CSNC-May/June 2022

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2022 SUSTAINABILITY REPORT

NATIONAL SHOPPER STUDY plus C-STORE

iQ

SATISFY CUSTOMERS’ SUMMER CRAVINGS

PREVENT & CONTROL PESTS NEXT GENERATION AUTOMATIC MERCHANDISING

MAY / JUNE 2022 CCentral.ca

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CONTENTS

M AY | J U N E 2 022 VOLU M E 5 | N U M BE R 3

C-STORE

10

iQ

5 Editor’s Message

Big insights, big excitement

6 The Buzz People, places, news and events 8 Quick Bites

Plant-based confection: Consumers have a taste for guilt-free treats and manufacturers are responding

10 C-store IQ National Shopper Study

COVER ILLUSTRATION, JASU HU; PHOTO TOP RIGHT, THOMAS FRICKE

Before and after: Maintaining an essential role in the post-pandemic lives of Canadian convenience shoppers

20 2022 Sustainability Report

The future is green: Incentives, ideas and inspiration for supporting sustainability in convenience

32

CAMA president Jim Jackson sees a future in micro markets

26 Feature: Pesty problems

Protect your brand’s integrity with these expert tips to prevent and control pests

28 Category Check: Cold comfort Consumers’ desire for indulgence turns up the heat for a wide range of frozen treats 30 Snapshot

Simply hover your phone’s camera over this code:

Kathy Perrotta of Ipsos Canada on selling summer and stocking up to satisfy Canadian consumers’ warm weather cravings

32 Backtalk

Automatic for the people: CAMA president Jim Jackson on navigating change and why he’s invested in the evolution of vending CSNC EDITORIAL ADVISORY BOARD

ALL CONVENIENCE E-NEWSLETTER Delivered to your in-box every week

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

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The latest industry news and information, plus resources, foodservice insights, store solutions, tobacco/vaping updates and more.

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EDITOR’S MESSAGE 20 Eglinton Ave. West, Suite 1800, Toronto, ON M4R 1K8 (416) 256-9908 | (877) 687-7321 | Fax (888) 889-9522 www.CCentral.ca

Big insights, big excitement

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EDITORIAL EDITOR & ASSOCIATE PUBLISHER, CSNC

Michelle Warren | mwarren@ensembleiq.com

EDITOR, OCTANE

Kelly Gray | kgray@ensembleiq.com

TRANSLATION | Danielle Hart

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Elijah Hoffman | ehoffman@ensembleiq.com

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CHIEF EXECUTIVE OFFICER | Jennifer Litterick CHIEF FINANCIAL OFFICER | Jane Volland CHIEF HUMAN RESOURCES OFFICER | Ann Jadown EXECUTIVE VICE PRESIDENT, OPERATIONS | Derek Estey EXECUTIVE VICE PRESIDENT, CONTENT | Joe Territo

Spring is in the air and with that comes hope: There’s lots to be excited about and it’s not just the weather. Convenience Store News Canada, in partnership with the research team at EnsembleIQ, is thrilled to launch the 2022 C-store IQ National Shopper Study and, wow, do we have a lot to share! C-store IQ debuted in January 2020—just before the pandemic—as the first convenience and gas specific study delving into the wants, needs, perspectives and habits of Canadian convenience store shoppers. Now C-store IQ is back, and the timing couldn’t be better. In two years, everything has changed: Researchers connected with 1,000 people across our country to find out what this means for convenience and gas. Inside (p. 10) you’ll find the first in an ongoing series of articles, reports and analysis—both in print, online and to be presented at The Convenience U CARWACS Show—digging into what matters most to your customers as they emerge from the pandemic and, in turn, the future of your business as an essential part of Canadians’ everyday lives. What else is exciting? 2022 marks another record-breaking year for Star Women in Convenience nominations. Thank you to those who nominated and those who champion this important program. We look forward to profiling the winners in the July/August issue and celebrating at an in-person event October 12. We’re also excited to announce a new program. This industry is full of amazing companies doing great things for their people, communities and the planet. These efforts deserve a spotlight. With that in mind, the inaugural CSNC Impact Awards will recognize initiatives introduced by retailers, suppliers and solution providers that make a meaningful difference in four key areas. Check out the 2022 Sustainability Report (p. 20) to find out more or visit CSNCImpactAwards.ca. Finally, I will leave you with this encouraging insight: More than half of Canadians—55%—are visiting a convenience store at least once a week and nearly one-in-10 are making daily trips. Now that’s something to get excited about! CSNC

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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Convenience Store News Canada

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THE BUZZ

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

CICC + ACSA

SAVE THE DATE Sweets & Snacks Expo May 23-26: Chicago SweetsandSnacks.com The Convenience U CARWACS Show Sept. 13-14: Toronto Congress Centre ConvenienceU.ca Star Women in Convenience Event Oct. 12: International Centre, Toronto StarWomenConvenience.ca

F U N FAC T

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10 HEADLINES YOU DON’T WANT TO MISS! Yay us!

Convenience Store News Canada is being heralded among the best of business content creators in North America, having been named a finalist in the Best Overall Art Direction and Design Category in the 2022 Jesse H. Neal Awards: “Our goal is to deliver engaging, comprehensive and valuable content that helps our readers—retail leaders, operators, distributors and suppliers—grow their businesses, while highlighting their successes. This nomination demonstrates that we are achieving that goal, and we’re grateful for this opportunity to showcase our work among our most accomplished peers.”

1. MEAT SNACKS FEEL THE HEAT OF INFLATION: WHAT DOES THAT MEAN FOR THE CATEGORY? 2. O KBA LAUNCHES ‘SAVE OUR STORES’ CAMPAIGN 3. GROUPE F. DUFRESNE ACQUIRES LES PETROLES ALCASYNA 4. BRINGING THE C-STORE EXPERIENCE TO OUR NATION’S LAWMAKERS: CICC 5. BACK TO WORK, BACK TO BUSINESS: GATEWAY CEO MARY KELLY SEES ‘HOPE’ FOR THE CITY CENTRE 6. N O DIP WITH CHIPS: POTATO CHIP SALES SURGE, AS C-STORES BENEFIT FROM PEPSICO-LOBLAW DISPUTE AND CONSUMERS’ HANKERING FOR SALTY SNACKS 7. POLICE, C-STORE INDUSTRY PREPARE FOR GAS THEFTS AS PRICES CONTINUE TO RISE 8. 7-ELEVEN JAPAN PILOTS HOLOGRAPHIC SELF-CHECKOUT 9. CIRCLE K LAUNCHES GLOBAL FUNDRAISER FOR UKRAINE 10. ONLINE ORDERING AND DELIVERY ARE HERE TO STAY: 4 C-STORE-SPECIFIC STRATEGIES TO GET IT RIGHT 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

Nearly one-third (31%) of bottled water users are willing to pay a premium for waters with added health benefits, according to research firm Mintel.

Convenience Store News Canada

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The Atlantic Convenience Stores Association (ACSA) is now integrated into the Convenience Industry Council of Canada. In turn, ACSA president Mike Hammoud is CICC’s vice-president, Atlantic Canada, while former ACSA board member David Button, CEO of North Atlantic Petroleum, will be joining the CICC Board of Directors. Founded in 2008, the ACSA was formed by convenience store owners and operators in Atlantic Canada. CICC was formed in 2019 and the two organizations worked together on several advocacy issues, including taxation, beverage alcohol, tobacco/vaping, regulations and more.

ON LI N E E XC LU S IVE S

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MOVING ON UP

Hannah Borland joins 7-Eleven Canada as food and beverage marketing manager, based in Vancouver. In her new role, she will develop and drive fresh food and proprietary beverage sales across all areas of the brand. Brittney Casavant is now sustainability manager for Federated Co-operatives Ltd. She will be responsible for providing strategic direction and alignment of FCL’s sustainability programs and initiatives Casavant joined FCL in 2014 as sustainability advisor. Caroline Evans is now vicepresident of sales at JTIMacdonald Corp. A 20-plus year JTI veteran and 2019 Star Women in Convenience winner, Evans succeeds Norman Pridgeon, who is retiring. She joined JTI in 1998 and has held various roles of increasing responsibility, most recently as corporate affairs & communications director for Canada.

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Sameer Haidari is now Canadian accelerator and business development director, car wash subscription as part of the Circle K global car wash team. A former senior category manager with Circle K, Haidari has deep data insights that will serve the company well growing its Canadian car wash business. Michael Howe joins WashLinks as its new general manager. He is responsible for the overall operation and profitability of the company, while building for future expansion and deepening commitment to its customer base. Howe comes to WashLinks from BayWatch Enterprises - Canada Division, which he grew from startup to its acquisition in 2021.

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Patrick Lucas is now senior manager fuel customer journey - global fuels at Alimentation Couche-Tard. He joined the company in March 2020 after two years at Parkland. Marc Molin is the new director of information technology at Parkland Fuel Corporation. He joined the team in January and will lead Parkland’s digital transformation program. Vincent Nadeau joins Kraft Heinz as VP sales in Canada—he will also serve as a member of the Kraft Heinz Canada Leadership Team. Nadeau brings more than two decades of experience, working with Mondelēz, PepsiCo and Guilbault & Associates. Heather Ryan is now CEO of Federated Co-operatives Limited. She joined FCL in 2013 and became VP, human resources, in 2015. In 2021, she took over as VP, supply chain. Jess Spaulding is the new chief marketing officer at PepsiCo Foods Canada. She joined PepsiCo in 2009, most recently serving as a senior marketing director in Plano, TX. Spaulding will relocate to Canada where she will oversee a brand portfolio that includes c-store staples, such as Lays, Doritos, Smartfood, Quaker, Crispy Minis and others. Vanessa Theoret is now senior director retail sales and account management at OLG. The 2019 Star Women in Convenience winner joined the company in 2014 and has held a number of increasingly senior roles, most recently as director, key accounts/ channel strategy. Christian Thooris will step into the role of director of sales small format for PepsiCo Beverages, as Marie-Hélène Jauron takes on a new mandate within the company. Christian has more than 19 years of experience with PepsiCo, most recently as director of field sales for Canada.

*Announce your new hires and promotions. Email mwarren@ensembleiq.com

SURVEY

What’s the nicest thing a customer ever said to you?

“When customers say they will split the jackpot with me I always feel extra excited!” – Nate Narcisian

READER POLL

Have you experienced an uptick in gas-and-dash related thefts?

83% yes

17

no

%

Digital dining

Over the last two years, digital orders for carry-out and delivery from foodservice outlets, including convenience stores, have increased by 155%, according to NPD’s continual tracking of the Canadian foodservice industry. Mobile app orders represent 75% of all digital foodservice orders, 20% were internet orders and 5% were orders sent by text.

