CSNC - Mar/Apr 2022 by ensembleiq

THE PEOPLE ISSUE

THE THIRST FOR ZERO SUGAR WIN BIG WITH LOTTERY IGNITE CIGAR SALES

YOUR LABOUR CRISIS SURVIVAL GUIDE

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CONTENTS

M A RCH | A PR IL 2022 VOLU M E 5 | N U M BE R 2

THE PEOPLE ISSUE 5 Editor’s Message

24 Retailer Spotlight on the Cover

All about the people

Sweet spot: Enniskillen General Store expands by establishing itself as a unique treat destination

6 The Buzz People, places, news and events

29 Foodservice Fundamentals

8 Quick Bites

More than zero: The beverage aisle is undergoing a major makeover, as zero sugar replaces diet

10 Top Ops

Ready, willing and able: Transform operations by upskilling your front-line staff

COVER PHOTO, JAIME HOGGE

12 Ask the Expert

Avoid the “Great Resignation”: Advice from Esther Fleurimond, Workplace Safety & Prevention Services

Turning challenges into opportunities: Introducing a new column by Jeff Dover of fsSTRATEGY

31 Category Check

Igniting sales: Cigars are appealing to a young-adult demographic

33 Snapshot

Kathy Perrotta of Ipsos Canada on competing for dollars amid consumers' shifting dining habits

34 Backtalk

More than luck: A conversation with Kerstin Lack, OLG’s chief lottery and customer officer

14 Feature: Help wanted?

Your labour crisis survival guide

18 2022 Tobacco and Vaping Report Convenience, the reliable channel for a category in flux

CSNC EDITORIAL ADVISORY BOARD

Comprised of leading retail executives and convenience operators, this volunteer group of industry champions offer advice, key insights and on-the-ground perspectives that serve as an invaluable resource to ensure content is relevant and meets the needs of the industry. Leslie Gordon, Circle K Norman Hower, 7-Eleven Canada Wendy Kadlovski, Nicholby’s Sean Lauria, Parkland

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Robbie Mulder, Little Short Stop Laurie & Randy Ure, Ure’s Country Kitchen Gino Vecia, Hasty Market

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EDITOR’S MESSAGE

All about the people

20 Eglinton Ave. West, Suite 1800, Toronto, ON M4R 1K8 (416) 256-9908 | (877) 687-7321 | Fax (888) 889-9522 www.CCentral.ca SENIOR VICE PRESIDENT, CANADA | Donna Kerry

EDITORIAL EDITOR & ASSOCIATE PUBLISHER, CSNC

Michelle Warren | mwarren@ensembleiq.com

EDITOR, OCTANE

Kelly Gray | kgray@ensembleiq.com

TRANSLATION | Danielle Hart

ADVERTISING SALES ASSOCIATE PUBLISHER

Elijah Hoffman | ehoffman@ensembleiq.com

VICE PRESIDENT, EVENT SALES

Michael Cronin | mcronin@ensembleiq.com

ACCOUNT EXECUTIVE

Chris Jones | cjones@ensembleiq.com

DESIGN AND PRODUCTION DIRECTOR OF PRODUCTION

Michael Kimpton | mkimpton@ensembleiq.com

ART DIRECTOR | Jackie Shipley DIRECTOR OF MARKETING, BRANDLAB

Alexandra Voulu | avoulu@ensembleiq.com

VICE PRESIDENT EVENTS & CONFERENCES Megan Judkins | mjudkins@ensembleiq.com

SENIOR DIRECTOR AUDIENCE STRATEGY Lina Trunina | ltrunina@ensembleiq.com

SENIOR DIRECTOR, DIGITAL CANADA & SPECIAL PROJECTS Valerie White | vwhite@ensembleiq.com

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MICHELLE’S PHOTO: JAIME HOGGE

With the “Great Resignation” and labour crisis dominating headlines and causing headaches across myriad industries, we very nearly called this The Labour Issue. But then I remembered what so many of our readers and advisors in the convenience industry tell me again and again—in this business, it’s about the people. So instead, welcome to The People Issue, which is full of ideas, examples and advice about how to attract, retain and support your operations’ biggest asset—people. Whether you have one employee or 1,000 employees, we’ve got you covered. From recognizing how the role of a cashier has evolved (big time) and upskilling your front-line staff accordingly (p. 10), to cultivating a culture of psychological safety (p. 12), experts weigh in on the best ways to support and empower your people, while positioning your business for success. Plus, in “Help wanted? Your labour crisis survival guide” (p. 14), convenience leaders and experts discuss challenges, solutions and best practices for becoming a place where people not only want to work, but also love to work. Thanks to everyone who shared their insights. Speaking of loving what you do, check out the profile of c-store owner T.J. Sheehan, who shares his vision for turning his Enniskillen General Stores into “sweet treat headquarters” (p. 24). I love a good news story and at a time when many independent operators are fighting to survive, Sheehan’s passion for expansion is inspiring. We’re gearing up to create more good news! Nominations are now open for the 2022 Star Women in Convenience Awards. This program not only recognizes the invaluable contributions of women to the industry, but also fosters an extraordinary sense of community and celebration. New this year, SWIC will honour winners in three categories to ensure your awards including outstanding individuals from c-store to c-suite: details at StarWomenConvenience.ca. The deadline to nominate is March 31. March also marks two years since the onslaught of the pandemic and the rise of convenience as an essential service. A lot has changed, but what hasn’t is your unwavering commitment to serve your communities across Canada. It’s all about the people—customers, clients, colleagues and staff. Take care of yourselves and each other. CSNC

LICENSING AND REPRINTS Please contact Wright’s Media | ensembleiq@wrightsmedia.com 1-877-652-5295 CONVENIENCE STORE NEWS CANADA / OCTANE is published 6 times a year by EnsembleIQ. CONVENIENCE STORE NEWS CANADA / OCTANE is circulated to managers, buyers and professionals working in Canada’s convenience, gas and wash channel. Please direct inquiries to the editorial offices. Contributions of articles, photographs and industry information are welcome, but cannot be acknowledged or returned. ©2022 All rights reserved. No part of this publication may be reproduced in any form, including photocopying and electronic retrieval/ retransmission, without the permission of the publisher.

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MARCH / APRIL 2022

THE BUZZ

CROSS - CANADA ROUND - UP / PEOPLE / PL ACES / NE WS & E VENTS

SAVE THE DATE Canadian Fuel Marketing Conference April 11-13: Montreal CIPMA.org/events

JTI-Macdonald Corp. is being recognized for valuing its number one asset: People. The company, which has roots in Canada dating back to 1858, was certified by the Top Employers Institute as Canada's #1 Top Employer 2022. Why? Its commitment and innovative approaches to inclusion, equity, wellbeing and mental health, as well as work to optimize the hybrid work model and its new global family leave policy. The company employs more than 500 people across Canada. "People are JTI's most important asset, and we are investing in them to improve our employees' experience and deliver real progress," says Alan Jackson, general manager of JTI-Macdonald. More about JTI’s initiatives at CCentral.ca.

READY FOR SUMMER Regal Confections, which manufactures and distributes global candy and chocolate confectionery across Canada, now owns Kisko Products, maker of freeze pop products Mr. Freeze, Kisko and Mrs. J’s Natural, as well as licensed brands including Welch’s, Mott’s and Crush. The Kisko acquisition complements Regal's confection offering and diversifies its portfolio.

200,000

Number of battery-electric and plug-in hybrid vehicles on the road in Canada, according to Statistics Canada. By 2030, one out of every three automobiles sold will be electric, increasing demand for charging stations coast to coast to coast.

MARCH / APRIL 2022

The Convenience U CARWACS Show Sept. 13-14: Toronto Congress Centre ConvenienceU.ca Star Women in Convenience Event October 12: Toronto StarWomenConvenience.ca

Quiz TIME

March is Caffeine Awareness Month, test your knowledge!

Which has more caffeine?

□ 1 small cup of coffee (250 mL) □ 1 250 mL can of energy drink □ 1 small cup of black tea (250 mL) □ 1 espresso shot (30 mL) □ 1 serving of diet cola (591 mL)

*Answer: Trick question, they contain about the same amount of caffeine (70/90 mg) (Source: Canadian Beverage Association)

People power

Sweets & Snacks Expo May 23-26: Chicago SweetsandSnacks.com

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ON LI N E E XC LU S IVE S

10 HEADLINES YOU DON’T WANT TO MISS! 1. PARKLAND CORP. BUYS M&M FOOD MARKET FOR $322 MILLION: THE STORY BEHIND THE DEAL 2. T HEFT RISING, SHOPLIFTERS MORE AGGRESSIVE: TIPS TO DETER CRIME 3. INSPIRING IDEAS FROM C-STORES AROUND THE WORLD 4. C ANADIAN TASK FORCE TO ADDRESS SUPPLY CHAIN ISSUES 5. T HE ROAD TO RECOVERY BEGINS HERE: CICC CONNECTS 6. 7 -ELEVEN CANADA EMBRACES FLEXITARIANS WITH NEW PLANT-BASED CHICKEN MENU ITEM 7. C ANADIAN TIRE GAS + ONROUTE SITES TO FEATURE NEW ELECTRIC VEHICLE CHARGING STATIONS 8. C ANADA’S GAS PRICES BREAKING RECORDS 9. P EPSICO AND BEYOND MEAT TO LAUNCH PLANT-BASED JERKY 10. DRIVING FOOT TRAFFIC WITH BITCOIN ATMS To stay up to date on the latest news and trends, get the All Convenience e-newsletter delivered to your in-box every Wednesday: CCentral.ca/signup

URBAN EXPANSION Parkland Corp. is rolling out a major expansion of its On the Run convenience brand, with plans to have about 1,000 stores across Canada and the U.S., most featuring retail gas sites, by the end of 2025. At the same time, Parkland is introducing a new standalone On the Run urban c-store concept: The first is to open in Vancouver and the plan is to open 50 stores in high foot traffic urban locations close to public transit and densely populated residential neighbourhoods. The M&M Food Market brand acquisition will be integral to this growth, as well as bolstering in-store, e-commerce and home delivery offerings.

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MOVING ON UP

Teresa Blakney will lead the snacks & sweet treats team as director of marketing at Conagra Brands. She joined the company in 2016 and has been credited with leading innovation in the frozen portfolio. Blakney has held marketing positions with Nestlé Waters and Campbell Soup Company. Michael Bryan is sales director at Conagra Brands. He joined in 2010 as a district sales manager and has held various roles, including business development manager, senior market strategy and planning manager, and, most recently, senior business development manage, team lead. Beka Jackson is now director, concept development and project management for North America at Circle K. Jackson joined the convenience giant in 2010 as a store designer in Western Canada, then project manager and, most recently, was director, foodservice project management for North America. Diana Masri is new categories investment associate for British American Tobacco (BAT). The 2021 Star Women in Convenience winner has been with the company since 2006, taking on increasingly senior roles and leading a successful team. Angela Rodenburgh joins Evanesce as the new global VP of marketing for the Vancouver-based sustainable packaging technology company. Before joining Evanesce, Rodenburgh was VP of marketing for Redwood Plastics & Rubber with responsibility for marketing strategy, development, and execution. She is a board member of SPE: Inspiring Plastics Professionals’ Injection Molding Division and was past chairman of the marketing committee for the International Association of Plastics Distribution (IAPD). Karla Schlieper is now president of Mondelēz Canada. Schlieper joined Mondelēz International in 2013 and since May 2019, she has led the Mondelēz business in Latin America's Southern Cone region, where she is spearheaded "a substantial turnaround of the business, against a challenging backdrop of the pandemic and in a volatile economy and demanding business climate.” Lynne Strickler is head of marketing in Canada for Conagra Brands. She will be responsible for building the brand strategy, aligning it with international and local business plans and ensuring key metrics are met, according to a press release. Prior to joining Conagra in 2017, Strickler held brand management roles with Kraft Foods and Kraft Heinz. *Announce your new hires and promotions. Email mwarren@ensembleiq.com

MARCH / APRIL 2022

QUICK BITES

BY DARREN CLIMANS

More than zero

The beverage aisle is undergoing a major makeover, as manufacturers compete for a piece of the growing zero-sugar segment

that “diet” wasn’t a fad, and that the market size and growth of the segment justified connecting diet formulations back to their flagship brands.

