Octane English - May/Jun 2019 by ensembleiq

CANADA’S CAR WASH & PETROLEUM MAGAZINE

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Vacuums: Free or paid?

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ACQUISITIONS AND INITIATIVE DRIVE GROWTH IAN WHITE, Parkland’s vice president of strategic marketing & innovation

C-Gas HR challenges persist May/June 2019

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MAY/JUNE 2019

Volume 24 | Number 3

CANADA’S CAR WASH & PETROLEUM MAGAZINE

CONTENTS

ADVERTISERS

12 Aerodry Systems, LLC ................................... 16 Drainvac International ....................................13 Eurovac Inc......................................................12 Forte Products ................................................. 7 Gallop Brush Co. ............................................ 14 Greenergy Fuels Canada Inc ...........................4 Istobal............................................................... 7 Mondo Products Co. Ltd. ................................2 Oasis Car Wash Systems ...........................17, 18 PECO Car Wash Systems ................................ 7 Pumps & Pressure Inc ...................................... 7 WashLinks/Sonnys ......................................... 11 World Fuel Services Canada, ULC ..................9

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Editor’s Message Back your staff

CIPMA looks forward Challenges remain as industry moves ahead

Still Challenged C-gas labour market pressures continue

Site Safety Is your staff prepared?

Free or Paid? What type of vacuum program fits your service?

COVER STORY Parkland Preforms. Acquisitions and initiatives driving big gains

Product News

STAY CURRENT TM

CANADA’S CAR

WASH & PETROLEU

M MAGAZINE

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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 PRESIDENT, ENSEMBLEIQ CANADA Jennifer Litterick | jlitterick@ensembleiq.com GROUP BRAND DIRECTOR - CONVENIENCE Kathryn Swan | kswan@ensembleiq.com VICE PRESIDENT/GENERAL MANAGER - EVENTS Michael Cronin | mcronin@ensembleiq.com EDITORIAL EDITOR, CSNEWS CANADA Jane Auster | jauster@ensembleiq.com EDITOR, OCTANE Kelly Gray | kgray@ensembleiq.com ONLINE EDITOR Michelle Warren | mwarren@ensembleiq.com TRANSLATION | Danielle Hart ADVERTISING SALES NATIONAL ACCOUNT MANAGER Elijah Hoffman | ehoffman@ensembleiq.com NATIONAL ACCOUNT MANAGER Jacquie Rankin | jrankin@ensembleiq.com SALES & EVENTS COORDINATOR Claudia Castro DESIGN AND PRODUCTION VICE PRESIDENT, PRODUCTION Derek Estey | destey@ensembleiq.com PRODUCTION MANAGER Michael Kimpton | mkimpton@ensembleiq.com ART DIRECTOR | Linda Rapini DIRECTOR OF MARKETING Alexandra Voulu | avoulu@ensembleiq.com AUDIENCE DEVELOPMENT MANAGER Lina Trunina | ltrunina@ensembleiq.com WEB OPERATIONS MANAGER Valerie White | vwhite@ensembleiq.com CORPORATE OFFICERS EXECUTIVE CHAIRMAN | Alan Glass CHIEF EXECUTIVE OFFICER | David Shanker CHIEF FINANCIAL OFFICER | Dan McCarthy CHIEF DIGITAL OFFICER | Joel Hughes

CHIEF INNOVATION OFFICER | Tanner Van Dusen CHIEF HUMAN RESOURCES OFFICER | Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCES Ed Several

Back your staff Sometimes you have to fire a customer. This was one of the takeaways from the recent Canadian Carwash Association (CCA) ‘Ask an Operator’ seminar at The Convenience U CARWACS Show in Toronto. Panellist Mike Black of Valet Car Wash brought up the well-worn maxim "The Customer is Always Right," a tagline made famous by London’s Selfridges Department Store. “Does this mean your staff is always wrong?” he asked, while making his remarks about protecting employee mental health. In this issue we talk about human resources and the challenges operators face with recruitment and retention of good personnel. Black pointed out that nasty customers who bark and yell complaints really take their toll on staff morale. At his locations he is instituting hard-hitting anti-harassment policies that show his staff Valet is serious about supporting them when customers cross the line. His thinking is that happy staff deliver the best possible customer service. And, happy staff who feel empowered on the job also take fewer sick days and time off. When faced with a customer who is being unreasonable, side with your worker. This shows you respect their judgment and value their efforts.

Businesses have limited resources. Bad customers who sap your time and energy take away from your ability to deliver services to appreciative customers. In some service scenarios, an operator just can’t win. Here, it is better to cut your losses and ask unreasonable customers to go elsewhere – "Thanks for the memories. We will miss you. Have a nice day." The opportunity is to look at the impossible customer as a learning experience. Yes, back up your employees, but also take time to discuss the challenge and see where improvement could be made in the future. The bottom line is that a business’s efforts are best placed with the vast majority of customers who are engaged and positive about the service experience. Don’t waste time on unreasonable crabapples who harass your staff and overburden them with impossible demands. Let workers see that the term "you’re fired" isn't just for employees but extends to all those who abuse the privileges of service.

kgray@ensembleiq.com

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. ©2019 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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Q&A WITH JENNIFER STEWART

CIPMA looks forward Challenges remain as industry moves ahead 2019 has shaped up to be the year of the gas station – for good or bad. While often in the background, the petroleum marketing sector has come out front and centre with increased government focus, and impending regulation. This March OCTANE sat down with Jennifer Stewart, President and CEO of the Canadian Independent Petroleum Marketers Association (CIPMA), to discuss the sector and what the future has in store.

OCTANE: What changes are you seeing in the industry?

CIPMA: I think it’s more the prospect of change for the sector that has been so rampant. We have governments of all stripes looking to implement regulation that impacts gasoline retailers, mostly with the purview of reducing emissions. This includes the federal Clean Fuel Standard, renewable fuel mandates, provincial ‘climate plans’, the federal carbon price and others. The last two years have seen a flurry of activities that all impact the sector, and we’re seeing that more than ever with the April 1st deadline of the carbon backstop coming into effect. This ‘backstop’ is a price on gasoline that will continue to increase and will be mandated in provinces that didn’t choose a cap and trade program or a carbon tax.

O: How do you think the retail sector can adapt?

CIPMA:We need to communicate to consumers why prices at the pump are higher, and work to dispel the age-old myth that prices are set at a whim or there is any anti-competitive behaviour. If consumers know they are paying a higher price at the pumps because of the tax, which in theory will green our planet, then we can work to reduce the public perception issue that our sector has often faced. Retailers also need to be aware of public perception, and even associated expectations. For this reason, we often engage researchers to provide public opinion in-

May/June 2019

sight that can help our members in taking the temperature of the consumer. While our role isn’t to tell members how to run their business, it is to make sure they’re aware of these significant changes, so that they can adapt and innovate to remain relevant. We’ve seen examples of this, with members diversifying their service offerings, adding in alternative fueling options such as electric charging stations, and increasing their renewable fuel offering.

O: What is the biggest threat to the sector?

CIPMA:I think ‘business as usual’ is the biggest threat to our sector. It’s clear that government is taking action to reduce emissions on a number of fronts, and there is wide Canadian support for this. As an association, we need to provide our members with as much context as possible on government initiatives and regulations to ensure they can make decisions that will offer consumers what they want, while ensuring there’s a business case for it.

O: What is the biggest opportunity?

CIPMA:The biggest opportunity here is for retailers to diversify and innovate. I think there is so much discussion globally about the future of petroleum, but we need to take the bull by the horns and demonstrate how we can do things differently. If you think about it, we are part of the solution. Higher renewable fuels need retail outlets, and there is so much advancement with how petroleum is refined

that already it’s much cleaner than it was in the past. We also need to reduce the guilt that is often imposed on Canadians for driving their vehicle. For this reason, we launched Smart Fuelling, a program that provides tangible recommendations to Canadians on how they can be more fuel efficient while still being engaged in their everyday activities.

O: Do you feel there is too much regulation?

CIPMA:Our governments do have a tendency to over regulate. In Canada, we tend to have a federal, Canadian-wide regulation and then a patchwork of provincial regulations that make cross border shipments and compliance that much more difficult. We have and always will advocate for less regulation and more harmonization of existing regulations, such as renewable fuel mandates, to create a much more holistic marketplace. The focus shouldn’t be on redundant compliance obligations but rather meeting the objective of the regulation while reducing burden on business.

O: How can the retail sector get its message out to consumers?

CIPMA:We need to be much savvier than we have been in the past. Canadians need to hear that we are part of the solution, and that we are working hard to provide fuel so they can live their lives in an efficient, affordable manner all while finding ways to diversify and make our fuels more environmentally progressive. OCTANE CCentral.ca

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Still challenged

Canada is home to just shy of 12,000 fueling sites. These sites offer employment to more than 85,000 workers who provide services in convenience retail, car wash and at the pumps. Over the past number of years, the industry has been racked by tough labour market realities that have led to businesses searching harder to fill staff openings. “Employers in all types of convenience and gas operations generally report that their current workforce is composed primarily of students working part-time,” says outgoing Western Convenience Stores Association (WCSA) President Andrew Klukas. Klukas was instrumental in the completion of Sector Labour Market Partnerships Final Engagement Report, the WCSA’s recent submission to BC Ministry of Jobs, Tourism and Skills Training. “These employees are difficult

May/June 2019

C-gas labour market pressures continue by Kelly Gray

to retain. Employers’ expectations regarding commitment, reliability and flexibility were often not met. This mismatch in expectations is made evident by employees quitting with inadequate notice and being resistant to performing the full scope of tasks associated with the job. Employers consistently report frustration and stress upon having to prioritize the need for constant staff supervision, recruitment and other human resource issues over other aspects of their businesses. One meeting participant said she interviews job applicants every day.” He reports there are high costs related to finding and retaining suitable employees. For example, the financial hit to companies involved in providing new employees with training and orientation is estimated to be somewhere between $2,000 and $4,000 a month. “One employer with an overall staff compliment of four employees reported training more than 30 new employees over three years at a cumulative cost of more than $60,000. In this instance, all of these employees either quit or were let go for various reasons related to unsatisfactory performance.” Operators can often see that higher wages would alleviate some of the Human Resource (HR) challenges, but sales gains and profit margins remain low in both fuel and c-gas retail sites. Last year convenience was up by just under two per cent in sales with profit margins holding below five per cent. Dedicated fuelling sites without c-store saw negative growth and much lower profits on gas and diesel sales. This low margin means very little room when it comes to wage increases. Regulatory pay upticks, such as those proposed by Ontario’s previous Liberal government, were met with concern by business that balked at $15 per hour for minimum wages. The new Ford Conservative government has frozen the increase to $14 until 2020. CCentral.ca

Across Canada the highest wage minimum – in Alberta OPERATORS CAN – stands at $15. The province OFTEN SEE THAT was plagued by staffing shortHIGHER WAGES WOULD ages caused by a tight labour ALLEVIATE SOME OF market where high industrial THE HUMAN RESOURCE wages ($27.25/average) in (HR) CHALLENGES the oil patch were pulling lower wage workers from businesses such as hospitality and convenience/gas. The answer was to pay a higher minimum. Alberta Opposition Leader Jason Kenney says he will roll back the minimum to $13 if he is elected. Pundits in the province suggest Kenney has only created confusion in a labour market where it remains a challenge to obtain the staff necessary to run many small retail operations. One way employers were able to step around the HR problem was to hire Temporary Foreign Workers (TFW). Facing a public backlash because of the optics of the program, the federal government created changes that scaled back TFW. One change that hit c-gas hard was the $1,000-per worker non-refundable application fee. Another change saw the application process slow to around six months. As well, employers were restricted on the number of temporary foreign workers they could hire. According to Klukas, B.C. operators reported having success with the TFW program before the $1,000 fee, but the process has now become too challenging, expensive and time-consuming to be of value to them. OCTANE

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THE HR CHALLENGE IN CANADA’S C-GAS SECTOR IS NOT EXPECTED TO EASE ANY TIME SOON. HERE ARE THREE SUGGESTIONS THAT COULD HELP TO MAKE A DIFFERENCE: • Establish a dedicated National Occupational Classification (NOC) code for workers in c-gas. Currently, convenience, gas, and car wash workers are grouped alongside other sectors, such as hospitality, where duties have only minor similarities such as those at Point of Sale. Workers in c-gas have unique skill sets in hazardous material handling, age-restricted products, and safety. The NOC should recognize this. • To improve staff retention operators should look to enhance recruitment, early orientation and training activities with an eye to creating greater understanding regarding expectations related to performance and the work environment. • While employers state higher wages are a big challenge, modest wage gains do attract more suitable job applicants, improve retention and help reduce the costs associated with continuous recruitment and training.