Convenience Store News Canada

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QUICK BITES

BY DARRE N CLIMANS

Plant-based confection

Consumers have a taste for guilt-free treats and manufacturers like those odds, responding with an array of new products

People love sweets. You might even say that we’re addicted to sweet treats. We also, undeniably, love to gamble. Conservative estimates taken from licensed sportsbooks in the U.S. suggest that north of $100 billion was wagered legally during the 2021 NFL season. Bets on Super Bowl LVI alone, from tens of millions of people, represented close to $10B. One of the most popular bets is the coin toss. Bets are placed on which team will win, heads or tails, and whether the team that wins the coin toss will then go on to become Super Bowl champs. The phrase, “It’s a coin toss,” implies that two outcomes have an equal probability of happening. We know that, mathematically, chance then decides if one thing or the opposite will occur. In business, few have an appetite for being at the mercy of such odds. Before investing, we rather seek assurances that a result is both likely and sustainable. Those

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are key elements in the evolution of markets. Sustainability as a goal, has itself become a market driver. For more than a century, the surety of success in confections has been a predictable reliance on impulse purchases by consumers. On my first trip to London in the 1980s, I took note of the many wall-mounted vending machines on subterranean Tube platforms, selling a limited selection of chocolate bars. My last trip in 2020 before COVID was to Santiago, Chile. The modern and highly efficient subway system in Santiago is littered with vending machines selling a wide variety of candies, snacks and chocolate confections. At first glance, the model doesn’t appear to have changed much in my lifetime. But there are indications that consumers are looking for more. In 2013, Lindt introduced a line of premium, indulgent products under the banner Hello. Thomas Linemayr, then-CEO and president, Lindt USA,

Convenience Store News Canada

Trickle or flood According to global insights and research provider Euromonitor, confectionery SKUs that call-out vegan represented less than 2% of the category SKU count in 2020. Fair Trade SKUs, globally, were approximately 1% of the total SKU count. However, Euromonitor further reported that Canada significantly over-indexed in both of these segments. The Ipsos FIVE Consumption Tracking Study monitors labels of importance, reflecting defined Canadian consumer needs. While vegan confectionery is still small, strong development among younger consumer cohorts denotes that future growth is likely, particularly as the focus on plant-based continues to rise in importance. Digging deeper into the motivations underpinning these purchases, Ipsos research points to the prioritization of ethics, health, all-natural and nurturing. Consumer demands Ontario-based manufacturer, Waterbridge Confectionery often

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explained, “We are excited about… the opportunity to engage millennials, a virtually untapped group in the premium chocolate space.” In 2021, Lindt expanded the Hello line to include vegan offerings and recently launched in Canada and the U.K. three new vegan bars made with oat milk.

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hears this question from consumers: “Are your wine gums suitable for vegetarians?” Until recently, the answer was no. It’s widely known that the traditional gelatin used as the binding agent in wine gums and other confection gummies is animal-based, but that is changing. Waterbridge listened to customers and worked with food scientists to replace gelatin with modified potato and tapioca starch. Use of beeswax precludes classifying the product as vegan. However, they are suitable for vegetarians and contain no animal by-products. As established companies shift their ways, many new confection players are differentiating themselves from the outset with plant-based offerings. For instance, The Yumy Candy Company is a health-conscious low-sugar plantbased confectionery company based in Vancouver. Its portfolio of healthier gelatine-free candies just got picked up by The Hudson Group, one of North America’s largest travel retail chains operating more than 1,000 stores across the U.S. and Canada. “While vegan claims were once predominantly used as secondary or tertiary claims in combination with other ‘free-from’, organic or health positionings, they are now coming to the fore as a primary focus,” according to research from Innova Market Insights.

Case in point: Dare’s Real Fruit Gummies put their “certified plant based” differentiator front and centre, as emphasized in a recent cheeky ad campaign: “Zero animals harmed. But we beat the pulp out of fruit.” Not just for vegans This is in keeping with the widespread shift of animal-free products further into the mainstream, with numerous global consumer surveys showing people are interested in plant-based foods across different categories. It not only appeals to vegan or vegetarian consumers, but also a much broader audience of so-called flexitarians. Consumers are embracing plantbased snacking for a number of reasons and companies are paying attention (Exhibit 1). In 2020, 67% of all new products with ‘plant-based’ claims were launched outside of the usual dairy and meat alternatives sectors, with confectionery being a primary focus, according to Innova. A growing number of milk-free and gelatin-free chocolate confectionery products are hitting store shelves, some being new twists on old favourites. In 2021, Nestlé launched KitKat V, what it calls “a great-tasting, no-compromise vegan version of KitKat.” Alexander von Maillot, head of confectionery at Nestlé, said at the time: “ One of the most common requests we see on social media is for

EXHIBIT 1

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Extremely/very important drivers for consumers making plantbased food/beverage choices ( Source: HealthFocus International) PROMOTES HEALTH

61 %

HELPS PREVENT DISEASE

57 %

TASTE PREFERENCE

57 %

COST

56 %

BETTER TREATMENT OF ANIMALS

55 %

EATING CLEAN

53 %

MORE ENERGY

53 %

LIFESTYLE PREFERENCE

51 %

ENVIRONMENTAL / SUSTAINABLILTY

48 %

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The global vegan chocolate confectionery market size is expected to reach $1 billion by 2027, rising at a market growth of 12.3% CAGR during the forecast period, according to data from Research and Markets a vegan KitKat, so we’re delighted to be able to make that wish come true. This is for everyone who wants a little more plant-based in their life when they treat themselves!” While total confectionery launches rose at a CAGR of less than 2% from 2016 to 2020, those with vegan claims increased at 17% CAGR. “More dynamic still were confectionery launches under the simpler ‘plantbased’ banner, with introductions more than doubling in 2020 alone,” according to Innova. On the back of the successful 2019 launch of a vegan version of its Galaxy bar, in 20021 Mars gave two more of its most iconic chocolate bars—Bounty and Topic—a vegan makeover. The products were both gluten-free, but vegan got top billing. Don’t leave it to chance Flipping a coin on plant-based confection is not an option. Suppliers are already getting on board, and consumers are voting with their purchasing power. The only question that remains for distributors and c-store operators is how far/fast you want to move to make room for and promote this burgeoning sub-category of confectionery products. 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.

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C-STORE

iQ

NATIONAL SHOPPER C STUDY Maintaining an essential role in the post-pandemic lives of Canadian convenience shoppers B Y M I C H E L L E WA R R E N

onvenience store shoppers across Canada are emerging from the pandemic with new daily routines, spending habits and expectations for their local convenience stores. Understanding these changes is fundamental, as convenience store operators work to hold on to their status as an “essential” part of consumers’ everyday lives. The convenience of longer hours and daily routine adjustments due to the pandemic are the primary reasons cited for shopping at convenience stores today vs. before the pandemic, but moving forward, shoppers are focused on competitive prices, a wider variety of products and sustainability, according to insights from the new

C-store IQ: National Shopper Study from Convenience Store News Canada. C-store IQ debuted in January 2020—just before the pandemic upended everything—as the first convenience and gas specific study delving into the wants, needs, perspectives and habits of Canadian consumers. Working with the research team at EnsembleIQ, Convenience Store News Canada surveyed more than 1,000 convenience shoppers across the country, who shared their definitions of convenience and so much more in this comprehensive study. Now, C-store IQ is back, with a fresh survey designed to bring you the insights and data necessary to better understand customers and achieve business success in a post-pandemic world. This is a topline report, and we will be digging into the data throughout 2022, both in the magazine and online, analyzing consumers’ attitudes, habits and expectations regarding key categories, foodservice, technology, fuelling, loyalty and more. Whether you are interested in information by demographic, province, urban/rural, Convenience Store News Canada can crunch the data and find the answers.

Reasons shopping at convenience stores more today vs. before pandemic

The convenience of longer hours and daily routine adjustments due to the pandemic are the primary reasons cited for shopping at convenience stores today vs. before the pandemic. Contactless payment and pickup solutions are less of a driver, as well as foodservice items which may change as things open up. Convenience stores are open longer hours

48%

Changes in daily routine due to COVID-19 Convenience stores are one of the only stores open or available in my area

24%

Feel shopping at convenience stores is safe

22%

21%

Trying to consolidate or make fewer shopping trips overall Satisfied with the safety & sanitation measures implemented at my preferred c-store(s)

Shopping convenience stores more for foodservice items My preferred convenience store offers curbside or pumpside pickup

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Convenience Store News Canada

16%

15% 12% 8%

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20%

Choosing to shop for groceries at a convenience store instead of a larger store My preferred convenience store offers contactless payment options

41%

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JASU HU

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C-STORE

New habits Popping into the local convenience store is part of the fabric of daily life for more than half of Canadians: 55% of shoppers are visiting a convenience store at least once a week and nearly one-in-10 (9%) are making daily trips. Only grocery stores have as high a share of shoppers making weekly or more frequent trips, which emphasizes the significant role that c-stores play in consumers’ shopping habits. While share of those shopping at chain vs. independent c-stores are nearly identical, there are notable differences from the pre-pandemic C-store IQ data. When asked “How often do you shop at each of the following types of stores?” 37% of today’s participants said they shop at a chain convenience store once a week or more—that’s down from 43% pre-pandemic. The 38% visiting independently owned convenience stores at least once a week is unchanged. Generation X and baby boomers are at odds when it comes to the store type they shop most often each week, with 34% of youngers consumers opting for chain convenience stores (compared to 21% shopping independents), while 40% of boomers rely on independently owned stores (compared to 28% who say they shop at chains). Proximity / close by Longer hours To purchase gas Loyalty program Foodservice quality Word of mouth Coupon Gas price app Mobile app offer Contactless shopping None of the above Availability of drive-thru Social media promotion Like their private label Mobile ordering Billboard Email Curbside pickup Radio or TV ad Text message

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Overall, Canadian c-store shoppers are loyal, with seven-in-10 (70%) reporting they typically shop at the same convenience store each time. It’s worth noting that Gen Z is the most loyal of the lot, with an incredible 81% saying they shop at the same store

each time, compared to 73% of millennials, 68% of Gen X and 69% of boomers. No doubt this same-store loyalty is, in part, a reflection of new workfrom-home habits, as well as less travel. Indeed, location is king, with 62% of c-stores shoppers saying this is what

Frequency of shopping store type

More than half (55%) of shoppers are visiting a convenience store at least weekly and nearly one-in-ten (9%) are making daily trips. Only grocery stores have as high a share of shoppers making weekly or more frequent trips. Share of those shopping at chain vs. independent are nearly identical with a significant drop in chain shoppers from 2019.

55%

38%

Shop at an Independentlyowned convenience store once/week or more

62% 43% 36% 21% 13% 11% 11% 8% 7% 6% 5% 5% 5% 4% 4% 4% 3% 3% 3% 3%

Convenience Store News Canada

Shop at any type of convenience store once/week or more

37%

Shop at a chain convenience store once/week or more

70%

of shoppers shop the same convenience store each time

A

B Aspects that influence a visit to a convenience store

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iQ

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influences their c-store of choice—that’s a notable 8 percentage point jump from the pre-pandemic survey when 54% called location king. Location, longer hours and need for gasoline have the most potential to influence shoppers to visit a convenience store, however gas purchases shaped only 36% of trips, compared to 46% two years ago. Also dropping in influence were loyalty programs at 21% (down from 28% pre-pandemic, perhaps with less gasoline purchases and the drop in shoppers reporting they shop weekly at a chain c-store), word of mouth, coupons and email. Timing is everything Overall, in-store only visits are happening more frequently than gasonly or a combination, with more than half of shoppers (54%) shopping in-store only at least weekly and, interestingly, one-in-five (21%) reporting they never combine their gasoline and in-store visits. Is this a reflection of people popping out to their local convenience store for a change of scenery from the at-home routine? If we dig deeper into timing, data shows convenience store trips increase throughout the day and peak in the late afternoon and evening, likely coinciding with travel back from work or school, finishing errands and perhaps special trips to grab a lastminute item or ingredient for dinner. People also tend to pop out at night to purchase gasoline to have a full tank the next morning. Not surprisingly, early morning, mid-afternoon and early evening dayparts all decreased significantly from two years ago, likely a result of pandemic-related schedule changes. Visits between 6 a.m. and 9 a.m. are down 4 percentage points, as fewer commuters are en route, and the same goes for that mid-afternoon snack break around 2 p.m., where consumers again report fewer trips, and the traditional commute home period, from 4 p.m. to 7 p.m. which is down five percentage points compared to prepandemic habits. With things opening up, however, that is changing quickly.