Signs of the times

Beverage Marketing Corporation (BMC) provides management consulting, research, and advisory services to the global beverage, food and consumer packaged goods (CPG) industries. Among its products is a comprehensive North American beverage database. According to BMC tracking, volume sales of “diet” or lower calorie carbonated soft drinks (CSDs) have been rising relative to “regular” CSDs. In the U.S. market, regular CSDs lost nearly half a share point a year between 2015 and 2021 (Exhibit 1). To put it in financial terms, that’s a loss of more than US$250M per year in each of the last five years.

󶀰

Sugar

Almost 70 years ago, the manager of a sanitarium for chronic disease in New York City had the idea of creating a sugar-free soft drink for both his patients and the general public. No-calorie drinks had been around since the 1920s. However, he had the vision of commercializing a new beverage, appealing to weight-conscious women as a target market, and offering a selection of flavours—no-cal ginger ale, root beer, black cherry, lime cola, chocolate and more. Within a year, sales had risen above US$5M. By the end of the decade, multiple competitors had entered the market. Royal Cola launched Diet Rite, which was

MARCH / APRIL 2022

marketed to diabetics. The name was a play on the word “dietetic” and (initially) it was available only in drug stores. The first no-cal beverage developed by Coca-Cola in 1963 was called Tab—as in ‘keep tabs on your weight’—because Coca-Cola didn’t want to draw consumer attention to the high sugar content of its core product. In fact, the Diet Coke brand didn’t launch until 1982. PepsiCo followed the same approach. Diet Pepsi started out as Patio Diet Cola, for about a year, until Diet Pepsi hit shelves in 1964. Diet 7Up started as Sugar Free 7Up. It took nearly 20 years for the biggest players to be convinced

The shift has not gone unnoticed: 70 years on, the beverage aisle is again undergoing a major makeover as manufacturers compete for a piece of a growing segment. The “zero sugar” tag is replacing “diet” for many familiar soft drink brands like Canada Dry, Schweppes Ginger Ale, 7Up, A&W and Sunkist, to name a few. There are a few holdovers, for now—Diet Dr. Pepper, Diet Pepsi, Diet Coke—based on their large and loyal customer bases. While formulations remain largely unchanged, the names and packaging of low/no calorie carbonated soft drinks are being updated. Greg Lyons, chief marketing officer at PepsiCo Beverages North America, recently explained the motivation: “Younger people just don't like the word ‘diet’… No Gen Z wants to be on a diet these days." The shift to zero beverages avoids negatives associated with the term diet. Zero seems to connote a halo of healthfulness, in terms of sugar and calories. It’s also a more gender-neutral term—diet tends to be less relatable for younger males. Zero sugar conversion is getting traction with consumers. According to Derek Hopkins, president of cold beverages at Keurig Dr Pepper (KDP), “Zero sugar launches alone were responsible for one percentage point of market-share gains for the company.” Meanwhile, an updated Coca-Cola Zero was launched in the U.S. in summer 2021 and enjoyed “accelerated growth,” according to chairman and CEO James Quincey.

SHUTTERSTOCK.COM

Shrinking diet

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EXHIBIT 1

EXHIBIT 2

Regular vs. diet/lo-cal carbonated soft drinks VOLUME SHARE OF CSD MARKET (U.S.) 2016

Beverage segment growth

VOLUME SHARE OF CSD MARKET (U.S.) 2021

DIET

26%

27.8%

AVERAGE ANNUAL VOLUME GROWTH 2016 - 2021 TOTAL CSD

1.4%

CSD - REGULAR

0.9%

CSD - DIET

2.8%

TOTAL BOTTLED WATER (BULK, MULTI, SS) 5.3% REGULAR

REGULAR

74%

72.2%

SINGLE-SERVE WATER DOMESTIC SPARKLING BOTTLED WATER IMPORTED BOTTLED WATER

FRUIT BEVERAGES

Coke reports that “23% of (these) Coke Zero Sugar consumers are new.”

Water water everywhere

Changing the name and packaging may goose sales in the near term. However, the bigger threat for the cola conglomerates is consumer migration to other forms of hydration, like sparkling and flat water (Exhibit 2). Retail growth rates for water products offering no calories, no sugar, no preservatives, and no additives have far surpassed the volume growth of CSDs. Recognizing the shift, Coca-Cola and Pepsi have become players in the water market. In 2017, Coca-Cola purchased popular Mexican sparkling water brand Topo-Chico for $220 million, to expand its portfolio of flavoured sparkling water brands, including Aha and Fresca, and flat-water brands VitaminWater, Dasani and SmartWater. PepsiCo Canada owns or licenses a broad range of water brands, including Bubly flavoured sparkling water and Montellier, as well as non-carbonated brands Aquafina and Arto LifeWtr. In 2020, PepsiCo in the U.S. introduced Driftwell, a functional/en-

52% CCentral.ca

hanced flavoured still water beverage with magnesium and L-theanine, an ingredient to help promote relaxation and aid sleep. According to Danny Stepper, CEO of LA Libations, a beverage company incubator, "Consumers are voting with our wallets, and sugar is something that people definitely want less of in (their) lives.” Euromonitor International’s Health and Nutrition global survey established “(an increase in) consumer knowledge about the ill-effects of high sugar consumption. Almost 52% of global consumers hold the view that lower sugar intake would make them feel healthier and 42% mentioned that they would attempt to limit their intake of refined sugars, with stronger intent generally reported among women and older respondents.”

Proliferation of choices

Nathaniel Lim, a senior analyst at Euromonitor International who focuses on non-alcoholic drinks, recently published an analysis on the growing demand for reduced-sugar beverages. He cited high global consumer interest “and growing government legislation efforts, such as sugar

of consumers around the globe believe that lower sugar intake would make them feel healthier

6% 36% 8%

-2.2%

taxes” as key elements pushing reformulation and re-branding. This is reflected in the development/reformulation of a wide range of zero-sugar products. Paddy Spence, CEO of zero-sugar upstart, Zevia, recently said: “When we bought the business (in 2009), this was a $5 million brand, highly unstable and with the somewhat insane proposition of competing head on with multi-billion-dollar category leaders." Zevia beverages are currently available via many major retailers across Ontario and Quebec. In the U.S., Zevia has distribution in more than 20,000 stores up from 4,000 locations just three years ago. Sales are now more than US$100M—a 32% compound annual growth rate—and an IPO in July 2021 raised about US$500M in capital. Spence sees a long runway for Zevia, even in the face of stiff competition from established brands: “Their philosophy is to have an incredible secret formula, lock it in the vault for 100 years, and hope the world doesn't change… We, on the other hand, believe the whole consumer landscape is changing and today brands in beverage not only need to win on taste, but they also need to win with clean ingredients.” Goes to show, even with zero sugar, the future can still be sweet. CSNC Darren Climans is a foodservice insights professional with close to 20 years’ experience partnering with broadline distributors, CPG suppliers, and foodservice operators. His practice is to understand issue-based decisions by taking a data-driven approach to strategic decision making.

MARCH / APRIL 2022

TOP OPS

BY JD DILLON

Ready, willing & able Transform operations by upskilling your front line Who’s running your convenience store right now?

Today, employers across North America are struggling to find people to work in front-line roles, including retail, foodservice, grocery and convenience. In Canada, 76% of c-stores employ less than 10 people, while 51% employ less than five. This means every associate must be capable of running the complete day-to-day operation. Unfortunately, rising turnover is making it harder to build a knowledgeable front-line workforce. In 2020, full-time associate turnover was already 81%, while part time was nearly double. Meanwhile, the convenience industry is in the midst of wide-scale transformation. Associates are now expected to do a lot more than just stocking shelves and running the register. As c-stores compete with alternative convenience offerings, including online ordering and home delivery, workers are taking on new responsibilities. They must cook and handle prepared food while keeping spoilage rates down and staying in compliance with health regulations. They’re interacting with customers in new ways thanks to the growing use of drive-thru and curbside pickup. Plus, the expansion of electric vehicle charging networks is bringing its own challenges and opportunities, as customers spend additional time on-site. Here are four tactics you can use to make sure your front-line team is always ready to execute.

Rapid onboarding

You hire new employees because you need them on the floor ASAP. You can’t wait for a regional trainer to travel to the store to complete their training. You also can’t just throw new people out there and to figure things out on their own. Both options add risk to the business and negatively impact the customer experience. Even worse, frustrated associates who feel like they’re being set up to fail have more options than ever to find a different job. C-stores spend an average of $2,181 to hire a full-time hourly employee. Make this investment count by providing a comprehensive onboarding experience. Break down

MARCH / APRIL 2022

the knowledge and skill required to run the store, including topics like job safety, food handling, payment processing, inventory management and customer service. Use a mobile learning management system (LMS) to guide associates through training using an in-store device, such as a tablet or POS, or even their own smartphones. The LMS ensures every employee, regardless of location or manager, receives the same training. It tracks their knowledge and skill development to ensure compliance and inform coaching opportunities. You also have the option to use assessments to accelerate training and get people on the floor faster if they prove they can already do certain parts of the job.

Digital communication

C-store operations are constantly changing. Prices. Products. Promotions. Regulations. Weather. Associates must have the latest information to make good decisions on the job. However, they don’t use traditional workplace communication tools like email. Many c-store managers implement their own digital tools, such as group texts and WhatsApp, to keep everyone informed using their own smartphones. It’s a quick fix that puts the company at risk through unapproved software. Avoid potential security risks by implementing a purpose-built digital communication tool for your front-line workers. Accelerate information flow by giving management a fast, reliable way to push messages to every employee. Give associates the option to share, react and provide feedback. After all, they’re often the first people to identify operational issues and need an easy way to report problems and share insights. Unlike everyday consumer tools, a digital communication platform will also help you abide by company, regional and union guidelines when it comes to what employees are permitted to do while off the clock.

Reinforcement

Just because someone was trained on how to complete a task during onboarding doesn’t mean they’ll remember how to do it correctly three months later. Everyone forgets infor-

mation, especially when we’re overwhelmed in a new job. Forgetting may be natural, but it’s also a major cause of inconsistent performance. This is becoming an even bigger problem as c-stores rely on employees with little-to-no retail experience. Use reinforcement training to help employees remember what matters most. Ask employees to recall critical food safety guidelines or how they would handle a difficult customer situation. The more often they recall information, the more likely they are to remember it long-term. Use your LMS to push three quick questions to each employee at the start of every shift. Reinforcement requires less than five minutes out of a busy workday, and it quickly adds up to a knowledgeable, capable workforce.

Cross-training

Staffing shortages are pushing front-line employers to find ways to do more with less. This includes cross-training employees to cover extra shifts and take on additional responsibilities. You may train cashiers to also prepare food items and serve coffee in larger stores. Or you may train associates to work between multiple locations that offer different products or services. Cross-training creates operational flexibility, while also combating employee burnout by adding variety to the daily work experience. When you’re short-staffed, you can’t pull people out of the operation for hours of training. Instead, make cross-training part of the job for employees who are ready to expand their skills. Use microlearning to add a few minutes of training to every shift. For example, cashiers can use slow periods to complete five-minute exercises on preparing hot food items. This will reduce the time needed for hands-on training, increase employee engagement and help you keep the operation running smoothly despite labour challenges. Front-line employees make or break store execution. They always have. The best workers have the knowledge and skill to run the store, solve problems as they pop up and keep pace with operational changes. Many of these associates are among the 45% of front-line workers that have already decided to leave their jobs. As it gets harder to find people with relevant work experience, c-store managers must implement tools and processes to help workers do their jobs consistently, effectively and confidently. CSNC JD Dillon has spent two decades working in operations and training with dynamic organizations, including Disney, Kaplan and AMC. A respected author and speaker in the global talent development community, he continues to apply his passion for helping people do their best work every day in his role as Axonify's chief learning architect. CCentral.ca

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BY ESTHER FLEURIMOND

What can those in the convenience channel and related industries do to retain valuable employees?

