought all the Hess stores [in 2014] because of the locations and good real estate," he said. "If you have an 'A' site today and towns aren't shifting, that site is going to be good for 20, 30 or 40 years. Speedway saw that when it bought Hess." This acquisition, he added, will bring 7-Eleven's brand equity to the locations. In addition, according to Monroe, the companies that are most successful are those that invest for the long horizon — think Warren Buffett, chairman and CEO of Berkshire Hathaway. "7-Eleven has a long horizon. It is investing for 40, 50 years," he said. Weighing in on the transaction's impact to the overall industry, Monroe believes it is great for the channel. "I don't think you will have that much impact as far as the competitors," he said.

Hitting the Restart Button on M&A As the U.S. slowly learns to handle the challenges brought on by COVID-19 and businesses begin to recover, M&A talks are springing up once again across the convenience channel.

"I had a lot of deals in the hopper and after March 23 or so, I was like the Maytag repairman who was sitting around waiting for his phone to ring," Monroe The Industry Perspective said. "I felt for these operators. They got blindsided Terry Monroe, founder and president of American Business Brokers, has often noted in by the pandemic. They were having to react to their the past that the convenience channel does not customers about safety, they were having to react to their employees, and they were reacting to the have a No. 1 national player like McDonald's in 60 Convenience Store News C S N E W S . c o m

FEATURE

suppliers and the supply chain interruption. They didn't have time to talk about M&A. They were in survival mode." Come August, Monroe said the phone started ringing again. "People are tired. I deal predominately with baby boomers who are thinking about retiring. They are tired, and everyone is wondering what is going to happen next," he said. Overall, there has never been a better time to be a buyer or a seller than right now, according to Monroe. "As a buyer, you have never seen money this cheap," he added. During its first-quarter earnings call for fiscal year 2021 on Sept. 1, Brian Hannasch, president and CEO of Alimentation CoucheTard Inc., noted that while the company is focused on driving significant and sustainable organic growth as well as M&A, deal flows were relatively quiet in the quarter, possibly as the industry focused on the novel coronavirus. As COVID-19 becomes "a bit of the new normal," opportunities are ticking up, he said. "We'll engage and if the value's there, we will certainly take advantage of those opportunities," Hannasch said, adding that Laval, Quebec-based Couche-Tard's balance sheet is in "great shape."

"With Speedway and 7-Eleven combining, they will almost have the entire United States covered." â&#x20AC;&#x201D; Terry Monroe, American Business Brokers

Looking at Couche-Tard's current markets, the CEO explained that the U.S. remains very fragmented, with many chains that remind him of the Midwest's Holiday Cos., which the company acquired in late 2017. "These are material in size, simple to integrate on a regional basis and if it's anything like Holiday, brings strong expertise and capabilities that are complementary," Hannasch said. "When I look at North America in particular and the U.S., it's just our largest source of synergies.â&#x20AC;? Casey's General Stores Inc.'s President and CEO Darren Rebelez also remarked on the uptick in M&A opportunities during its first-quarter fiscal 2021 earnings call on Sept. 9. He said the Ankeny, Iowabased retailer is having a lot of conversations. "I think what has happened maybe a little bit in the short-term is that other potential acquisition opportunities are experiencing some elevated fuel margins. They're making money right now at the moment and so, they're feeling a little more comfortable," he said. "So, depending on who the conversation is with and what day you catch them on, some people are more interested in selling vs. less [interested]." Currently, Casey's is building out its opportunity pipeline. "We're having those discussions and building those relationships so that when people are ready, we are as well," Rebelez said. "Once we get back to more normal, margins will be a little bit tighter. Prepared foods will become a much bigger strategic capability that a lot of these people don't have. Scale is going to matter a lot more, and there'll be a lot of opportunities," he explained. "We'll continue to pursue what might be available today. We've got a great balance sheet and we're in great position to act on those opportunities when they come up, so we're real bullish about it." CSN

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Get Customers Onboard With Safety Measures Whether it’s social distancing or mask mandates, c-store operators are using a variety of methods to attain customer compliance with COVID-19 policies By Tammy Mastroberte

the COVID-19 pandemic has changed the way most people live throughout the world and directly impacted retailers and the way they operate — especially those deemed essential, such as convenience stores. Safety measures including social distancing, hand sanitizing and mask mandates have become a part of everyday living for both customers and store employees, and c-stores around the world have adopted these policies to keep everyone safe.

SINCE SPRING 2020,

Not all customers, however, are happy to comply with such mandates and measures. As a result, retailers have been left to find ways of enforcing pandemic policies at their locations. Among the methods being utilized are employee training, store signage, store layout changes, increasing labor, and even offering free masks to customers who come in without one. “We supported the mask requirement as mandates came out and decided to offer free masks to anyone who didn’t have one,” Bob Hammond, vice president of store operations for Louisville, Ky.-based Thorntons LLC, operating 202 c-stores, told Convenience Store News.

changes in advance to give customers notice and time to prepare.”

Employee Training Anytime new rules are put in place and customers are asked to comply, there is bound to be some pushback or issues, and that has certainly been the case with mask mandates and other safety measures. At c-stores, store-level employees are the first line of defense when it comes to ensuring compliance, so proper training is essential to assist them in this process. “There are CDC guidelines but no overarching mandate, so everyone is left to police and ensure compliance on their own and even though a store might have a sign that says a person must wear a mask, when someone comes in and refuses to wear one, it’s up to the employee and the establishment to ensure compliance,” said Oscar Villanueva, managing director of security services at R3 Continuum, based in Minneapolis, which focuses on crisis response, mitigation and management.

The chain added additional labor to stores to help ensure compliance, which is still in place today — specifically during the morning rush, which is 40 percent of its business, according to Hammond. “We added significant additional labor at the store level to make sure team members had the ability to approach a guest about wearing a mask if needed,” he explained. Thorntons is not alone in mandating masks to shop in its stores. At Stewart’s Shops, a c-store chain based in Saratoga Springs, N.Y., operating more than 335 locations across New York and southern Vermont, the retailer began enforcing a “No Mask, No Service” policy in July after the New York State Department of Health emergency regulation went into effect. Signs on the doors alert customers to the policy and ask them to help with compliance. Love’s Travel Stops & Country Stores, based in Oklahoma City, Okla., with more than 510 locations, also mandates face coverings at all its locations and has masks available for purchase. “We’ve used many ways to communicate changes to our customers, such as overhead announcements and printed and digital signage,” explained Drew Graham, director of operations. “We also try to announce 64 Convenience Store News C S N E W S . c o m

In early August, Thorntons began requiring customers at all its stores to wear a face covering, even in communities without an executive order in place.

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If an employee is not trained in hostility management or de-escalation techniques, they will be ill-prepared to confront such customers and many will defer to the store manager, who without training may not be prepared either, Villanueva noted. “There have been news stories about an employee getting an arm broken in Target over a confrontation with a customer, and in Bed Bath and Beyond, the employee got a manager but ended up punching a woman in the face,” he said, explaining that incidents like this can be avoided with training and a well-defined plan from the corporate level. He believes clearly defined company policies outlined and communicated from the corporate level are key and says it would be helpful for managers and supervisors to get high-level training on hostility management and de-escalation techniques, while employees should receive some type of awareness training.

Confrontation Management 101 Oscar Villanueva, managing director of security services at R3 Continuum, which focuses on crisis response, mitigation and management, shared the following recommendations to manage hostility and de-escalate confrontational situations with customers. Recommendations for store-level employees and managers: • Communicate your concerns professionally (remember that what the customer says or does is not personal). • Reference the safety needs of both parties. • Work to understand the customer’s position and show empathy. • Ask for the customer’s help in resolving the issue. • Present alternatives for resolving the issue. • If all else fails, seek assistance from a manager. • If unable to resolve the situation and there is imminent danger, call security or the police for assistance. Recommendations for the corporate level:

Many c-store operators are using floor decals, plexiglass partitions, signage and in-store audio to help customers comply with safety measures.

At Thorntons, the company already had a de-escalation program in place prior to COVID-19 in order to help team members understand how to work with customers who might be upset about out-of-stocks during a promotion or other scenarios. With the pandemic, the chain stepped up this program even more, according to Hammond. In addition to developing team member talking points on how to deal with different customer concerns, such as not wearing a mask for a medical condition or just not thinking they need to, Thorntons also created role-playing videos with employees acting out different scenarios. All of this was communicated through its internal social media platform, Thorntons’ Insiders. “Team members signed off that they received all the tools, and the videos were done with a light hand as people had fun creating them,” Hammond shared. “We created a COVID task force with people from

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

• Create a policy addressing mask-wearing and social distancing for both employees and customers. • Communicate the policy via signage for customers and via internal communications for employees. • Ensure that employees adhere to the policy and lead by example. • Have contingency plans/procedures in case the policy is not followed (i.e., seeking security and law enforcement assistance, if necessary). • Provide training on hostility management and de-escalation techniques to both associates and managers.

our financial department, communications, human resources and my team, regional and senior leaders where we meet every day to see what is needed at the store level and what we need to provide or fix.” Similarly, at Love’s, the company developed a task force in March to respond to COVID-19, monitor the situation, and provide additional education and guidance on a variety of procedures, including enforcing its mask mandate and the extra cleaning and disinfecting protocols put in place.