Site Safety

Is your staff

prepared?

by Kelly Gray Gas stations are dangerous places. Consider that in the U.S. close to 30 forecourt workers are killed on the job each year. Another 2.3 per cent of workers are injured with about one percent requiring retraining or a transfer due to the severity of injury. Are you paying attention to the hazards at your site? According to National Energy Equipment’s national health, safety and environment specialist Michael Lamont, the leading hazard for workers is vehicles and pedestrian traffic at forecourt. “People are often distracted and not paying attention when they drive in to fuel. When our crews are working on equipment, there is a real hazard to their safety. To mitigate this our teams are knowledgeable in Petroleum Oriented Safety Training (POST) (www.posttraining.ca) and they place pylons, flags, barriers and service vehicles per standard to protect staff,” he says, noting that POST is an industry-led program that offers online courses and annual get-togethers such as the recent safety forum at the 2019 Toronto Convenience U CARWACS Show. Recently, The Canadian Fuels Association addressed distracted fuelling. They commissioned a study (“Risk Associated with Cell Phone Use During Refuelling”) and discovered the chance of starting a fire at the pumps with a cellphone is less than one in 10 billion. The far greater safety risk is mobile device

May/June 2019

distraction where phone use increases the risk of spills and other pump-side incidents. And, while the Technical Standards and Safety Authority (TSSA) permits cellphone use for pay-at-pump applications, they caution about the need for customer focus during refuelling. They advise operators to interrupt fuelling should they observe a customer calling or texting while at the dispenser. Lamont suggests good safety practice often comes down to training. “Do your staff know the size of the storage tanks? Do they know where to locate the vapour recovery? Are they clearing away ice from fills? Do they know what to do in the event of a spill or tank leak? When do you hit the ‘E Stop’ button? Training prepares staff for worst case scenarios and helps keep them and customers safe,” he says. Rob Hoffman, director, government & stakeholder relations with the Canadian Fuels Association, agrees with Lamont. He suggests that alongside training protocols, engineered controls such as state-of-the-art dispenser design and technology greatly reduce the risk associated with the flammable nature of fuels. “Incidents at the pumps are very rare today thanks to continuous improvements from the industry." However, he concludes, "distracted behaviour from customers is still the leading source of concern when it comes to safety on site. For best practice to occur, customers need to be more aware and staff need to be aware of customers and how they may act.” OCTANE

Key areas for safety focus FUEL STORAGE Fuel storage poses several risks. These include fire/explosion, environmental damage and health concerns. ★ Ensure staff are adequately trained (keep all training records). ★ Maintain and monitor storage tanks and dispensers. ★ Identify hazardous areas and control all sources of ignition – placard site with appropriate warning and hazard signs.

VEHICLE MOVEMENT Cars and vehicles pose a considerable hazard to forecourt personnel and customers as well as create the opportunity for equipment damage through collision. ★ Design a safe system of traffic movement such as a one-way system for entering and exiting the forecourt and clearly sign it. ★ Offer a designated parking area close to the c-store and away from the fuel dispensers. ★ Create a barrier to protect structures such as fuel tanks and liquified petroleum gas (LPG) storage areas. CCentral.ca

HAZARDOUS SUBSTANCES

FIRE

Car wash and commercial cleaning products can be harmful if staff are incorrectly exposed though spillage or leaking containers. These can lead to respiratory problems, serious skin irritations or chemical burns. ★ Store hazardous products such as chemicals in their original containers. ★ Obtain and keep on hand manufacturer hazard data sheet information on all substances stored and used on the premises. ★ Train staff and provide appropriate protective clothing.

Fueling sites are filled with potential fire hazards. It's important to keep escape routes clear. ★ Remove any obstructions at exits. ★ Have regular checks to ensure that compliance is occurring. ★ Have trash and waste cleared regularly and hazardous materialsremoved only by a certified waste disposal firm.

MANUAL HANDLING Access covers to storage tanks; LPG cylinders and large cleaning fluid containers are heavy. Moving these may cause injury if staff are not trained to see the hazard. ★ Train staff in proper lifting techniques. ★ Provide suitable equipment such as lifts for removing access covers and hand trucks. ★ Eliminate all unnecessary manual handling.

VIOLENCE TO STAFF Robberies and drive-offs are a considerable hazard to staff. ★ Get involved with local police programs and investigate national best practices. ★ Consider the use of closed-circuit television, panic alarms and other security measures. ★ Develop a robbery or drive-off procedure in the safety manual and drill staff to make sure they follow through.

SLIPS AND TRIPS Fuel and oil spillage at forecourt can create slip hazards for both customers and staff. Winter ice and snow are another threat that can see people tumble or cars slide into dispensers. ★ Use an industrial salt mixed with fine gravel or sand to spread on the forecourt during icy conditions. ★ Absorb and clean up any fuel or oil spill. ★ Train staff on how to deal with minor fuel spillages.

ELECTRICITY Poorly maintained equipment and shoddy system installs increase the risk of electrical accidents in an environment where there are both power and wet conditions. ★ Make certain all electrical equipment used outdoors is suitably insulated. ★ All electrical controlling machinery should be clearly labelled and easily accessible. ★ Check that the installation of electrical equipment (especially for car wash) is suitable for a wet environment and has adequate protection from mechanical damage. ★ Make certain there is a readily accessible emergency stop button to halt car wash operation. CCentral.ca

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Free or paid What type of vacuum program fits your service? by Kelly Gray The concept of free vacuums at wash sites started in the U.S. about 15 years ago. The idea was to drive greater volume, and many operators report as much as a 20 per cent increase in traffic with the free vac program added on to express wash service.

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Mike Black, who operates 10 Valet Car Washes in Ontario, saw the benefits of this type of service early on. He reports they brought free vacuums to their Cambridge, ON location about 13 years ago. Today, Valet has built a lot of brand good will with sites featuring large vacuum ‘farms’ that customers can access free of charge. For example, one site offers 24 spots alongside the 135-ft. conveyor tunnel wash. “Even though our vacs are free, we know that customers become quite annoyed if they are not working properly,” says Black. “Operators need to pay attention to the details with vacuums or they risk service outages and maintenance challenges,” he adds, noting that the increase in volume at the machines means committing more manpower to equipment. He advises using free tokens or an on/off switch to help regulate use. As well, the free vacuums must be available only to the site’s customers. “The idea is to offer the vacuums to those using other paid services. If people can just drive onto your lot, use the free vacuum and leave, the purpose is lost. You must monitor the service.” When it comes to maintenance, clogs in pipes are the leading cause of shut down. “People are always sucking up mittens and other larger items that get jammed in the system. It's important to have on-site personnel who can quickly address this problem,” says Black, who adds that cold weather can cause plastic piping to shrink and leak. “Turbines also have to be rebuilt every couple of years and motors need to be replaced with some regularity,” he says. Black reports that a current trend is to limit the amount of free time you get with the vacuums. “If you have an unlimited wash club, eligibility for free vacuums might be extended to only these customers as a way to add further value to this program.” CCentral.ca

Paid vac service sees less wear and tear Winnipeg-based Red River Co-op offers free air for tire inflating, but charges members to use vacuums at its wash sites. According to the group’s maintenance manager, James Dyck, current vacuum models tend to be very durable with motors lasting about five years. “Make sure hoses are not plugged and regularly whack the filtre bags to remove excess dust. A high-pressure hose is usually all you need to give the bags a proper cleaning and you are good to go,” he says, adding that vacuums don’t have too many moving parts so their reliability is good as long as sites spend a little time on regular light maintenance. Black agrees, but cautions that free vacuum programs see vacs running longer and harder. “This means more opportunity for breakdown, so pay attention to equipment and plan to spend for upkeep. Vacuums that run well keep customers happy,” he says.

Vac innovations Vacuum equipment manufacturers have been innovating to help operators meet this customer service challenge. Among them is AIR-serv. One of the world’s largest suppliers of on-site vacuum and tire inflation equipment with more than 80,000 units globally (6,000 gas station locations in Canada), AIR-serv partners with local and national charities through its Air for Charity program. Under the program, locations contribute up to 20 per cent of vacuum and inflator revenue back to needy organizations. One example of vacs giving back is Petro-Canada where vacuum services have been teamed with Canada’s Olympic and Paralympics teams under the AIRserv/Petro-Canada Tire Inflator Program. According to AIR-serv Canada’s Director of Canadian Operations, Frank Merrill, sites contribute $150,000 annually to our Canadian Olympic/ Paralympic Athletes. Merrill notes that manufacturers have been keeping up with trends. “With more loyalty programs and app features now available, the industry will see more operators utilizing points for payment on vacuum systems,” he says, remarking that AIR-serv has been offering Flash Pay on its equipment as a nod to greater convenience and a reduction in cash-on-site issues. “We were seeing locations in Vancouver where two vacuums a week were being pulled off site to have cash boxes smashed open by thieves. We developed a concrete coin vault to help limit this expensive theft and see digital payments as a good way to further this initiative,” he says. Another vacuum innovator is Red Deer-based Dynovac. This company manufacturers one of the most durable systems on the market with a proven motor that has been time tested over 40 years. Dynovac systems feature no bags or filtres and use a cyclonic separator CCentral.ca

that is 99 percent efficient. When it comes to hoses, Dynovac delivers with a lightweight, corrosion resistant design built using a double extrusion profile to offer a product that bounces back into shape when crushed or twisted. Interior walls of the hose are smooth for more efficient suction. Supplier Coleman Hanna is innovating with vacuum units that offer combination services such as air blaster, tire inflator, three-fragrance applicator and hot shampoo dispenser. The combos are available options with the 94000 and 93000 series systems and are ideal as stand alone island units. By offering additional services operators can earn more income from sites.

Here, Red River Co-op’s James Dyck concludes that it's just good business to protect your vacuum investment with security such as bollards and regular maintenance to keep equipment in top shape. “Don’t frustrate your customers with equipment that is not effective. If your free or paid vacuum doesn’t work well, chances are customers will go somewhere else.” OCTANE WITH MORE LOYALTY PROGRAMS AND APP FEATURES NOW AVAILABLE, THE INDUSTRY WILL SEE MORE OPERATORS UTILIZING POINTS FOR PAYMENT ON VACUUM SYSTEMS

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IAN WHITE, Parklandâ&#x20AC;&#x2122;s vice president of strategic marketing & innovation

Parkland performs

Acquisitions and initiatives driving big gains by Mario Toneguzzi

Calgary-based Parkland Fuel Corporation has become one of North Americaâ&#x20AC;&#x2122;s fastest growing independent marketers of fuel and petroleum products by focusing on enhancing the customer experience and expanding internationally.

CCentral.ca

May/June 2019

| 15

According to Ian White, Parkland’s vice president of strategic marketing & innovation, their growth and increased scale allow for improved capabilities.

Parkland has an honest Alberta pedigree and a firm foothold in Canada’s oil patch. The company started out as a cattle operation in Red Deer before morphing into a fuel leviathan with some 1,850 retail sites that include brands such as FasGas, UltraMar, Pioneer, and Chevron as well as RaceTrac in the U.S. The company’s current format was launched in 2010 when it moved its headquarters to Calgary and renamed itself Parkland Fuel Corporation. Today, Parkland delivers gasoline, diesel, propane, lubricants, heating oil and other high-quality petroleum products to motorists, businesses, households and wholesale customers in Canada and the United States. It is also a leading operator of convenience stores with banners such as On The Run. "Parkland continues to deliver strong performance across the enterprise,” says company president and chief executive officer Bob Espey, reporting a standout fourth quarter with the company reporting net earnings of $77 million up from $49 million in Q4 of 2017. Net earnings grew from $82 million in 2017 to $206 million in 2018. On a full-year basis, fuel and petroleum product volume was 17.0 billion litres, up 27 per cent year over year, driven primarily by incremental business from acquisitions.