Peace of mind

Avoid the “Great Resignation” by cultivating a culture of psychological safety The media have made much of the “Great Resignation,” a phenomenon in which a record number of U.S. employees have walked away from their jobs since the COVID-19 pandemic began. Experts have suggested many reasons for this, but it all comes down to the grass looking greener— or safer—somewhere else. While Canadian employees haven’t followed suit, The Work Trend Index, a global survey of 30,000 people, found that more than 40% were considering leaving their employer last year. That’s a lot of unhappy employees. Take note that there are lots of jobs waiting for any unhappy employee—job

vacancies reached an all-time high of 912,600 in Canada in the third quarter of 2021, according to Statistics Canada. While hiring may be an immediate priority for some convenience stores, retaining existing employees should be an ongoing priority for every store. How? Cultivate a culture of psychological safety. During the pandemic, work has been exceptionally stressful for front-line retail employees. Staff shortages, long hours, shifting COVID-19 requirements, and aggressive customers have all taken a toll on mental health and wellbeing. That’s why I’m passionate about psychological safety, because going forward it’s what will differentiate employees who are thriving from those who are just surviving. Research into psychological safety has identified many benefits, such as greater confidence, trust and productivity. All of this creates a solid business case. For example: • Employees of organizations that increase psychological safety feel more engaged, which can lead to a 12% increase in productivity, according to Gallup's 10th Employee Engagement Meta-analysis Report • Deloitte Canada quantifies the return on investment for Canadian firms that invest in mental health programming: After just one year the median annual return is $1.62 for every dollar invested. After three years, the return more than doubles to $2.18, according to The ROI in workplace mental health programs: Good for people, good for business report from Deloitte Insights.

Start by protecting employees’ physical health and safety

Physical safety, including freedom from violence and harassment, is a prerequisite for psychological safety. Research shows that employees who feel their employer is looking out for their physical safety have more confidence in their employer, are more committed to their job, and are less likely to experience psychological distress and mental health problems. Ensure your physical safety program is up to speed.

Esther Fleurimond is a consultant with Workplace Safety & Prevention Services

9 psychological safety best practices for store managers and supervisors Senior management support is critical to any initiative, including creating a psychologically safe environment. But on a daily basis, managers and supervisors also have an enormous influence on whether their employees have a positive experience at work. The following best practices, from Canada Life’s Workplace Strategies for Mental Health, can be implemented at no cost to help managers and supervisors create and sustain a psychologically safe environment among their team members. 1. E stablish clear expectations on what employees are supposed to do.

2. Recognize employees when they do their job well. 3. Provide constructive feedback when they don’t. 4. Listen to their concerns.

5. S hare information with them when you’re about to change their roles or introduce a new process or policy. 6. M ake yourself available to answer questions. 7. P lan their work effectively.

8. Support their decisions: “If an employee has an elderly relative to care for, a childcare issue, or is in mental distress, you have to support the employee in whatever they decide to do. Otherwise, they disengage.” 9. A sk for employee input before making a decision that affects their work: “If employees have too much work, they have to feel comfortable telling you.”

Putting these practices in place doesn’t have to be complicated. Start with two-way conversations. Schedule a couple of minutes in each team meeting or during a walk-through to ask employees how they are doing. Not the work, not the operations, not the budget, not the planning, but the person. CSNC *The information in this article is accurate as of its publication date.

As a consultant with WSPS, Esther Fleurimond works with customers on developing psychological health and safety programs in the workplace. WSPS is a health and safety association supporting employers and workers in Ontario’s agricultural, manufacturing and service sectors. Visit WSPS.ca or reach out to customercare@ wsps.ca or 1-877-494-WSPS (9777).

MARCH / APRIL 2022

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Your labour crisis survival guide BY CH R IS DA N I E LS

In early January, Big Dog Convenience lost one of its best employees who had worked as an evening cashier. “She got an offer for an office job getting paid more than we can even pay our managers and a four-figure signing bonus,” says Ramona Roberts, owner and operator of the five-location chain in P.E.I. “When it comes to cashiers, giving them signing bonuses in the thousands of dollars is tough, financially, to do. However, that is the level at which we’re competing for workers even in a small market like ours.” Roberts, who has had to cover shifts she normally wouldn’t amid the staffing shortage, concludes, “The competition for people is unlike anything I’ve ever seen before.” If supply chain was the most concerning issue for c-stores in the first 18 months of the pandemic, it has been replaced by la-

MARCH / APRIL 2022

bour. Good help is what’s become in short supply amid the economy having opened back up and falling unemployment. According to Statistics Canada’s Job Vacancy and Wage Survey, the number of job vacancies in Canada reached an all-time high of 912,600 in the third quarter of 2021, 62.1% higher than the same quarter two years earlier. Five sectors accounted for two-thirds (67.6%) of the increase—foodservice and retail trade, among them. Meanwhile, the job vacancy rate—the proportion of all jobs unfilled—was 5.4%, also a record high. Many c-store operators report being short-staffed because of the labour squeeze. And they’ve also gone through periods of reduced headcount as Omicron, the highly transmissible COVID-19 variant, sidelined staff. Media reports even surfaced

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Work together and share resources to make sure stores stay open Tap into the Canada Summer Jobs program to find affordable student help

The number of job vacancies in Canada reached an all-time high of

912,600

in the third quarter of 2021

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Job descriptions have changed

of grocery stores in urban centres being forced to close for a day or more because of a lack of able employees. Little Short Stop Stores, which has 30 locations across Cambridge, Guelph, Kitchener and Waterloo in southwestern Ontario, “had two stores with a positive case,” says Robbie Mulder, district manager of the family-run chain. “That might not sound like a lot but when that happens it knocks five or six other employees out because they crossed shifts with that individual, and all had to isolate.” Fortunately, she says, “we were able to take care of those stores in the interim with employees from other locations and, being a family-run business, we had members of our families step up and come in and help, too.” Parkland Corporation's On the Run/Marché Express franchisees, who typically own more than one location, shared staff. “We saw stores who are not part of the same team work together and share resources to make sure places could stay open,” says Alison Manning, VP, people and culture, Canada, for Parkland, which

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has about 2,000 c-store and retail gas locations nationwide. Single-store independents have also faced challenges. Ure’s Country Kitchen in Harrow, Ont. has a c-store, restaurant and mini golf course all part of its operations, and every time government restrictions forced the closure of indoor dining, it was forced to lay off staff. “We’ve been very lucky because after the first round of layoffs all of our staff, except for one who had found another job, returned,” says Laurie Ure, co-owner, with her husband, Randy, of Ure’s Country Kitchen. “Hopefully, the staff we had to lay off again will come back again,” adds Ure. (At the time of our interview in January, Ontario was getting ready to reopen restaurants at 50% capacity after pausing indoor dining for a third time.) It’s clear the ability for the c-store industry to attract and retain employees has become mission critical. Here’s our guide to how convenience and gas retailers are navigating the challenges of today’s labour market. ▶

MARCH / APRIL 2022

Competing for talent

6 ways to become a place where people want to work

Pay more than minimum wage as a starting salary: Do so not just to stay competitive but to recognize the job description has changed. Cashiers need to be IT-savvy to handle current payment and virtual order systems, while also having to control crowds and enforce mask-wearing. “It is not a low-skill position anymore,” says Ramona Roberts, owner and operator of Big Dog Convenience. “They have to be numerate and literate, and the ask on them is ever-increasing. They should be compensated for that with a starting salary above minimum wage.”

Consider financial incentives/ perks: While it may be cost-prohibitive for c-stores to offer a signing or referral bonus, they can give other incentives. Think an employee discount on products, or offering staff a stipend, like $100 per month, towards in-store purchases. “These things don’t cost a lot, but can go a long way to attracting and retaining talent,” says Lisa Hutcheson, a retail consultant at J.C. Williams Group. “And stores should be upfront about the incentives they offer in their recruiting practices.”

Build your employer brand on social media: Job seekers, especially youth and young adults, like to work at places with buzz and that they’d be happy to tell their friends about. Use social media to, “tout yourself as a great employer,” says Hutcheson. “Talk about your store and what is fun and cool about it. C-stores haven’t traditionally been thought of as exciting places to work, but I am seeing more independent stores with unique features, and they should highlight them.”

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Foster employee community: It can be difficult to build a sense of community and rapport between store-level staff when they might only see each other while passing between shifts. Use social media. 7-Eleven Canada has an “internal Facebook page that allows employees to share stories, best practices and make other comments,” says vice-president and general manager Norman Hower. “We also seek to engage them to share feedback on what’s working and have them ask questions of our senior leadership team through this platform.” A group of employees and managers at Little Short Stop Stores, meanwhile, have a group chat on WhatsApp. “Everyone gets a message delivered at the same time, which would have been unheard of for us to do in the past. It has proven really beneficial for team communication,” says Robbie Mulder, district manager for Little Short Stop Stores.

Allow staff to contribute—and grow: Open the lines of communication, and you’ll find staff have great ideas to improve the employee or customer experience. But just don’t listen, also act on the suggestions you can. “It makes them feel part of the team when you involve everyone in problem-solving,” says Laurie Ure, co-owner and manager of Ure’s Country Kitchen. “The key to retaining staff is treating them with respect and letting them contribute.” Alison Manning, VP, people and culture, Canada, for Parkland, says, “Our retailers provide staff with development opportunities, such as by creating different tiers of employment, so staff can see a pathway to moving up, including even to supervisor.”

Use social media 7-Eleven Canada has an internal Facebook page where employees share stories, best practices, comments, feedback and can ask questions

Recognize and reward: When the Ures decided to take a vacation from work for the first time at the end of last year, they asked one of their young employees who had been with them for three-and-a-half years if she would like to help manage the store. She jumped at the opportunity, as she “wants to be a Canadian Border Services officer and this would be a great example if she were to be asked in an interview of a time when she stepped up and took on extra responsibility.” Ure gave this staffer a $1 per hour raise, on top of one she had already earned in the summer, for taking on the extra responsibility.

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It seems every service-based establishment needs more staff, and there aren’t enough job seekers to meet the demand. Here are how c-stores can compete and strategies for them to improve their employer brand.

Back to school

C-stores turn to colleges and universities for talent

Tech overload

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7-Eleven is simplifying the employee experience with its new delivery app

With the labour shortage in the service sector and high turnover in c-stores, operators both large and small are tapping post-secondary institutions and building a pipeline for talent. Through word of mouth, Little Short Stop Stores in southwestern Ontario has been attracting international students in the business program at Conestoga College over the past few years. “We typically get a number of students for 10 months, then they graduate, and we hire a new set of international students for another 10 months,” says district manager Robbie Mulder. “It has been really beneficial for us. We’ve developed some of these students into full-time assistant managers and even managers.” 7-Eleven Canada VP and GM Norman Hower says it “is consistently looking for ways to innovate in our hiring.” To that end, the company is building relationships with its local colleges and universities, including Northern Alberta Institute of Technology (NAIT), Southern Alberta Institute of Technology (SAIT), Bow Valley College, Camosun College and Royal Roads University. “7-Eleven Canada is in the early stages of developing internship programs to improve the communities we operate in, while growing awareness of our business. These internships are focussed on creating opportunities for students who work in business management and administration, as well as other disciplines, where we can add value and learning experiences.” Lisa Hutcheson, a retail consultant at J.C. Williams Group, says independent c-stores should look at the Canada Summer Jobs program for affordable help. The program aims to create 100,000 job for youth and young adults between 15and 30-years old, including with private companies of 50 or fewer full-time staff. Employers selected for the program cover 50% of the pay for these jobs; the government covers the rest. “If minimum wage is $15 per hour, you are getting that young person in the job for only $7.50 per hour,” she says, noting jobs need to provide a quality experience and improve skills. “You could create a position that includes being at cash, but also doing social media to help build brand awareness for the store or assisting with supply chain management.” It’s too late to apply for the program for this summer, but circle January in your calendar: that is when Applications to Canada Summer Jobs are usually due.