De-Escalation Techniques When encountering a customer who refuses to comply, the way the person is approached is important to how the conversation or confrontation may go, according to Russ Turner, director of People Incorporated’s Training Institute, based in Eagan, Minn. “The main thing is to approach people as if you are

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allies and assume a positive intent,” he explained. “If they don’t have a mask, they probably forgot it in the car and are not used to wearing it yet. Assuming positive intent will help the employee be less reactive.” When asking for compliance, using a connector phrase — “Thanks for coming in” or “Good to see you” or “We are happy you are here” — can disarm people and establish a connection before an employee asks for compliance on something. And Thorntons has added exterior signage it’s important for it to be an “ask,” to its stores clearly communicating not a “tell,” Turner advised. the measures it has put in place. “Use polite language like ‘would you please’ or ‘could you’ or ‘would you be willing to,’ and mention if there is a mandate in the state. Like here in Minnesota, we have a state mask mandate,” he said. “Also, it’s good to give people an out like, ‘Hey, it looks like you may have left your mask in the car,’ or

“The manager offered for the customer to give them a list of the things they needed in the store, so the employees could pull them and bring them out to the customer,” he recounted. “It was about giving an option to meet the customer where she was.”

Store-Level Changes To help customers comply with the new mandates, many c-store operators are updating signage, using floor

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

Employees also can ask the customer to help in resolving the issue or in offering other options, according to Villanueva, who cited an incident at Trader Joe’s where an employee had to call a manager over for a customer who refused to wear a mask in the store.

decals and point-of-purchase materials, providing hand sanitizer, and more. Love’s started communicating with its customers in mid-March through the brand’s website, press releases, social media, fleet emails, its app and store signage regarding the changes that the company was making, according to Graham. “We placed additional hand-sanitizing stations at our locations and installed plexiglass at the registers,” Graham noted, adding that the Love’s Connect mobile app and rewards program also allows for a number of contactless options such as mobile pay, mobile shower check-in, and mobile receipts. “In addition to their convenience, these initiatives help protect team members and customers, and help them abide by social distancing guidelines.” Thorntons has a similar approach, as the retailer is also using its website, rewards program and social media to communicate with customers, as well as floor decals, signage and more. The chain has installed plexiglass and point-of purchase signage on windows, and uses Thorntons Radio inside and outside the stores to communicate changes, noted Hammond. The company also invested in GripHero anti-static hand protectors for every fuel pump, which are single-use and biodegradable. Perry Kuklin, director of marketing for Lavi Industries, a company based in Valencia, Calif., that helps retailers with queue management and customer-flow equipment and technology, said floor decals, roping off certain areas to guide a line, and other signage can help customer compliance tremendously, specifically because it helps them visualize what needs to be followed. “It’s important to make sure people can visualize and understand what 6 feet apart is, whether it’s a retractable belt for every 6 feet with a sign that says, ‘Please stand behind this sign,’ or floor stickers. It really helps,” Kuklin noted, adding that with c-stores sometimes short on space, forming a single-line queue and even adding acrylic partitions to keep other customers from walking too close can be helpful. “We offer merchandising fixtures that form the foundation of a checkout queue and adding signage to these can be helpful as well.” It’s important to have signage that communicates exactly what the expectations are, Villanueva said, and to make sure signs are posted clearly outside the store before a customer even enters. The signs should be large enough that customers can’t miss them. “If you don’t communicate to clients as they are coming in, then you risk them saying they didn’t see a sign,” he said. CSN

FOODSERVICE

FOOD I NSIGHT P O W E R E D B Y DATA S S E N T I A L

Pandemic Pivots Comfort foods have been top-of-mind for consumers during this stressful year NAVIGATING THE UNCHARTED waters of curbside delivery, new offerings from meal kits to ready-to-heat meals, and upgraded sanitation practices are just a few pandemic pivots that operators are thinking of today. Datassential has been reporting COVID-19 research since the beginning of the pandemic and has found that every foodservice segment has its own hurdles, but cleanliness and innovation are the key to best-in-class consumer ratings.

Cleanliness Is Key COVID-19 has made consumers scrutinize every decision through the lens of sanitation. According to Datassential findings, “when consumers do venture out and go to a c-store, packaged snacks and beverages are seen as safer and more likely to be purchases.” As consumers begin to eat out again, 41 percent think it’s safe to get food from a convenience market, while about a quarter think it isn’t safe at all. Consumers rank chains such as TA/Petro, Kwik Trip and GetGo Café & Market as best-inclass when it comes to cleanliness, according to Datassential’s BrandFingerprints tracking. Can’t Stop Your Innovation A popular pandemic food trend is comfort foods, which have been top-of-mind for consumers during this stressful year. Operators are finding a balance between everyday classics and trending platforms and ingredients to create winning new items and limited-time offers. QSR operators are taking comfort foods like burgers, pizza and mac & cheese and upgrading them with spicy ingredients like habanero, chipotle and hatch chiles. In Datassential’s SCORES, a consumer rating tool for new items, we see that Freddy’s Frozen Custard & Steakburgers released a Hatch Green Chile Burger that scored high in both purchase intent and uniqueness with consumers. Trends to Know C-stores skew toward heavily trafficked areas, making them convenient for quick bites. Operators and consumers alike are adapting to new opportunities for grab-and-go meals. QuickChek, in particular, has excelled in new items during the past few months, introducing a variety of grab-and-go options. For instance, its Eggplant Parm Sub is a vegetarian-friendly sandwich made to order, with the option of on-lot pickup via ordering through its app. CSN

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Datassential’s coronavirus research takes an exhaustive look at industry topics impacted by the COVID-19 crisis. For free access to all of its coronavirus reports and resources, visit Datassential’s COVID-19 page at datassential.com/coronavirus.

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

TOBACCO

Riding the Highs & Lows Convenience store retailers overcome the many challenges facing the tobacco business By Melissa Kress THE BACKBAR IS, undoubtedly,

a tale of two categories. Cigarettes make up the lion’s share of the tobacco business at convenience stores, but sales in the category have been trending downward with annual declines over several years. On the other hand, the other tobacco products (OTP) category, including smokeless and cigars, is often the bright spot in the business. This year is no different — well, maybe a little different. Looking at the numbers for the 52 weeks ending in midJune, cigarette sales were down 2.3 percent, according to Don Burke, senior vice president of Management Science Associates Inc. (MSA). While still registering a decrease, the dip is not as low as the segment has experienced in recent history. That is likely a factor of the COVID-19 pandemic, Burke noted. “Just for perspective, if I was presenting this number 10 months ago, it would have been a decline of -4 percent to -5 percent,” he said, speaking during Convenience Store News’ Aug. 27 “Retailer Roundtable: The State of Tobacco 2020” webinar. While wreaking havoc on other key c-store product categories such as prepared food and dispensed beverages, the novel coronavirus pandemic has been benefiting the cigarettes market.

“The fact that many people are working from home without smoking restrictions has helped to build this market somewhat and, in fact, this year we may see — in terms of total nicotine — an increase in the market this year vs. last year,” Burke said. “That’s the first time there has been an increase in many, many years, and cigarettes may have a very good year.” Moving to the OTP category, he said smokeless is “clearly” the leader, with the strongest growth coming mainly from smaller manufacturers; followed by cigars, particularly large cigars. The real star of the entire tobacco business, though, these days is modern oral nicotine, which falls under the smokeless segment. “The growth rate we are seeing is incredibly strong,” Burke said, pointing out that oral nicotine is a product consumers can use while wearing a mask during the pandemic. “This is the category that wholesalers and retailers really need to pay attention to; this has the strongest growth in the tobacco market today.”