Time of day when typically shop at convenience stores

Convenience store trips increase throughout the day and peak in the late afternoon and evening. Early morning, mid-afternoon and early evening dayparts all decreased significantly from two years ago, possibly a result of pandemic-related schedule changes.

13%

17%

6:00am 8:59am

15% 9:00am 10:59am

24%

11:00am 1:59pm

2:00pm 3:59pm

28%

34%

39%

4:00pm 6:59pm

34% 15% 7:00pm 9:59pm

10:00pm or later

Significant increase / decrease vs. pre-pandemic

Use of any expanded services at convenience stores

56%

Most shoppers are regularly using at least one of the expanded services offered at convenience stores (that's up from 46% prepandemic). New pandemicrelated habits are reflected in the use of contactless solutions, including self check-out, mobile payment and drive-thru, which are utilized by close to onein-10.

of shoppers regularly use at least one expanded service at convenience stores

Usage of specific services at convenience stores Cash ATM

26%

Postal services

10%

Car wash

Self check-out

Mobile payment Drive-thru

Internet access/Wi-Fi

Passport photos

Home delivery

Pick-up lockers

Mobile ordering

Curbside pickup Video games

Money transfer/wire Copy/fax

Bitcoin ATM

CCentral.ca

22%

21% 8% 8% 8% 6% 4% 4% 4%

3% 3% 3%

2% 2% 1%

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C-STORE

iQ What’s in the shopping bag?

Chocolate, candy and full-size salty snacks are the Top 3 food items purchased by c-store shoppers.** Not surprisingly, when compared to prepandemic, grab-and-go prepared food items decreased in popularity (again, those numbers are expected to climb as people get back to regular routines). The pandemic shifted buying habits across several categories. Research

shows shoppers are buying more fresh produce, while milk purchases also increased significantly, with 38% of shoppers saying they milk at convenience in the past month (that’s up from 30% pre-pandemic). More consumers are also looking to c-stores for their lottery needs, with 60% buying lotto in the last month. Beyond traditional c-store fare, what are shoppers looking for at their favourite c-store? A majority are regularly using at least one of a myriad

of expanded services, the most popular being cash ATMs, followed by car wash and postal services. It’s worth noting that pick-up lockers are gaining popularity, with double the number of shoppers using the service at their convenience store. Note that new habits formed during the pandemic are shaping in-store behaviours, with close to one-in-10 shoppers embracing contactless solutions, including self-checkout, mobile payment and drive-thru.

Almost half of shoppers (46%) consider the shopping experience to be ‘important’ or ‘very important’ when choosing a retailer to shop at, regardless of store type.

46%

Very important / Important

Price of products

Factors that describe a positive shopping experience 65%

Products I need are in-stock

42%

Variety of products offered

30%

Loyalty program

30%

Store cleanliness/hygiene

23%

General convenience

19%

Employee friendliness

15%

Quality of prepared food

28%

Moderately important

26%

Slightly / Not important

Performance ratings for convenience store shopped most often

Stores are performing well in speed, general convenience, cleanliness/organization and employee friendliness and helpfulness. Whereas, improvement areas include assortment of healthy Items, pricing, and embracing technology. Cleanliness and employee helpfulness, while strong, have decreased significantly compared to pre-pandemic levels.

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13%

Speed of shopping trip

12%

Store organization

11%

Fun to shop

9% 5%

Offers delivery

5%

Store design/organization

Offers curbside pick-up

Availability of contactless options

Embraces cutting-edge tech

Speed of shopping General convenience Employee friendliness) Store cleanliness Employee helpfulness Store organization Products needed are in-stock Store look/feel Contactless shopping options Loyalty program Variety of products Prepared food quality Coffee program Delivery Fun to shop Local/Canadian-made Product Offering Embraces cutting-edge tech Price of products Healthy/Better-for-you items Excellent/Very Good

14

14%

Employee helpfulness

Convenience Store News Canada

Good

4%

4% 1%

62% 61% 59% 54% 61% 53% 58% 50% 48% 45% 45% 51% 44% 43% 43% 42% 41% 37% 36% 33% 26% 26%

Fair/Poor

30% 9% 33% 6% 29% 12% 32% 14% 34% 14% 37% 13% 39% 13% 39% 17% 36% 20% 35% 21% 39% 18% 36% 21% 36% 22% 35% 24% 39% 25% 40% 24% 40% 27% 37% 37% 34% 0%

Significant increase / decrease vs. pre-pandemic

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Importance of ‘experience’ when choosing which store to shop at

CCentral.ca


LpEpS DdReIxVciEteSsA ho ers

an

with the

SUMMER consumer contest


C-STORE

iQ Priorities and expectations Shoppers have certain expectations and about half of shoppers (46%) consider the overall shopping experience to be ‘important’ or ‘very important’ when

choosing a retailer to shop at, regardless of store type. What makes for a positive shopping experience, according to c-store shoppers? Price and on-shelf availability are the two top priorities. In addition, shoppers are keeping an eye on the variety of products offered, as well as being able to tap into loyalty

programs. Keep in mind, these factors apply to all shopping experiences, but c-store operators who tap into what makes for a positive shopping experience will be better positioned to keep customers satisfied. Where do convenience stores stand out? At first glance, stores

Areas where convenience stores must improve to encourage more shopping

Not surprising, better prices would motivate most shoppers to consider convenience stores more often, twice as many as the next top suggestion of improving variety. Likely a result of the ongoing pandemic and supply chain issues, making sure products needed are in-stock is recommended by one-in-four. Product pricing

Variety of products offered

26%

Products needed in-stock

62%

30%

26%

Loyalty program

23%

Store cleanliness

21%

Healthier/Better-for-you items

19%

Employee friendliness

17%

Prepared food quality

16%

Local/Canadian-made product offering

15%

Variety of prepared food/beverages

15%

Store organization

14%

Store look/feel

13%

Employee helpfulness

13%

Speed of shopping

12%

Larger pack size/More bulk

11%

Better sustainability effort/recycling

11%

Coffee program

10%

Fun to shop

8%

Delivery

Contactless shopping options

7%

Embraces cutting-edge tech

5%

Shoppers spent an average of $15.46 on their most recent in-store visit excluding the costs of gasoline, a significant increase from pre-pandemic numbers, driven by an 8-percentage point drop in trips under $5 and a boost in trips $30 or more to 14% from 10%. Almost half (44%) most recently spent $5 to $15 in-store. ‘Plastic’ is used most, with 73% paying with a debit or credit card.

Payment type used on most recent convenience shopping trip

23%

13% 9% 1%

1%

21% 14%

14%

4%

Less than $2.00

1%

3%

Mobile payment

$5.00 9.99

$10.00 14.99

$15.00 19.99

$20.00 29.99

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Convenience Store News Canada

$30.00 or more

1% Gift card

1%

Can’t recall

30%

22% Cash

$2.00 4.99

Significant increase / decrease vs. pre-pandemic

16

14% 10%

Retailer’s mobile app

32%

Credit card

41% 35%

Debit card

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Mean spend $15.46 (up from $13.56 pre-pandemic)

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TOBACCO ADVERTISING IS NOT AVAILABLE IN THE DIGITAL ISSUE


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THIS TOPLINE REPORT IS JUST THE BEGINNING

During the coming weeks and months, Convenience Store News Canada will dig deeper into the data, sharing valuable Canadian consumer insights, both in the magazine and online at CCentral.ca. Here’s what you can expect: Inside the Minds of Gen Z Shoppers Top Categories

Foodservice & Prepared Foods Beverage Alcohol

Payment and Loyalty Technology

Health and Sustainability Tobacco and Vaping

Fuel and Electric Vehicles and more!

Convenience Store News Canada

What do you want to know?

JASU HU

are performing well in speed, general convenience, employee friendliness/ helpfulness and cleanliness/organization. However, when compared to prepandemic levels, shoppers’ impressions of c-stores’ cleanliness and employee helpfulness, while strong, took a notable dive. No doubt, people are more conscious of overall sanitation (hence the drop to 54% from 61%) and it’s more of a challenge to be seen as “helpful” in a world where social distancing and masking no doubt prompted shoppers to want to get in and out of stores as quickly as possible. Loyalty programs also fell in the rankings, with 44% of shoppers rating the programs as “excellent” in comparison to 51% pre-pandemic. Is this a reflection of people buying less fuel? Other areas flagged for improvement include, assortment of healthy/betterfor-you items, pricing and embracing technology. Consider this in the context of what factors describe an overall positive shopping experience, and there is pressure to offer a wider variety of items at convenience at a competitive price point. Indeed, when asked “What are the top areas where convenience stores need to improve in order to motivate you to shop there more often?” shoppers say that better prices would motivate them to consider convenience stores more often, twice as many as the next top suggestion of improving variety. Likely a result of the ongoing supply-chain issues, making sure products needed are in-stock is recommended by one-in-four shoppers. Shoppers spent an average of $15.46 on their most recent in-store visit (excluding the cost of gasoline), which is a significant increase from prepandemic levels, driven by a drop in trips under $5—down 8 percentage points) and a boost in trips $30 or more (up 4 percentage points). While no one can predict the future, here’s what we do know. Convenience store shoppers have changed—they’re not only spending more, but also expecting more across all aspects of the business, from product assortment to technology to loyalty to the overall instore experience. Understanding c-stores shoppers’ evolving attitudes and habits will be instrumental in ensuring the convenience industry thrives in a postpandemic world. CSNC

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Save the date! 2022 Awards Event October 12, 2022

In-person • Toronto International Centre Honour the 2022 Star Women in Convenience during an industry-wide celebration.

Keynote • Leadership Panel • Networking • Awards •

StarWomenConvenience.ca

Align your brand with this important event! For sponsorship opportunities, contact Michael Cronin 416-569-4934 mcronin@ensembleiq.com PRESENTED BY

NATIONAL INDUSTRY PARTNER

REGIONAL INDUSTRY PARTNER


THE FUTURE IS GREEN

2022 Sustainability Report

Incentives, ideas and inspiration for supporting sustainability in convenience BY CH R IS DA N I ELS

Given the economic uncertainty over the past few years, you might think that the customer has reverted to making purchase decisions based on affordability, and little else. That may have been true at the height of the COVID-19 pandemic. But that is not the priority now—and not as the customer emerges from pandemic life. In fact, various studies show the customer is doubling down on a commitment to helping advance sustainability. And she wants to see real action from companies on

environmental issues. One study, Ernst & Young’s Future Consumer Index, tracks how consumers want to live their lives once the pandemic is over. And its most recent eighth edition shows they now care more about the future of the planet than they do about affordability and even their own health. “There has been a compelling shift from a focus on ‘my health, my wallet’ to a focus on ‘me and my planet,’” says Kristina Rogers, EY’s global consumer leader.