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Technological advances can be a doubleedged sword. Delivery apps, for instance, have created an exciting new revenue stream for c-stores, putting customers in—or should we “out of”—the driver’s seat, by enabling them to order products from the comfort of their home, delivered right to their door. But the apps can be a juggling act for frontline staff. With many stores listed on multiple apps, employees are having to monitor different dashboards while helping customers in store. 7-Eleven Canada has found a solution to that problem with its delivery app 7Now, launched last June, without limiting reach and sales generated by other apps. “Our 7Now delivery hardware devices serve as a consolidator for our marketplace providers such as DoorDash and Uber Eats,” says Norman Hower, VP and GM of the national chain. “This removes complexity by reducing the number of tablets we need to keep in stores and provides a seamless and consistent way to fulfill customer orders fast. As we grow new delivery partners in the future, our 7Now Delivery proprietary hardware will keep things simple and straightforward for our team members.” In November, 7-Eleven Canada also launched mobile checkout and it has taken some pressure off staff and all that they have to do. According to Hower, “this new innovation is the first time this proprietary technology has been rolled out on this scale” in c-stores. “Not only does this meet the ever-changing customer preferences, but it also cuts down physical lineups, allowing our staff to tend to other needs around the store,” he says. Training around these tech innovations was rolled out to both new and existing store-level employees. “This training has been brought up right to our leadership teams so that they can see and understand the tech firsthand,” adds Hower. CSNC

MARCH / APRIL 2022

The 2022

Tobacco and Vaping Report

Convenience, the reliable channel for a category in flux

Tobacco and related products continue to play a key role in the convenience sector. That role, however, is under fire and under threat from new and proposed government regulations. Action on numerous fronts—including at the store level—is needed. 18

MARCH / APRIL 2022

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B Y D O N A L E E M O U LT O N

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The regulatory landscape

TOBACCO

Increasing taxation is an issue for smokers and the stores where they purchase cigarettes. In its 2021 budget, the federal government announced it would impose an additional $4 levy on a carton of 200 cigarettes, a move that will bring more than $2.1 billion into federal coffers over five years. Equivalent increases are planned for other tobacco products. While the taxing move may convince some smokers to quit, many more will sidestep the increased cost by buying illegal cigarettes. “There is a direct correlation between government policies and the growth of the contraband market,” says Anne Kothawala, president and CEO of the Convenience Industry Council of Canada. She points to British Columbia and Newfoundland and Labrador, both of which are reporting a significant drop in legal sales in the wake of provincial tax increases on tobacco. In Newfoundland and Labrador, the recent $6-per-carton increase is the third time in nine months the government has hiked taxes on tobacco products. A carton of cigarettes has increased by $20 overall. “In Newfoundland, the problem has evolved so quickly that there are reports of people standing outside convenience stores yelling at customers going in the door that they can buy cigarettes from them for cash at one-third the price,” says Kothawala. BOTTOM LINE FOR C-STORES: TAXES GO UP, SALES GO DOWN.

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VAPING

Last June, the federal government announced a proposed ban on the sale of flavoured vaping products. A week later, it followed up by announcing impending changes to vaping regulations that will cap the concentration of nicotine in vapour products sold across Canada to a maximum of 20 mg/ml. Eric Gagnon, VP of corporate and regulatory affairs for Imperial Tobacco Canada in Montreal, calls the restrictions “mind boggling.” “This is nothing more than punitive and excessive regulations,” he says. “Vapour products have played a significant role in recent years in reducing smoking rates in Canada. We should be maintaining the level of choice, not limiting choice.” Another concern for the convenience sector: specialty vape stores. Ontario has moved to implement both a flavour ban and a nicotine cap—but only for vape products sold in convenience stores. Singling out c-stores flies in the face of the 2019 Drug use Among Ontario Students Report released by the Centre for Addiction and Mental Health that found convenience stores are the least common source of vaping products for youth. Borrowing from a friend topped the list (53.7%), buying from a friend or someone else (11.2%) and purchasing from a specialty vape

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store (9.7%) rounded out the top three sources of vaping products for youth. By contrast, the number of young people accessing vapour products from convenience stores was so low that it didn't even make the list. BOTTOM LINE FOR C-STORES: AN UNFAIR PLAYING FIELD MAKES IT DIFFICULT TO PROVIDE MEANINGFUL CHOICES TO CUSTOMERS.

What’s a c-store to do?

Plenty, says John Mazzuca, an Alberta-based key account manager with National Smokeless Tobacco Company (NSTC). He recommends starting with inventory. “A recent audit by our sales force documented out-of-stocks as high as 10% for select SKUs during routine store visits. At this level, out-ofstocks could lead to a loss of one in 10 adult smokeless tobacco consumers.” Adult consumers are also looking for fresh product, he notes. “We recommend retailers monitor inventory weekly, at a minimum.” In the face of increasing taxes, pricing products competitively is a necessity. “We continue to see increased adult tobacco consumer interest in lower-priced pouch products,” says Mazzuca. “We expect that trend to continue in 2022 and beyond. When considering product offerings in their stores, retailers should make sure pouches are part of the mix.” “Focusing on dollar margin profit per can as opposed to a margin percentage calculation should be considered,” says Ontario-based NSTC key account manager Steve Rawn. A good partner is also a good idea, he adds. National Smokeless Tobacco Company, for example, helps retailers track store sales data and benchmark store performance; highlight opportunities for growth and tailors retail programs to spur that growth; and provides merchandising solutions for a retailer’s unique space. JTI Macdonald Corp. works closely with operators to navigate issues and provide support. In a statement, the company said: “C-stores are an essential part of our industry and JTI’s vision. Throughout visits, whether it be in-person or virtual, we always want to provide our partners with diverse and accurate education to ensure they are well equipped with product knowledge, legislation details, and general data to support the growth and success of their business. We are very appreciative of our strong and trusted business relationships, and always look forward to future partnership opportunities.” BOTTOM LINE FOR C-STORES: MAKE IT CONVENIENT AND AFFORDABLE FOR CUSTOMERS TO BUY TOBACCO AND TOBACCO-RELATED PRODUCTS.

MARCH / APRIL 2022

Sales figures

A trusted destination

TOBACCO 2019 2001

THE TOTAL NUMBER OF CIGARETTES SOLD IN CANADA CONTINUES TO DECLINE, according to the federal government

42,087,329,210 23,895,350,226 CIGARETTE SALES AT CONVENIENCE

2020 2019 2018

While the macro-observation is cigarette sales at convenience are trending downward, 2020 defied that trend with a notable jump in sales (and tax revenues), according to NielsenIQ Market Track. What happened? Government-mandated lockdowns curtailed illegal sales activity and smokers’ access to unregulated product.

$4,178,637,366

3. Balance product mix: Know your customers and stock the brands they smoke, however ensure your product mix includes tobacco alternatives, such as cigars, snus and vapes for those who are looking to try something new.

$4,374,799,920

VAPING

GLOBAL E-CIGARETTE INDUSTRY

According to Finaria, a finance and investment company based in the U.K., when all the receipts are added, the global e-cigarette industry is expected to hit roughly

$21 billion in 2021 E-CIGARETTES SOLD IN CANADA

2022 2020

One of the top-ranking markets for e-cigarettes

+ $1 BILLION projected

4.18% annual growth rate

E-CIGARETTE SALES AT CONVENIENCE

2020 2019

NielsenIQ Market Track

1. Be informed: While c-store operators cannot actively promote products, you can answer customer queries. Let your customers come to you with questions and be ready with the right information. 2. Understand your brands: If a customer is looking to make a cigarette change, be it lighter, stronger or a different price point, offer insights.

$4,289,115,172

+ $1.3 BILLION

Despite regulatory challenges and sales upheaval due to contraband, tobacco and related products—cigars, e-cigarettes and other non-combustible products—are a key category and sales driver for c-stores. As pandemic-related restrictions begin to ease and consumers have greater sourcing options (legal or otherwise), c-store operators will have to work even harder to keep customers coming back. However, with a proven track record for selling age-restricted products, the channel is in a unique position to continue its leadership and guide customers in this space.

$134,699,462 $205,305,576

MARCH / APRIL 2022

52% increase

4. Work with territory managers: Most vendors work hard at building relationships with c-stores and offer a variety of tools to educate front-line staff that include one-onone conversations, as well as online training sessions and video modules. Take advantage! 5. Avoid plain packaging pains: Shoppers want to be in and out quickly so invest in a storage system that makes plain packaged products quickly accessible. 6. Train staff: Give new staff the training and resources they need to understand your storage system, as well as brand attributes and regulatory rules. Pay staff to complete training modules offered by manufacturers. 7. Promote integrity: When it comes to any age-restricted product, c-stores are essential gatekeepers. Always err on the side of caution by asking for ID and encourage staff to do the same. One way to avoid awkward conversations is to have technology do the work. The Ontario Convenience Stores Association partnered with Liquid Avatar to roll out a new pilot: Smart Age program provides digital age verification, supported with biometric authentication, for restricted product sales, such as tobacco, as well as lottery, alcohol and other goods and services. It’s done through a mobile device using verifiable digital credentials and biometrics without a user divulging any personally identifiable information to the store clerk . CSNC

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C OV E R ST ORY

SWEET SPOT With five Enniskillen General Stores now open in Ontario, the Sheehans set themselves apart as destination for unique treats and more BY CH R IS POW E LL | PORT R A IT BY JA I M E HO G GE

It was during the 2013 T.H.E.E Farmers Parade of Lights, an annual holiday event that started in 1999 with farmers decorating their tractors and driving them through the Ontario villages of Tyrone, Haydon, Enniskillen and Enfield, that Thomas (T.J.) Sheehan spotted the “For Sale” sign on the Enniskillen General Store. The nearly 200-year-old store at 7851 Old Scugog Rd. was a landmark in the small community about an hour east of Toronto, having variously served as a post office and a butcher shop since first opening in 1840. Sheehan knew the store well—as a kid, he had regularly ridden his bike there to buy ice cream, delighting at its signature oversized cones practically as big as his head. As the brightly lit tractors passed him by, Sheehan had a lightbulb idea of his own. Turning to his wife Jessie, he said, “We’re going to buy that store.” “She was like ‘No you’re not,’” recalls Sheehan. But he wouldn’t be talked out of his plan: He approached the store’s owner shortly after Christmas, and on April 8, 2014, the Sheehan family became the newest owners of an old Enniskillen institution. ▶

MARCH / APRIL 2022

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5 QUESTIONS WITH T.J. SHEEHAN How do you juggle five stores? Great managers and staff. It’s not an easy task but I like to work on good training. I’m incredibly lucky to have amazing staff and a supportive family. What are your days like? My days are busy. I try to have a routine but there are things that come up all the time and I have to adjust. I try to go to each store as much as I can. Saturdays are one of my favourite days. I get up around 5 a.m., visit all the stores and then get home to bring my kids to soccer practice. What tools do you use to stay on top of things and communicate with staff? I love technology. I’m always looking for new but cost-effective technology to assist us. We use software for scheduling and communication with staff. We have a group chat between all the managers so if there are concerns or problems, we can fix them together. Why expand? This is a tough question. I love being busy. I got it from my parents who were small business owners, too. I feel many people and even suppliers would tell me things like, ‘this is a competitive business, you might not make it.’ Plus, some suppliers wouldn’t even deal with us or give us any break on pricing because we’re so small. That’s actually driven me to grow. I have a need to prove to myself. I can be successful. I can make this work. And one day these suppliers will recognize this. Will you open more stores? Absolutely. I have big dreams, but I want to be smart about it, grow correctly and ensure my cash flow is good too.