At the Store Level C-store retailers tell a similar story based on the experience at their specific stores. Paul Crozier, category manager for cigarettes at Sheetz Inc., said the Altoona, Pa.-based chain saw more cigarette purchases by the carton and smokeless

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

O UR FALL

FAVO RITES tobacco purchases by the roll, most likely tied to adult tobacco users’ desire to be out less. “Fewer trips, higher sales,” he added. In certain geographies, tobacco outlets and vape shops were considered non-essential businesses (whereas convenience stores were deemed essential), so they were mostly closed during the early months of the pandemic. That also contributed to some influx of volume, Crozier noted. Yesway and Allsup’s convenience stores have seen similar trends, according to Kevin Harder, category manager for tobacco and car wash. “Purchase patterns were the definite major change,” he said, explaining that cigarette carton sales were up about 30 percent over the prior year, and continue to be up six months into the pandemic.

RICH. BOLD. FLAVOR.

“Overall, cigarette sales were up about 6 percent. There was definitely pantry-loading; people were trying to stock up for the unknown,” Harder said. “If you are not sure if you are going to have a job anymore, or not sure when you are going to be able to get out of the house again, picking up a carton is definitely something you are going to need to do.” Yesway and Allsup’s stores, which are both operated by BW Gas & Convenience, an affiliate of Beverly, Mass.-based Brookwood Financial Partners, also saw a roughly 20-percent jump in oral nicotine sales. Social distancing has removed some of the stigma around smoking and tobacco use in public, observed Chris Dillard, category manager for tobacco at The Spinx Co. Consumers also have more freedom now to smoke or use tobacco at home when they want and how they want. Similar to the other c-store retailers, Greenville, S.C.-based Spinx experienced pantry-loading, especially in the early days of the pandemic. “From when the first part of the COVID shutdown hit in March and into April, we saw a lot of heavy conversion from cans to rolls in smokeless and from packs to cartons [in cigarettes] at conversion percentages that would be almost double what we would typically see,” Dillard said. Spinx, as well as the other chains, also felt the COVID-19 impact in inventory and out-of-stocks. Spinx experienced supply issues especially in the cigars segment, partially driven by inventory

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TOBACCO

coming from out of the country and partially driven by curfews that affected how many hours a plant could operate, according to Dillard. “Even though cigars continue to grow, I wonder how much more could we grow if we had better in-stock conditions,” he said. Although there are still some issues, Harder reported that most of the manufacturing appears to be back on track. Most of the challenges presented themselves in the early days.

“If you are not sure if you are going to have a job anymore, or not sure when you are going to be able to get out of the house again, picking up a carton is definitely something you are going to need to do.” — Kevin Harder, Yesway

Regulatory Stumbling Blocks Hitting in mid-March, the coronavirus pandemic struck on the heels of two major regulatory changes aimed at the tobacco industry: the federal Tobacco 21 legislation in late December, and the Food and Drug Administration’s (FDA) removal of unauthorized flavored vapor products, excluding disposables, from the backbar in early February. MSA’s analysis of the 52 weeks ending in mid-June found that the vapor segment — which includes everything but electronic cigarettes — was still growing. However, Burke said the segment started to show a slight decline beyond the mid-June numbers. Tobacco 21 hit vaping harder than any other segment, he said, adding, “I think that was the intent of that regulation.” And the impact of the FDA’s flavor ban may be driving vapor users back to the disposable cigalike products, as those items are showing some growth. “The category was definitely in flux between November 2019 through February, all pre-COVID,” Sheetz’s Crozier said. “It was more than just age 21 and the flavor pull. They were certainly factors, but Juul pulled their mint flavor in late 2019 and that had an impact.” At the Yesway and Allsup’s chains, the increase in the legal minimum age to buy tobacco products at the federal level did not have much of an impact on cigarettes. “Looking at December 2019 to the end of January 2020, our sales on cigarettes were down about 3.4 percent compared to about 3.7 percent the same time the prior year,” Harder cited. The stores saw more of a decrease in sales of e-cigarettes and vapor products, though Harder said that followed on the heels of several events making it hard to pin down the driving force. “Vapor was already down by about 30 percent due to the preemptive removal of certain flavors by some of the manufacturers,” he explained. “It’s hard to say if that was part of the natural decline, [or] how much more did it decrease just because of the flavor restrictions of the FDA. It was already trending down.” Vapor sales have rebounded slightly since the height of the pandemic, according to Harder. Pinpointing the reasons behind the backbar’s numbers also comes down to timing. “Q1 is a tough time in the c-store business regardless of regulatory environment changes. Customers are typically in the savings/change mentality gearing up to pay Christmas debt and stick to New Year’s resolutions, which negatively impacts tobacco use,” Spinx’s Dillard said.

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

Echoing what Harder said, Spinx has not really seen much of a pullback. There was an initial pullback on vapor, but traditional combustible products and smokeless did not even see “a bump in the road,” he said. “We’ve seen some positive growth in volume and share.”

SO METHING FO R EVERY O CCASIO N

Interestingly, Spinx also has seen a “pretty quick” conversion in the vapor segment from those flavors that were removed to ones that remained on the market, Dillard noted. As soon as the federal regulations came down, the c-store retailer took a hard look at its tobacco business and projected some “significant declines” in sales, gross profit and share based on the regulatory shifts. “We looked at how we were going to pivot our tobacco strategy to accommodate the regulatory changes,” he said. Spinx did face some challenges around the shifting space in the tobacco category, challenges that included trying to return flavored vapor products to the manufacturers. “Where is it going to go? When are we getting reimbursed? We were playing the guessing game figuring out how that process was going to work,” Dillard said. “It was very clunky, at best.” Communicating the changes in the category to customers was yet another challenge.

PMTA: Another Hit to the Backbar Having navigated the Tobacco 21 law, the FDA’s flavored vapor products ban and the COVID-19 crisis already this year, c-store operators unfortunately are not done yet with obstacles facing their tobacco sales. On Sept. 9, the deadline hit for tobacco companies and manufacturers to file premarket tobacco product applications (PMTAs) with the FDA for products included in the agency’s 2016 deeming rule — among them, vapor products. Any product that did not file a PMTA had to be removed from the market as of Sept. 10. “Our approach at Spinx has been flexibility, flexibility, flexibility,” Dillard said. Meanwhile, at Yesway and Allsup’s stores, the motto has been “be prepared.” “We were quite strategic with a lot of the items we initially carried,” Harder said. “We purposely decided who were going to partner with to make sure they were fairly well-known brands that we can trust.” If those brands did not file PMTAs, they will be removed. The retailer has other products waiting in the wings to fill the space. Crozier says retailers and manufacturers should already have been prepared for the original PMTA

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— Don Burke, Management Science Associates Inc.

deadline, which stood at May 12, 2020, before it was delayed with court approval in April due to COVID-19. Now, he advised, it is “critical” for retailers to check with manufacturers and wholesalers to determine which products have submitted applications to the FDA. The FDA has said it will publish a list of the products with submissions on file. In a blog post on Aug. 31, Mitch Zeller, director of the agency’s Center for Tobacco Products, said the FDA had received applications for about 2,000 electronic cigarettes and other newly regulated tobacco products to date. There are more than 400 million eligible items that would need to apply to stay on the market. Once an application is submitted and accepted by the agency, the FDA has a 12-month timeline to review and approve the PMTA. Pointing to vapor as the segment most impacted by the PMTA requirement, Burke said most retailers and manufacturers have been prepared for the deadline. “I don’t see a big impact here,” he added. “I don’t think we are going to have a huge loss in sales based on the Sept. 9 deadline.” CSN

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ALCOHOLIC BEVERAGES

A Newly Spirited Rutter’s The retailer recently unveiled an assortment of 800-plus adult beverages at one location By Renée M. Covino

RUTTER’S HAS MADE room for spirits, literally, at one of its West Virginia stores.

Customers at the chain’s Inwood, W.Va., location can now shop a larger selection when purchasing alcoholic beverages, thanks to a room specifically built to sell all of the store’s adult beverage products — an assortment of more than 800 options that includes newly added spirits plus the previous inventory mix of beer and wine. This “store within a store” experience is designed to not only be easily accessible, but also a cut above the typical convenience store beer cave. “Our goal is to always be best-in-class with everything we do,” explained Chris Hartman, director of fuels, forecourt and advertising for York, Pa.-based Rutter’s. “We designed the adult beverage room to meet our customers’ beer, wine and spirits needs in one convenient place.” Since unveiling the 800-square-foot room to customers on July 1, the Inwood store has seen “a great response” to the new offering, according to Hartman. “Customers are letting us know that they are enjoying the added convenience we’ve offered them with spirits,” he said. Located directly across from the checkout area, in the front of the store, the adult beverage room features a

The 800-square-foot room houses roughly 500 spirits options, 200 beer options and 100 wine options.

wide variety of options in bottled spirits, as well as readyto-drink cocktails and wine. Chilled selections are available. Additionally, Rutter’s 29-degree beer cave is located within the adult beverage room. “Customers access the beer cave entrance through the room,” noted Hartman. “Having all of our available adult beverage options in one area makes it a unique destination inside our store.”