Coming to customers with greater choice According to Ian White, Parkland’s vice president of strategic marketing & innovation, their growth and increased scale allow for improved capabilities. “However, local brands will continue to play an important role and we will

remain connected to the communities with local leadership and retail operators. Building new sites and retrofitting existing sites is a core part of our strategy. On The Run (OTR) will be associated with all Parkland forecourt brands with the goal of 1,000 OTR locations across Canada,” he says. “Over the years, meaningful, exclusive local fuel brands such as Ultramar, Pioneer and Chevron have been added to the Parkland family,” he adds. “This past November, we partnered with mobile fueling company Filld and launched this service in Vancouver to offer even greater choice to customers where they can come to our stations or we can come to them at their business or homes. We intend to extend this service across major markets in Canada.” Parkland reports the collaboration and official launch of Filld’s service in Vancouver came on the heels of Parkland’s co-leading a $15 million investment into Filld’s Series B preferred shares. As part of its investment in Filld, Parkland will be the exclusive supplier of fuel to Filld in Canada, and a preferred supplier of fuel to Filld in the United States. Filld was founded in 2015 as a flexible, safe, scalable last mile infrastructure company that delivered fuel to customers’ vehicles in the San Francisco Area and Washington, D.C. Under the Parkland partnership, Filld will expand its mobile fuelling services to Canadian communities throughout 2019 beginning with fleet services, then expanding to offer consumer service once operational efficiency and sufficient density are achieved. CCentral.ca

The Filld program is an example of the proprietary enterprise loyalty program that is currently in pilot, which will include the Parkland ecosystem of brands, products and services working together. â&#x20AC;&#x153;We see this as an important competitive differentiator for (Parkland Fuel) as we move toward a relevant, personalized experience for our customers. Parkland is committed to offering customers choice when interacting with our market-leading brands across the country. As the operator of the Chevron stations in British Columbia, this innovative fuel delivery solution allows customers the opportunity to have quality fuel delivered to them in a safe and reliable manner in addition to filling up at one of our locations,â&#x20AC;? says White.

Expansion, meaningful acquisition and development initiatives driving gains Last year Parkland retrofitted 78 existing On the Run/MarchĂŠ Express locations and constructed 12 flagship sites. With an eye to capturing three to five per cent annual retail growth, Parkland will invest in new locations, new dealer growth, private label, their CCentral.ca

loyalty program, and enhancing the customer experience through the On The Run rollout. On the commercial side, the company said it will leverage the Pipeline brand to create a national cardlock network and invest in trucking and routing optimization technologies. “Our development initiatives will see the brand rolled out across our Canadian network in the coming years,” adds White. “In 2018, we expanded our private label brand, Last year ‘59th Street Food Co.,’ and Parkland are now offering 20 products retrofitted 78 at select Parkland locations. existing On the We are planning to launch Run/Marché an additional 20 private Express label products in 2019. In locations and addition, we are currently constructed 12 testing our ‘Journie’ loyalty flagship sites. program in two Canadian markets, and expect to expand the program across our network in 2019. “Ongoing optimization of our commercial brand portfolio in various geographies has seen certain legacy operations, particularly in Eastern Canada, successfully rebranded to Ultramar. This enables Parkland to drive future growth and sustained profitability under one aligned customer value proposition. “Parkland has a track record of successful acquisition and is always assessing new opportunities,” said White, mentioning their latest acquisition that Parkland hopes will broaden its import and export capabilities and expand distribution and supply points. In January, Parkland announced the closing of its purchase of 75 per cent of the shares of Sol Investments Limited, which is the largest independent marketer and supplier of petroleum products in the Caribbean, operating in 23 jurisdictions. “The opportunity to expand to a new geography and market through a strong business platform like Sol is an exciting time for Parkland. The assets and infrastructure we have acquired are proven, well known, and will enable Parkland to extend its supply advantage into a new region,” concludes CEO Espey, who is upbeat about Parkland’s opportunities for continued growth and market gains. OCTANE

May/June 2019

CCentral.ca

Suppliers, what's new in your product line? Contact Elijah Hoffman at 647.558.0103 or ehoffman@ensembleiq.com.

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AIR-serv is the global leader in supplying tire inflators and self-serve auto vacuum equipment and sevices to the retail petroleum industry. AIR-serv currently services more than 80,000 retail petroleum stores across North America. AIR-serv has coast-to-coast service coverage in Canada. The AIR-serv Total Service Program eliminates the purchase and maintenance cost of this equipment and provides state-ofthe- art equipment, professionally maintained to maximum operating capacity at all times. AIR-serv’s uptime rate is an astounding 99.5%! 800.263.1429 | www.AIR-serv.com

PRODUCTS, EQUIPMENT AND SERVICES

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After 4 decades specializing in centralized vacuum systems, Drainvac now delivers VacReels, a unique line of retractable commercial hose reels. Designed specifically for the car wash and detailing operator, these robust vacuum hose reels will effortlessly maximize your staff's productivity. ✔ Improve staff safety while reducing vehicle damage caused by the impacts of conventional vacuum systems. ✔ Say goodbye to tangled messy vac hoses! Due to our patented design, VacReels' 50 feet of 1 1/2" diameter commercial hose will always stay centered with industrial reinforced clock spring coils and off the floor. ✔ For carpets and seats, simultaneous hot water (210F/99°C) injection & extraction models available. ✔ Combine with Drainvac's Automatik and Cyclonik wet and dry vacuums Please contact us for your nearest technical representative who can design a system tailored to your needs. 1.800.408.1448 | www.Drainvac.com

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May/June 2019

| 19

Canadian

CaRWaSH aSSOCiaTiOn Directors Christopher armena – morgan arnelien –

mark VII

Carwash Program

Co-ordInator, EnErgy ProduCts, FEdEratEd Co-oPEratIVEs LImItEd

Jeff Beam –

mondo ProduCts Co Ltd

Cristina Caruso –

CatEgory PortFoLIo managEr,

Car wash, sunCor EnErgy

domenic dimonte – sameer haidari –

Crosstown Car washEs CatEgory managEr,

CIrCLE k - CEntraL Canada dIVIsIon

Jason kaye –

BayVIEw Car wash Ltd.

sean mcBride –

CLEanIng systEms InC.

karen smith –

VaLEt Car wash

kirsten Vaive – tim walker –

mosaIC

rEVInmEdIa

rudy van woerkom – BIg CIty auto n truCk wash

mark Vella –

7-ELEVEn

NATIONAL OFFICE Finance director Karen Dalton cae operations director Kiki cloutier manager membership Jorge de Mendonça Canadian Carwash association 411 richmond st. E., suite 200 toronto, on m5a 3s5 tel: 416.239.0339 office@canadiancarwash.ca www.canadiancarwash.ca

Find a

CaRWaSH › The carwash search feaTure ‹

canadiancarwash.ca/search http://canadiancarwash.ca/search on the CCA website has close to a thousand member sites on it. Is your carwash listed? Member sites are listed for free, so contact office@canadiancarwash.ca for more information.

may 2019

Six New Board MeMBerS elected at cca aNNual GeNeral MeetiNG the canadian carwash association members elected six new Board members at its annual General Meeting held March 5, 2019 at the toronto congress centre.

Morgan Arnelien, Carwash Program Coordinator, Energy Products with Federated Co-operatives Limited; Jeff Beam, Mondo Products; Cristina Caruso, Category Portfolio Manager, Carwash, Suncor Energy; Sameer Haidari, Category Manager, Circle K, Central Canada Division; Karen Smith, Valet Car Wash; and Tim Walker, Revin Media join returning Directors Mark Vella, 7-Eleven; Chris Armena, Mark VII; Domenic DiMonte, Crosstown Car Washes; Jason Kaye, Bayview Car Wash Ltd; Sean McBride, Cleaning Systems Inc; Kirsten Vaive, Mosaic; Rudy van Woerkom, Belvedere Technical Service Ltd who were all elected to serve a one-year term. President Jason Kaye thanked the directors leaving the Board including Brad Goetz, Mondo Products Co. Ltd. who had served on the Board for 25 years; Brad Baldwin, Zep Vehicle Care Inc. who served for 10 years; former President Mike Dietrich, Parkland Fuel Corporation; and Terry Fahey, Fahey Electric/Capital Wash Systems.

Meet Your New directorS Morgan arnelien, Carwash Program Co-ordinator, Energy Products, Federated Co-operatives Limited – Saskatoon, SK. Morgan provides guidance and strategic direction for over 130+ Co-op carwash locations across the Prairies/ Western Canada. Prior to his current role Morgan was the Energy Marketing Co-ordinator at FCL, where he was responsible for developing carwash and gas bar marketing campaigns. Jeff Beam, Mondo Products Co Ltd – Ajax, ON. Jeff started in the car wash industry 40 years ago as an attendant at a Gulf Oil car wash in Kitchener, Ont. After a successful 17-year car wash management career with Petro Canada, Jeff transitioned into car wash chemical sales and service. As a 23-year veteran of car wash chemical technical support he has gained a wealth of experience in tunnel, roll over, coin operated, friction and touchless car washes. cristina caruso, National Category Portfolio Manager, Car Wash Marketing, Suncor Energy - Mississauga, ON. Cristina joined the company in 2000 and has been in a number of positions with Suncor ranging from sales, operations and marketing. Since 2011 Cristina has been in category management with Suncor, starting out on the Convenience Store side of the business and is now in car wash for the past year and a half. Sameer Haidari, Category Manager, Circle K - Central Canada Division - Scarborough, ON. During his time as an analyst for Circle K, Sameer capitalized upon every opportunity that involved analyzing and generating insights regarding car wash trends and the industry as a whole. His profound understanding of the operations and delivery of car washes have led him to manage hundreds of car washes for Circle K. ...ContInuEs

INDUSTRY FORUM INDUSTRY FORUM D eD Ic a T e D T O s h a rI NG K NO wL e D G e a N D B e s T P r a c TI ce s I N Th e c a r w a s h I N D u s Tr Y

Meet Your New directorS ContInuEd

waSH VoluMe report Q4 reSultS he Canadian Carwash Association has released the 2018 fourth quarter results of the t$64,581 Wash Volume Report (WVR) reporting that average revenue per site was down 11.5% at compared to $72,598 in the fourth quarter of 2017. The average number of cycles

per site was 6,594 down 9.4% compared to the 2017 fourth quarter results. Average revenue per cycle was $ 9.79 which was down 6.7% compared to 2017 quarterly results. Full results are available on the CCA website for members. CCA Members now have exclusive access online to three years (12 quarters) of results by province or region. In addition, average precipitation data in millimetres has been added to the average cycles per site charts by province or region which shows the clear impact of weather on carwash operations. Undertaken for the CCA by Kent Group Ltd., a research firm specializing in the gas station and car wash industry, the WVR is a national quarterly survey of 1,033 carwash sites. Carwash operator members of the CCA may participate in the WVR program and receive results specific to their regional at no extra cost beyond their membership fee. All CCA members can access the full fourth quarter results. Also available online is information on how you can add your carwash site to the WVR. CANADIAN AVERAGE REVENUE PER SITE $90,475 $68,621

18 20 4 Q

20 3 Q

20 2

18 20

17 20 4

1 Q

$64,581 $52,323

$60,037

17 20 2 Q

17 20 1 Q

16 20 4

20 3 Q

20 2 Q

$45,501

$56,787

$52,409

$62,334

$72,958

$76,660

$75,906

CEO Matt McCulloch recently announced that CarWashConnect was rebranding to Mosaic. The software company provides digital solutions for the carwash industry including monthly pass and subscription services, in-app messaging, enhanced reporting and analytics. The new website is www.wearemosaic.ca

Looking to get into the Car Wash and Quick Lube business? Hereâ&#x20AC;&#x2122;s a great opportunity for a new or existing operator looking to expand. Complete turn key modern car wash and quick lube, includes all car wash equipment including full tunnel package, pay station, POS system and outside vacs. Jiffy lube comes with all equipment and POS operating system. Business consists of a 150-foot exterior tunnel wash with a large subscription base, interior cleaning bay, 4 bay quick lube bays with full basement, lots of storage. 3 furnished upstairs offices. Located in a high traffic area in Etobicoke, Ontario. Asking $379,000 for both car wash and quick lube business. Please contact Mike Black for further information at mdblack@sentex.net or call 1-519-654-2570.

carwaSHcoNNect iS Now MoSaic

Valet car waSH aNd JiFFY luBe

Karen Smith, Training and Compliance Manager, Valet Car Wash - Kitchener, ON. Karen started with Shell Canada in 1993 as a retailer; operating gas bars, convenience and car wash. She served on the Shell training team, assisting with new POS role out and new retailer training in Ontario and Alberta. She joined the Valet team 2012, in a management capacity. She is responsible for understanding regulations on labor laws, health and safety and compliance. She develops policies and procedures and enhances the health and safety program at Valet`s 10 locations including . Karen served on the CCA board previously in 2002-2004. tim walker, Revinmedia Dundas, Ontario. Revinmedia, established in 2004 as a marketing and branding company, is primarily focused on creating a consistent, brand strategy to help companies achieve their fullest potential. Currently specializing in the car wash industry, previous clients have come from a variety of sectors including food and education. From brand concept, design, design imaging, site signage, marketing, printing to installation, countless clients have realized significant returns from implementing revinmediaâ&#x20AC;&#x2122;s leading edge, branding and marketing initiatives.