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MARCH / APRIL 2022

They didn’t know it at the time, but that store would prove a foundational block of a convenience store mini empire that would eventually grow to include five Enniskillen General Store locations in Port Perry, Bowmanville, Oshawa and its newest store in Peterborough—a former Mister Convenience location the Sheehans took over in November (they also operates a pet store). In some ways it seemed almost pre-destined that Sheehan would go into the convenience business; he came from convenience store stock, after all. His parents had operated a gas station convenience store in Oshawa since the early 1970s, and eventually came to own a pet store of their own that Sheehan ran prior to starting his own store. “I always felt really comfortable with retail,” he says. “My parents worked seven days a week and I was always in the store.” This was in the days before Sunday shopping, and as one of the few places to buy food staples on those days, their store would always be busy. “We’d go to church, and then afterwards open the gas station,” says Sheehan. “I spent a lot of time with them at the store. I don’t know if I wanted to do it right away, but I definitely enjoyed it. I felt like I learned a lot early and knew what I was doing, so I kind of always wanted to go on my own.” It’s important to have a unique selling proposition (USP) in a business as commodified as convenience, and Enniskillen General Store has made sweets and treats a core part of its proposition. Sheehan says he’s trying to build his business around being a “sweet treat headquarters.” In addition to serving more than 45 different flavours of Kawar-

tha Dairy ice cream—and yes, they’re still oversized—as well as other frozen treats and ice cream cakes, the stores are also a destination for imported and retro candy, like Dunkaroos and the sour candy brand Warheads, as well as gum brands, like Beemans and Thrills. “It’s taken off like crazy,” says Sheehan of the move into candy. “People see it and say, ‘I remember this from 20, 30, 40 years ago.’” The stores also saw demand for grocery items spike during the pandemic, with grocery sales skyrocketing by as much as 400% to 500% between the summer of 2020 and summer 2021. “It’s still doing well, but it has come down a bit,” says Sheehan, who attributes the growth to people trying to avoid shopping at big grocery stores. The pandemic and the supply chain issues bedevilling so many businesses have also proven a challenge. It hasn’t been too bad so far, a certain flavour of Gatorade here, a specific chocolate bar there, but it doesn’t sit well with Sheehan, who prides himself on having shelves stuffed with products. “I love a packed store, with lots of product in our storage room,” he says. “I hate running out because I think that’s a detriment to a business. If someone comes in and you don’t have their favourite drink or chocolate bar, they’re going to start going somewhere else.” Sheehan is always on the lookout for new products and regularly attends The Convenience U CARWACS Show. “We love going,” he says, adding it’s a valuable forum for connecting with new people— exhibitors and fellow attendees. “Meeting companies is great, especially for new products and services. It helps our business because we

Sheehan is always on the lookout for new products and regularly attends The Convenience U CARWACS Show

OPE R ATOR IN S IG HT S WHAT’S YOUR USP? In business as commodified and competitive as convenience, carve your niche with a unique selling proposition.

The original Enniskillen General Store location learn about the latest new products and that always helps grow sales.” Sheehan also puts social media at the heart of his business. Enniskillen General Store has more than 23,000 Facebook followers, 16,200 on Instagram and more than 3,600 followers on Twitter. Last year, Sheehan made his first foray into TikTok with a promotion called “Ice Cream Love,” which saw him post a video of him placing a $20 gift card—in the shape of an ice cream cone, naturally—in various community locations around the stores’ operating area. “I love using social,” he says. “It doesn’t cost you anything to do it, just a little bit of your time.” As the owner of five stores (six if you include the pet store) time is perhaps the one thing he never seems to have enough of. CSNC

OUR PLANTBASED FAM JUST GOT BIGGER

STOCK UP Sheehan likes a packed store and stockroom. “If someone comes in and you don’t have their favourite drink or chocolate bar, they’re going to start going somewhere else.” BE SOCIAL A little bit of time and a sense of fun are great ways for independent operators to keep their store top of mind with their community. Consider product shots, as well as promotions and other community-oriented announcements.

FOODSERVICE FUNDAMENTALS

BY JEFF DOVER

Turning challenges into opportunities The foodservice sector is under pressure, but convenience stores have an advantage Foodservice is an increasingly important segment for convenience stores. In some cases, a separate, branded or unbranded, quick service outlet is created. In others, foodservice is provided on a smaller scale, served by the store’s cashier. Regardless of the scale, foodservice provides a welcome incremental revenue stream for businesses and enhanced product offering for customers. Currently, many challenges are facing foodservice operators. These include supply chain challenges, food inflation, labour challenges and COVID-19 related operating restrictions to name a few. Convenience stores offering foodservices can turn some of these challenges into opportunities.

Supply chain issues

Just like convenience stores, many foodservice operators are dealing with supply chain challenges. These challenges stem from COVID-19 related closures at manufacturers and distributors and are related to the labour challenges discussed below (i.e., warehouses and distributors are challenged recruiting and retaining employees). These issues have forced restaurateurs to modify menus as they deal with regular short deliveries. Convenience stores have an advantage in this regard. Most of the foodservice product comes through the same distribution chain as the rest of the goods served. Further, except those with branded foodservice operations, convenience stores are able to freely adjust the menu to respond to product shortages. Having food available when customers are hungry is more important than what the menu offering is—as long as it is something they crave.

Food inflation

Food inflation is a challenge for foodservice operators. The University of British Columbia’s Food Price report forecasts the cost of food to increase 5% to 7% in 2022, after increasing 3.8% in 2021, and I believe the projected inflation may be understated. As a result of this and other inflationary CCentral.ca

pressures, restaurant operators are forced to increase menu prices. Prior to the pandemic, restaurant visits in Canada had been flat for many years, forcing revenue growth to come through price increases or taking market share from competitors. With changing traffic patterns and decreased spending, this does not bode well for foodservice revenues. Recent research shows that, with increased menu pricing, consumers are not seeing value for restaurant meals. Convenience store operators have an advantage when it comes to menu pricing. Many of the costs restaurant operators face have already been absorbed by the store itself. The two greatest costs are cost of sales, which is 100% variable, and labour expense, where convenience stores have an advantage, as discussed below. This operating cost advantage also includes occupancy expenses (though foodservice sales must justify the retail space provided for these items), such as rent and utilities, typically the third greatest expense for restaurateurs. Given the operating cost advantage, convenience stores are not required to increase their menu prices by as much as restaurants to maintain the same margin. This can provide convenience stores with a pricing advantage.

Labour shortages

Many businesses, including convenience stores, have historically been challenged in attracting and retaining employees. One of the most challenged industries from a labour perspective has been the restaurant industry. These labour challenges have been exacerbated as the economy recovers from the pandemic. Restaurant employees were furloughed in March 2020, and many found other work and don’t plan on returning to the industry. Restaurants are responding by reducing operating hours and menu offerings. The competition for staff is significant and has driven up labour costs, as restaurants compete by increasing hourly wage rates, offering signing bonuses and other benefits.

The convenience store foodservice model provides significant advantages from a labour perspective. Essentially, foodservices are provided without incremental labour. As most convenience stores utilize prepared foods, which just have to be heated, food production is minimal. The cashier is able to serve the food or it is self-serve. With no seating area, labour is not required to maintain tables, etc. (though condiment stations require maintenance). So, while convenience stores may struggle to find staff, they have a tremendous advantage over restaurants from a labour perspective, which results in greater margins, even when offering menu items at lower prices.

COVID-19 restrictions

Throughout the pandemic, restaurants have been subject to among the most significant restrictions on their operations, the greatest being restrictions on indoor dining. Such restrictions have had a dramatic effect on restaurant revenues as increases in takeout and delivery sales have not kept pace with the reduction in indoor dining. Increasing off-premises consumption of food and beverage from restaurants was a trend prior to the pandemic and has accelerated ever since. Restaurants known for takeout and delivery, especially those with drive-thru, fared much better during the pandemic than those relying primarily on customers consuming meals on premises. The convenience store foodservice model has an advantage in this regard as well. In almost all cases, food and beverage is consumed off-premises. As a result, the foodservice operations have not been impacted significantly.

Conclusion

Provision of foodservice is an excellent way to enhance convenience store revenues. Foodservice is typically a challenging business, with low margins. The convenience store foodservice model, however, has many built-in advantages. With sound quality and cost control procedures, it can generate incremental profitability and enhanced product offering for customers. CSNC Jeff Dover is president of fsSTRATEGY, a consulting firm specializing in strategic advisory services for the hospitality industry, with an emphasis on food and beverage. He is based in Toronto and can be reached at 416229-2290 ext. 2 or jdover@fsstrategy.com. MARCH / APRIL 2022

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Igniting sales

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The evolution of cigar offerings is catching the attention of a young-adult demographic

Cigar smokers are bucking the downturn in tobacco use. The global market for cigars and cigarillos is expected to increase at a compound annual growth rate of 3.1% from 2019 and 2025, according to Grand View Research data. Health Canada stats from 2019 found that 3% of Canadians reported smoking some sort of cigar in the previous 30 days and anecdotal evidence shows the momentum continued throughout the pandemic. Why the uptick? It’s complicated—and not chalked up readily to just one factor. COVID in some ways has helped cigar sales. With Canadians not travelling as much to their favourite top cigar-producing destinations like Cuba and the Dominican Republic, they aren’t coming home with a big box of cigars picked up during their vacations. And, let’s face it, the pandemic has made us all a bit more indulgent in our choices. We feel we deserve to enjoy those pleasures as part of everyday life and not wait for special occasions. Shoppers have also been

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somewhat reluctant to make separate trips to specialty boutiques to buy specific items, making c-stores extra attractive to cigar buyers. At the same time, who is purchasing cigars has also evolved beyond the traditional demographic—older men—and shifted to younger adult purchasers. “Over the last few years, we have noticed a diversification in the market,” explains Jean Paul Brown, business development, Vale Republic Ltd., a company that sells rolling papers, pre-rolled cones and whole leaf fronto/grabba tobacco, popular among roll-your-own cigar smokers. “We are seeing more interest from women generally.” Having female celebrities, like Beyoncé, Madonna and Jennifer Lopez, go public with their love of cigars can’t help but spark interest. “Also, with the legalization of cannabis, younger consumers are purchasing less expensive convenience store cigar products to complement their smoke,” he adds. “Shoppers are much more price sensitive

and are looking for ways to save money.” Along with the diversification of cigar buyers, companies have followed suit by shaking up their offerings. “Over the years, companies have been getting increasingly innovative, resulting in more product options, giving consumers assortments of new sizes, blends, and tastes to suit their preferences,” notes Brown. And instead of going to specialty cigar shops, consumers are turning to convenience stores as an accessible option. Looking forward, as COVID-19 restrictions continue to ease, Brown predicts that more tobacco companies will start to attend trade shows and participate in other customer-facing marketing activities to further spur growth of the cigar market. He also sees the potential of strong sales for grabba cigars among younger smokers. “We expect the trend to continue on an upward growth trajectory,” he says. Convenience stores are very important to sales, as much of their revenue comes from tobacco products. “There has been significant year over year growth over the past decade with convenience store cigar sales,” Brown says. Daniel W. More, president, Brigham Enterprises Inc., agrees: “We see convenience stores, both chain and independent, as being extremely important, especially for machine-made cigars. The average consumer for these products is accustomed to finding them available conveniently in the C&G channel.” On the premium side, he points to trends in cigar wrappers and sizing, but says it’s cyclical with these trends returning every four to five years. Because of federal and provincial restrictions, capitalizing on the latest thing generating buzz is difficult. For example, More points to the popularity of Russian cream flavours, now doing very well in the United States (convenience giant 7-Eleven displays premium cigars in cedar-lined humidors as part of its new Evolution Stores concept). However, Canadian restrictions prohibit such flavours. Unfortunately, More says they serve only to fuel the demand for illegal importation and distribution through other channels. Still, there are opportunities for c-stores to spark the interest of cigar customers with well-curated selections that speak to their local demographics. CSNC

MARCH / APRIL 2022

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Competing for dollars As consumers' dining habits shift (again), what does it mean for c-stores? Societal shifts have resulted in major changes in how Canadians prioritize not only their meal regimes, but also where they source their foods and beverages for these occasions. Though the impacts of the COVID-19 pandemic restrictions continue as a force in many regions, pent-up demand across the country is building as consumers look to return to out-of-home dining enjoyment and experience. Ipsos Foodservice Monitor’s (FSM) daily tracking of all out of home channels, reveals that weekly visit incidence improved considerably in December 2021, versus the lockdown period imposed in December 2020, as 26% more Canadians visited restaurants in our current phase. While safety concerns naturally still exist, the desire to return to dining out is evident in the FSM Diner Optimism Scale, which shows a considerable improvement in visit demand to go out to restaurants and declining willingness to stay home and socialize virtually. Shifting sentiment has potential business impacts for the entire food and beverage regardless of your channel priorities. Retailers don’t only compete for food dollars with other retailers. Therefore, it is critical to have revenue management strategies in place to preserve gains realized from mandated lockdowns. Similarly, foodservice operators need to understand which occasions and traffic has been lost to the retail sector to set plans to sway consumers back with the right offer to re-ignite channel results.