“Having all of our available adult beverage options in one area makes it a unique destination inside our store.” — Chris Hartman, Rutter’s

On the whole, the adult beverage assortment in the room consists of roughly 500 spirits options, 200 beer options and 100 wine options.

Auction Allowance Earlier this year, Rutter’s, which operates 78 c-stores in Pennsylvania, Maryland and West Virginia, won a West Virginia Alcohol Beverage Control Administration auction for a 10-year license, enabling it to sell spirits at the Inwood store. 78 Convenience Store News C S N E W S . c o m

ALCOHOLIC BEVERAGES

The adult beverage room is located directly across from the checkout area.

“At Rutter’s, we’re always looking at how we can better fill our customers’ needs and keep them saying, ‘Why Go Anywhere Else?’ When the opportunity to add spirits at our store in West Virginia came up through the state’s auction process, we believed it would be a great extension to our already-existing beer and wine selection,” said Hartman. Currently, Rutter’s is only able to sell spirits at the Inwood location due to the liquor laws in the other states in which it operates. “However, we do sell beer and wine in 38 stores in Pennsylvania, which has been very successful for us,” Hartman shared. Spiked slushies and cocktails to-go are also a hit at all of the Rutter’s stores that sell alcohol. According to Hartman, the idea behind the spiked slushies was to differentiate its stores that have licenses to sell adult beverages from the competition. “We were the first c-store in Pennsylvania to introduce them,” he said. Rutter’s now offers up to 16 flavors of spiked slushies per location. Customers can get frozen options of their favorite malt beverages, as well as frosé wine. According to the retailer’s website, flavors include Spiked Sex on the Beach, Spiked Iced Tea, and Spiked Mango-Rita. All are available in a 20-ounce cup, 64-ounce party bag or 128-ounce party bag. “Customers love the frozen flavors, especially on a warm summer day,” Hartman said.

Impeccable Timing In the future, Rutter’s hopes it can add adult beverage rooms to more stores. 80 Convenience Store News C S N E W S . c o m

Adding spirits has had a positive impact on the entire alcohol category at the store.

“Now that we’re up and running, we see the success [that] adding spirits has on the whole alcohol category. If the opportunity becomes available to add spirits at our locations in other states, we believe this would be a great model to utilize,” Hartman said. So far, no tweaks have been necessary to the Inwood alcohol assortment. Rutter’s timing for expanding adult beverages has proven impeccable given the coronavirus pandemic, which has heavily impacted on-premise alcohol consumption. “We’ve seen a significant positive impact on alcohol sales,” Hartman said of the COVID-19 pandemic. “We believe this is due to bars and restaurants being closed, which has forced home consumption amongst our customers.” CSN

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HEALTH & BEAUTY CARE

Self-Care: The New Wellness Essential HBC was largely under the radar for c-stores, but that was before COVID-19 By Renée M. Covino

just a trendy phrase uttered by those who frequent hot yoga classes and drink green juice. In the wake of the COVID-19 pandemic, self-care is now a new essential for Americans, and one that wise convenience store operators should tap into. SELF-CARE IS NO LONGER

“With anxiety as a top concern for consumers today — regarding income, health, and the future in general — self-care will continue to expand deeper into the minds of people everywhere,” said Mark Mechelse, vice president of insights and communications for retail industry trade association Global Market Development Center (GMDC) and its Retail Tomorrow initiative, which seeks to connect a community of innovators to retailers, suppliers, service companies and thought leaders in order to foster uncommon partnerships focused on improving the shopper experience. As a result of this movement, c-stores are being presented with opportunities for growth in this sector if they “tap into the lives of their customers and accommodate their self-care needs,” Mechelse explained. The health and beauty care (HBC) category has long been considered an “afterthought” in the convenience trade, according to Scott Breisinger, national broker manager, convenience stores, for GSK Consumer

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Healthcare. This year, however, the pandemic has awakened convenience-channel buyers to more opportunities. “Convenience is now taking a more active approach to HBC,” he said. With that in mind, here are some of the latest developments boosting the health of the HBC category in c-stores today, and opportunities for tomorrow:

Profile Shift The shopper profile of convenience stores continues to shift to a younger demographic. GSK Consumer Healthcare reports that millennials and Generation X now make up 44 percent of c-store shoppers (22 percent each), and these consumers are increasingly seeking healthier options at c-stores, from food and beverages to products to improve their health and well-being. The momentum around HBC at c-stores will continue even after COVID-19 due to the convenience factor, especially with millennials, predicts Dajuana Gotwal, marketing and B2B director for Nourishing Biologicals, a skincare brand.

Increased Demand Across retail channels (including online), multiple industry data sources show that the HBC category has

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HEALTH & BEAUTY CARE

experienced unprecedented growth in demand over the last few months as shoppers look to meet their health and wellness needs amidst the pandemic. Health and hygiene products, specifically over-thecounter (OTC) medications, vitamins, supplements and personal cleansing products, have especially skyrocketed. Consumers are stocking up — and in some cases, hoarding — wellness essentials to keep themselves and their families safe and healthy during these unprecedented times. At c-stores, toiletries, particularly toothpaste, are getting more play because of the convenience factor. Consumers today would rather pay a little more than have to make another stop, don a mask and encounter a larger quantity of fellow customers at more crowded stores. Gotwal points out that c-stores already have convenience and immediacy on their side, but they could focus more on HBC by offering more coupons and deals, lower prices and new products to really cater to their customers’ health and wellness needs.

Standalone Wellness Centers The No. 1 merchandising opportunity for c-stores that want to have a serious HBC offering is a “wellness display,” as Breisinger describes it. “These are going to be key for them grabbing their HBC share during COVID and beyond,” he noted. The idea is to put these four-sided, freestanding displays (either created by the chain or by a company like GSK) out front and center to alert consumers to the breadth of health and wellness items available at their local c-store. Within the displays, popular segments of HBC are segmented and labeled on the sides of the fixture, such as OTC, Immunity Support, Vitamins & Supplements, and Sleep & Stress Support. “We’re going to see a lot of this,” reports Breisinger. “C-stores are approaching us and specifically asking how quickly we can get these up for them. This is all part of the more active approach.”

Private Brands Out-of-stocks and income constraints due to the pandemic have activated significant private brand trial within various HBC segments, according to Bob DiNunzio, director of category solutions at Daymon, a nearly 50-year veteran of building successful private brand programs around the world. “Consumers turned to private brands to provide solutions to stretch their dollars without sacrificing quality,” he said.

Emotional Health In the area of self-care, consumers are not only focusing on their physical health, but also their emotional health. While it came as no surprise that during the stock-up phase of the COVID-19 crisis, sales of functional hygiene items like hand sanitizer and soap surged, DiNunzio relayed that there was also an increase in purchases of products that help consumers pamper and indulge themselves, such as bath additives and facial treatments. 84 Convenience Store News C S N E W S . c o m

“Currently, we are seeing shoppers prioritizing the importance of their emotional health as an integral part of their overall wellness — perhaps now more than ever,” he said, noting that he expects this focus to continue, driving sustained growth in beauty segments such as facial care and bath care. He suggests c-stores try stocking pampering/ indulgence items that don’t take up too much space. Think bath bombs and facial masks.

Proactive Management Another growing HBC angle is that of offense. Consumers are being more proactive in managing their total body health. Supplement enhancements, such as immune-boosting solutions like elderberry, vitamin C and probiotics, can extend the category beyond the basics. This is also a great area for c-stores to consider private label, recommends DiNunzio.

The No. 1 merchandising opportunity for c-stores that want to have a serious HBC offering is a “wellness display.” — Scott Breisinger, GSK Consumer Healthcare

Smoking Cessation As a convenience retailer that prides itself on having a variety of products for everyone, Wawa Inc. has been expanding options for its customers, including access to a full line of smoking cessation products. Since early July, Wawa has stocked a “robust” lineup of Nicorette smoking cessation products in its 900 stores, including Nicorette Gum (4mg) in Cinnamon Surge, Fruit Chill and White Ice Mint varieties, and Nicorette Coated Ice Mint Lozenges (2mg and 4mg), according to GSK. Wawa is the first convenience store retailer to execute a full chain launch, with five Nicorette SKUs, Breisinger said.