CANADIAN CARWASH ASSOCIAT CANADIAN CARWASH ASSOCIATION

ARE YOU READY FOR THE NEW REALITY?

Birth of an association MAY/JUNE 2019 CCentral.ca @CCentral360 PM42940023

Small bites = Big business PLUS Special Convenience U CARWACS coverage

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MAY/JUNE 2019

Volume 2 | Number 3

CONTENTS 05 Editor’s Message The great vaper caper 06 The Buzz People, places, news and events 08 Quick Bites Imitating food-first operations for strategic advantage

10 Snapshot Top 10 category winners 12 Top Ops Seasonal needs 15

Convenience U Takeaways How to become the “place to be”

17 Q&A A new voice for convenience 22 FEATURE Sushi Dépanneur’s unique niche 28

ADVERTISERS

15 ADT Security Services Canada Inc...................8 CCentral.ca.................................................... 31* Convenience U CARWACS Show..................25 Ferrero..............................................................13 Ford Motor Company of Canada................... 14 Hilary's Salesmaster Inc..................................33 ITWAL Ltd.......................................................36 JTI-Macdonald Corp.............................30 & 31* JUUL Labs Canada.................................. 26 & 27 Mondelez Canada Inc.......................................2 Myblu..............................................................34 National Smokless Tobacco Company.............4 Nestle Canada Inc........................................... 19 Regal Confections............................................21 Scandinavian Tobacco Group Canada............ 11 SSCS, Inc.........................................................18 Star Women in Convenience.......................... 16

COVER STORY VAPE SPECIAL REPORT

37 Category Check Sports drinks - Game on! 38 Backtalk Tony Chapman - Shift from being transactional to transformational!

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CONVENIENCE NEWS & INSIGHTS, DELIVERED TO YOUR IN-BOX TWICE WEEKLY. Stay current on foodservice, store solutions, tobacco/vaping, and more. Don't miss our e-newsletters! Sign up today at www.CCentral.ca

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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 PRESIDENT, ENSEMBLEIQ CANADA Jennifer Litterick | jlitterick@ensembleiq.com GROUP BRAND DIRECTOR - CONVENIENCE Kathryn Swan | kswan@ensembleiq.com VICE PRESIDENT/GENERAL MANAGER - EVENTS Michael Cronin | mcronin@ensembleiq.com EDITORIAL EDITOR, CSNEWS CANADA Jane Auster | jauster@ensembleiq.com EDITOR, OCTANE Kelly Gray | kgray@ensembleiq.com ONLINE EDITOR Michelle Warren | mwarren@ensembleiq.com TRANSLATION | Danielle Hart ADVERTISING SALES NATIONAL ACCOUNT MANAGER Jacquie Rankin | jrankin@ensembleiq.com NATIONAL ACCOUNT MANAGER Elijah Hoffman | ehoffman@ensembleiq.com SALES & EVENTS COORDINATOR Claudia Castro DESIGN AND PRODUCTION VICE PRESIDENT, PRODUCTION Derek Estey | destey@ensembleiq.com PRODUCTION MANAGER Michael Kimpton | mkimpton@ensembleiq.com ART DIRECTOR | Linda Rapini DIRECTOR OF MARKETING Alexandra Voulu | avoulu@ensembleiq.com AUDIENCE DEVELOPMENT MANAGER Lina Trunina | ltrunina@ensembleiq.com WEB OPERATIONS MANAGER Valerie White | vwhite@ensembleiq.com CORPORATE OFFICERS EXECUTIVE CHAIRMAN | Alan Glass CHIEF EXECUTIVE OFFICER | David Shanker CHIEF FINANCIAL OFFICER | Dan McCarthy CHIEF DIGITAL OFFICER | Joel Hughes

CHIEF INNOVATION OFFICER | Tanner Van Dusen CHIEF HUMAN RESOURCES OFFICER | Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCES Ed Several

SUBSCRIPTION SERVICES Subscriptions: $65.00 per year, 2 year $120.00, Outside Canada $100.00 per year, Single copy $12.00, Groups $46.00, Outside Canada Single copy $16.00. Email: ycm@convenienceu.ca Phone: 1-844-694-4422, between 9 a.m. to 5 p.m. EST weekdays Fax: 1-844-815-0700 / Online: www.ccentral.ca/subscribe LICENSING AND REPRINTS Please contact Wright’s Media | ensembleiq@wrightsmedia.com 1-877-652-5295 CONVENIENCE STORE NEWS CANADA / OCTANE is published 6 times a year by EnsembleIQ. CONVENIENCE STORE NEWS CANADA / OCTANE is circulated to managers, buyers and professionals working in Canada’s convenience, gas and wash channel. Please direct inquiries to the editorial ofﬁces. Contributions of articles, photographs and industry information are welcome, but cannot be acknowledged or returned. ©2019 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.

The great vaper caper I recently Googled “vaping and c-stores in Canada.” More than 3 million entries came up. This is one hot category that shows signs of heating up even more in 2019. And more and more convenience retailers may want in. Until quite recently, when consumers thought of vaping, many conjured images of head shops filled with paraphernalia and perhaps that heady, shall we say, vibe. But the retail environment around vaping is changing. Under the Tobacco and Vaping Products Act (TVPA), which became law about a year ago, on May 23, 2018, adults can now legally get vaping products with nicotine. The TVPA replaces the Tobacco Act, which governed how tobacco products were sold, labelled, produced and promoted. The TVPA continues to do that, but expands the scope of the legislation to “protect youth from nicotine addiction and from incentive to use tobacco and vaping products” while also allowing adults “to access vaping products as a less harmful alternative to smoking.” The legislation is also quite clear in its restrictions: • not allowing vaping products to be sold or given to anyone under 18 years of age • not allowing the sale of vaping products that appeal to youth in how they look or work

• setting rules about promoting vaping products, including: · not promoting flavours that appeal to youth · not misleading consumers about the health effects of these products Recently, the government announced its intention to toughen the legislation by introducing more advertising restrictions on vaping, a new public education campaign aimed at young people, limits on where advertisements can be placed, limits on advertising content, limits on the display of vaping products in certain retail locations, and health warning messages on ads. At the same time some provincial regulations are allowing retailers to promote vape products. For instance, under Ontario’s Bill 36, the province’s cannabis legislation, convenience stores and gas stations can promote e-cigarette products, as long as the promotions comply with federal law. Other provinces may follow suit. It’s no wonder a number of vaping companies are looking to make inroads in c-stores. In our special feature on vaping in this issue, we look at this brave new world.

Jane Auster, Editor

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THE BUZZ

CROSS-CANADA ROUND-UP

FEWER WORKERS IN ATLANTIC CANADA

Hired help may be harder to come by on Canada’s East Coast. A report from the Atlantic Provinces Economic Council found that the region’s labour force declined by 30,600 between 2012 and 2018, largely due to retiring baby boomers. The region’s unemployment rate also declined. Rising immigration is providing only partial relief. Immigrants added about 19,000 people to Atlantic Canada’s labour pool over the last six years, significantly below the number needed to close the labour force gap.

IN THE BAG

PEI has become the first province in Canada to ban single-use plastic bags. The Plastic Bag Reduction Act, which comes into effect July 1, 2019, prohibits a business from providing plastic checkout bags to customers. Stores may offer paper bags, at a minimum cost of 15 cents. Halifax is also moving to ban single-use plastic bags. The city council has passed a motion that calls for a bylaw to be drafted by January 1, 2020, and for the city to work with the next nine largest municipalities in the province to address the issue.

| May/June 2019

PEOPLE, PLACES, NEWS AND EVENTS

IN THE SPIRIT OF INNOVATION

All 7-Eleven stores in Canada will be transformed into “Dimensional Doors” where Ghostbusters World players can collect traps and weapons while enjoying a Slurpee and taking down ghosts. Ghostbusters World leverages the latest in augmented reality technology to create an immersive realm where ghosts roam the streets, transforming anyone with a mobile phone into a ghostbuster tasked with fighting and trapping ghosts straight out of their favourite Ghostbusters films, TV shows, comic books and video games.

DECISION UPHELD

A landmark judgment ordering the three major tobacco companies to pay billions of dollars in damages to Quebec smokers has been upheld by the Quebec Court of Appeal. Imperial Tobacco, JTI-Macdonald and Rothmans-Benson & Hedges had appealed the ruling that found the companies chose profits over the health of their customers. They are expected to launch an appeal of this latest ruling.

NO-WASTE STORES NOW IN CANADA

Environmentally friendly stores are opening across Canada, especially British Columbia. Boasting no or little waste, these retailers sell products without single-use packaging. Customers are encouraged to bring their own bags or containers. Deposit fees are charged for items such as ice cream that require packaging. The no-waste stores appeal to Canadians looking to reduce their environmental footprint.

C-STORE GIANT SEES FUTURE IN WEED

AT YOUR CONVENIENCE

Customers are looking to retail stores to make their lives more convenient. According to SOTI Inc.’s Connected Retailer Survey, Canadian consumers are demanding more in-store mobile technology and innovation for an expedient shopping experience without forfeiting human interaction. The survey found that 64 per cent of respondents indicated retailers who use more mobile technology enable a faster shopping experience while 62 per cent favour self-service technologies such as digital signage and self-checkout to improve the in-store shopping experience.

LAWSUIT OVER CANNABIS LICENCE

Alimentation Couche-Tard has entered the cannabis market. The c-store retailer has inked a multi-year agreement with Canopy Growth Corporation. It has also signed a trademark licence agreement with one of Ontario’s cannabis lottery winners who will operate a “Tweed” branded retail operation in London, Ont. The lottery winner will have full ownership and control over the London store. According to Alimentation Couche-Tard, the new store will serve as an important entry to a market that could lead to future international opportunities.

The Ontario government’s abrupt about-face on storefront cannabis licences has landed it in court. The owner of a new retail outlet is suing the provincial government for $1.1 million following the unexpected announcement that a cap would be implemented on marijuana retail store licences. Before this, the government had stated there would be no limit on licences for individual storefront operations.

WELL-OILED ISSUE

Police in several Ontario communities are cautioning c-store owners to take a close look at what’s on their shelves – it may be illegal cannabis products. In particular, products containing cannabidiol (CBD), found in the cannabis flower, cannot be sold legally in stores not licensed to sell marijuana. Although CBD will not get users “high,” it is a popular natural remedy often found in oils and capsules.