GLOBAL Concern for the planet has overtaken affordability concerns for consumers (% of consumers) firs li t y ab i

12%

16%

12%

MILLENNIAL

30%

23%

14%

16%

17%

GEN X

27%

16%

13%

18%

26%

25% 20% 15%

t-2 1 Oc

y-2

-21 F eb

t-2 0

30%

Oc

35%

1

Aff

He

So

c ie

or d

28%

al t

32%

Ma

h fi

rst

GEN Z

ty fi

E xp

er i

rst

e fi en c

st F ir P la

ne t

t

rst

Younger generations will seek experience-driven and sustainability-focused lifestyles in the future October 2021 (% of consumers)

Planet first Affordability first Experience first Health first Society first

10% 18%

BABY BOOMER

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11%

13%

21%

37%

Convenience Store News Canada

5%

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The index found 26% of respondents rated the planet as their top concern, up from 16% the year prior, in October 2020. The planet led affordability at 25% (down from 32%) and personal health at 18%. Consumers’ purchasing power This shift in mindset will have a major impact on consumer behaviour, purchase decisions and brand preferences. “Most people are reshaping their consumption habits,” says Rogers. “Some want to do more to preserve the planet; others want to buy less, but better quality. Understanding what’s driving customers’ purchase behaviour could require a radical response [from some companies],” says Rogers. Lisa Hutcheson, managing partner at consulting firm JC Williams Group, says c-stores need to listen, and strive to make even small changes that will benefit their business. “Consumer awareness—and their willingness to change loyalty based on sustainability—is here to stay,” she says. “And yet, retailers still seem to think that the brand is more important than if something is sustainable. But consumers are much more aware and savvier to buy into just a brand.” (And at least one major legacy product sold at c-stores is making sustainability core to its brand identity and consumer messaging—see sidebar.) This awareness is growing globally, says Hutcheson, and many retailers are responding by empowering shoppers. She points to Danish grocery chain Coop, which launched a feature on its app that allows customers to get an overview of their carbon footprint based on their shopping receipt. Customers see the products and brands they bought that had the smallest footprint—and the largest. (The analysis is based on factors like production, processing, transportation and food waste.) “The demand for transparency is ever-increasing, and so this is an idea c-store operators should think about,” says Hutcheson. “The reason I say that is the cost to develop an app isn’t as cost prohibitive as it used to be. And so, giving customers a platform of transparency becomes very viable even if you own a few stores.” Planet-friendly packaging Douglas Horne, founder and CEO of Vancouver-based Evanesce, which designs, develops and manufactures plantbased packaging for the food service sector, agrees c-stores can’t afford to stay behind the eight ball on sustainability. “There has been widespread realization in the marketplace that things need to be done differently,” he says. In the fourth quarter of this year, Evanesce will begin using its patented Molded Starch Technology to mass produce 100% compostable Douglas Horne food packaging, including food trays, cups, bowls and meal trays, saying the market is ready. The packaging will be made from agricultural waste, like potato, tapioca and rice husks, and cost about half of other eco-friendly packaging alternatives. He says the Molded Starch technology solves the drawback

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of using recyclable plates and cups, which become waste if remnants of food they carried aren’t cleaned off. “With our products, the food is just more organics; it’s all compost,” says Horne. In the other side of the business, Evanesce produces biopolymer compostable straws, hot and cold beverage cups, cutlery, drink stirrers and more. “We have been selling to convenience stores through wholesalers, and are seeing good uptick especially with the straws,” says Horne. “Because the fact is, consumers want solutions that are environmentally friendly.” Champion energy alternatives Reducing its reliance on plastics is a big area of focus for the big c-store chains, but far from the only one. The truth is, there are so many ways to be more sustainable and encourage sustainable behaviours. That the world needs to evolve energy alternatives made headlines when Russia, a huge exporter of oil and natural gas, invaded Ukraine. But those energy sources are also major pollutants. To that end, 7-Eleven announced earlier this year that it will build 500 electric vehicle ports at 250 select stores in the U.S. and Canada. In a statement, 7-Eleven president and CEO Joe DePinto said its goal is to “make EV charging more convenient and help accelerate broader adoption of EVs and alternative fuels.” Parkland announced last summer plans to roll out 100 EV ultra-fast charging ports at retail locations in Western Canada and recently unveiled design plans for the “Electric Charging Destination of the Future.” What’s on your store shelves? Couche-Tard’s 2021 Sustainability Report outlines the different ways the company is changing its business practices and updates the progress it has made with suppliers. That includes on a promise to sell only 100% cage-free eggs at its corporate stores worldwide by 2025. It is part of a commitment to making farming more sustainable. In the Grand Canyon Region of the U.S. and western Quebec, Couche-Tard has already achieved that goal (even sandwiches in Quebec are premade with cage-free eggs). The report adds: “We also aim to work together with our suppliers to source meat and poultry-based foods from breeders and processing plants where animals are treated well and protected from unnecessary suffering and disease.” Sustainability is clearly no longer a buzzword. It’s the future of business, from packaging to animal welfare to empowering customers. ▶

With a shelf-life of two years, Molded Starch trays are sturdy, leak-free and decompose in 90 days or less.

Convenience Store News Canada

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May | June 2022

21


App-etite for reducing waste More than a third of food produced and distributed in Canada never gets eaten, according to The National Zero Waste Council in Vancouver. And globally, wasted food releases 8% to 10% of greenhouse gasses per year, from producing and transporting this food to its rotting (which emits methane.) Too Good To Go, a six-year-old Copenhagenbased climate-change-fighting company, has signed up almost 300 convenience/small grocery stores to its app since launching Sam Kashani in Canada late last year. Its app promotes “Surprise Bags” of surplus food at one-third of the retail price. (Too Good to Go takes a small cut.) Sam Kashani, country manager for Canada, says he’s been thrilled with the reception from c-stores, noting they represent about 15% of its partners, which also include grocers and restaurants. “In addition to making a positive environmental impact, a store turns surplus food into incremental revenue and incremental traffic,” notes Kashani. Akshay Koda, a supervisor at Jayy’s Cheers Convenience in downtown Toronto, says joining the app about eight months ago has been a big success. It assembles about two to three “Surprise Bags” per day (though sometimes as many as 10), putting in items like a bag of chips, snack food, cereal and bottled beverages that are about to expire or have recently expired. “And the bags always go,” says Koda. A carbon-neutral first Mars Wrigley Canada will support the launch of its Mars bar becoming certified carbon neutral with a big marketing campaign. More than 9 million Mars bars in Canada move off shelves per year, and by Jan. 1, 2023, the company pledges it will be “the first carbon natural chocolate bar to appear on Canadian shelves.” To achieve reducing the bar’s carbon footprint by more than 25%, satellite data is being leveraged to geomap cocoa farms, enabling Mars Wrigley to monitor for risks and work with its supply chain to prevent future forest loss. Alluding to the marketing campaign, Shannon Denny, director, corporate affairs at Mars Wrigley Canada, says, “By pursuing carbon neutrality for the iconic Mars bars, we hope to engage consumers in the fight against climate change.”

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Convenience Store News Canada

CBA seeking support The Canadian Beverage Association (CBA) is looking to “work with the c-store sector in Ontario” on its transition to an Extended Producer Responsibility Blue Bin system. The system shifts full accountability to manufacturers and producers of waste rather than sharing the responsibility with municipalities. To help consumer-packaged companies in beverage fulfill this new requirement, “we’re looking for early partnerships from c-store retailers/gas bars to improve the infrastructure for recycling and make sure recyclables are rescued,” says Jim Goetz, president of the CBA. “We are excited to work on feeding the circular economy in Ontario and across the country.” CPP tackles packaging The Canada Plastics Pact (CPP) is creating a circular economy in Canada in which plastic waste is kept in the economy and out of the environment. This multistakeholder, industry-led, cross-value chain collaboration platform aims to tackle plastic packaging waste and pollution by bringing together businesses, government, non-governmental organizations and other key actors in the local plastics value chain. CPP Partners are working towards achieving four clear, actionable targets by the year 2025.

CLEAR ACTIONABLE TARGETS BY 2025

100% plastic packaging designed to be resuable, recyclable or compostable

Define a list of plastic packaging that is to be designated as problematic or unnecessary and take measure to eliminiate them

50% 30% of plastic packaging is effectively recycled or composted

recycled content across all plastic packaging

CPP launched in January 2021 and, while there are no convenience retailers on the list (yet), members include high-profile suppliers, from Bimbo Canada to Club Coffee, Coca-Cola Canada, ColgatePalmolive Company, Danone Canada, FGF Brands, General Mills, Keurig Dr. Pepper Canada, Kraft Heinz Canada. Kruger Products, Maple Leaf Foods, Mars Canada, Mondelēz Canada, Nature’s Touch, Nestlé Canada, Primo Water North America and Unilever Canada.

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MAKING CHANGE

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Increase Profits

Drive Traffic

Inspire Loyalty LIVE and IN-PERSON

September 13-14, 2022 Toronto Congress Centre ConvenienceU.ca CARWACS.com


Sustainable sweetness

A survey of 7,000 consumers across 10 European countries revealed: • 7 0% of consumers factor sustainability into their food and beverage purchase decisions— higher still amongst younger consumers. • 7 4% of high frequency chocolate purchasers prefer sustainable products. • 56% of younger consumers bought more chocolate with sustainable cocoa than regular cocoa. According to Niels Boetje, managing director cocoa at Cargill, “Our research suggests that increasingly, consumers look for… concrete claims and compelling stories that connect the products they purchase with tangible progress on critical issues like child protection and deforestation elimination.” Cargill is paying particular attention to consumers in the 18 to 35 demographic where “just over half of these gen Z and millennial shoppers (reported) a corresponding uptick in sustainable product purchases.” Committing to sustainability has the further advantage of delivering higher margins. More than two-thirds of consumers surveyed indicated “they would pay more for a chocolate product made with sustainable cocoa.” -Darren Climans

Packaging promises

Coca-Cola Company: Recently unveiled its first-ever beverage bottle made from 100% plant-based plastic, excluding the cap and label, which was made using technologies that are ready for commercial scale. PepsiCo: 100% of its packaging is to be recyclable, compostable, biodegradable, or reusable by 2025.

Mars: 100% of its plastic packaging is to be reusable, recyclable or compostable by 2025, plus the company is promising a 25% reduction in virgin plastic use. Hershey: 100% of its plastic packaging to be reusable, recyclable or compostable by 2030.

Mondelēz International: Committed to making all packaging recyclable by 2025. In addition, the company has committed to a 2050 net zero emissions target across its full value chain.

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Convenience Store News Canada

Going green

10 easy actions for sustainable c-stores

1. Replace incandescent light bulbs with energysaving options like CLF and LED lighting. 2. Reduce paper by digitizing operations, such as inventory management, as well as employee handbooks.

3. Say no to plastic bags by offering customers paper or encouraging them to BYOB: Better yet, create a revenue source by selling reusable bags!

4. Switch out single-use plastics, like straws, cups and utensils, for eco-friendly alternatives. 5. Reduce energy waste by investing in energyefficient equipment: Old refrigerators are energy hogs and can account for up to 40% of energy costs at a convenience store! 6. Help customers do the right thing by installing recycling bins outside your store.

7. Install water efficient taps and faucets in restrooms and kitchen areas.

8. Adjust your thermostat when possible: a few degrees can make a difference. 9. Source and stock more sustainable products and brands. 10. Communicate with and engage customers by highlighting your sustainability efforts through in-store signage and on social media. CSNC

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Sustainability is a growing concern for consumers of confectionery products, according to research conducted by Savanta, on behalf of Cargill.

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Launch Year

AWAR D S

CALL FOR NOMINATIONS! Making an impact

Your industry is filled with companies making a positive impact and it’s time to shine a light on those efforts!

The Convenience Stores News Canada Impact Awards will recognize initiatives introduced by retailers, suppliers and solution providers that are making a meaningful difference, from helping the planet to supporting employees and communities. The goal is to celebrate companies—large or small—making a positive impact across four key areas:

• Sustainability (initiatives around food waste, ethical sourcing, energy efficiency etc.) • Diversity, Equity & Inclusion • Supporting Employees • Community Service/Local Impact/Giving Back There is no fee to nominate (you can even nominate in multiple categories), and honourees will be featured in Convenience Store News Canada magazine and online this fall. Tell the industry about the amazing work being done at your company!