“Clean” Products Looking to the future, innovation and growth within the HBC category is predicted to accelerate from consumers’ increasing desire for “clean” products. “Consistent with food trends, beauty and personal-care product innovation is being driven by natural, plant-based ingredients to address the desire for cleaner labels, while also pushing further to deliver on sustainability,” DiNunzio explained. He believes that as consumers continue to embrace HBC products that are as close to nature as possible — made from ingredients that are cleaner, healthier and gentler on the environment — c-stores can leverage private brands to offer new and unique solutions that deliver sales and drive loyalty to their banner and proprietary brands. CSN

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GENERAL MERCHANDISE

The Element of Surprise Seasonal merchandise sales are up in c-stores as consumers seek to mitigate the monotony of stay-at-home living By Renée M. Covino TO EVERYTHING, there is a season; and lately, seasonal items are turn, turn, turning in convenience stores.

With so many major c-store categories negatively impacted by the COVID-19 pandemic during the first six months of this year, it was uplifting — and somewhat surprising — to see seasonal general merchandise products up more than 13 percent in dollar sales, according to the Convenience Store News 2020 Midyear Report Card. “Seasons are the emotional topspin on the everyday basics. This is more true than ever given all of the events that have taken place over the last few months,” said Spencer Baird, executive in residence at Inmar Intelligence, which is dedicated to helping companies and emerging brands stay relevant and propel growth. “Every season brings back memories and connections with points of warmth. Retailers help bring out the richness of those emotional connections [through seasonal merchandise].” The “treasure hunt” shopping mentality is another attraction of seasonal items. This segment is “usually driven by impulse for consumers — the element of surprise and innovation appeals highly to every shopper,” noted Mark Mechelse, vice president of insights and communications for retail industry trade association Global Market Development Center (GMDC) and its Retail Tomorrow initiative, which seeks to connect a community of innovators to retailers, suppliers, service companies and thought leaders in order to foster uncommon partnerships focused on improving the shopper experience. “For convenience retailers, these items are low volume, but offer high profit margins to build basket profitability and incremental revenue above core purchasing,” Mechelse added, noting that the strongest seasonal opportunities for impulse purchases are those that have mass appeal and are celebrated by the general population. Such seasons include Back to School, Halloween, Thanksgiving, Christmas, Easter, Mother’s Day, Father’s Day, Graduation and Wedding/Anniversary. “Each holds their own unique ‘flavor’ in a store; however, all should be front and center in aisles or at the front end to remind consumers of the new styles and traditions they are seeking to make an occasion special,” said Mechelse. The larger the season, the more prominent the display and variety of products should be. Christmas, for example, is the most celebrated season and usually for the longest time — especially this year amidst the pandemic — so c-stores should feel free to remind consumers of the upcoming winter holidays months in advance, he advised.

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

In recent years, private-brand products have become a focus for many retailers’ seasonal programs, allowing these items to become destination drivers for their stores, according to Bob DiNunzio, director of category solutions at Daymon, a more than 50-year veteran of helping retailers build successful private brand programs around the world. “Some retailers have even introduced seasonal themes across categories to create broader seasonal solutions in-store, while leveraging [these] as a consumer engagement vehicle to differentiate them from their competition and enhance the shopping experience,” he said.

Home Sweet Home With shutdowns, social distancing and remote working creating an environment where most people are staying at home more often these days, “all aspects of life [are] centered around this idea of home as the hub,” DiNunzio explained, pointing out that this trend is expected to continue given concerns over a potential second wave of COVID-19. As a result, the pandemic has driven renewed interest in seasonal merchandise. “Seasonal products that enhance the day to day and mitigate the monotony of home living are increasingly being sought after by shoppers,” DiNunzio observed. The coronavirus is not only having an impact on the functional needs of U.S. households, but it is also having an emotional impact, Inmar Intelligence’s Baird echoed. “Functionally, people [are having] more in-home

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GENERAL MERCHANDISE

occasions whether that’s meals, snacking or cleaning,” he said. And as far as seasonal items go, “the distancing has driven emotional voids that lead to different consumption trends.” GMDC research has shown that localizing a seasonal general merchandise assortment is a successful strategy, whether the convenience store is a rural general store with a broad general merchandise assortment, or an urban c-store focused on immediate consumer needs and featuring select general merchandise items. A less effective strategy is making general merchandise decisions as a single chainwide approach. Additionally, retailers that utilize digital offers are four times more likely to enjoy sales growth in seasonal general merchandise, according to GMDC research. Like c-store industry leaders in other categories, Mechelse said leaders in seasonal general merchandise will “leverage the physical store as an outlet for multimedia retailing and offer end-to-end touchless buying, reducing their dependency on human and physical assets. The prioritization of consumer values will shift to safety, accessibility, reliability and transparency, in that order.”

What’s Next? Looking to the remainder of 2020, DiNunzio believes that the momentum around seasonal merchandise is likely to continue, particularly as most Americans are expected to celebrate the holidays differently this year. In fact, Daymon’s research shows that 66 percent plan to celebrate the remaining 2020 holidays at home and, as a result, family gatherings are expected to be smaller and more intimate. “C-stores can deliver on these changing holiday needs through more targeted seasonal products and messaging that caters to smaller celebrations,” he advised. “By leading the solve through new and unique private-brand

How to Scoop Up Seasonal Sales Seasonal general merchandise is a year-round impulse opportunity for convenience stores thanks to holidays and weather-related traditions. Here are some must-dos for retailers seeking to capitalize on the sales potential, particularly in these COVID times: • Focus on nostalgic seasonal items that connect with consumers’ emotions and memories, which are running high right now. • Keep seasonal items top-of-mind for customers by providing the element of surprise and focusing on innovation. • Remember to take regional seasonal variations into account. • Focus on the seasons that have mass appeal and are celebrated by the general population, such as Back to School, Halloween, Thanksgiving, Christmas, Easter, Mother’s Day, Father’s Day, Wedding/Anniversary, Graduation, and Fourth of July. • Pay attention to opportunities for private-brand seasonal items; remember that shoppers are looking to stretch their dollars amidst budget sensitivities. • Realize that the prioritization of consumer values will shift to safety, accessibility, reliability and transparency, in that order. Apply these priorities to seasonal items just as much as other in-store categories. • Stock masks and hand sanitizer with a seasonal slant — they are obvious profit magnets in these current times. • Look beyond the pandemic; begin approaching your seasonal planning with an eye toward the future.

seasonal solutions, c-stores can drive greater loyalty to their banner and brands, while allowing shoppers to stretch their dollars amidst mounting budget sensitivities.” Innovation should still be front and center, according to Mechelse. “Economic downturns are key opportunities to get ahead and stay in front,” he said. “Innovation can be tricky and expensive to get right, so ensure you’re committed.” In a sign of the times, Mechelse recommends seasonal innovation around items than are already a hit due to the pandemic, such as face masks and hand sanitizer. “Now, more than six months into the pandemic, finding these items everywhere is an expectation among consumers,” he said. “If gas stations and convenience stores aren’t carrying seasonal versions of these items, they’re missing an opportunity.” CSN

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

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SERVICES

The Need for Clean As COVID-19 restrictions ease, car washes are proving to be a lucrative service for c-stores By Danielle Romano OVER THE PAST SEVERAL YEARS, convenience store retailers are increasingly recognizing the benefits of entering the car wash business. Not only is the service a profit generator, accounting for incremental growth at the pumps and inside the store, but operators are also experiencing the ease of managing a high-volume, professional-level service that requires few employees and few vendors — a factor that has become more crucial in the case of the COVID-19 pandemic.

“Designed and run properly, the car wash may indeed become the strongest profit center of the business. Since there is very low person-to-person contact in the express car wash model, it has fared very well in COVID-19,” said Kevin Collette, vice president, sales, automotive/petroleum for Tamarac, Fla.-based Sonny’s The Car Wash Factory. “For many c-store operators, the high-volume, low-labor design has created a strong, consistent profit center due to its traffic-building and loyalty-building abilities.” 90 Convenience Store News C S N E W S . c o m

Approximately one in five convenience store/fuel retail locations currently has a car wash as part of its business. Historically, these have functioned as an add-on service primarily to attract fuel customers and reward loyalty rather than as a standalone revenue driver. However, suppliers are seeing changes in the role car washes are serving in today’s c-store market. According to figures from the International Car Wash Association, in-bay automatic systems (also known as rollovers because the machine moves back and forth over a stationary vehicle) comprise three-quarters of all c-store car wash models, followed by conveyor car washes (also known as tunnel car washes) at 15 percent, and selfserve at 8 percent. “In terms of COVID-19, an important factor of in-bay automatic is that the consumer doesn’t get out of their car, so the risk factor for any kind of interaction is pretty low,” explained Ken Underhill, director of marketing for High Ridge, Mo.-based D&S Car Wash Equipment Co., a provider of innovative, high-performance products for the professional car wash industry, automobile dealerships and convenience stores.