CCentral.ca

SAVE THE DATES October 1-4, 2019 Atlanta, GA NACS Show 2019 www.nacsshow.com/ October 8, 2019 Toronto, ON Star Women in Convenience ccentral.ca/starwomen October 29-30, 2019 Greater Vancouver Area Abbotsford, BC The Convenience U CARWACS Show ccentral.ca/shows/

May/June 2019

QUICK BITES

BY DARREN CLIMANS

Imitating food-first operations for strategic advantage

Invest in food & foodservice Market research provider Euromonitor International (www.euromonitor.com) estimates that between 2016 and 2021, total Canadian convenience store retail sales will decline – 0.8% per year in real terms. Canadian convenience foodservice sales over the same period are projected to grow by +1% per annum, net of price inflation. There are plenty of tactics and strategies that convenience operators can explore and implement to grow retail sales. However, as with newsstand operators, logic dictates pursuing growth via foodservice offerings.

Fish where the fish are Real growth after inflation in foodservice is forecast to be at or above 1% per year until 2022 (Exhibit 2). Quick Serve Restaurants (QSR) represent about 45% of total commercial foodservice sales in Canada, just over $30B in

| May/June 2019

Commercial Foodservice Sales Forecast (year-over-year change)

1.2%

3.4%

3.6% 1.4%

0.7%

0.6% 2017

1.8%

3.9%

4.2%

Nominal Real

4.6%

5.3%

By 2014, sharp declines of sales of newspapers and magazines, combined with a protracted trend away from tobacco consumption, had led to a run of double-digit year-over-year declines in system revenue. A bold move was necessary to shift focus and allocate more space to food and beverages – healthier fare like seaweed snacks, gluten-free items, and fresh & prepared foods. The same strategic shift has been mirrored by other similar convenience operators, including Gateway Newstands and Hudson Ltd. International News has cut “readables” to less than 5% of sales. The transition hasn’t been painless, leading to increased franchisee turnover, but, after five years, revenues have recovered, and margins are way up.

EXHIBIT 2 | PURCHASING POWER

2.7%

Canadian newsstand & convenience retailer International News (INS) was dramatically affected by the consumer shift from analogue to digital.

2018/F 2019/F 2020/F 2021/F 2022/F

Source: Foodservice Facts 2018, Restaurants Canada

2018 (Exhibit 1). The lion’s share of QSR sales are by large chain operators like Tim Hortons, McDonald’s, Subway, Starbucks, and the like. Eight of the top 10 chains in Canada by sales are QSR operators. Together, the Top 10 operators represent over one-third of total commercial foodservice sales. For convenience operators to be successful in capturing customers and share in the foodservice sphere, it’s important to take a page from the QSR playbook.

The leading edge One go-to hack that has taken hold in the ‘post-growth’ world is to look and learn from players who are growing rapidly in foodservice by taking share. Exhibit 4 sketches the approach of a number of QSR and fast casual operators worth considering. These are some of the fastest growing/ emerging chains from the U.S. Each of these operators had revenue growth of more than 25% in 2017. Some are growing exponentially. It’s not magic – it comes down to their core value offerings and strategic approach. They’ve tapped into a recipe of food trends, tastes/preferences, social causes, marketing, and tech innovations that have led to consumer engagement – reinforcing the old adage that if you build it right, they will come.

Tech is Key

29% USED REWARDS OR SPECIAL DEALS ON THEIR SMARTPHONE AND TABLET. UP 6% OVER 2017.

Commit to tech TIP Next time you visit your favourite QSR outlet, pay attention to the number of patrons using their phones, in some way, in the transaction. Everything from pre-ordering, cashless payment, in-store rewards, and sourcing information. After the purchase, there’s a better-than-not likelihood that their phones will be at the ready on the table to surf, text, and entertain. TIP Ordering online for carryout or delivery is growing, though it still represents a limited number of QSR eater occasions. However, it is very worth noting that nearly onethird of consumers are using their smartphones for loyalty rewards or special deals. The 2018 Restarurants Canada Foodservice Facts graphic (Exhibit 3) tells the tale of the ways in which consumers are plugging in. Technology accessibility and functionality will increasingly be key influencers for consumers when it comes to restaurant choice decision-making.

CCentral.ca

EXHIBIT 1 | QSR IS WHERE IT'S AT

Sales Growth Forecast '18/'171

Sales Growth '17/'161

2017 Sales (in Millions)

2017 Average Unit Volume2

2017 Units

Pre-Tax Profit % (operating revenue)3

Quick-service restaurants

4.9%

5.6%

$30,528.0

$801,714

38,080

4.3%

Full-Service restaurants

4.7%

5.9%

$29,903.7

$693,782

43,103

3.4%

Caterers

4.7%

2.8%

$5,526.6

$520,269

10,623

7.3%

Drinking Places

0.1%

0.4%

$2,413.7

$464,801

5,193

4.0%

Total Commercial

4.6%

5.3%

$68,372.9

$704,893

96,998

4.2%

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.

Provides free WiFi access

Provides video/TV entertainment

25%

24%

25%

29%

26%

30%

33%

31%

33%

34%

32%

36%

38%

Uses Offers mobile/ Provides online/ technology to smartphone mobile or improve overall or kiosk/tablet kiosk/tabletop experience payment ordering capabilities

Full Service restaurants

Tabletop technology as entertainment

Quick Service restaurants

Ordering behaviour

2016

2017

2018

2016

2017

2018

Online for carryout

0.4%

0.6%

0.8%

2.2%

2.3%

2.8%

Online for delivery

0.4%

0.6%

1.6%

2.2%

2.4%

Source: Foodservice Facts 2018, Restaurants Canada

Chain

Unit

Key Features

FIRST WATCH

250

Classic breakfast offerings with creative new dishes Quinoa breakfast bowls, cage-free eggs, power wraps, fresh juices Project Sunrise Coffee – Better Coffee, Better World Proprietary brand of fair trade specialy grade coffee from Huila, Colombia, grown by woman coffee growers, Mujeres en Café

CORE LIFE EATERY

Healthy and affordable - scratch cooking with flavourful source ingredients Custom-created greens, grains and broth-based dishes No trans fats, artificial colours, sweeteners, other artificial additives and GMOs. Chicken and steak used are sustainably raised, no antibiotics or hormones

CAVA

Mediterranean fast casual concept Using technology to enhance the human experience Network of sensors to monitor food safety on delivery trucks & in its kitchens, digital learning system for onboarding new staff Turning system and company data into actionable insights. Will roll out a new digital ordering and loyalty platform in 2019 personalized marketing messages, rewards and mobile pay.

IKE’S PLACE

Indulgent made-to-order sandwiches with pop-culture themed alternatives Dozens of condiments, toppings, and sauces Patented “Ike’s Dirty Secret Sauce” is spread on every sandwich Plant-based sandwich options made with housemade vegan meats Veggie, Vegan, Gluten-Free, Halal

EVEN STEVENS

Craft Casual cause-centric sandwich chain Burritos, bowls, salads, sides, small bites Fighting poverty one sandwich at a time Partners with local non-profits to fight hunger You buy a sandwich, the local community benefits from donations Local ingredients when possible

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Quick Service Family Dining Casual Dining

Share of restaurant meals and snacks ordered online

EXHIBIT 4 | FOLLOW THE LEADERS

Source: Technomic Future 50, 2018

40%

Technological Factors Influencing Consumer QSR Restaurant Choice 43%

In his article “The rise of Japan: How the car industry was won,” the Globe & Mail’s automotive writer Peter Cheney pointed out, “Japan systematically borrowed the best ideas from (Britain, USA, and Germany). …Japan studied Germany’s superb mechanical designs and installed them in cars that the average consumer could afford.” When it comes to growing your business by taking foodservice share from your big QSR competitiors, it would serve you well to remember that imitation is the sincerest form of flattery. ◗

EXHIBIT 3 | TECH IS KEY 42%

Divine your future

Source: Foodservice Facts 2018, Restaurants Canada

Performance by Segment - Canada (Commercial Foodservice)

SNAPSHOT

BY ISABEL MORALES

Top 10 category winners Are you stocking the right assortment?

TOP 10 CATEGORIES BY SALES

are still growing, albeit more slowly, at 2%. Like many beverages, these drinks could be considered the equivalent of a snack, as Canadians seek not just to eat, but to drink in between meals throughout the day. On the other side of the chart, juice and other shelf stable beverages are not faring as well. While sales still reach more than $145 million, sales have declined by 1% over the previous period. Even coconut water, which was a top growth driver just a couple of years ago, has been negatively affected by consumers seeking enhanced waters for their hydration needs. Sales in the past year reached $3,263,833, down 9% over the previous year. In comparing what’s hot and what’s not, it becomes clear that what once might have been quenching, filling and nourishing, must now be purpose-fulfilling, light and fizzy. Water is a category that seems to meet all three of these criteria, and it’s breathing new life into the beverage industry. Renewed interest in carbonated waters is yet another reflection of consumers’ ongoing shift toward healthier choices. Beyond the potential health benefits consumers see, these drinks can be refreshing and provide interesting flavours. In order to grow, convenience stores need to stay relevant to their core customers and ensure they are offering more than just beverages. They also need to keep pace with other players who are diversify-

ing and evolving with respect to product assortment, ease of access to products and modernization. As the relevance of the channel concept fades, convenience stores will need to continue to innovate to remain competitive. At their core, convenience stores have three key strengths: speed, experience and personalization. These are the foundation blocks they can build on as competition rises and channel lines blur. To execute, convenience stores need to get the product mix right (evolving when needed), emphasize health and wellness, and think beyond beverages. When it comes to food offerings, convenience stores can no longer afford to stick to the basics. Leading on fresh, natural food trends will be essential going forward, particularly as other channels have diversified into everything from sushi to gourmet sandwiches –offerings a step above from what they can make easily at home. Being transparent and health-conscious – and displaying these attributes– will also be critical. Aside from food and store layout, convenience retailers need to be continually innovative. This includes marketing more intelligently and across digital platforms, developing personalized offers and rewards that are determined directly by individualized consumer shopping and purchase habits. ◗ Isabel Morales is the Consumer Insights Manager for Nielsen

Latest 52 Weeks, ended Feb 2, 2019 $ Sales

$ Vol % Chg

Units

Latest 52 Weeks YA

Units Vol % Chg

$ Sales

$ Vol % Chg

Units

Units Vol % Chg

EXTREME ENERGY DRINKS

299,048,241.0

107,112,760.1

277,837,402.0

98,852,419.7

SALTY SNACKS

234,123,170.0

86,995,650.1

220,966,428.0

86,776,195.9

209,949,444.0

116,084,462.8

-1

205,454,106.0

117,272,437.9

177,771,887.0

83,233,291.3

173,645,952.0

82,888,930.7

146,344,253.0

-3

36,557,917.3

-5

150,447,026.0

38,651,401.2

145,181,712.0

-1

63,404,316.4

-2

146,184,793.0

64,462,841.6

FLAT WATER

123,379,489.0

92,264,886.0

121,435,752.0

90,301,573.2

FLAVOURED SOFT DRINKS CHOCOLATE MILK JUICES & DRINKS - SHELF STABLE CANDY CONFECTIONS

108,085,185.0

51,342,269.8

-3

107,014,916.0

53,100,946.8

MEAT STICKS & BEEF JERKY

75,392,546.0

20,956,481.6

69,476,601.0

20,321,168.5

AUTOMOTIVE CARE PRODUCTS

64,111,390.0

12,223,661.5

-2

63,607,604.0

12,532,867.4

| May/June 2019

Source: Nielsen, Latest 52 Weeks, ended Feb 2, 2019

Built on the premise of speed, convenience stores are modeled to deliver on specific consumer needs that competing channels don’t yet address fully. While Nielsen research suggests that the strength of convenience stores will continue, it’s not guaranteed, particularly as consumer shopping trips decline, competing channels diversify and e-commerce grows. Today, convenience stores are highly relevant to consumers’ on-the-go lifestyles and are well equipped to deliver products that meet their immediate needs. But channel distinctions are starting to blur. E-commerce, click-and-collect options and a trend toward stores with smaller footprints and diverse offerings are raising the bar of competition. In the last year (52 weeks ended Feb. 2, 2019) the top 10 categories in the convenience channel accounted for nearly $1.6 billion in sales! Led by extreme energy drinks, five of the top 10 categories are from the beverage category. As consumers live their lives on the go, they are still making time to stay hydrated and are using their local convenience store to help satisfy their thirst. Extreme energy drinks and flavoured soft drinks lead the way and dominate sales with $299,048,241 and $209,949,444, respectively. As far as growth, extreme energy drinks are exceeding category growth at 8%, while flavoured soft drinks

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Tobacco advertising is not available in the digital issue

TOP OPS

BY JEFF DOVER

Seasonal needs Four top tips to find the right staff when you need them Spring has arrived and summer, with vacations and changes in business patterns, is not far behind. It is time to start thinking about seasonal staffing.