Improving consumer outlook

Let’s dig a little further to assess improving consumer confidence. With cautiousness easing—fewer adults reporting that they remain cautious with their daily activities (-32% vs. 2020)—the willingness to enjoy life more than ever is up by a whopping 29 percentage points. There is also a rising share of consumers working outside the home (+9%) which is

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an important factor when evaluating the daytime return to foodservice channels. As fear and uncertainty subsides, all these signals point to improving consumer outlook.

Rising fatigue and boredom with cooking routines

When evaluating home cooking routines, boredom with daily tasks and meal repertoires is on the rise. Meal preparers more often report that cost, health demands and necessity are driving daily cooking chores, as opposed to enjoyment and nurturing loved ones, which was more prominent in the early pandemic phases. Cooking fatigue is also prevalent as Canadian cooks increasingly opt for assisted and aided meal solutions. Though most meal items remain home prepared, usage of partially homemade options and meal kits has increased versus the initial pandemic period. Finally, motivations driving daily choices continue to evolve. Demand for the “4 E’s” is rising in prominence as consumers look to the return of Experience, Exploration, Energy and Entertainment to meet desire for expanded variety and global discovery.

QSR fared best through the pandemic

The quick-service restaurants’ (QSR) share of occasions increased during the pandemic period (+17%) driven by long embedded off-premises channel strategies like takeout, drive-thru and delivery. Conversely, full-service restaurants (FSR), more reliant on the on-premises dining experience, have been gravely impacted by pandemic lockdowns, movement restrictions and labour shortages. Though delivery services have provided some

assistance to beleaguered operators, traffic at FSRs remains down by nearly 32% versus pre-pandemic period.

Occasion impacts

Occasion losses at both QSR and FSR are most notable during the daytime hours, with lunch declines outpacing breakfast losses. Breakfast occasion shifts to retail have increased the morning size of the prize as there are fewer occasions skipped and more items prepared at home. The lunch occasion has lost some relevance during the latest pandemic phase, with more skipping, fewer social occasions and less dining out. Dinner has been the primary focus of restaurant diners during restricted periods spurred by pick-up and delivery services supporting the ‘work-free night-in’ where consumers look to treat and indulge themselves.

Looking ahead

With a large ‘at home’ population supported by fewer ‘working’ Canadians (e.g., the rising share of retirees, homemakers, students and non-working individuals) and fewer consumers going out to work, home habits are certainly now imprinted in the consumer psyche after two years of lockdown. Consider the evolving role of convenience. Ease, speed and on-demand availability, once the hallmark of foodservice channels, has increased as drivers of home choice. Today, meal preparers increasingly report that going to the fridge, freezer or pantry is easier than going out. In order to set future growth strategies, it will be critical to understand how targeted daypart habits and functional and emotional priorities have evolved to hit the mark and find growth. Compared to the pre-pandemic period, consumers demand more from meals today, with needs ranging from high-quality food experiences to discovery of new tastes and flavours that support expanding palates, added convenience and further opportunities for customization. CSNC Kathy Perrotta is a VP with Ipsos Canada Market Strategy and Understanding, working with Food & Beverage Group Syndicated Services.

MARCH / APRIL 2022

BACKTALK

BY M I C H E L L E WA R R E N

More than luck

As OLG’s chief lottery and customer officer, Kerstin Lack knows the key role that lottery plays in driving c-store traffic and sales

supply chain management and customer-centricity. Convenience Store News Canada connected with Lack to find out how the pandemic has shaped OLG’s business, what that means convenience and how OLG is investing in its relationship with convenience retailers. On how has the pandemic reshaped OLG’s business: KL: Despite the challenges faced during the pandemic, OLG contin-

ued to drive the performance of its lottery business. Lottery retail sales reached an all-time high of $4.2 billion in the fiscal year that ended in March 2021: The convenience and gas category helped generate $3.8 billion of OLG’s lottery sales in Fiscal 2020-2021, with 70% of the convenience and gas stores earning 81% of sales. We’re on track for similar results this year. [As of press time, 2021-2022 results were not available.] On the importance of the convenience and gas channel to OLG: KL: OLG recognizes that our approximately 10,000 valued retailer

Despite the myriad challenges the convenience channel continues to navigate after two years of pandemic-related lockdowns and business fluctuations, lottery sales are a bright spot, a beacon of hope if you will, buoying in-store traffic and generating welcome commissions for convenience operators through promotions (in March, Ontario retailers earn a 30% commission on all $3 Instant Bingo and Instant Crossword tickets), new sales opportunities and supports. Helping steer the ship is Kerstin Lack, who joined the Ontario Lottery and Gaming Corporation (OLG) as chief lottery and customer officer last fall. She is responsible for driving value and growth in OLG’s Lottery business through the development of new and improved customer experiences and products, engaging underserved segments of the market, effective and efficient

MARCH / APRIL 2022

partners across the province, including convenience and gas stores, are critical to lottery sales. Safeguarding the health of our lottery retail network is of utmost importance to OLG. OLG is proud to say that its blended retailer commission rate is the highest in Canada. Did you know that more than half of the $4.2 billion of lottery retail proceeds in Fiscal 2020-21—$2.4 billion—were returned to Ontarians in prize money? Lottery winners represent a key driver for in-store lottery sales. Each year, retailers process approximately $1.9 billion in lottery prize claims at their stores, collectively paying out between $1.1 billion and $1.4 billion in cash prizes. OLG paid more than $330 million in commissions to our retailers across the province in the last fiscal year: Compare that to the $196 million in commissions paid in Fiscal 2009-10. This represents an increase of 5% compounded annual growth rate (CAGR) to total commissions paid to retailers over the past decade.

“In the convenience and gas category, lottery sells five times more than the next highest product category (not including fuel)”

On how OLG is investing in its relationship with c-stores: KL: To help support OLG’s valued retail partners

during the pandemic, OLG has run several unique lottery retailer initiatives that have provided increased commissions on the sale of a variety of lottery products. In a Canadian lottery first, OLG launched the “Support Local” initiative in January 2021 that returned all profits to retailers for three months’ worth of sales on the new Instant Plinko game. Based on the success of the Instant Plinko initiative, other programs quickly followed for such games as, Lightening Lotto and Instant Top Up. The commission increase on these products ranged from 10% to CCentral.ca

30%. OLG has other initiatives in the pipeline that we believe will continue to drive higher retail sales and higher retail commissions. Plus, bonus commissions are earned when retailers sell a top prize-winning ticket at their store, in addition to commissions on winning redemptions at the store. Bonus commissions vary from $100 to over $1,500 per top prize-winning ticket. On the pivot to online gaming/lotto and how this impacts the role the convenience channel plays in the future of OLG: KL: Ontario provides a range of entertainment options to adult On-

tarians, including digital online play, offered in a safe and secure environment. Last summer OLG launched Ontario’s only legal digital sportsbook, ProLine+ to allow customers to place single event wagers or in-game bets on sports. [However,] OLG’s retail network remains the traditional place to purchase and redeem lottery products. OLG continues to invest in this important channel. For example, in February, OLG launched new and exciting sports betting products at retail locations across the province under the popular ProLine brand. The new ProLine allows in-store customers to make single event wagers on sports based on dynamic competitive odds, and also have access to new sports, events, and markets to place bets on. The new ProLine also allows retailers to make same day payouts for wins of less than $1,000 at the retailer's availability. OLG is offering a complete gaming experience for our customers, whether it be at retail locations or online. On how c-stores benefit from selling a winning ticket and what operators can do to boost lottery sales: KL: Retail lottery is obviously a key driver of store traffic and in-

store sales of other high-margin items. OLG believes that samestore lottery sales have considerable upside, meaning that retailers can drive commission growth through improved merchandising and leveraging new product launches. For example, we have exciting changes coming to Lotto 6/49, the game Canadians have loved for decades. More details will be shared soon about how Lotto 6/49 will get bigger in September 2022. Also, the new ProLine products are expected to generate more player interaction at retail locations, contributing to increased retailer commissions and economic recovery in Ontario. It’s also important to know that 100% of OLG proceeds are reinvested into provincial priorities to improve the quality of life for all Ontarians. So, when you play any OLG games, you play for Ontario.

sell tips, but there are also retailer-only contests, such as the current promotion for a chance to win a ProLine prize pack valued at $100. On why retailers who don’t sell lotto should get into the game: KL: OLG has been in the lottery business since 1975 and has a proven

track record of benefits for our lottery retailers across the province: • Grow your business—the average retailer generates over $9,000 per week in lottery sales. • Increase traffic and basket size with the number one selling products at the front of the store.

• In the convenience and gas category, lottery sells five times more than the next highest product category (not including fuel). • Retailers earn regular and bonus commissions on a high-volume category. Compared to other jurisdictions, OLG’s blended lottery retailer commission rate is the highest in Canada. • Most importantly, 100% of OLG proceeds are reinvested into provincial priorities to improve the quality of life for all Ontarians. • W hen your customers play any OLG games, they play for Ontario. CSNC 22_0345_CN_Conv_Store_News_MAR_APR_CN Mod: January 24, 2022 3:46 PM Print: 02/04/22 1:45:38 PM page 1 v7

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On new initiatives to support operators: KL: OLG continues to find new opportunities to optimize lottery

sales and drive traffic to lottery retailers in order to increase their commissions. One such opportunity that retailers are starting to see in their stores is a refresh of two core pieces of OLG’s merchandise— the Lottery Playstand and Instant Ticket Display. The new designs include several operational and aesthetic enhancements that will improve lottery experience for retailers and customers. Also, to ensure more efficient and effective communications with our approximately 10,000 retailers, we launched the OLG Retailer Hub on OLG.ca. It’s a one-stop shop for retailer communications, training and compliance information. It keeps retailers updated with current promotions, upcoming product launches and also promotes best-in-class retailers that share how they are leveraging lottery to increase their revenue and service their customers. The Retailer Hub not only provides valuable information and up-

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CONTENTS

M A RCH | A PR IL 2022 VOLU M E 27 | N U M BE R 2

5 Editor’s Message Paradox of innovation 6

Sound decisions

Chemical dependency

Less noise at the car wash means happier staff and customers

Car wash chemistry is all about efficiency, effectiveness and economy

Getting the message

Good choices

Pump-side marketing drives in-store trade

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Sanjeev ‘Sonny’ Kumar’s business features a full-range eight position forecourt, 1,500-sq.-ft. convenience store, Indian foods restaurant and Fusion [car] wash

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Electric vehicles charge profits

A few weeks ago, I read an interesting item about electric vehicle (EV) usage in the United Kingdom, where more than 163,000 electric vehicles were registered last year. BP, a major fuel supplier with 11,000 fast-charging units in Britain, reported they are on track to see their EV charging share outgun their forecourt petroleum business. BP’s head of customers and products, Emma Delaney, says sales of EV charging grew by 45% between Q2 and Q3 last year. “If I think about a tank of fuel versus a fast charge, we are nearing a place where the business fundamentals on the fast charge are better than they are on the (fossil) fuel,” she said. Are we moving in this direction here in Canada? The answer is yes, but more slowly than almost anywhere else. Public buy-in to electric cars has stagnated around 4% in Canada and about 5% in the U.S. EVs are too expensive (if you can find one), and people outside major centres (especially in the Prairies) see them as problematic. The Canadian Government has stipulated 2030 as the year 50% of all new vehicle sales will be from EV and alternative fuel vehicles. The likelihood of this happening is slim, even though the driving public is highly interested in economical alternative fuel vehicles. Consider that when VW launched its ID.4 EV in 2020, the website crashed due to popularity. If Canada wants to get real on alternative fuel vehicles, the government must ante up with better rebates and incentives that go beyond what is on the table now. To be sure, the future is brighter for both society and neighbourhood fuel/convenience store locations with more alternative fuel vehicles on the road. OCTANE

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CONVENIENCE STORE NEWS CANADA / OCTANE is published 6 times a year by EnsembleIQ. CONVENIENCE STORE NEWS CANADA / OCTANE is circulated to managers, buyers and professionals working in Canada’s convenience, gas and wash channel. Please direct inquiries to the editorial offices. Contributions of articles, photographs and industry information are welcome, but cannot be acknowledged or returned. ©2022 All rights reserved. No part of this publication may be reproduced in any form, including photocopying and electronic retrieval/ retransmission, without the permission of the publisher.