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SERVICES

“In fact, consumers can get a car wash without entering a c-store at all — which normally goes against what operators want them to do — but now with COVID19 inhibiting behaviors, this offers an opportunity to spend additional money without having to shop in-store,” he continued. “I think [car washes] are offsetting some of the lost volume and traffic of consumers not wanting to go into the store itself but still purchasing a car wash and potentially filling up.”

“Car washes create a diversion. You can’t go to a movie theater, you can’t go out to eat, but for some people, car washes tap into the emotional side of doing an activity.” — Ken Underhill, D&S Car Wash Equipment Co.

Deemed Essential In the early phases of the coronavirus pandemic, the U.S. Department of Homeland Security identified “essential” critical infrastructure workforce during the ongoing national emergency. Convenience stores and retail fuel centers, such as gas stations and truck stops, and the distribution systems that support them made the cut. The situation with c-store car wash operations, though, was not as cut and dry. “In the early months of COVID-19 when businesses were being shut down by municipalities, car washes deemed essential business varied and existed in a gray area,” Underhill told Convenience Store News. “A general statement is that across the country, a lot of car washes were forced to shut down, particularly ones where customers had to get out of their cars, such as self-serve and tunnel, and a lot of them shut down the vacuuming component.” In March, as stay-at-home orders were issued and restrictions were enacted in the Mid-Atlantic region on gatherings larger than 10 persons, La Plata, Md.-based 92 Convenience Store News C S N E W S . c o m

convenience store chain Dash In, operator of 42 Splash In ECO Car Wash locations, closed its tunnel car washes through April, explained Mike Mulhern, director of Splash In ECO Car Wash. Additionally, five of its in-bay automatic car wash locations were required to close, and its first Splash In ECO Tunnel Conveyor Car Wash, which debuted last year in Clinton, Md., was shut down in April. To offset the impact, Splash In temporarily paused its unlimited wash membership program at the Clinton location and provided members with wash codes they could use at any of its other sites. The company also coordinated across Splash In and Dash In to shift Splash In employee responsibilities to other surrounding Dash In stores. The Splash In team then worked to examine a renewed cleaning process, which included the procurement of sanitation equipment. Ensuring its car wash operations are in line with federal, state and local guidelines remains a critical focus for the company. “In May, we received Interpretive Guidance documents from the Offices of Legal Counsel in Maryland recommending that ‘enforcement action not be taken against fully automated car washes if they are open to the general public.’ As a result, we made the decision in May to reopen our automated car wash locations with a focus on ensuring the safety of both our customers and our employees,” Mulhern said. “Since reopening, we have seen traffic increase slowly. The COVID-19 pandemic has created anxiety and financial hardships for many across our communities [so], when we reopened, we decided to bring a bit of cheer to our members by giving them a few weeks of unlimited car washes on us.”

Withstanding the Times Fortunately, the blatant shutdown of car washes nationwide did not last long and neither did the negative impact for the consumer-facing side of the service. With commuting and the economy trending downward, consumers weren’t spending a lot of money on amenities such as car washes; however, in the last six months, c-store car washes reached an all-time high. “Car washes create a diversion. You can’t go to a movie theater, you can’t go out to eat, but for some people, car washes tap into the emotional side of doing an activity — it’s entertaining, cleansing and makes consumers feel good,” D&S Equipment’s Underhill expressed. “It’s an opportunity to release in a time of high-level stress. In addition, although the outside of a car isn’t necessarily something you can get COVID19 from, it’s all part of this ultra-sensitivity to cleanliness.”

SERVICES

Ensuring its operations are in line with federal, state and local guidelines is a critical focus for Dash In, which operates 42 Splash In ECO Car Wash locations.

“COVID-19 has created an opportunity to focus on customer safety and wash experience. This ultimately drives customer loyalty.” — Kevin Collette, Sonny’s The Car Wash Factory

As the coronavirus pandemic lingers on, Sonny’s Collette expects c-store operators will rely heavily on marketing car wash memberships in-store and at the pump as consumers continue to look for safe activities in the short term. Long term, he suggests that retailers consider converting or upgrading their existing washes, or incorporating business management tools such as fuel pump integration and license plate recognition to provide an opportunity to sell at various consumer touchpoints and enable customers to have a VIP experience. “Offering hand sanitizers at the vacuums, misting sanitizers as part of the chemical 94 Convenience Store News C S N E W S . c o m

applications during the wash, good lighting, signage, and providing a consistently clean wash go a long way in creating customer comfort,” Collette told CSNews. “COVID-19 has created an opportunity to focus on customer safety and wash experience. This ultimately drives customer loyalty.” Mulhern at Splash In believes most operators will create processes and install equipment to enable a touchless car wash experience for customers. For example, at Splash In, the company is installing Tap Pay for a touchless credit card payment experience, and near-field communication technology for a touchless phone payment experience. He offers a few final pieces of advice to c-store retailers operating car washes: • Ensure the safety and comfort of employees and customers. “Follow Centers for Disease Control and Prevention (CDC) guidelines, and also align with state and local public health department guidelines.” • Maintain an open line of communication with employees. “At Splash In, we encourage employees to be open about how they are feeling and to share any concerns they may have.” • Limit in-person engagement but remain committed to maintaining and enhancing the customer experience. “Identify creative ways to engage with employees and customers in a way that complies with CDC guidelines and ensures their safety but still lets them know that you care.” CSN

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TECHNOLOGY

Connecting to the Future Technology Leader of the Year Gus Olympidis leads Family Express to the forefront of frictionless in a world where everything is connected By Angela Hanson SHORTLY AFTER FAMILY EXPRESS CORP. opened a 25,000-square-foot expansion of its bakery distribution center in March, tripling its logistical capacity, the company faced a major curveball as the spread of the novel coronavirus prompted major changes in how convenience stores operate, including at the bakery case. The Valparaiso, Ind.based retailer did what it is accustomed to doing: it looked ahead to a future full of change and pivoted to meet consumer needs in a new way.

"Instantaneously, the brand-new bakery, before it produced a single item, had become irrelevant," Family Express founder and CEO Gus Olympidis told Convenience Store News. To transition to an all-packaged bakery product, the company quickly ordered a "tremendous" amount of packaging apparatus to facilitate a permanent shift. In the meantime, it innovated with what it had on hand and dramatically expanded the use of a flow wrapper device that was previously intended only for cookies.

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"We're working the gears off of it right now," Olympidis chuckled. The chief executiveâ&#x20AC;&#x2122;s ability to make smart decisions regarding technology with an eye for both the short-term and long-term health of Family Express is one of several reasons he is this yearâ&#x20AC;&#x2122;s Convenience Store News Technology Leader of the Year. This annual award goes to a technology leader (individual or company) who not only contributes to the success of their organization, but also to the advancement and growth of the convenience store industry as a whole. Family Express, which operates 75 c-stores throughout northwest and central Indiana, is at the forefront of frictionless commerce and on the verge of transitioning to new, next-generation technology. In spring 2019, the company integrated multiple vendors into its custom loyalty app powered by Paytronix, in order to provide a truly frictionless and convenient experience for customers. This included native online ordering

Congratulations to

Gus Olympidis Founder, President & CEO of Family Express For being awarded the

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TECHNOLOGY

Family Express' impending rollout of NCR's Optic platform (left) and its introduction of Franke bean-to-cup coffee equipment (right) are among the chain's current technology highlights.

through Olo; seamless management of important internal store information with Yext; and integration of key features such as a customer feedback portal through Zendesk. Today, there’s an ongoing focus on platforms that can work well together. To Olympidis, embracing new technology means more than going all-in on the latest hardware with the highest specifications. He approaches technology strategically, with three guiding principles. "In our world, we want technology to do a few things: we want it, first and foremost, to solve a problem. Second, we prefer if it primarily solves a problem that our customers have, because their problem is more important than our problem. Sometimes you initiate technology to make your life easier, but it's questionable whether it makes their life easier,” he explained. "Thirdly, we want technology to be conductive; to be part of an ecosystem, if you may," he continued. "Because technology is changing at the speed of light. Technology that operates in a silo, we believe, is highly perishable."

Creating a ‘Smart Pump’ Family Express' impending rollout of NCR's Optic platform aligns with this philosophy, as it will allow the company to build on its capabilities post-installation, according to Olympidis. "[It] literally creates a smart pump," he said. "It creates perpetual connectivity to the ecosystem so, over time, you will be able to do different things that aren't going to happen day one."