Determine your requirements.

Is your store busier during the summer? Do regular staff take time off? Determine the number of positions you need to fill and the hours of those positions. You might need to cover the day shift one week, an evening shift for two weeks later on and the overnight shift the last two weeks of the summer. A primary reason to hire seasonal staff is to give your regular staff time off when they want it. Summer is often a popular vacation time, fortunately coinciding with the availability of students seeking summer employment.

Many recruitment tools are available, ranging from a “help wanted” sign in the window, online job sites and ads in the local paper. A good and low-cost way to recruit is using job posting boards at local schools. There may be no need to reinvent the wheel; the best source of seasonal employment may be past seasonal employees (i.e., students regularly have summers off and may be available for other short-term employment such as Christmas or spring break). Friends of current employees could be another effective recruitment option.

Recruit right.

Depending where you are in Canada, this may be a challenge. A variety of tools are available. Ideally, provide as much information as possible about the position – specifically, the timing requirement and how that may change. If you have high turnover, seasonal positions may become permanent. If that is the case, it should be stated. Otherwise, start and end dates should be stated along with regular hours per week and how those hours may change over the season.

Cover all your shifts.

When hiring, one of the keys is ensuring the person you are hiring is available to cover the shifts you require – the entire season. A better candidate who does not have the availability you require does not meet your needs. Seasonal employees tend to leave earlier than committed to take a week or two off before returning to school. A good way to combat this is a bonus, such as an extra amount per hour worked if they stay until the end of the season.

| May/June 2019

Manage seasonal needs.

Managing seasonal employees is similar in most ways to managing regular employees. One key is to remember that, in many cases, they are on holiday from school. While working at your store may be a summer job, they also wish to enjoy their summer (or Christmas break, etc.). When hiring, you should definitely seek commitment for the hours you require including coverage for vacations for regular staff. However, accommodating time off for seasonal employees is essential. For example, the potential employee may desire a weekend off for a family wedding or a few days for a camping trip. I recommend asking during the interview about such plans and committing to accommodate them. Good

seasonal employees can be hard to find and a willingness to work with them will make yours an attractive place of employment. Last summer, I saw a store lose a great second-year seasonal employee because of an unwillingness to give her a Saturday night off for her sister’s wedding. Seasonal employment should be considered a winwin situation. The store is getting the assistance required for a busy season and/or to cover staff holidays while the employee is getting valuable short-term employment. Good luck in your search, and have a great summer! ◗

Jeff Dover is a Principal with fsSTRATEGY Inc. fsSTRATEGY is a niche consulting firm specializing in strategy in the hospitality industry. For additional information on fsSTRATEGY services, contact us at nextsteps@ fsstrategy.com or 416-229-2290.

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PHOTOS: GOLD MEDIA

How to become the “place to be” The Convenience U CARWACS Show offers retailers strategies to succeed BY TALBOT BOGGS With so many technological and social changes impacting the industry, convenience retailers must find new and innovative ways to drive customers to their stores, connect with them on a personal basis and provide the products and services they want, quickly and effortlessly. “Traffic is the key word today: It’s everything to our world,” marketing guru Tony Chapman told attendees at the 16th annual Convenience U CARWACS show in Toronto recently. “With phone apps and now even drones to deliver to your door, convenience stores are no longer convenient. They must become ‘a place to be,’ not just somewhere to buy stuff. Every consumer is on a journey. You must connect with them emotionally, be more of what matters to them, be frictionless and add value to them.” Retailers can be more by being safe and affordable, consistent in their services and products, well lit, well stocked, friendly, helpful and accommodating, supply better-for-your-family food options and new, innovative products. They should work to make the shopping experience frictionless by being organized and easy to shop, offering lots of healthy options and being open convenient hours for their customers. “What is the premise for your store and do your customers understand what that is?” Chapman asked. “Are you putting out the right promotions at the right prices and do you have the right people to offer CCentral.ca

the help that customers want and need? Ask how you can become a part of the neighbourhood and give customers more of what matters to them. Be transformative and help them on their journey.”

Profit centres Robert Colucci, commercial director with Fontem Ventures Canada/blu, urged all sectors of the industry to work together to build the e-smoking category. “Seventythree per cent of smokers want to quit,” he said during a panel discussion. “The innovation of e-cigarettes has helped, but retailers need lots of good information about them, what they are, what’s in them and their variations to help customers make that change in their lives.” Next to cigarettes, lottery is the number one driver of traffic in the convenience and gas channel, accounting for $2.9 billion in sales and $210 million in commissions a year, said Larry Colatosti, executive director of sales with the Ontario Lottery and Gaming Corp. The corporation is continually looking for innovations in the games it offers and functionalities such as bigger, better-quality screens, customer-facing bar code readers, ticket checkers, play-stands with digital screens and digital menu boards.

Employee engagement Other keys to driving and retaining traffic are hiring the right people and creating a great workplace culture which rewards effort, success and innovation. Hiring the right people for the job can pay huge dividends for customers and your business.

Studies have shown that organizations with highly-engaged teams of employees have higher share prices and are more profitable and more likely to reach targets. “Create a culture of innovation where people feel they can contribute new ideas and be rewarded,” said George Anastasopoulous, chief outcomes engineer at Leadership Fundamentals. “If you take care of your employees they will take care of your customers.” With the legalization of recreational cannabis use come further possibilities of employee impairment in the workplace. Convenience owners, operators and staff need to know the rules regarding cannabis use, should review their policies and, if necessary, get the kind of help that is available through police and Workplace Safety and Prevention Services (WSPS). “Impairment from cannabis use is real and needs to be taken seriously,” said Larry Masotti, director of strategic relationships at WSPS. Convenience U CARWACS is Canada’s number one trade event for the convenience, gas and car wash industries where exhibitors display the latest and most innovative products and services in conjunction with educational seminars designed to help retailers improve their businesses. “Convenience U is open to all industry suppliers, retailers, distributors, associations and industry stakeholders,” said Michael Cronin, vice president, events, with show organizer EnsembleIQ. “Convenience U is the industry’s event, and the industry has taken ownership of it…it’s the place to be to learn how to make your business better.” ◗ May/June 2019

| 15

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OCTOBER 8, 2019

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Presented by

Industry Partner

Q&A with Anne Kothawala

A new voice for

convenience

The Convenience Industry Council of Canada – “where convenience and communities come together” TEXT BY JANE AUSTER PHOTOGRAPHY BY JAIME HOGGE

After decades in association management and more than five years at the helm of the National Convenience Stores Distributors Association (NACDA), Anne Kothawala recently assumed a new role as the president and CEO of a national association representing the convenience channel. The Convenience Industry Council of Canada (CICC) has an ambitious mandate coming at a time when convenience retail is facing the headwinds of industry and social change as well as increased government regulation.

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May/June 2019

| 17

CSN. A new association recently launched. Kothawala. The Convenience Industry Council of Canada (CICC). The rationale behind that was to really ensure that our name is reflective of who we represent. We are not an association of just retailers, we are not an association of just distributors, and we are not an association of just vendors. We represent all three of those stakeholders; in other words, we represent the channel. We felt that our name should best reflect that. We really are about advocating for the industry.

2019 Board of Directors Jackie Bellerose

Bryan Ro

Distributor Co-Chair Wallace & Carey, VP of People Services

This is a huge change. It is a huge change in the sense that, in the past when NACDA affiliated with the old CCSA there wasn’t an attempt to bring retailers and distributors closer together. And of course, you also have the four regions. So you had six different associations that were working together. But, over time it became clear that structure was not the best way to achieve success for the industry.

What will be the governance structure? The governance structure will be made up of retailers and distributors on the board. (See sidebar.) However, one of the big changes will be that we’re going to have different tiers of associate members, and those tiers are going to be based on their footprint and sales in the channel. Some are going to pay more than others, simply because they’re bigger players

Retailer Co Canadian T

in the channel. But for those top tier associate memPresident, Raymond Bouchard bers, we are goingMetro, to be bringing some&new member Director, Negotiations Merchandising Eric Rolhe benefits. One of the most important is that we’ll be Core-Mark Stephane Bouchard creating a Supplier Advisory Council, whereby they will Regitan Wholesale, Vice President have an opportunity to, from time to time, meet with Doug Ros 7-Eleven, V Ryan Bugden the board and better understand what the priorities of E.L. Bugden, Director of Procurement the board are, and to have that dialogue. Again, we are Stephane John Connors ensuring that everything we do is reflective of the needs Couche-Ta Operations Brown Derby Wholesale, President of the industry, that it’s not siloed. We want to ensure Ian White we’re always thinking about the channel at large. Marc Gagnon Sobeys Wholesale, VP National Wholesale

What’s your mandate? Marc Goodman

Parkland F Strategic M

Suncor Energy Products Category We’re going to have basically fourInc., keyDirector, pillars: Management 1. Government relations, and that’s obviously critical to the successMark of the channel. Increasingly, we are Kinnin seeing both at theTresurer provincial and federal level countless MacEwen, Vice President, Retail Convenience areas of regulation that will have a negative impact on our business. I can name a whole bunch of them, not Serge Nadeau Cadrin, General Manager the least of whichBeaudry is marketing to kids, at the federal level. Huge changes that will impact point of sale for Lawrence Richler Husky Energy Inc.,they Vice President, Canadian in store convenience stores and what can advertise Products Marketing and what they can’t, so that’s something that we’re monitoring very closely, and advocating on. Impacts in terms of payroll taxes, minimum wage, beer and wine. We are going to be closely monitoring which provinces are having elections in what years, and where there are opportunities. Government relations is really at the core of what we’re going to do.

2. Events. We will continue to organize our industry event, which is the National Convenience Industry Summit. And we will also continue to have National C-Store Day, which goes to our mission and mandate: to really reinforce the role that convenience stores across the country play in their communities. They support local charities, they do so much work that people either take for granted or don’t notice. The convenience store is almost the first right of passage, where you think of your youth and going to the local corner store with, I guess at that time, a quarter in your pocket and buying some penny candy and a popsicle. And then if you look again at our industry and how we’re often times the first foothold in an economy, whether that’s a family starting a convenience store or whether that’s one of the bigger chains employing new Canadians as their first job. CCentral.ca

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We really do represent a lot of opportunity, and I think a lot of times, we don’t get credit for that. 3. Responsible Retailing. We also manage and protect our industry’s reputation including a new responsible retailing program that will be used for any age-restricted products that we sell. The program will be called ID Please/Ta Carte STP and it will start with the retailers that are part of our organization, and hopefully will be something that is going to grow over time. Let’s face it, we sell a number of age-restricted products, and we do a good job of it. But, often times, because everyone has heard of one incident, then that becomes the stereotype, such as where tobacco has been sold to an underage person. But really, when you look at the numbers, we outpace the LCBO, the Beer Store. We definitely have a strong track record. Some of the products that we sell are going to continue to be age-restricted, so we have to be nimble as an industry. 4. Research. What we’ve heard loud and clear from a number of our vendor partners is they count on us to provide convenience industry-specific data. So, the facts and figures report will continue that was produced by CCSA. We get tremendous feedback on it, and people really come to rely on that as critical information for their decision-making for their business decisions. Over time we hope to have at least every year one other research project that we can hang our hat on, to help the industry better understand the marketplace and make good business decisions.