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SOUND DECISIONS Less noise means happier staff and customers

Car washes can be loud, very loud. Car wash operations without sound limiters can hit levels as high as 90db and cause hearing loss to unprotected workers, annoy neighbours and make customers uncomfortable. New technology that has increased the use of quieter electric motors over older hydraulic systems, better entryways and sound cloaking techniques have worked to bring the noise down at Canada’s car wash centres. Operators are listening. At Skogie’s Car Wash in Kelowna, B.C., they have looked to lower the loud with state-of-the-art equipment at new sites. “We just built a new wash and chose to use Belanger’s SpinLite equipment because it is gentle and much quieter than previous generations of tunnel equipment,” says Skogie’s director Chris Skoglund. “You can talk on speakerphone while going through the wash, which you could not do previously. We will be upgrading one of our other sites to SpinLite this spring.” Chris Skoglund

MARCH / APRIL 2022

b y K E L LY G R AY

Bubbles Car Wash & Detail Centre At Bubbles in Alberta, operator Natasha Toffoli has also been paying attention to noise-limiting technology. “Of course, blowers are noisy all around, but yes, we’ve had to implement dampening at our new site as the sounds echoed through the main floor of the building,” she says. “We installed sound panels throughout the vacuum bays and built a sound dampening system around the blowers. These installations reduced the sound substantially.”

are systems that utilize remote placement of motors and fans to keep sound levels down. At Mississauga Ont.-based AutoSpa, crews work from moving conveyors with vacuum hoses, cleaning solution applicators and other tools set up on an overhead gantry. Vacuum system motors are placed well away from the work area to keep the site as quiet as possible, while wash technicians get to vehicle interiors. Supplied by Eurovac, AutoSpa uses dual 30 horsepower vac systems that are powerful and quiet thanks to motor placement in the compressor room. The hoses run above the conveyor on a rail system. This placement allows wash technicians to limit reach for hoses and always have a vacuum

Central vacuums

Alongside dryers, vacuums can be among the loudest machines in the car wash, with some equipment running close to 90db. Combatting this challenge

AutoSpa Mississauga

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ready at hand. delivers over 10,000CFM per 10hp At Baril Ford in St-Hyamotor. This year International cinthe, Que., they turned to Drying Corporation will release Drainvac for a solution to quiet the next generation of its Stealth their shop. According to Baril (Quiet Dryers) called the “Stealth Ford Lincoln president Eric DuPredator” (Ultra Quiet Dryer). This Eric Dumouchel mouchel, the first great advandryer is 10db more quiet than its tage of Drainvac is the motor. predecessor and features new pat“It’s industrial,” he says, noting that while ent-pending “reverse flow air technology” it offers a large sound, it can be mounted that produces in excess of 11,000CFM per far away from the action in the garage in a 10hp motor and 20% more velocity. separate room. “This way, employees have NCS MacNeil’s PowerLock is an air a good quality work environment, and valve that reduces energy use by preventthey can talk to each other.” Dumouchel ing airflow between vehicles and minimizremarks that having a quieter shop means ing peak load charges. PowerLock lowers staff can pay greater attention to details. noise levels by up to 5db when it’s engaged. “With the equipment on the wall, there’s The company reports its product works in no more machines on wheels that would new sites as well as add-ons for existing bang on car doors or fall on their sides. equipment. PowerLock can save up to 30% And, because it can be noisy in the shop, on both peak billing charges and overall people often didn’t hear the vacuum and electricity use from car wash dryers could accidentally hit the bodywork of the Proto-Vest has stepped up the quiet car and make some damage,” he says. with its model S130 with Silencing Package. Utilizing a 30hp rotary blower, Dryers the system features low maintenance, Based in Cary, Ill., International Drying touchless design that is 10db quieter when Corporation released the “Stealth” (Quiet coupled with the silencer package. AccordDryer) in 2018. This system features ing to the company, they addressed noise patented “Smooth air technology” (SAT) from the blower inlet, covered the toe that offers a low turbulence design and blower and the motor, and blocked noise

from the rotor and from outgoing air to create a product that is considered 10 times quieter than average.

Keeping the noise inside

Entry and exit doors are the first and last best method for sound reduction where sites are located close to residential areas where noise complaints can become an everyday occurrence. Here, polycarbonate doors offer the best sound resistance with entry systems that offer quick open and close features. The faster the door closes, the less time noisy dryer motors and other wash machinery can interact with the neighbours. Sound reducing coating technology offers another way for wash operators to keep wash sounds inside. A spray-on surface for interior walls and ceilings or a sound-reducing paint applied to a single side of a blown cellulose metal stud wall will boost the Sound Transmission Class or STC rating from 40-45 by +7 points to 52. STC is a measurement used to calculate the effectiveness of sound reduction materials, and how they reduce sound transmission between rooms. The higher the STC rating, the more effective a material is at blocking sound. OCTANE

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CHEMICAL DEPENDENCY

Car wash chemistry is all about efficiency, effectiveness and economy b y K E L LY G R AY

MARCH / APRIL 2022

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Car wash chemistry has come a long way over formulae. Today’s super-concentrated chemical products must have the years. Greener, value-laden chemicals have the right mix to work effectively. Understanding your dispensing removed many of the hazards of old-school system, having the right products that meet up with water quality products. Indeed, today’s range of waxes and and flow rate goes a long way to creating a balanced scenario that cleaning agents allow operators to use less to sees efficient water and chemical use creating an efficient and valachieve more for their customers. ue-laden wash package.” Today’s car wash chemicals are available in Trevino mentions that challenges can occur when operators mix super concentrated formulations that cost less and match products from multiple suppliers. “Are your pre-soaks or to transport, take up less room in storage and other detergents compatible with one another?” he asks. “The lack of mechanical areas, and offer less cost per applichemical compatibility can result in poor drying, clogged lines and cation than in the past. Car wash detergents nozzles, as well as solid residue particles on the vehicle’s surface due and waxes cost operators between 5% and 7% to the reaction of the chemicals to each other. Even the pit and reclaim of the wash package price. This value transsystem can be impacted,” he says, adding that these challenges can add lates into around 0.40 cents to $1.50 up to a more expensive and less effective car wash outcome. per application at the car wash; deImportant as well is that operators should be cognipending on the package. zant of the growing use of chemistry buzzwords in car “Efficiency in all aspects of car wash industry marketing. “While we are all aware of the wash chemicals has gone through the roof,” says NCS rise of ceramic technologies in the space, we’ve found vice-president Western sales, James Trevino. He menthat many times when our chemical technicians visit tions industry-wide performance and usage trends have a site to convert a competitive product line to ours, the been undergoing rapid change. ceramic products the operator are using are actually inNCS is now the industry leader following a series of terfering with the efficiency of the other products used James Trevino acquisitions that saw them take on CSI, Zep and Mondo. in the wash,” says Mack Ewing, director, strategic initiaTrevino suggests that training on chemical usage is the tives, Transchem Group. “With this in mind, we believe best first step to effective chemical use. “It is also importthat the efficiency of car wash chemistry is all about edant to know exactly how much water is being used and ucating technicians on how to select products that comfind a sweet spot to determine mix rates. Water pressure plement each other to deliver a better clean in any given and flow rate are important considerations to effective situation,” he says, pointing to their recently developed chemical usage,” he says, adding that operators need to Chemical Technical Manual that provides an in-depth, fully understand their chemical dispensing systems and easy to understand overview of how to work with car how they mix with the wash water. “Good dispensing wash chemistry, including detailed overviews of dilution Mack Ewing systems take a lot of the guesswork out of chemical mix rates and handling best practices.

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False economies negatively impact quality and cost money

Creating an operational saving without doing the necessary homework on how these initiatives may impact chemical use runs the risk of creating poor quality and performance in the final product. Here are some examples of where operators may find challenges. *Trying to save water by changing nozzle sizes, reducing the number of nozzles, or reducing pressure impact the mix. Here, chemicals need to be adjusted to maintain wash performance. *Increasing throughput with a faster conveyor speed or limiting the number of passes without adjusting chemistry can reduce wash quality and raise costs per wash. *Not paying attention to water softener maintenance. Soft water uses lower amounts of chemicals and delivers better results. *Reducing water temperature on pre-soaks to save money. Lower temperatures often mean more chemicals and dwell time are necessary. *Reducing dwell time in a touchless system to speed throughput means more and stronger detergents.

CHEMICAL DISPENSERS KEY TO EFFICIENCY In British Columbia, Skogie’s is a multi-unit car wash chain that is built on customer approval and solid business practice. According to director Chris Skoglund, success in the car wash business is all about the details and getting chemistry spot on. For example, the Skogie’s Clement Drive location in Kelowna offers longer tunnels to allow more drip space before drying. This space on the conveyor allows for more dwell time on pre-soak so that the chemical agents can do their job. The chemical dilution and dispensing system is an essential component that makes the application of pre-soaks, waxes and detergents accurate and effective. Chemical dispensers improve safety and quality and eliminate chemical waste and improper mixing. Accurate dilution of concentrated chemicals delivers predictable performance. Systems should offer operators the ability to set both flow and dilution rates. Pumps should also be compatible with a range of chemical products to allow operators the greatest leeway when choosing the right product for their business or when they change chemistry for the season. Concluding, Skoglund says, “Dispensers provide more accurate dilutions, reduce the amount of water needed per wash and help get vehicles through the wash even faster. Overall, dispensers work to improve the use of chemicals that are already economical.” OCTANE

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Fuel sales bring in customers, but margins are razor-thin. For many operators, the real money is being made most often at the car wash or in-store with sales of soft drinks, confectionery, tobacco and takeout prepared foods. Getting customers from the forecourt to the backcourt cash desk is essential to business performance. Marketing at the dispenser helps create impulse purchase decisions operators can take to the bank.