Deadline to Enter: August 26 Nominate now! CSNCImpactAwards.com


PESTY Protect your brand’s integrity with these expert tips to prevent and control pests

It’s every c-store operator’s nightmare: A viral video starring an army of cockroaches or a family of rats parading through your products. Not only are pests and rodents bad for business, but they’re hazardous to staff and customer health. There are ways to spoil this pest party, however. We consulted four experts across the country for their top tips to safely protect the integrity of your business from creepy crawlers of all kinds.

A growing problem for c-store owners “The volume of mouse, rat and wildlife issues out there is exploding, year after year,” says Bill Dowd, owner of Hamilton, Ont.-based Skedaddle Humane Wildlife Control. “Rodents carry more than 60 diseases that are transmissible to humans, so there’s a health and safety

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risk for the store owner, the employees, and their customers.” Pests will damage or devour your product, eating into your bottom line and your reputation.

Don’t let them in C-store owners should proactively hire a pest company to find all potential entry points pests can use to get into the store, suggests entomologist Taz Stuart, director of technical operations at Poulin’s Pest Control in Winnipeg. “Make sure foundations, cracks and crevices are filled so there’s no access for rodents or other pests; that includes using rodent-proofing material like Xcluder,” says Stuart. Inside, make sure all doors—front, back, side and receiving—are covered with mechanical devices and bait stations where required. Get a pest’s eye view by inspecting the bottom of your exterior doors, suggests Jun

Convenience Store News Canada

Bukht, associate certified entomologist at Major Pest Control in Edmonton. “Old weather stripping doesn’t work well; if you can see light coming through or you can put a pencil through, mice can get in,” says Bukht. “If your gap’s the size of a quarter, rats can enter, too.” Make your facility unattractive to them by reducing clutter and making sure there’s not a lot of brush right up against the building. Set up mechanical and glue traps throughout the building, where back entrances meet the walls. “Some people do it with weather prevention in mind, and they don’t realize how tightly it needs to be sealed if you want to keep ants out, for example,” says Moncton-based entomologist Sean Rollo, technical director for Orkin Canada. “We see people using expanding foam to seal gaps, but that’s not going to stop rodents—they’ll just burrow right through that.”

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BY W E N DY H E L F E N BAU M

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“Rodents carry more than 60 diseases that are transmissible to humans, so there’s a health and safety risk for the store owner, the employees, and their customers”

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Watch for warning signs of pests on patrol When restocking shelves, look for black or brown, rice-shaped droppings behind products or on the floor, especially in corners, says Bukht. “Rodents communicate through their poop: Usually, if you see just one dropping, there’s a female rat or mouse ready to mate. Multiple droppings tell other rats or mice there’s a food source here,” he explains. Other signs of unwanted guests include packaging that has been chewed or scratched, and teeth marks on cardboard boxes or drywall. Listen for rustling, scratching, squeaking or gnawing noises, and sniff around for a musty odour. You may also see rodents scurrying about, especially the more curious babies. They like to nest around or under coolers and refrigerators, under the sink or inside walls, notes Bukht, who uses talcum powder at night to see where rodent footsteps lead. If you see signs of pests, don’t ignore it, warns Dowd. “Rodents reproduce every 21 days, and they typically have five to seven babies per litter, so things get out of control very quickly,” says Dowd.

Keep everything clean and properly stored Pests usually choose your store due to poor sanitation, so wipe spills up promptly, especially pop syrup, which attracts flies, roaches and rodents, advises Bukht. Garbage should be removed daily. “As soon as boxes are emptied, throw them out,” says Bukht. “Mice like to hide in there for shelter and cockroaches love corrugated cardboard sheets.” Don’t store things in gaps between coolers and the wall, where mice like to nest. To trap cockroaches, set up insect monitors anywhere near food, says Stuart. “With roaches, you’ve got to be hospital clean. You don’t want them to get established: In 32-36 days, you’ll have another 24-48 from a female

cockroach,” he explains. In back storage areas, keep boxes at least a foot off the floor and store food in sealed plastic bins.

Be diligent about deliveries Pests travel to c-stores through food and supply delivery. Stuart suggests asking suppliers whether they have pest programs in place. When a supplier has a rodent problem, you’ll often see teeth marks or find fecal matter in the plastic wrapping or on the pallet, he adds. When doors are propped open for deliveries, that’s another open invitation to critters, so keep them closed. Of course, c-store owners should be realistic about how vigilant their team can be when it comes to pest duty, acknowledges Rollo. “An employee can’t spend 10 hours searching through every shipment to see if there’s pest activity, but they can do some inspections,” explains Rollo. “Cockroaches are harder to spot; they like to hide in corrugated cardboard. But if you unpack, put things on shelves and take the cardboard out immediately, that helps.”

Prioritize a pest control protocol A pest control contract, where a licensed technician will set and check traps monthly and seal off entry points can help protect your business. A thorough inspection plus recommendations to remove or prevent pests can take anywhere from an hour to half a day depending on the size of your store, notes Rollo. “It’s money well spent. It’s not an expenditure; it’s an investment,” he says. “It’s no different than a security system company that evaluates your property for weak spots in your building that criminals can access.” Bukht adds that c-store owners need to face potential pest problems right away. “Keep on top of it, rather than waiting until a customer shoots a video through your window of the rats all over the chocolate display,” he warns. CSNC

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CATEGORY CHECK

BY MICHELE SPONAGLE

Cold comfort

Consumers’ desire for indulgence turns up the heat for a wide range of frozen treats The frozen treat category is heating up this summer with suppliers feeling positive about the season. Their optimism is justified. Last year, despite the pandemic, some makers say sales were robust as consumers sought comfort with sweet indulgences. It’s no wonder that Canada ranked sixth among top ice cream consuming nations. In fact, sales of ice cream and frozen desserts in Canada hit $1.4 billion in 2021, according to Euromonitor International.

Better-for-you (BFY) options The healthy splurge trend has staying power. Chapman’s is introducing a new 55 ml NSA (no sugar added) lactose-free bar to its roster, suitable for diabetics, those with a lactose intolerance or keto-diet followers. “Before now, these categories of guests rarely got a treat at these occasions,” says vice president Ashley Chapman. Though healthy choices in frozen treats are expanding, ice cream still rules. “We’re seeing real ice cream items selling a lot more than frozen dessert items or water ice,” explains Mike Rogiani, president, The Ice Cream Depot, in Nisku, Alta. “We haven’t seen a lot of new innovation in the category recently and what innovation we’ve seen, such as low calorie or non-dairy items, have captured only a very small market segment.” He also notes that ice cream sales do well at the beginning and the end of the summer, with water-ice products doing particularly well in hot weather. To keep retailers engaged, the company will feature promotions for products it is focusing on. “We try to run promotions that ensure retailers are stocking up on items that sell best for the season,” he adds.

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Convenience Store News Canada

Though healthy choices are expanding, ice cream still rules

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Sweet indulgence Unilever, the world’s largest ice cream company, is confident in the category’s growth, announcing that it will roll out at least 19 new frozen treats for 2022. Its portfolio of superstar brands will grow with noteworthy mash-ups, like Breyer’s M&M’s Mini Caramel Fudge ice cream and two Klondike SKUs—Reese’s Peanut Butter Cones and Chocolate Cones. Of note is the bolstering of better-for-you options with the addition of Magnum Non-Dairy Hazelnut Crunch Bar.

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Supply issues, inflation and the cost of gas are threatening a meltdown for profits and may necessitate higher prices

Supply issues, inflation and the cost of gas are threatening a meltdown for profits and may necessitate higher prices. “We’re watching closely and we’re hoping that these things won’t impact prices too much,” says Andrew McBarnett, CEO, Neale’s Sweet N’ Nice. “We’re having trouble getting some stuff into the country. It’s a challenge.” Global flavours, local sourcing Despite those pressures, he is looking forward to his brand having a presence at summer events. “Engagement is very important for us,” he says. “When we first started, it really helped us grow.” He feels his customers will welcome the introduction of soursop ice cream—a flavour they’ve wanted for some time.” The launch is very on-trend as consumers show an interest in tropical flavour and global-inspired foods. McBarnett also sees how the buy-Canadian momentum is influencing shopping behaviours. As an Ontario-based, Canadian-owned company that uses 100% domestic milk, Neale’s Sweet N’ Nice will trumpet its Canadian-ness even louder when it redoes its packaging this year and offer discount coupons. The last two years have been kind to Kisko Products, makers of beloved brands like Mr. Freeze. It reports a 10 to 15% lift in sales,

according to its president, Mark Josephs. He’s hopeful for another good year as people will be on the go and travelling more, which will mean more traffic and sales for c-stores. With 50% less sugar, its Mr. Freeze Jumbo Lite (150 ml) does very well in the space. All-natural Mott’s and Welch’s Juice Ice Bars will now be made with certified organic juices to appeal to BFY consumers. Inflation threatens to cloud the sunny skies for frozen treats. Josephs says, between freight, labour and goods, that his costs have risen about 18%. “Manufacturers and processors are taking a hit to their margins and it hasn’t stopped yet.” While some costs are being passed along to retailers and consumers, wholesalers will be offering deals throughout the year. CSNC 22_0879_CN_Conv_Store_News_MAY_JUN_CN Mod: April 4, 2022 11:41 AM Print: 04/04/22 3:24:49 PM page 1 v7

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From barbeques to beverages, stock up to satisfy Canadian consumers’ warm weather cravings

Canadians fire it up Key to summer fun is our home grilling habit. Canadians are twice as likely to fire up the grill when the weather is warm than when it’s cold outside. Though barbequing habits did soften slightly in 2021 when compared to 2019 (-8% vs. 2019), with many gathering restrictions easing we can expect grilling enjoyment to be a mainstay of our 2022 entertaining experiences. We also eat a wide variety of charred fare, with dinner being the principal occasion for barbeque engagement. In the age of rising ‘lessetarianism’ (less meat consumption), it should not be surprising that vegetables and potatoes are the fastest rising dishes

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Gen Z target (18 to 24 years old). Further engaging Gen Z and millennial targets is an important future growth opportunity for the category.

TOP BBQ DISHES STEAK (BEEF) HAMBURGER VEGETABLES PORK RIBS BAKED/ROAST POTATOES CHICKEN BREAST SAUSAGES HOT DOGS BEEF ROAST

% CHANGE VS. PRE-PANDEMIC SPRING/SUMMER 10 4 75 34 48 -22 35 -21 36

enjoyed on the grill. However, it is important to note that meat proteins led by steak and burgers still top our list of favourites. The fired-up experience is also critical because of its connection to ‘special’ events. One in five spring summer meal occasions prepared on the grill is in celebration of a special occasion. Capturing your fair share of these moments is critical given that shoppers typically spend more money on celebratory dining. For the love of ice cream Canadians continue their love affair with frosty fare. More than half (54%) of all frozen confectionery (ice cream and frozen novelties) is consumed between May and September, making this ‘sweet treat’ season. The love of ice cream is certainly not for kids alone. Though consumers under 13 years old remain strongly developed for frozen confectionery consumption, warm weather eat rates rose by 25% among the all-important

Convenience Store News Canada

More snacks please Canadian outdoor snacking occasions are not exclusive to ice cream alone. In fact, Canadians are traditionally voracious warm weather noshers, with spring summer snacking in 2021 19% higher than during the cold weather months. Top snacks consumed in warm weather months are led by fresh fruit, cheese, chocolate, potato chips, cookies and frozen novelties. Cheers to sunshine Finally, beverages play a considerable role in meeting thirst, refreshment, hydration, enjoyment and social needs during the warm weather months for Canadians of all ages. Beyond tap water, the top spring summer beverages include, bottled water, coffee, carbonated soft drinks, fruit juice, tea and beer. However, if we compare drinking rates in 2021 versus 2019 habits, we are drinking more sparkling waters, carbonated soft drinks, cold coffee beverages, alcohol RTD/cider/premixes, smoothies and milkshakes. Looking ahead to spring/summer 2022, Canadians are looking forward to celebrating the sunshine with unique food and drink experiences. In turn, understanding the occasions and triggers that drive those choices is a significant opportunity for convenience retailers, manufacturers and foodservice operators to connect with consumers and drive sales. CSNC Kathy Perrotta is a VP with Ipsos Canada Market Strategy and Understanding, working with Food & Beverage Group Syndicated Services.