Why 2019? Was this year chosen for a particular reason? Or was this in the works for years? It hasn’t been in the works for long frankly. I think it was really born out of the desire on the part of a number of retailers and distributors who felt that the current model wasn’t working. They felt there needed to be some change, and we needed to try something new. They came together, but that only happened late summer. The feeling was that they were getting closer to the end of 2018 so let’s make this happen for 2019. It was borne out of increased frustration that the current model was not working for them.

| May/June 2019

We really do represent a lot of opportunity, and I think a lot of times, we don’t get credit for that. You need a strong association with everything going on in this industry. Absolutely. There’s so much change, I mean we’re a target in so many areas, from a government relations perspective, from a regulatory perspective, with a huge target on our backs. We have to make sure we’re doing, frankly, a better job of telling our story to everybody. The convenience store is the place where, when there’s an ice storm or really bad weather, you can get salt, and its our distributors who get the salt and the windshield fluid to the local gas station so that you can put windshield washer fluid in your car, so you can drive and put salt on your walk, so you can actually get out to your car. These are the things we take for granted. But somebody’s got to get those products to the store. That’s why our tagline is going to be “where convenience and communities come together.”

One year from now, where do you see this association? I hope that it’s an association that’s well established in the marketplace. And when I say in the marketplace, I mean with governments, where they know they have a partner in ensuring that there’s a mutual respect and understanding of the role that we play and the role they play. We’re not saying that nothing should be regulated, but we’re saying that they need to better understand what the ripple effect is when they do bring in regulations. So, I think a few successes under our belt, from a government relations standpoint, will really help to ensure that we really are a go-to organization for government departments that are making decisions about regulations that are going to impact our industry. Just generally, we want to do a better job of telling that story that I talked about so that when governments think about us and our industry and our channel, they’re thinking about us from a more positive lens. And to be known as frankly an organization that gets results, that is nimble, efficient, so that vendors, retailers, distributors all say at the end of the year, “wow, we made the right decision. This is what we were looking for. This is success.” ◗

2019 Board of Directors Jackie Bellerose Distributor Co-Chair Wallace & Carey, VP of People Services

Raymond Bouchard Metro, Director, Negotiations & Merchandising

Stephane Bouchard Regitan Wholesale, Vice President

Ryan Bugden E.L. Bugden, Director of Procurement

John Connors Brown Derby Wholesale, President

Marc Gagnon Sobeys Wholesale, VP National Wholesale

Marc Goodman Suncor Energy Products Inc., Director, Category Management

Mark Kinnin Tresurer MacEwen, Vice President, Retail Convenience

Serge Nadeau Beaudry Cadrin, General Manager

Lawrence Richler Husky Energy Inc., Vice President, Canadian Products Marketing

Bryan Robinson Retailer Co-Chair Canadian Tire Corporation, Divisional Vice President, Petroleum Marketing

Eric Rolheiser Core-Mark International, President

Doug Rosencrans 7-Eleven, VP & GM

Stephane Trudel Couche-Tard/Circle K, Senior Vice President, Operations

Ian White Parkland Fuel Corporation, Vice President, Strategic Marketing

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Sushi Dépanneur’s unique niche From big business dreams to small business success TEXT BY MARK CARDWELL PHOTOGRAPHY BY CHANTALE LECOURS

| May/June 2019

CCentral.ca

“

MANY PEOPLE LOVE MAKING AND EATING ASIAN FOOD AT HOME, SO BUSINESS IS GOOD.

NingNing Xuan imagined herself working in big business when she first came to Canada from China to study commerce in 2001. But after 15 years of owning and operating a specialized convenience store in downtown Montreal, featuring traditional convenience fare as well as unique food items, she’s learned that small is beautiful. “Our store is perfect and our lives are so good now,” says NingNing, who owns Sushi Dépanneur with her husband, Xujuang Fan. “We love the business, each other and our customers.” Located on a busy commercial street in Montreal’s trendy Plateau neighbourhood, Sushi Dépanneur is best known for the 100-plus kinds of sushi that Xujuang makes fresh to order at a food counter on one side of the store. Loyal customers come back for the wide variety of nigiri, sashimi and sushi and seasonal specials. On the other side of the store is a grocery section run by NingNing that specializes in canned, packaged and dried foods, sauces and ingredients for Asian cuisine. The store notably carries 20 kinds of soya sauce – including

organic, dark and sweet – as well as sauces, ingredients and pastes to make specific dishes like tom yum. “Asian cuisine is very popular here now,” says Ning Ning, or ‘Nicky’ to her many customers and suppliers. “It’s different from Western cuisine because there isn’t a lot of baking and cooking involved. Many people love making and eating Asian food at home, so business is good.” It is, however, the sale of sushi and other fresh-made Asian foods like rolls and sushi pizza (made with rice instead of flour) that generates the lion’s share of the store’s revenues and earns it local renown. That was not the case when NingNing and Xujuang, who both hail from the northern Chinese port city of Dalian – but met as classmates at Carleton University in Ottawa – moved to Montreal in 2003 and went to work at Sushi Dépanneur. The store had been opened a year earlier by NingNing’s sister Cathy and her husband

Sushi Dépanneur’s top tips ➦ CCentral.ca

May/June 2019

| 23

Jao Letian, a certified sushi chef who had worked at high-end restaurants in China. The two couples worked together for more than a year, with Cathy on cash and the others working at the small sushi counter at the back of the store. “We were so lucky to work with Jao and learn on the job to be sushi chefs,” recalls NingNing. “He’s very serious and he’s a great teacher.” She and Xujuang bought the business a year later and have run it on their own ever since. According to NingNing, the business has grown slowly but surely through local word of mouth. Riding a sushi boom “Sushi wasn’t as popular then as it is now,” she says. “It took about five years before it really caught on. Then – wow! – everybody went crazy for sushi and fish and vegetables and avocados and rice.” Business has really boomed since 2015, she adds, when she and her husband moved the store to a bigger location on the same street – Avenue Mont-Royal Est - but close to a major subway station and an area rich with young professionals and students. “We’re much better here,” NingNing says about the store, which neighbours a liquor store, a Second Cup and several restaurants and specialty shops. “All of our customers followed us here. And there are a lot of young people who like to spend money and eat healthy.” The store’s 10 employees help prepare and sell sushi that is made fresh when ordered at the counter for takeout or by phone for delivery. “There’s no pre-made except for some takeout boxes we always have ready at lunch and suppertime,” says NingNing. “They are very popular.” She adds that she and Xujuang, who are now parents of a baby girl, have worked hard to build a prosperous business and a happy life for their young family in the country they now call home. “Our goal has always been to focus on one thing we can do or improve to make it perfect,” says NingNing, who spends most of her time now at home taking care of the baby. “I think we’ve done that in our store and in our lives.” ◗

| May/June 2019

Sushi Dépanneur’s top tips 3 | Focus on quality and 1 | Believe in yourself. Don’t listen to doubters but believe in your abilities and goals to run a successful operation.

2 | Give 100%. Don’t ask

employees to do things you need done. You know what you want and what the customer needs. Employees will follow your instructions and lead.

cleanliness. Make sure you keep your store clean and buy only the best-quality and fresh ingredients to showcase your store at its very best.

4 | Always smile and listen. Giving good service means being friendly at all times and understanding and meeting your customers’ needs.

Snapshot Location: Sushi Dépanneur, 928 Avenue du Mont-Royal Est, Montréal, (514) 523-5555 Specialty: Asian and exotic foods for takeout or ingredients to create at home. Hours: Closed Mondays. Open Tues.-Sun. from 11 a.m. to 3 p.m., and 4 p.m. to 9 p.m. Number of employees: 10, including the owners. Website: www.sushidepanneur.com

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Designed for adult smokers. Not for sale to minors. NOT FOR SALE TO MINORS: This is an age-restricted product and age verification is required at sale. Source: Nielsen Canada C&G channel, week ending March 2nd, 2019. © 2019 JUUL Labs, Inc. All rights reserved.

COVER

Are you ready for the new reality? TEXT BY DONALEE MOULTON

| May/June 2019

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Vaping refers to the act of inhaling and exhaling – or smoking – a vapour (aerosol) produced by products like e-cigarettes. Vaping products heat liquid formulations, called e-liquids, that are then inhaled.

Not all that long ago, tobacco was the staple for c-stores across Canada. Cigarettes, by the package (large and small) and by the carton (large and small) lined shelves in full display of a steady stream of customers. Those days are gone. In their place are new customers looking to buy a product that has the allure of smoking without, potentially, containing the more than 4,000 chemicals in the typical cigarette.

Electronic cigarettes, commonly called e-cigarettes or simply e-cigs, and related products are becoming a staple for many tobacco smokers and a cadre of non-smokers. As a result, the product category offers convenience stores a new and growing opportunity to draw more customers into their premises more often. The category, however, is not without controversy.

As you enter this brave new world, it’s time to get to know this emerging category.

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What is vaping? Vaping refers to the act of inhaling and exhaling – or smoking – a vapour (aerosol) produced by products like e-cigarettes. Vaping products heat liquid formulations, called e-liquids, that are then inhaled. According to Imperial Tobacco Canada, most vapour products are based on what is called a coil and wick technology. The coil, also known as an atomizer, heats a cotton wick that conveys the liquid, producing the vapour that is inhaled. Vaping devices come in numerous shapes and sizes, a factor that has confused many in the c-store sector. Some products are small and resemble USB drives or pens. Others are much larger. Despite the diversity of options, however, there are only two types of vaping devices, Health Canada reports. An open system enables the device to be refilled. A closed system requires the whole product or the part that holds the e-liquid to be replaced. There are also related systems and products including what are called heatnot-burn products that heat tobacco instead of burning it.

As a category, is vaping different from smoking? Absolutely, says Rob Colucci of Fontem Canada – blu Vapour, whose overarching goal as a vaping product company is to transition adult smokers to something better and ultimately eliminate the consumption of combustible (smoking) tobacco. “As a category vapour has exponential growth potential,” he says. “The key to this goal is to help existing adult smokers switch by offering vaping products as a less harmful alternative to cigarettes. Health Canada recognizes and shares this goal, as is made clear on their website where it is noted that vaping is less harmful than smoking.”

How prevalent is vaping? That is a difficult question to answer. A 2017 study from the University of Waterloo, Tobacco Use in Canada, found that in 2015, among Canadians 15 years and older a “substantial number” had tried e-cigarettes. The specific numbers look like this:

13.2%

(3.9 million) reported having ever tried an e-cigarette

3.2%

(approximately 946,000) used one in the past 30 days

1.0%

(roughly 308,000) reported daily use

May/June 2019

| 29

ADVERTORIAL

Logic Compact Q&A With Charis Chrysochoidis, Reduced-Risk Products Lead at JTI In January, trusted industry partner JTI launched Logic Compact, a brand new, closedpod, high-nicotine vape available in four flavours. We wanted to know what makes Logic Compact unique and what JTI is doing to ensure its partnership with Canadian convenience store retailers continues to click.

First off, what is Logic Compact? Logic Compact is an exciting new vape product developed by our Reduced Risk Products team, a group dedicated to developing products with the potential to reduce the health risks from smoking. Logic Compact is the latest closed-tank, high nicotine vaping innovation to hit the market, and it is now available at selected Canadian retailers in British Columbia, Alberta, Ontario and Quebec. Pods are available in four intense flavours and each pod contains 1.6ml of e-liquid. All customers need to do is click the pod into the device and vape.

Has JTI taken any steps to ensure this new product will enhance your partnership with retailers? Excellent question. For 160 years, we have earned your trust by delivering high quality, high traffic products and thoughtful customer service. It’s these valued retail partnerships that set JTI apart from the competition – and we want to keep it that way. That’s why Logic Compact is a competitively priced, high-margin product for retailers. If applying JTI’s recommended retail selling price, convenience store owners are looking at 20% margins on sales of Logic Compact. For a limited time offer, the Starter Kit RSP is $19.99 while the 2x e-liquid pod refills packs remain at an RSP of $9.99.