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“When your customers are fuelling at the forecourt, they are available for up to five minutes of media impressions,” says Tim Walker, principal of Soapy Brushy, a Toronto-based car wash consultancy that offers advice on marketing and media for car wash and fuel site operators. Walker often advises operators to consider a pump topper to deliver key messaging about in-store specials, coming promotions,

MARCH / APRIL 2022

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A pump topper is right at eye-level. Toppers are easy to see and hard to ignore

and store news. “A pump topper is right at eye-level. Toppers are easy to see and hard to ignore. Over the course of fuelling, a customer reads the pump talker several times. This information helps trigger and cement impulse purchase decisions that can be maximized in-store with further messaging such as well-placed digital media screens.” Pump toppers are highly economical and use printed materials that fit into durable sleeves attached to dispensers. However, new technology is coming to the forefront with digital messaging that is timely and on point. At Dover Fueling Solutions (DFS) they are piloting both DX Promote and Anthem UX in the Canadian market. The DFS Anthem UX (user experience) platform on the Wayne Ovation fuel dispenser features a 27-inch colour touch display, loyalty abilities and marketing opportunities delivered by a Microsoft Azure cloud-based platform. Launched in the fall of 2021, the Anthem UX system provides personalized experiences in content and targeted advertising, right at the dispenser. The innovative platform has multi-language capabilities that allow customers to interact with equipment in their language of choice. Returning customers are recognized and can be offered products based on their purchase history, purchase a wash or receive marketing and loyalty messages that drive in-store business. And, it accepts contactless payment options for gas purchases, including Apple Pay and other digital wallet tools to protect your customers and your business. DX Promote was launched in July 2020 with the DFS Anthem UX user experience platform and is a core solution in the DFS DX connected solutions platform. DFS DX uses the latest generation of their iX Media and Media by DFS offerings for stations that want greater control over their customers’ in-dispenser media experience. By using DX Promote’s open infrastructure and integrating it with a subscription to DFS collaborator Shep Digital Solutions’ merchandising platform; fuel retailers can drive in-store traffic by using their sales data and predictive analytics to amplify promotional messaging. The automated scheduling and content distribution process makes it easy to manage content and tailor it to customers’ needs. According to Brian Nelson, president and chief operating officer at Shep Digital Solutions, “These new solutions allow convenience retailers the opportunity to take back control of their forecourt and focus on converting fuel-only customers to instore, multi-product purchasers, leading to increased profits.” Gilbarco Veeder Root has stepped up

All our customers are happy about the “wow effect” that our technology is providing to their gas stations

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These new solutions allow convenience retailers the opportunity to take back control of their forecourt and focus on converting fuelonly customers to in-store, multi-product purchasers, leading to increased profits

its dispenser system capability with Encore Experience. The company reports Encore Experience delivers more than 100 million promotions per month, driving demonstrated traffic and in-store sales lift. Recent market research at one U.S.-based retailer shows Encore Experience drove a 39% increase in sales of in-store promotions to gas station c-store customers. Encore Experience can be factory-installed to support media in new Encore 700 S dispensers or on FlexPay IV retrofit kits for existing Encore 300, 500 units. The system will work with any point of sale system and does not require changes to existing POS systems. Encore Experience supports all major file types, allowing operators to develop their own video or graphics to create messaging or promote their brand. Pompe Media is a Quebec-based company that is bringing new merchandising tools to the forecourt through the introduction of several unique technological innovations. Pompe Media improves the customer shopping experience by displaying news, weather and other content such as c-store specials and promotions in front of customers as they fill their gas tanks. Recently they rolled their system into Ontario with plans for further market expansion. According to Sylvain Béland, vice-president of development, Pompe Media, dispenser-top systems offer a 21.5-inch display screen that delivers content to motorists while they spend up to four minutes fuelling. “All our customers are happy about the ‘wow effect’ that our technology is providing to their gas stations. But more importantly, they are very satisfied with the impact of their overall sales that we are generating. For example, we increase lottery sales by 16% on average as well as have a strong sales impact on energy drinks, candy bars, car washes and even on gasoline.” Last year 7-Eleven Canada became the first convenience group in the country to launch a chain-wide national payment and marketing app. Mobile Checkout installs free on mobile devices and offers methods for contactless payment for gas and car wash as well as in-store purchases. Once open, the app delivers targeted marketing messaging to drive in-store sales. We’re reinventing convenience with the 7-Eleven Mobile Checkout, and this is yet another example of how we’re developing digital innovation to actively exceed our customers’ needs,” says Norman Hower, vice-president and general manager of 7-Eleven Canada. Canada is the second market to introduce the feature after a successful launch and expansion in the U.S. earlier in 2021. Mobile Checkout has been used by over a million 7-Eleven customers at all of their 3,000 participating stores in the U.S. OCTANE

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GOOD CHOICES Flexible wash option is a winner in Collingwood, Ont. car wash renovation b y K E L L Y G R A Y | P H O T O G R A P H Y b y G A R Y D AV I D S O N

MARCH / APRIL 2022

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Cars in Collingwood, Ont., will be a little cleaner this year following extensive upgrades and renovations at the First Street Pioneer Station. The business, operated by Sanjeev “Sonny” Kumar, features a full-range eight position forecourt, 1,500-sq.ft. convenience store, Indian foods restaurant and Fusion [car] Wash. “I took over the site in June of 2021,” says Kumar, who had been involved in another fuel location in the community for more than 20 years before it was sold last year. He reports that the First Street fuel and wash business he now operates launched initially in 2012 as a Pioneer station. “ When we took it on, we could see there needed to be some investment to make the site more attractive to customers in the area.” Changes included a refresh of the c-store and launch of an adjacent Indian foods restaurant, as well as a new ISTOBAL FLEX5 wash system to replace the older touchless system. Kumar’s new Fusion Wash opened on December 13, 2021, to rave reviews from customers. “The first week was amazing, and we have seen a steady and sustained growth in business as a result of the upgrade.” His Fusion Wash customers now have greater choice with a system that can offer both soft-touch friction and touchless service. “We retired the old equipment that had become tired over the years and cleaned up the facility,” he says, mentioning that they were able to keep existing below-grade separators and continue to recycle and reuse water for select parts of the system such as high-pressure pre-rinse. “The old system was strictly touchless. After shopping around, we decided on the FLEX5 Combo because of its capability. With a five-brush design, the FLEX5 delivers the clean our custom-

“Choice has proven to be a winner for our business”

NEW WEBSITE COMING SOON. 1-877-613-1491 SALES@PDMCL AREN.COM

Kumar offers a classic assortment of c-store products

ers want, and it can easily accommodate other customers who look for a touchless option. Choice means no one is left out, and this is good for business.” Kumar looked to PD McLaren for equipment and advice before making his decision. The FLEX5 Combo can be either a three or five brush unit (depending on operator need) and includes the same contouring rotating top and oscillating side high-pressure components used on the ISTOBAL FLEX5 Touch-Free configuration. The Combo’s high-pressure pumping unit provides 33-GPM@1100-PSI, and with multiple pumps on the pumping stand, the machine can turn on just one or multiple pumps at once to provide only the required amount of water. This functional aspect makes the system incredibly efficient in both water and electrical consumption. The FLEX5 Combo unit can utilize five brushes in one pass, making the car wash 30% faster than using its optional three brush configuration, says John Sorensen, regional sales manager with PD McLaren. Sorensen comments that Kumar was interested originally in a full tunnel express. “Sunny was looking to maximize his thru-put. We were able to analyze and predict his customer capture. With this data in hand, we were better able to offer solutions for his business. The FLEX5 Combo is a good mix between a small tunnel wash and a rollover. And, the system can handle his traffic surges which occur through the day.” Kumar elected to go with a fully optimized system that allows for a multi-wax capability to give his customers the most choices possible. There is a dual pre-soak that uses both low and high PH formats. In addition, the system offers under-spray, high-pressure wheel, quarter panel blasters and five brushes. The Premier dryers CCentral.ca

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Powerful six motor dryer with Elephant Ears gets the job done are 60 horsepower units that use six motors to power a set of ‘Elephant Ear’ blowers that focus on getting fluids off the top and sides of the vehicle. The off-board placement of the dryers means Kumar can have two vehicles in his wash bay at once. The site turned to Baywatch Doors for new entry systems. Kumar selected a polycarbonate three window door for both entry and exit. He also elected to go with Baywatch’s top-of-the-line technology called IntelliWatch. “Our doors are controlled via the Internet. We can monitor them remotely and can make changes for the weather,” he says, noting that they currently have the doors set for -25ºC, at which point the doors stay closed to keep the wash bay warm. “Our system gives us a reading on both inside and outside temperatures. There is an alarm that lets us know if there is a problem like a stuck entry, damage or temperature alert.” The installation came with a few challenges. “We upgraded the electrical from 200 amp to 400 amp. At first, we had thought we would run the power lines above ground, and we obtained permits for the work. But, the contractor suggested it would be better to go with underground cabling. This change meant a delay while we arranged for new permits. There were also challenges caused by supply chain issues,” he says, remarking that altogether the delays only amounted to a few weeks. Today, the site has a cohort of four persons, including Kumar. He comments that the new wash system has allowed them to increase service levels while maintaining the same number of staff before the renovation. On average, the system runs 10 to 15 cars per hour. The top-level Fusion Platinum package uses a combination of soft-touch friction and touchless elements and takes six-and-a-half minutes to complete, while other packages run between three and five minutes. Kumar reports they offer three packages that feature touchless, friction, and combinations. Express touchless is $6.99, Superior (friction) $8.99 and Ultimate is $10.99. Prices are $2 more without a fuel purchase. “Choice has proven to be a winner for our business. This flexible car wash system is like having two machines in one, and that capability has meant more share in a very competitive market,” concludes Kumar. OCTANE

“We have seen a steady and sustained growth in business as a result of the upgrade”

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Product News FINDOOR IS CANADA’S BIGGEST MANUFACTURER OF FOLDING DOORS Our industrial grade doors which open sideways, have been designed to withstand tough demanding use and variable weather conditions without adversely impacting the surety of operation. Our speciality doors can be completely customized to fit any order, they can come equipped with electric openers or with easy manual operation. Windows and man doors can be fit to any size . This is an excellent choice of door for example barns, fire stations, shops or car washes and much much more. Try Findoor for your next door project. www.findoor.ca 866-338-8308

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CANADIAN CANADIAN

CARWASH CARWASH ASSOCIATION ASSOCIATION DIRECTORS

Morgan Arnelien – FEDERATED CO-OPERATIVES LIMITED Jeff Beam

– MONDO PRODUCTS CO LTD

Cristina Caruso – SUNCOR ENERGY INC. Michael Destro

– TAMLANN INVESTMENTS

MARCH 2022

CCA SUPPLIER HIGHLIGHT The Canadian Carwash Association would like to take this opportunity to thank and acknowledge our Supplier members for their support and dedication to our CCA Carwash Owners and Operators!

Michael Howe – BAYWATCH ENTERPRISES CANADA DIVISION Mike Jacques – NATIONAL CAR WASH SOLUTIONS Matthew Lapolice Jamie Shaw

Supplier and Platinum Sponsor

– MARK VII

– 7-ELEVEN CANADA, INC.

Karen Smith

– VALET CAR WASH

Rudy van Woerkom – BIG CITY AUTO N TRUCK WASH Tim Walker

EnsembleIQ

– REVINMEDIA

NATIONAL OFFICE

Supplier and Gold Sponsor

Director of Operations Elizabeth McCaw Accountant Ricky Nason Event Coordinator Jennifer Hickey

LMI Canada Insurance

Mondo Products Co. Ltd.

Membership Coordinator Juliano Sinopoli Canadian Carwash Association 411 Richmond Street East, Suite 200 Toronto, Ontario M5A3S5

COVID-19

Mark VII

Zep Vehicle Care Inc.

Supplier and Bronze Sponsor

RESOURCES Members have access to a library of resources through the CCA and CFIB partnership. Visit https://www.canadiancarwash. ca/COVID-19-and-the-Industry for more information.

Transchem Group

New Wave Industries, Ltd. PurClean-PurWater

INDUSTRY FORUM INDUSTRY FORUM DEDICATED TO SHARING KNOWLEDGE AND BEST PRACTICES IN THE CARWASH INDUSTRY

Other Supplier - CCA Members AIR-serv Canada Inc. Associated Industrial Brush BayWatch Entreprises LLC. Belvedere Technical Services Ltd. CECCATO Spa CTM Design Services Ltd. Deltic Washforce

DKD Vehicle Wash Supplies Ltd. Green Canpump Independent Wash Services Ltd. Kleen Rite Corp. London Mat Industries Ltd/ Tapeswitch Canada Lustra, a division of Cleaning Systems, Inc.

MacNeil Wash Systems Petro Service Limited Power Pressure Systems Inc. Pumps and Pressure Inc. Washworks Canada Wash Links

Suppliers to the carwash industry are a significant part of the CCA member base. The relationship between the carwash industry, suppliers and oil companies are closely connected and the CCA actively promotes communication and cooperation between these groups. These valuable relationships have impact and influence on the industry’s business and legislative environments. Our suppliers are encouraged to take advantage of connecting with operators. This allows them to learn what their needs are and how they can better serve them. Suppliers are given opportunities to get in front of our members through hosting webinars, presenting educational sessions and sponsoring CCA in a number of ways. Suppliers to the carwash industry join the CCA as Associate Members. For more information on CCA’s Sponsorship and Associate Memberships, please visit www.canadiancarwash.ca/Supplier-to-the-Industry CANADIAN CARWASH ASSOCIATION CANADIAN CARWASH ASSOCIATION