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With the warm weather season and long weekend celebrations upon us, how are Canadians, tired and tested from a long cold winter of lockdowns and restrictions, getting ready for summer fun? They are heading outdoors. It’s that magical time of year. Flowers are blooming, the sun is shining, and holiday planning is in full swing. As consumers prepare with bathing suits and sunscreen in hand, those in the food and beverage industry need to align marketing initiatives, promotional strategies and shelf sets with consumers’ evolving and emerging warm weather needs. In the spring summer months, Canadians eat outdoors twice as often when compared to cold weather dining habits. During the 2021 warm weather lockdown, this behaviour increased 42% when compared to habits in the pre-pandemic May to Sept 2019 period. Unique needs driving our warm weather consumption choices are led by refreshment, experience, cheer/happiness, indulgence and entertainment.

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BACKTALK

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

Automatic for the people Canadian Automatic Merchandising Association president Jim Jackson on navigating change and why he’s invested in the evolution of vending PHOTO BY THOM AS FRICK E

territory, with the goal of ensuring the long-term success of the business. On the surface, convenience and vending are competitors, however, with the advent of technology and unattended markets, they also have a lot in common. Here, Jackson discusses how the pandemic impacted his industry, the importance of embracing technology, the rise of micro markets and why he’s optimistic about the future of automatic merchandising. How has the pandemic shaped your industry?

JJ: It has been a long two years for

Jim Jackson, president of Winnipegbased Quality Vending & Coffee Services, has been in the business for more than 40 years and during that time he’s seen massive shifts in automatic merchandising. However, nothing could have prepared him for the most recent shake up. After several years on the board at the Canadian Automatic Merchandising Association (CAMA), the industry veteran stepped into the role of president in March 2020—a time of extraordinary

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disruption across all industries, which resulted in the emptying of offices, schools shifting to online learning, a sharp decline in travel and the restricted access to spaces previously open to the public, such as hospitals. In other words, it was a nightmare for those in the vending space: At the height of the pandemic, many of CAMA’s operators experienced a decline in sales of 50% or more. For two years, CAMA worked to support its members through unchartered

Convenience Store News Canada

our industry. Being in the business of providing food and beverage convenience services to businesses, our success has always been based on the success of our customers. The more employees they can keep within the four walls of their business, the greater the demand and need for our services. We all know that in the past two years, many businesses adopted a work-from-home approach and many manufacturing facilities worked with a reduced employee base or, in some cases, shut down entirely. It is simple to see how this would have a negative affect on our industry and that of many others that are in the business of providing services or support. Many of our operators saw their business decline more than 50%. This forced our operators to do a deep cleanse of their operation. They had the time to review and eliminate unnecessary expenses from their operations and adjust their employee needs to match the reduced workload and revenues. You became president of CAMA in 2020, just as the world changed dramatically and many of your members were hard hit. How is the landscape different as we move out of the pandemic? Have a lot of your member businesses closed? ? JJ: Many of the pandemic restrictions

are being lifted and many of our customers have or are in the process of bringing employees back into the

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Founded in 1953, the Canadian Automatic Merchandising Association represents the interests of vending operators, machine manufacturers, and product & service suppliers. The group is focused on supporting and enhancing the vending, office coffee and burgeoning micro market industries. office. I would estimate that many operators are back to 80% of prepandemic sales numbers. The next 20% will require some time, possibly some diversification to their business portfolio and, of course, capitalizing on some new business opportunities. I am not aware of any members closing their business. We have all weathered the storm and hopefully the sailing will be smooth going forward. How do things look moving forward?

JJ: Now that we are coming out of

the pandemic and customers are starting to repopulate their offices and factories, our industry is faced with new challenges. These challenges show up in the form of labour shortages, supply chain issues and overwhelming increases to our cost of goods. It is hard to believe that with the number of people having lost their jobs in the past two years that we would be faced with a labour shortage, but it is real and has become a challenge for all industries. We are also experiencing delays in shipments of consumable products from many suppliers, as they are faced with shortages in raw ingredients and packaging for their production lines. Our operators are constantly scrambling to keep up with the everincreasing cost of goods that we are receiving from our supply chain. Moving forward our operators and suppliers are excited to start working towards getting their businesses back to a pre-pandemic level. This will take some time, patience and creativity, but we are optimistic that there is light at the end of the tunnel, and it is now in our view. How are operators and manufacturers pivoting or rethinking their approach to meet changing consumer needs?

JJ: The biggest impact on our industry

in the past few years is the growth of unattended retail or a concept known as micro markets. The growth and demand for this concept is still going full speed ahead. Employers love the

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idea of having a convenience store in their staff breakroom. Fresh food plays a big part in a micro market, as well as the availability and selection of products that do not fit in a traditional vending machine. Upscaled coffee programs are generally a part of the market experience and employees love the idea of not having to leave the office to get a gourmet beverage. The experience of self-checkout and the ability to pay with debit, credit or from a prepaid user account adds to the experience. Customers can also receive loyalty rewards and promotions on their purchases. Employers and staff appreciate the look of custom millwork that blends in with the aesthetics of the room décor, as it makes for an inviting and relaxing place to visit and enjoy your coffee or lunch break experience. Our suppliers are responding to the growth and demand for micro markets by focusing on equipment and product offerings that are required by the operators to fulfill and manage this growth in unattended retail. On a personal note, how did you get into the business?

JJ: Quality Vending was founded in

1977 by my brother and his business partners. I joined the team as their first employee in 1979. I wasn’t just an employee; I was treated more like a partner. I played an integral role in the growth and success of the company and to many of our industry peers, I was the face of Quality Vending. In 2017 when the owners started talking about retirement… I had a conversation with my wife, Darlene, our children, and our accountant who is now our business partner, and we came up with a plan and an offer to purchase the business: We became the new owners of Quality Vending & Coffee Services in March of 2018. This decision to buy the company did not come without a vision for the future of the business, as it also included my own succession plan. Darlene and I have four children, and all of them had the opportunity to work summer

jobs at Quality while they were going to school. Our oldest son, Jeremy, and our youngest son, David, took a liking to the vending and convenience service industry and expressed an interest in making a career in the industry as business owners: Both Jeremy and David have already become well known and respected amongst our network of operators and suppliers and will be leaders in the industry for decades to come. 45 years in, how has Quality Vending evolved to stay competitive? JJ: I believe the key to our success

has been working hard to be the best at what we do and having the vision to adopt new technology and take advantage of new opportunities as they are presented to our industry. Quality has a well-diversified portfolio of services and has become the one stop shop for our customers. We provide our customers with vending services, coffee services, pantry services, micro markets, water coolers, and equipment repair and service. We are also at the forefront of our industry in adopting new technology and concepts that will streamline the efficiency of our operation and provide our customers with the best user experience with our equipment. In 2012, Quality was one of the first companies in Canada to embrace the concept of the micro market and helped fuel the growth of micro markets in Canada. What does the future hold for your industry? What are you particularly excited about? JJ: I have a very positive outlook for

the future of our industry. Our members are quick to adapt to the changing needs of our customers and the potential new business opportunities that the growth in unattended retail/micro markets has presented. It is very exciting to witness new technology that creates efficiencies in all aspects of our business and is revolutionizing our industry. Our industry will remain strong and exciting for generations to come. CSNC

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M AY | J U N E 2 022

CONTENTS 5 Editor’s Message Looking Forward 7

8 12

CEMA

Challenges remain for consumers considering alternative vehicle purchases

VOLU M E 27 | N U M BE R 3

8

Fuel Management 2022

Keeping an eye on fuel inventory is now more essential than ever

Site of Dreams

New Calgary wash location makes friends with the environment

17 No cash, no problem

Digital POS puts operators on track for profits

20

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It’s in the cards

Credit card transaction fees are taking a big bite out of gas station profits

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EDITOR’S MESSAGE 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

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TRANSLATION | Danielle Hart

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ART DIRECTOR | Jackie Shipley DIRECTOR OF MARKETING, BRANDLAB

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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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Looking forward

We look to the future in this issue and see it brightly lit with digitized payment and information systems. Imagine navigating your business during the recent pandemic without digital aids, such as debit cards and apps for HR and POS. These tools saw the future come early and stay late with mass adoption by both customers and retailers. According to a recent study by wireless payment provider Square, 93% of Canadian retailers use or plan to use automation technology to decrease staff members’ hands-on time. The same study reported that 85% of customers felt that the measures designed to make the shopping experience contactless actually made the activity more enjoyable. While car washes and gas stations were once largely cash-based enterprises, the shift to digital portals for cashless, contactless payments has made locations more customer-focused, more responsive to changes in the business environment and more profitable overall. Just a few decades ago, who would have thought car wash and fuel operators could run data and manage multiple sites from the palm of one hand using mobile devices such as a telephone. Indeed, at fuelling locations, cloud-based apps that detail wetstock and forecast volume sales are now standard and key to sound management practices. From the customer perspective, POS technology that interfaces with loyalty programs and payment tools have made shopping for service less of a task and more value-laden with points, promotions, and performance. On a side note, I want to mention that this is my last issue with OCTANE. I wish to take this opportunity to thank associates and members of the community who helped to make OCTANE Canada’s most authoritative information package for car wash and retail fuelling. Many thanks for reading. 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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Challenges remain for consumers considering alternative vehicle purchases While the emissions plan tabled by the federal government on March 29 includes more incentives for Canadians to drive zero-emissions vehicles (ZEVs) that consumers generally support, a new survey suggests there are challenges when it comes to the alternative vehicle sector. Earlier this year, the Canadian Transportation Alliance commissioned Abacus Data to survey consumers about their vehicles, purchasing intentions, alternative fuel vehicles and awareness of and support for government policies relative to decarbonization. The survey of 1,500 adults, conducted from January 7 to 11, used the Lucid exchange platform, with an accuracy of plus/minus 2.53% at the 95% confidence level. It found 87% of Canadian households own at least one vehicle, with just over one-third owning more than one. Of those surveyed, 92% drive an average of 407 km each week. In addition, most Canadians (53%) expect to purchase a vehicle within the new two years, and 91% of those surveyed are willing to purchase an alternative fuel vehicle. For most consumers, cost (85%) and fuel efficiency (73%) were among the top three priorities for their vehicle needs. While Canadian consumers are supportive of reducing emissions from the transport sector with a preference for an incentive approach compared to mandated policies, only 22% of those surveyed said environmental impact was among their top three priorities for vehicle attributes. The survey also found the majority of Canadian prefer a larger vehicle, with 55% of respondents owning a sport utility vehicle or pick-up truck, and 49% owning a car. In other