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"To bring a flexible communication platform for media right where rubber meets the road, exactly where the consumer is looking at, how big is that?" — Gus Olympidis, Family Express Once it's in place, Optic will facilitate new payment methods at the pump and bring the in-store menu outdoors. This could facilitate a delivery-to-pump or an order-outside, pick-up-inside program. The key is to roll it out on a wide scale so that customers won't be confused by one Family Express location having options that others don't. "We'd like to press a button and get it converted tomorrow but, realistically, for all that's inherent in converting an existing site, a lot of work is just beginning now," Olympidis said. The post-installation marketing potential at the updated pumps will also be high. "Humans look at and below their eye level," the CEO pointed out. "To bring a flexible communication platform for media right where rubber meets the road, exactly where the consumer is looking at, how big is that? We

s n o i t a l u t a r Cong GUS OLYMPIDIS 2020 Technology Leader of the Year

TECHNOLOGY

The COVID-19 pandemic has prompted Family Express to think in new ways.

don't even know what this will mean for our program right now, but I bet it proves to be very material, very impactful."

Frictionless Foodservice Family Express is also launching a new bean-to-cup coffee initiative in partnership with Franke. The new equipment will take the chain's coffee program from its old drip system, in which Olympidis said a handful of flavors were "not tasting delicious two to three hours down the road," to on-demand java featuring 24 flavor options — 12 each for hot and iced coffee. The bean-to-cup program is yet another step in the retailer’s journey to frictionless. Customers can order their drink from the menu in just two touches. This makes the ordering process simpler and faster, as well as safer since it means less touching of a high-contact surface.

"We don't know exactly what the future will look like, but we know that unless it's part of a powerful ecosystem — whatever you're using — there will be something to replace it." — Gus Olympidis, Family Express

in a way that is specific to particular stores over time. For instance, the company is considering creating a bakery four-pack, which its competitors don't offer.

Lowering the level of touch is something Family Express intends to continue focusing on even in a post-COVID-19 world.

COVID-19 has changed the calculus of management of the business, according to Olympidis. The changes Family Express had to make to stay in business after the pandemic hit required a great deal of effort, but ultimately prompted the retailer to think in new ways.

"We're not going back," Olympidis said, noting that incoming equipment will dramatically enhance its corporate bakery's ability to create innovative packaging. "We will have the benefit and the luxury of equipment designed for packaging options not available to us right now."

"Necessity being the mother of invention is so glaringly obvious in our case. It makes you wonder what else you should be doing that you're not," he said. "It's a humbling experience when you end up with something really good by accident."

Previously, the way products were delivered in trays resulted in a certain level of homogenization in the stores’ offerings to achieve efficiency. Now that every item is individually packaged and has its own UPC code, that no longer needs to be the case. The bakery program will be able to evolve

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

As technological innovation continues, the Family Express of today might look very different from the Family Express of tomorrow — and that's just fine with Olympidis. "We don't know exactly what the future will look like, but we know that unless it's part of a powerful ecosystem — whatever you're using — there will be something to replace it." CSN

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TWIC TALK

JoAnn Saverino, Saverino & Associates Inc. The 2019 TWIC Woman of the Year is encouraged to see intelligent young women getting leadership opportunities now early on in their careers By Linda Lisanti the Convenience Store News Top Women in Convenience (TWIC) awards program has recognized nearly 300 of the best and brightest women making a positive impact on not only the companies they work for, but also the entire convenience retail channel.

NOW IN ITS SEVENTH YEAR,

TWIC is the only program that recognizes exceptional female leaders, rising stars and mentors among retailer, supplier and distributor firms in the convenience store industry, from the C-suite to the store level to the independent entrepreneur. In TWIC Talk, our quarterly Q&A series, we interview a past TWIC winner about what it’s like to be a female leader in the convenience store industry today — the opportunities, the challenges — and get their words of wisdom for up-andcomers seeking to blaze their own trail. This month’s TWIC Talk subject is JoAnn Saverino, vice president of sales and marketing for Team Saverino/ Saverino & Associates Inc., a sales and marketing company serving convenience stores and other classes of trade in more than 25 states. She’s been a part of her family’s business since 1988. In 2019, Saverino was one of the five women celebrated by TWIC as Women of the Year.

CSNews: How would you describe the current state of affairs for gender equality in the convenience store industry? How does this compare to 10 years ago? Gender equality has come a long way, but genuine equality still has a long journey. Convenience store businesses, in recent years, have absolutely embraced women in leadership roles and have made significant efforts toward inclusion. Many have done a great job with the advancement of women compared to 10 years ago, but I believe those companies still represent a minority of the entire industry. Some major corporations have set good examples of recognizing talent and offering leadership opportunities to incoming young people, which would have been very unlikely 10 years ago, but males still dominate those opportunities. I would like to see them advancing based on merit and promoting within, and gender should not be a factor. Men and women in this industry are all working toward

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success together and are moving the change forward. I look forward to the day when our daughters and granddaughters will have equal opportunities in all industries. Young men who were raised by, and are being raised by, parents who set the example of equality, who are being raised by strong women holding authority, are helping to make the change. CSNews: What is the most positive change you have personally witnessed? I would say the most positive change I have seen personally is intelligent young women getting leadership opportunities early on in their careers, when historically that privilege was reserved for men; not making women start at the bottom of the corporate ladder, with the promise of a slow climb, by being told to “be patient.” Clever women in corporate management roles leading teams and growing their companies successfully are more common now than ever before. I know many in this industry who started at the ground level and with hard work, dedication and perseverance earned top spots in their organizations, which is truly admirable, but not actually a level playing field when men could achieve those same positions much more quickly. Positive results are undeniable, but some organizations miss out on young female talent because they are not offered the training or opportunity early in the process. Meeting the bright young women who were also honored last fall as part of TWIC made me so proud of how far we have all come, past the generation when the only women in leadership were closer to the end of their careers rather than the beginning. CSNews: Along your career path, did you personally experience gender bias or inequality? If so, how did you overcome? I have to smile now thinking back to those days. Women who made sales calls 20-plus years ago could tell you countless stories of endless awkward circumstances. It was very common to find myself as the only woman in the room, and I was so young and naïve that I wasn’t even overly affected by it because it seemed normal — it was what I expected. The days of backhanded compliments, being judged by your appearance, suggestive calendars

hanging on the office wall of a buyer; subtle things men wouldn’t have noticed. I was once singled out during a broker meeting at a national trade show when the speaker was about to tell a joke and then announced, to a large crowd, that he “couldn’t tell the joke because there was a lady in the room.” On cue, every man in the room turned to look directly at me. I was mortified at the time and for the rest of the event, I was conscious of the recognition every time I crossed paths with someone who had been in that room. Hurtful instances of being carelessly excluded from a dinner, golf outing or event because I didn’t fit into the group of men doing the planning. After being excluded from more than a few golf outings, I bought my own clubs and learned to play golf, determined to be included, and I succeeded. Let me clarify, for the record, I am not bitter about any of these examples. These instances are what made me, and scores of other women, stronger, wiser and prepared for all situations. I learned to persevere despite the circumstances, committed to proving I had the talent it took to succeed. Witnessing firsthand the leadership and fortitude shown by women in this industry gave me the courage and confidence to keep reaching to achieve more. CSNews: What barriers to advancement do you see still existing in the c-store industry? I hope that one day, our industry — all industries — will recognize potential and talent for just that, no matter what it looks like. That business owners set aside ego and small-minded ideas and look within their organizations at the talent and dedication of the women who work with them. Recognize their ability to advance your business. Really, I think stereotypes and preconceived ideas are the hardest barriers to break. The more that c-store organizations, like TWIC, bring attention to the existence of inequality, continue to advocate for change, and recognize women who have made a difference, the smaller that barrier becomes. So, thank you! There will likely always be some sort of bias not just toward gender, but age, race, disabilities, sexual orientation, political views, the list goes on and on, but as long as we recognize that, learn to listen with an open mind and improve, I see a light at the end of the tunnel. I hope and pray that my little granddaughter and grandson grow up in a completely different environment than mine. CSNews: What is your advice for other industry women looking to rise to higher ranks? Unite yourself with other professional women. Build a network of strong influencers and use them. Be confident, be accountable, be an asset, communicate well, listen well, share your success with your team, freely give and accept praise. Keep learning and count your blessings every single day. CSN

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STORE SPOTLIGHT

Building for the Future Enmarket’s new prototype accelerates the retailer’s speed to market for new builds By Danielle Romano

At a Glance Enmarket Location: 4318 Ogeechee Road, Savannah, Ga. Size: 5,893 square feet Unique features: The first Enmarket store to feature Marketwash+, an express tunnel car wash; significantly larger footprint, allowing for an expanded hot, cold and frozen beverage offering; The Eatery; bean-to-cup coffee; Mooz frozen yogurt station; self-checkout and mobile checkout

THEY SAY HOME is where the heart is. For Savannah, Ga.-based Enmarket, home is where innovation and growth intersect. Less than a year after debuting a one-ofa-kind convenience store in Savannah’s downtown historic district, Enmarket unveiled another new hometown store that will serve as the prototype for future new builds as the c-store chain expands.