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words, consumers put their personal needs first when it comes to their vehicle choices. To incentivize most vehicle consumers who are willing to purchase an alternative fuel vehicle, the survey shows more consumer education and additional government investment in infrastructure and vehicle development are needed. Most respondents said that electricity was a renewable fuel, (71%), while 11% said petroleum was a renewable fuel. Finally, while most of those surveyed are willing to consider purchasing an alternative fuel vehicle, nearly half (49%) of those expect their next vehicle to run on gasoline or diesel. Only a quarter of respondents (24%) say they will likely purchase an HEV and 19% an EV. Just over half were somewhat or very familiar with the federal government’s emissions targets for 2030 and 2050. What does this all mean? Most Canadian households own a vehicle, and more than 50% expect to

BY J E N N I F E R S T E WA R T

purchase a vehicle in the next two years. Canadians support plans for emission reductions, but more education about those timelines and how they could help influence consumer choices is necessary. There also needs to be more awareness of government policy on emission targets and decarbonization. If future consumer vehicle needs are to include alternative fuel vehicles, then more incentives are needed for those consumers to change their present-day assumptions. Finally, consumers need to know that if they purchase an alternative fuel vehicle, the infrastructure to support that vehicle, charging stations and all necessary supports are in place for them to feel assured their preferred mode of transportation is reliable, affordable and works for their needs. In essence, the survey shows a significant gap in understanding of just how we achieve net-zero and the roles that various sectors can play. It’s clear there’s a pathway forward that isn’t just one sector in isolation, but the road will be windy and long to get there. As an industry, let’s make the path as clear as possible and show what can be done through innovation, collaboration and leading-edge technology. We owe it to our sector and all Canadians to meet the road where it’s going, versus letting it pass us by. OCTANE Jennifer Stewart is president and CEO of the Canadian Energy Marketers Association (CEMA), formerly CIPMA.

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FUEL

2022 Keeping an eye on fuel inventory is now more essential than ever BY K E L LY G R AY

8

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OCTANE

Fuel retail is a challenging business. Margins on gas and diesel are razor-thin, and business tends to work on volume sales. Customers are buying less fuel than they used to, thanks to pandemic travel reduction, higher cost of a fill and alternative energy vehicles. Indices such as these show good fuel management practice is now more essential than ever. At Canada’s retail fuel sites, every five litres of fuel lost to theft, evaporation, leaks and calibration errors means an operator must sell an additional 85 litres of fuel to recoup the profit. Better to spend money on systems that deliver a firm grip on tank inputs and outflow than use ‘guestimates’ to determine what is in the tank. There are four key areas impacting fuel management,

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MANAGEMENT

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Matt Tormollen

suggests Matt Tormollen, vice-president & general manager, Global Solutions at Dover Fueling Solutions. He sees theft, fuel delivery accuracy, the need for real-time inventory inputs, and environmental compliance as leading areas where operators face challenges. “Thieves are becoming more clever and sophisticated in their efforts to hack into fuelling dispensers and the underground tanks. Thieves are stealing thousands of dollars worth of fuel per occurrence in broad daylight then reselling it on the black market,” says Tormollen, mentioning that loss prevention must be paired with tools to ensure delivery accuracy. “An 8,500-gallon delivery with an error of just 0.5% can equal $170.00 worth of loss in fuel inventory.” Important as well is the need to have inventory determined in real-time rather than rely on projections. “Often fuel deliveries need to be scheduled days in advance of the deliveries due to a nationwide shortage of fuel delivery truck drivers,” he says. “Last-minute changes with delivery times require quick and accurate processing of information of existing fuel inventories in the event a change needs to be made with the order or delivery time.” Confusion in inventory can occur due to meter drift, an equipment challenge where wear and tear may cause meters to perform inaccurately between calibrations. According to Gilbarco Veeder-Root, the growing number of contaminants from today’s cleaner fuels, recalibration and maintenance are needed more frequently, compromising the accuracy of fuel meters. Also impacting inventory accuracy is loss caused by evaporation due to temperature. Gilbarco Veeder-Root points out that this can occur in delivery trucks and underground storage tanks. For example, cold outside temperatures can cause the fuel to contract in the truck before delivery occurs. This contraction causes a variance between the actual delivery and the bill of lading. When the outside temperature is warmer than the temperature below ground, a fuel delivery may contract inside tanks and result in an apparent loss without any delivery discrepancy. Storage tank leaks stand out as a leading cause of fuel level discrepancy. A leak delivers a direct hit to the profitability of the site and creates a massive chain of environmental events that can mean huge costs. Do your paperwork for environmental compliance, advises Tormollen. “Fuelling station operators face egregious daily fines for locations that are legally out of compliance for not having paperwork completed promptly. Typically, fines are based on the number of days that a location had incomplete daily reports.”

At Canada’s retail fuel sites, every 5 litres of fuel lost to theft, evaporation, leaks and calibration errors means an operator must sell an additional 85 litres of fuel to recoup the profit

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“An 8,500-gallon delivery with an error of just 0.5% can equal $170.00 worth of loss in fuel inventory”

Tanknology offers robotic testing technology for fuel storage tanks that complements conventional out-ofservice inspections. This robotic tool is ideal where it is not practical to drain and put the tank out of service for inspection, or if operators anticipate that no repairs are required. According to Tanknology, the Robotic service systematically scans the tank floor to collect and record a high volume of UT data for analysis by a qualified inspector. Trends “The fuel management sector is heading towards complete automation and the integration of sophisticated analytics and telemetries,” says Tormollen. “Advanced technology today can routinely and remotely control a variety of key systems from fuelling dispensers. This technology reduces the number of times a service technician needs to make an onsite visit, to a completely customizable double-meat, doublecheese sandwich with jalapenos on a sourdough bun." Another trend is in c-stores, says Tormollen, adding: “Companies are constructing bigger stores with larger fuel islands to accommodate as many as 100 vehicles at once. This size demands a much larger real-estate footprint, but something to keep in mind is that larger fuel storage tanks require more attention to environmental compliance. Home office logistics need to have the capability to accommodate more frequent fuel deliveries that can often be as many as four to six tanker deliveries a day. This accommodation requires more planning to make certain that delivery trucks aren’t waiting for extended periods and that their loads will fit in the tank. All of this will be done with a handful of people in the home office using complex automated systems. Many fuel retailers have passed the threshold of operating a multi-billion dollar per year fuel business and, as a result, need to have access to superior technology. Even though many fuel operators are doing billions of dollars of business, margins can remain slim. Automation is the key to efficiency, and efficiency is the key to profitability.” OCTANE

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Solutions Fuel management solutions include automatic tank gauges to alarm management services. The Veeder-Root TLS4 series Automatic Tank Gauges (ATGs) provide comprehensive wetstock fuel site data for advanced fuel management. The system offers multiple reconciliation features to track fuel inventory as it enters or exits in underground tanks, regardless of delivery or dispensing activity. The unit continually tests the tank for leaks with data collected during each idle period for a highly accurate leak detection database. Tanks are also continuously monitored for theft that may happen during quiet periods. The TLS4 is capable of complete remote access allowing managers to view inventory in real-time from anywhere there is WiFi. At Dover Fueling Solutions, they offer ClearView Wetstock Monitoring Services. These monitoring systems rapidly identify and resolve instances of fuel loss to help fuel businesses remain as profitable as possible. The end-to-end fuel management solution collects and processes real-time data so that operators can quickly reconcile any fuel discrepancies down to the gallon or litre.

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COVER STORY

SITE OF DREAMS New Calgary wash location makes friends with the environment B Y K E L L Y G R A Y | P H O T O G R A P H Y B Y D AV I D WA T T

Dreams Eco Xpress Car Wash opened this past February in Calgary northeast. The new site is the second location for the growing chain, with the first already a successful enterprise in Okotoks, a bedroom community 18 kilometres south of Calgary. Next up is a third location in Calgary southeast, which is to open later this year. Behind the success of the group is a strong water and effluent management program and a push to use biodegradable chemicals. “Our customers have noticed that you can be green and still have effective car cleaning,” says Tom Tallon, director of operations at Dreams Eco Xpress. He mentions that they have been able to offer the service and still keep pricing competitive, an important consideration in what has become a very tough market for car wash in the city.

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A NEW MOTION In Wheel & Tire Cleaning

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“We use reclaimed and recycled water in 60% of the wash,” says Tallon. “At our Okotoks location, the system utilizes settling tanks and then a filtration system to reclaim water. Here in Calgary, we are using a newer and more advanced PurWater and PurClean system that runs at a higher volume to accomplish our water goals,” he says, mentioning that they had to jump through a few hoops to obtain water recycling permits from the City of Calgary before opening. At Dreams’ new Calgary site, they have been able to bring water use down to 30 to 40 gallons (135-180 litres)

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Happy endings: Dreams Eco Xpress offers free vacuums and a 12 producer flash dryer

per vehicle. Dreams Eco Xpress Wash uses only freshwater, alongside chemical treatments like waxes and detergents, to achieve a spot-free rinse at the end of the ride. “We use reclaim on the high-pressure stainless steel ‘octopus’ arches at the front end to prep the vehicle,” he says, adding that the operation uses a cohort of six staffers to run the tunnel. “Having staff in the tunnel provides a more personal experience that is in keeping with our business model. We want our returning customers to recognize a friendly face, and we want our staff to greet our customers. We want our customers to see Dreams as ‘their car wash’;

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the only place they bring their vehicle for a trusted clean.” Dreams turned to National Carwash Solutions (NCS) and its ZEP Vehicle Care Division for easy-on-the-environment chemicals that are biodegradable as well as effective. “Staff still need to be properly trained in terms of mix rates and safety. For example, those that handle chemicals need WHMIS (Workplace Hazardous Materials Information System) training and certification.” The express wash is a hybrid PECO automatic tunnel from distributor P.D. McLaren. Features include a five-zone wash system that uses soft cloth technology and a 12 producer flash dryer at the last stage, as well as a pulley conveyor to run about 100 vehicles per hour. “Having the pulley conveyor allows us to give wheels the total treatment. The system also uses neoprene foam to deliver a scratch-free friction wash that has been getting great remarks from our customers.” Entry and exit systems are from SupraLift. “We use underground heating at the doors to reduce things like ice buildup. We also run the tunnel at a higher temperature during colder months to compensate for the difference between outside and inside air temps. And, while we have closed at -45ºC because the doors were frozen shut, we are typically the only wash operators open at -30ºC,” he says. At the front end, Dreams turned to Hamilton Manufacturing for their paystation. “We have gone cashless with Hamilton’s CTK controller that allows us to sell wash bundles or single washes, and it can scan codes when we have promotions or need to comp a customer.” Dreams also uses RFID stickers for its member customers. Memberships are for one wash per day and come in three packages—The Heavenly Wash ($50), Cloud 9 ($45), and Enhanced Basic ($40). Monthly passes are charged to credit cards on file and are automatically renewed. Single wash services offer a great one-time price. Tailored to clean, protect and shine, Heavenly Wash is $21 and includes Armor All Extreme Shine Wax, Rain-X for Wheels and Ceramic Seal. The Cloud 9 Wash is $16 and is designed to clean and protect vehicles. Cloud 9 offers a basic wash with bug prep, undercar-

riage treatment, triple foam, Rain-X Complete Surface Protection and two-step wheel cleaner. Enhanced Basic Wash is $12 and gives a double soft wash, as well as a spot-free rinse. “All our wash products come with free vacuum, mat wash and high-pressure blowguns. And, we offer a special express lane for our membership customers to make each wash as fast as possible,” says Tallon, remarking that they designed the programs and the total wash package to be attractive to the widest possible demographic. “While we work hard to make this the most environmentally sensitive car wash, and it’s attractive to groups that seek out this type of service, we believe our service goes beyond just sensitivity to the environment. We must achieve a great clean and, we have to do it in a way that is convenient and value-laden to our customers. Having a car wash that uses less water and eco-sensitive chemistry is just the starting point.” OCTANE

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DAVID WATT

Digital POS puts operators on track for profits

BY K E L LY G R AY

Success comes down to getting control of the basics, says Paul Facciol, vice-president of Shine Auto Wash and Storguard Self Storage. Facciol’s Coquitlam, B.C, location offers an express friction wash with a dual 200-foot tunnel, two 165-foot conveyors with two pay stations per tunnel. Tunnel controllers, motor control centres and POS are from Innovative Control Systems (ICS). “We’ve noticed a decrease in the use of cash payments, so we’ve adopted a variety of payment options such as prepaid cards, Apple Pay and RFID (Radio Frequency Identification) for fleet accounts. It’s all electronic and easy for customers who don’t want the hassle of coins or bills.” The same is true in Calgary at the Barlow Trail iWash, a multi-service site owned and operated by Kunal Patel. Patel

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opened the site in June 2019 and iWash offers the largest commercial vehicle wash bays in the city, as well as automatic rollover and wand wash bays for regular vehicles. He sought to create a cashless business from the very start. “With cashless payment, there are no coins to collect, and security is less of a concern,” he says, mentioning customers can pay via credit, debit, ApplePay and GooglePay, in addition to pre-loaded iWash loyalty cards. “It’s as simple as tap, wash and go. And, commercial customers no longer have to worry about drivers having receipts for washes. We track usage and send a monthly invoice. Everything is handled via our Exacta software and menu board system that makes product selection and payment easy.” According to Bill Macdonell, there is a new level of sophistication available with current paystation systems. Macdonell is president of Wiz-Tec Computing Technologies, a Canadian leader in point of sale for car wash, gas and c-store operations. He reports they got into car wash POS three and a half years ago after a year of research talking to operators about their needs. “Modernization and the move to digital is something everyone in the car wash sector has to do,” he says, mentioning that a switch to a good digital POS can result in a 15% uptick in revenue. “With older systems, a

customer might take three minutes before they can hit the ‘buy’ button. With digital, the time is decreased to seconds before the purchase is made. This speeds transactions and speeds the line at busy car washes.” Macdonell points out that digital systems, such as those on offer from Wiz-Tec, cancel theft and fraud thanks to security features such as EMV compliance. In older systems, operators may have utilized the magnetic stripe on credit cards to run the transaction. This legacy method costs operators an extra percentage (2.5%-4%) that banks demand to cover the liability on these low-security transactions. Less cash on hand also means less pilfering, less chance of strongarm crime and no reason for thieves to rip cash boxes from wall mounts. “In the past, gift cards and loyalty cards were a challenge for operators. Our system facilitates credit, loyalty, debit and gift cards. The system motivates customers to utilize all the credits on their in-house wash card and sees purchases climb from $4 to $7.86.” MONEXgroup offered the first contactless only solution to accept credit, Interac and mobile wallets for car wash payments back in 2016. “Car washes that are only equipped with coin-operated payment systems are very limited in the types of customers they can attract” says Layal Scheirich, vice-president, sales at MONEXgroup. “Only those with enough coins on hand, or who are willing to obtain coins before they arrive, can use the car wash equipment. Anyone who prefers to pay by card or mobile is simply going to go to a different carwash” she adds. “Restricting the types of add-ons that customers may consider purchasing is another limitation, because they may not have enough cash on hand to purchase upgrades for their wash. Once the coins are used, it’s done, so many customers just do the basics and leave.” MONEXgroup’s Unattended Terminals are seam-

Car washes that are only equipped with coin-operated payment systems are very limited in the types of customers they can attract. Only those with enough coins on hand, or who are willing to obtain coins before they arrive, can use the car wash equipment

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lessly integrated with loyalty apps that allow the customer to tap into their rewards account. According to Scheirich, customers can earn, manage and redeem points balance from the same mobile app, and pay with contactless tap right at the bay. It is fast, convenient, secure and safe. “With modern contactless payment terminals, your carwash business takes advantage of all the benefits of a powerful customer loyalty program” she says. Besides for the obvious convenience for customers, there are additional benefits for the car wash business, such as reduced theft and reconciliation errors, real-time monitoring, detailed reporting, low maintenance, and easy setup and integration with any existing equipment. Nayax Canada is another innovator that is creating cashless, contactless payment car washes that are putting money into operator pockets. “Our complete solution provides a seamless experience that ensures that operators need only one point of contact to handle every aspect of their business. Our customers see a decrease of about 20% in operational costs using our complete management solution,” says Gilad Levy, general manager, Nayax Canada. Currently, the Nayax POS is installed worldwide on more than 515,000 machines, including car washes, air & vac machines, vending machines, laundromats, and

Cashless Payments

Telemetry System

A switch to a good digital POS can result in a 15% uptick in revenue

other unattended industries. The devices are rain and cold-resistant, with the cost for products running just CAD$599 per unit. “The system is very smart and can send a text or e-mail message to alert operators to various adverse events such as no-sale or refund needed. There is full reporting, and operators can simply access the systems via their mobile devices using MoMa, our mobile management app,” Levy says, remarking that no cash, no longer means, no sale. OCTANE

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Credit card transaction fees are taking a big bite out of gas station profits

BY K E L LY G R AY

Canadian businesses are paying some of the world’s making money off retail fuel sales, with operators looking to highest credit card interchange fees. These fees are tacked on the forecourt as a loss leader. to every credit card transaction by companies such as Visa “Canadians are still paying some of the highest and Mastercard and their banking partners, and it can add transaction fees in the world, but we are better off than 1.5% to 3% to the cost of doing business. Fees such as these those in the U.S. where they have the highest fees,” says Dan are making it hard for operations like fuel retail, where razorKelly, president of the Canadian Federation of Independent thin margins and high volume sales are the current business Business (CFIB). He remarks that some progress has been model. On a $50 gas purchase, credit card companies and made for in-store transactions where the fees have seen banks receive between $1 and $2 to stickhandle a small decrease. However, with the pandemic the sale, while the operator was hoping to make changing how people shop, there is less in-store around $1.50 profit on the gas purchase. The traffic and far more e-commerce. operator’s profit went to the card companies and In 2015 lobbying efforts scored a win when banks, leaving the operator hoping the customer interchange fees fell from 1.65% to 1.5% and the will come into the convenience store for a card sector said it was committed to reducing the sandwich or buy a car wash package to make the rate further beginning in 2020. This effort has gas sale worthwhile. As it stands now, credit card saved businesses about $1billion. But, there is still Dan Kelly companies and their bank partners are the ones a long way to go to catch up with the European

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IT’S IN THE CARDS

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SHUTTERSTOCK.COM

4 TIPS FOR LOWERING CREDIT CARD COSTS

Union, where interchange rates are among the lowest. According to the Retail Council of Canada (RCC), France limits interchange to 0.28% and the EU is moving to a 0.30% cap across the board. Altogether 37 countries have negotiated a reduction in transaction costs. “We are asking to speed this process to assist with the business recovery from the pandemic,” says Kelly, mentioning ongoing discussions on a code of conduct. “As people turn more often to digital shopping and the use of credit cards for their purchases and use less cash it is highly important that these credit card service fees be right-sized and brought into reality.” Will this happen? Consider changes in the United Kingdom following Brexit and current initiatives in the U.S. to raise rates. When the UK left the European Union, their transaction fee moved from 0.3% to 1.5%. In the U.S., Congress is expected to agree to a $1.2 billion increase in ‘swipe fees’ this year. Fees in the U.S. for Visa and Mastercard credit cards average 2.22% of the transaction amount and totalled $61.6 billion in 2020, a number that is up 137% over the previous decade (Nilson Report/Merchant Processing Fees in the United States). “Our governments have promised a decline in the rate, but we are still waiting for this to happen,” Kelly says, mentioning that operators in some provinces may soon be able to attach a surcharge to purchases that utilize a credit card. This practise is standard in the EU but is currently against the agreement businesses sign with credit card companies here in Canada. With the cost of fuel rising, it becomes a challenge to sidestep a credit card because customers need them to make larger purchases. There are still ways to limit exposure to the high cost of card transactions. Kelly suggests that businesses discuss the matter with their members of Parliament to put additional pressure on the government to get behind change.

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Use verification tools With 30% of chargebacks coming from fraudulent card use, operators often are left with additional fees, estimated to be around 1.47% of total revenue. By using AVS (address verification system) and CVV (credit verification value) tools; operators can verify that the card on offer is legitimate. AVS works through a third-party service and incurs a small cost. The AVS system checks to see if the billing address of the customer matches the address on file with the credit card issuing bank. CVV is the three to four digit number found on the back of cards, including Visa and Mastercard. By asking for the CVV number, mandatory in Canada since 2018, the operator ensures the card is actually on hand when the purchase is being made. Stay away from manual entry Physically keyed-in transactions have the highest processing rates. The suggestion here is that if a customer’s card does not swipe, ask for another card or form of payment. Do the paperwork every day When businesses take their time to settle transactions, they often get downgraded, with interchange fees rising by as much as 0.5%. Ask for Interac debit Debit transactions are charged a single transaction rate–regardless of the value of the purchase. Merchants, such as gas station operators, pay under 10 cents to process each debit transaction (some fees can be as high as 40 cents). This fee does not change regardless of the size of the purchase. OCTANE

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CANADIAN CANADIAN

CARWASH CARWASH ASSOCIATION ASSOCIATION

MAY 2022

DIRECTORS

Morgan Arnelien – FEDERATED CO-OPERATIVES LIMITED Jeff Beam

– MONDO PRODUCTS CO LTD

Cristina Caruso – SUNCOR ENERGY INC. Michael Destro

– TAMLANN INVESTMENTS

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

– MARK VII

CCA SUPPLIER HIGHLIGHT CCA is proud to announce our Annual Golf Tournament will be returning on Tuesday, June 7th, 2022 at 7:30am ET, hosted at Georgetown Golf Club! This will be CCA's first live event in over two years! Enjoy breakfast, a round of golf, and a luncheon with the opportunity to network and re-connect with peers!

– 7-ELEVEN CANADA, INC.

Karen Smith

– VALET CAR WASH

Early Bird Registration is now open until Thursday April 28th!

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

– REVINMEDIA

NATIONAL OFFICE Director of Operations

This event will be open to both members and non-members of the Canadian Carwash Association. Save your spot today: https://www.canadiancarwash.ca/event-4720616

Elizabeth McCaw Accountant Ricky Nason Event Coordinator Jennifer Hickey Membership Coordinator Juliano Sinopoli Canadian Carwash Association 411 Richmond Street East, Suite 200 Toronto, Ontario M5A3S5

COVID-19

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.

Please contact Jennifer Hickey at: events@canadiancarwash.ca for more information!


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

The Canadian Carwash Association is excited to announce that our Annual Golf Tournament will be returning June 7th at Georgetown Golf Club! This a great opportunity to get back in front of members, colleagues and industry professionals. If you’re interested in partnering with us, we have limited sponsorship opportunities remaining that may be the right fit with your organization!

Proud Sponsors

CANADIAN CARWASH ASSOCIATION CANADIAN CARWASH ASSOCIATION


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