“This particular store is right next to the new headquarters, which is one of the reasons it was the perfect location for our new prototype,” said Enmarket President Brett Giesick. “Our future growth model is dual-pronged: we continue to look for acquisition opportunities, but are also ramping up our new-to-industry locations. The prototype will greatly accelerate the speed to market on new builds by streamlining the pre-construction and construction phases. We can build this prototype at most, if not all, properties we already own.” Located at 4318 Ogeechee Road, the opening of the prototype store enhances the development of the Enmarket corporate campus at the intersection of Chatham Parkway and Ogeechee Road. Positioned on a highly visible intersection in Savannah, commuters arriving to the city

from the southern bedroom communities such as Richmond Hill arrive via Highway 17, so they see the brand every time they come to work and every time they travel home. The campus is also right around the corner from many major media companies, multifamily residential units, car dealerships, and county facilities including law enforcement. Vacant land in the area still awaits development and it’s coming quickly, Giesick noted. “We’re positioned as a convenient stop for many of our neighbors or commuters looking for a morning coffee or biscuit, a mid-day lunch, or an after-work stop for a car wash and some food or drinks to take home. Having the office positioned here is a reminder to the community that we are a local, family-owned company supporting many families,” he told Convenience Store News.

Path to Success The Enmarket brand has been in the market since 2015 when the company — then known as Enmark — launched a chainwide rebranding initiative in partnership with design firm Paragon Solutions. The Enmarket brand was created to pay homage to the retailer’s legacy,

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An express tunnel car wash and an expanded hot, cold and frozen beverage offering — including bean-to-cup coffee — are among the highlights.

while positioning it for the future and communicating the modern, food-centric company it had become. The business was originally founded in 1963 as Interstate Stations. Today, Enmarket operates 126 convenience stores, 14 quick-serve restaurants and one fast-casual restaurant throughout Georgia, South Carolina and North Carolina. The creation of the brand’s new prototype involved a highly collaborative process across the entire organization. All departments were called on to provide input, from operations, marketing and foodservice to facilities and technology. “Input was considered from leadership in all departments. We asked employees working at existing stores to weigh in on the design,” Giesick said. “We visited stores all around the country to get different ideas. There were many iterations we considered on our path to the final version.” It took about two years to arrive at the final design. Enmarket built one iteration that the retailer thought might be its go-forward prototype, but then identified a couple of significant changes that needed to be made. Those changes included a relocation of the checkout area, a more efficient kitchen, and a slightly smaller overall store footprint. “We’re excited about the final result,” Giesick expressed. The most noticeable difference of the 5,893-squarefoot prototype is the sheer size of it in comparison to the brand’s legacy locations. The prototype store is significantly larger, allowing for an expanded hot, cold and frozen beverage offering, as well as a full kitchen, self-checkout and mobile checkout, and expanded restrooms. Additionally, with its taller open-joist ceilings, the prototype store feels large and airy, and two entries provide ease of access. “We removed some of the complexities found in previous prototypes, such as curved walls, atrium-type rooflines and a multitude of wall finishes to reduce timeframes, supply chain issues and costs,” Giesick explained. “The simplified footprint does still allow for multiple exterior finishes, making it easier to build essentially the same store in municipalities with differing building ordinances.” The new prototype features The Eatery, a proprietary

foodservice concept that debuted in 2014. The Eatery offers meals across all dayparts, from southern-style biscuits for breakfast, to sandwiches and salads for lunch, to fried chicken or fish with a side of vegetables for dinner. Other foodservice offers in the prototype store include: • Grab-and-go food options, stocked in both coolers and hot-hold merchandisers; • Bean-to-cup coffee; and • Mooz, Enmarket’s frozen yogurt program complete with a toppings bar; it is located between the store’s massive fountain wall and the deli case. This site is also the first to be equipped with Marketwash+, an express tunnel car wash. Enmarket operates 22 in-bay car washes at other locations. “One of the many features we are excited about at the new store is the new car wash. It’s our first Marketwash+, which is an 80-foot tunnel wash. It’ll stand up to anything Savannah and the surrounding region’s pollen season can throw at our cars and, best of all, it does a fantastic job in about half the time of most car washes,” Giesick said. “The Marketwash+ concept of a fast and quality car wash gives us another business model as an add-on to a new or existing site,” he continued, “while at the same time giving us flexibility for another use of a property that might not be the best suited for a c-store.”

Looking Ahead Enmarket plans to continue opening new stores under this prototype design. The retailer currently has two in operation, with two more under construction. In addition to the core prototype design, there is one variation that includes a rear entry for when truck diesel is available in the back of the store. One of these sites opened in June in Port Wentworth, Ga., with another one under construction in Pooler, Ga., which is due to open later this year. A non-diesel prototype store opened in July in Thunderbolt, Ga. “Beyond that, we have a bank of land that we plan to develop with either one version or the other, and we continue to look for real estate that will allow for this design,” Giesick said. CSN OCT OBE R

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ADINDEX Altria Group Distribution.......2, 3 Anchor Packaging......................57 Autofry/MTI, Inc...........................26 Budderfly........................................23 Calico Brands................................22 Chester’s International..............53 Cheyenne International.............59 Convenience Distribution Association....................................91 CoreMark International.............47 Eby-Brown LLC............................99 E-Alternative Solutions.............33 E&J Gallo Winery........................79 Elegance Brands..........................Front Cover Forte Products.............................38 GlaxoSmithKline Consumer Health Care....................................83 Goya Foods Inc............................51 Grip Hero........................................69 Hunt Brothers Pizza LLC..........55 Imageworks Display & Marketing Group..........................61 ITG Brands.....................................24–25 J&J Snack Foods Corp..............67 Jack Link’s Beef Jerky...............39 JUUL Labs......................................16–17

Kinter...............................................40 Krispy Krunchy Chicken...........71 Lancer Corp...................................65, Outsert Liggett Vector Brands...............29, 93 Living Essentials LLC.................27 Mars Wrigley Confectionery...5 McLane Company.......................Back Cover Mondelez International.............103 NCR Corp.......................................97 Paragon Solutions.......................18 Perfetti Van Melle USA..............13 Premier Manufacturing.............73, 75, 77 Procter & Gamble........................49 Red House Manufacturing.......15 Reynolds American Trade Marketing Services.........45 Swedish Match North America LLC................................. 11, 37, 89, 101, 131 Swisher International Inc..........19, 20–21, 95 The Coca-Cola Company.........35 The Hershey Company..............31 Transact Technologies Inc.......81 Universal Merchants...................Outsert Van’s Kitchen................................63 VOSS Water...................................41

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INSIDE THE CONSUMER MIND

Charged Up Electric vehicle ownership is increasing among convenience store shoppers Bloomberg New Energy Finance forecasts that 60 percent of all light-duty vehicles sold in 2040 will be electric vehicles (EVs), and 25 percent to 27 percent of all vehicles on the road by 2040 will be electric. The convenience channel sits in a prime spot to pivot from being a fuel provider to an energy provider. The 2020 Convenience Store News Realities of the Aisle Study, which surveyed 1,500-plus consumers who shop a c-store at least once a month, revealed an increase in EV ownership among c-store shoppers. Specifically, the research showed:

16% 23%

Male shoppers are more likely than female shoppers to own an EV:

of the convenience store shoppers surveyed said they currently own a plug-in electric vehicle, a significant increase of 11 points from 2019.

81%

ONLY 6% consider it “not very important” or “not at all important.”

Among this same group, 61% say they charge their vehicle every time or almost every time when stopping at a convenience store.

vs. 10%

OPPORTUNITY ALERT:

EV ownership is higher among daily c-store shoppers than weekly or monthly shoppers:

22% vs. 15%

And daily shoppers who own an EV say they charge their vehicle “every time” Among the c-store shoppers who currently or “almost every time” own an electric vehicle, 81% consider it when stopping at a “extremely important” or “very important” convenience store (72%). for a convenience store to have a charging station for plug-in vehicles.

ONLY

4% never charge their vehicle at a c-store

PLUGGING IN:

16%

of c-store shoppers who do not currently own an EV say they are “extremely likely” or “very likely” to consider purchasing one in the next 2-3 years, an increase of 7 points from 2019.

Source: Convenience Store News 2020 Realities of the Aisle Study 130 Convenience Store News C S N E W S . c o m

Nearly one in four (23%) are “somewhat likely” to consider it.

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