For convenience store operators, foot traffic is paramount. What can Logic Compact do to increase foot traffic for retailers? The biggest decision we made to ensure your stores are busy is limiting Logic Compact’s refill pack to just two pods. That’s half as many pods per pack as key competitors — for twice as many in-store visits from your customers — because JTI knows that one of your top priorities is getting customers to walk through your doors on a repeat basis. We’ve also included a store locator on www. logicvapes.ca so interested adult consumers can easily find local retailers selling Logic Compact. AVAILABLE IN 4 INTENSE FLAVOURS:

The vape market is crowded. What makes Logic Compact special and why should retailers take notice? Other vape devices are hard to use and a headache for your staff to explain. But not Logic Compact. Logic Compact has just three parts—the device, the e-liquid pod and the charging cable—and they all magnetically click together. No more wasting valuable staff time learning about and explaining complicated and messy vape systems. And Logic Compact’s intense high nicotine e-liquid pods give customers the vaping experience they’ve been asking for.

*For some consumers, nicotine salts may make it easier to inhale the high level of nicotine contained in this product than would be possible without it.

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This product is intended to be used with nicotine. Nicotine is an addictive substance.

“Convenience stores are one of the few brick-and-mortar options for adult smokers to legally purchase vaping devices and products. As such, they play an integral role.”

The use of e-cigarettes is also growing in popularity, according to the report. That popularity appears to be global. In the U.S., for example, a national survey in 2016 found that roughly 4.5 per cent of the adult population were current e-cigarette users. Individuals under 35 accounted for more than half of this figure. “The vaping market is relatively new and expected to grow rapidly as cigarette sales decline,” notes Michael Nederhoff, Canada’s general manager with JUUL Labs in Toronto. “Some estimate the yearly growth rate of this category is over 15 per cent and could cross $43 billion globally by 2023.”

What is the sales potential of e-cigarettes for c-stores? “Vaping products present a big opportunity for convenience stores,” says Nederhoff. “Vapes are on their way to becoming a sizable product category for convenience store operators. Adult smokers are increasingly interested in what vaping technology has to offer. And regulators and industry are working hard to make sure these products are available in a responsible and controlled way.” Charis Chrysochoidis, reduced risk products lead for Canada with JTI-Macdonald Corp., in Toronto, points out that the category is likely to expand given a regulatory reversal by Health Canada. “The sale of nicotine containing e-liquids was only legalized in May 2018, so we expect the category to grow over the next couple of years as more adult consumers discover alternative choices to their existing smoking and vaping products. And we think most of this growth will occur through convenience store sales.” The margin on vape products is also superior to tobacco, notes Stewart Ingles, president of Hilary’s Salesmaster Inc, a na-

| May/June 2019

tional retail distributor based in Concord, Ont. “Convenience stores hardly ever get true dollar margins as they will with this category, so they need to embrace and promote within their stores based on the provincial legal rules.” “This, in my opinion,” he adds, “is the most important new category to enter this market since the energy drinks.”

Will consumers switch from online to in-store? There is another reason vaping is growing in Canada and has the potential to become a big category in c-stores, says Peter Luongo, Rothmans, Benson & Hedges Inc.’s managing director in Toronto. “Currently online sales are the number one channel for vape product sales, and specialized vape stores are another potential destination for consumers.” Indeed, says Nederhoff, “convenience stores are one of the few brick-and-mortar options for adult smokers to legally purchase vaping devices and products. As such, they play an integral role.” From a sales perspective, there is no special equipment or features required to sell vaping products. Pricing is also straightforward if c-stores follow the manufacturers’ recommended price point. While prices will vary according to type of product and manufacturer, the market is competitive. C-stores can expect pricing to reflect that competitive market.

What do c-store owners need to know about the products? Understanding e-cigarettes and vaping products has proven problematic. “Initially, the vaping category flooded convenience store owners with complex systems that were hard to explain to both store owners and consumers,” says Chrysochoidis. JTI is hoping it has cut through this

confusion with its new vape system, which Chrysochoidis calls a “game changer.” “Logic Compact offers convenience stores a simple and easy way to use vape, and consumers are responding positively. With its magnetic pods and charger, vaping just clicks with Logic Compact.” The system, known as a closed tank, uses replaceable 1.6ml pre-filled e-liquid pods. The pods come in four flavours — tobacco, menthol, fresh berries and tropical — and click seamlessly into the device magnetically, as does the charging cable. “Choosing simple, sleek vape technology like Logic Compact makes it easy for convenience store owners to increase foot traffic and revenues and capitalize on the profit opportunity that vapes represent,” says Chrysochoidis. Other companies, such as JUUL, offer c-stores the option to carry pods in flavours that range from mango to cucumber to Virginia tobacco. These sell for a recommended $20.99 a pack. Device kits, including starter kits, are also essential. JUUL’s starter kit, for instance, includes a rechargeable device, USB charging dock, four JUULpods, and it comes with a oneyear limited device warranty. Then there is the IQOS 3 MULTI, a heated tobacco system and not technically a vape, that gives customers 10 back-toback experiences without having to charge the IQOS holder in between heatsticks. Variety defines the vaping market.

Why is vaping controversial? Although Health Canada acknowledges that vaping is less harmful than smoking, the country’s national health overseer also has serious concerns about e-cigarettes and related products. According to Health Canada, vaping can lead to nicotine addiction, it can cause lung damage, and the long-term impacts remain unknown.

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WARNING: Vaping products contain nicotine. Nicotine is highly addictive. Youth and adult non-smokers should not vape.

Most vaping regulations are provincial and vary across the country, although generally there is a concerted effort to protect younger people from e-cigarettes and related products.

There are also concerns about the appeal of vaping for young people, a concern manufacturers take seriously. “Our position is very simple: just as we believe that youth should not smoke, we agree that youth should not vape,” says Eric Gagnon, head of corporate affairs at Imperial Tobacco Canada. “We support measures that prevent under-age access to vapour products.” Fontem Canada - blu Vapour’s Colucci adds, “We recognize that much work needs to be done in striking an appropriate balance between ensuring no youth uptake of vaping products while ensuring sufficient communication with adult smokers is allowed so as to encourage them to switch out of tobacco. “Fontem Canada – blu Vapour shares Health Canada’s concerns about the increase in vaping product use by youth and agrees that youth access to vaping products and the inducement to use them is a serious and legitimate concern. Accordingly, we strongly support government regulatory initiatives aimed at preventing vaping products to be targeted at youth in Canada and around the world.”

What do regulations require of c-stores? Most vaping regulations are provincial and vary across the country, although generally there is a concerted effort to protect younger people from e-cigarettes and related products. Federally, the Tobacco and Vaping Products Act, which became law on May 23, 2018, protects youth from nicotine addiction and from incentives to use tobacco and vaping products. It allows adults to access vaping products as a less harmful alternative to smoking. The act creates a national minimum age of access for vaping products: 18 years. It also includes significant restrictions on the promotion of vaping products, such as bans on: • advertising that appeals to youth; • lifestyle advertising; • sponsorship promotion; and • giveaways of vaping products or branded merchandise. Additional restrictions under the legislation came into force late last year. These include bans on: • the sale and promotion of vaping products that make the product appealing to youth, such as interesting shapes or sounds; • the promotion of certain flavours — like candy, desserts, or soft drinks — that may be appealing to youth; and • product promotion by testimonials or endorsements. ◗

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Is that a customer or a secret shopper? Keeping vaping products out of the hands, and mouths, of young people is one area on which government, health professionals and manufacturers all agree. The extent of that agreement is reflected in an announcement from JUUL Labs that it has launched a secret shopping program in Canada. Shoppers are testing stores across the country to ensure that all retail partners conduct proper age verification and uphold bulk purchase restrictions. Stores that are found to be repeatedly noncompliant will be flagged and will be subject to remedial action – including being denied the ability to sell JUUL Labs products and reporting to appropriate provincial governments and Health Canada. “While both convenience stores and vape shops do a good job age testing, we are working with them in the spirit of continuous improvement to do even better,” says Michael Nederhoff, general manager of JUUL Labs Canada.

May/June 2019

| 35

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BY JANE AUSTER

CATEGORY CHECK

Game on! Sports drinks quench thirst for sales You don’t have to be a sports fanatic to realize that sports drinks can add major fizz to your convenience sales. The sports drink market in convenience shows healthy sales of $91,119,758, according to Nielsen MarketTrack and is performing well in national C&G (excluding Newfoundland) compared to other channels at +2% (dollars vs. prior year) growth (National C&G, 52 Weeks Ending December 29, 2018). Over eight per cent of the sports category dollar sales are from SKUs less than one year old, however those SKUs contributed four times more sales than the category grew ($7,553,100 in innovation sales vs. $1,773,197 in category growth; source: Nielsen MarketTrack, National C&G, 52 Weeks Ending December 29, 2018). “This shows that consumers are really looking for new and unique products and we are pumped to have some great innovation hitting the market,” says Jeff Fitch, commercial strategy director for Coca-Cola Ltd., makers of Powerade, which features a zero sugar, zero calorie hydrating beverage with electrolytes. “In 2019, we are expanding our Powerade Zero lineup with a new flavour – Grape (710 mL). We’re also introducing Powerade Twisted Blackberry to our roster of base drinks. This is a unique flavour offering not currently available within the category, and will be available in both 946 mL (single bottle) and a 6 x 591 mL. And lastly, we are injecting some excitement into the category through a limited-time offer for Powerade Ultra – a sports drinks CCentral.ca

with 25 per cent more electrolytes than base Powerade (available in two flavours: Blue Raspberry Cherry and White Cherry (710 mL).”

Who’s drinking?

Here are a few tips from Coca-Cola Ltd.’s Jeff Fitch to help keep these drivers in mind:

Sports drinks, perhaps not surprisingly, tend to appeal to a younger demographic. Fully 80 per cent of consumers are under the age of 49 (Source: Environics Demographic Analytics, 2017 - Ipsos FIVE, L52W to Mar, 2018 vs YA):

Have the assortment consumers want – core SKUs as well as key innovation. Consumers are looking for new and exciting products.

<18 = 20% 18-24 = 22% 25-34 = 14%

65% are in the labour force, though only 25% have a university degree 55% are without children

Place prominently in the cooler. We recommend knee to eye level for easy identification, and using signage to highlight the sports category. Display in prominent/high traffic areas in store. Not all parts of the store are visited in every trip, and placing products where consumers will see them most could increase interaction with the category.

How can you appeal to sports drinks consumers?

Have the right package available and promoted at the right time of year for the right price. As an example, summer is a key hydration period, so having a large selection of both products and packages makes sense at this time of year so consumers can find exactly what they want – whether they’re going out for a solo bicycle ride or a picnic with a bunch of friends.

The top three drivers of purchase decisions in C&G are the range of different types of products, the selection of new and interesting items, and the range of different prices and quality (ShopperPulse2018). ◗

When cross-promoting or bundling, look for combinations that complement each other instead of substitutes. For instance, you could bundle sports drinks with sparkling water, vitamin water, sparkling soft drinks and teas.

Consumers are going for sports drinks over the key summer months of June through August (May 27-August 25), according to Nielsen MarketTrack, National C&G, 52 Weeks Ending December 29, 2018.

May/June 2019

| 37

BACKTALK

Tony Chapman

Shift from being transactional to transformational! “Traffic” is

PHOTO: GOLD MEDIA

your big word. In a world where more and more people order online, have everything delivered or do click and collect, how do you even get them in your door to build traffic?

| May/June 2019

Traffic is the oxygen of retail; it breeds opportunity because if you have traffic, you can win them over, you can get them to buy impulse goods. Without it, your business is starving. You have to shift from a place to buy things to the place to be. What I mean by the place to be is one that offers something that matters most to me. It could be better-for-me snacks that still make my kids smile but I know they’re eating healthier. It could be an impulse item that gives me energy to get me through a busy afternoon. It could be something I’m out of stock of at home that is essential. More than anything else nowadays, the “be” is all about humanity; it’s about somebody that knows my name, cares about me, is interested in my family, knows I might have parked a dog outside and offers me a dog snack on my way out. Things like that are connected to who I am and my journey in life. You (convenience retailers) are spending enough time to understand where I need to go. Your role is almost like Yoda. Instead of trying to be the hero of the story, you’re helping me get through my day. When you can be that CCentral.ca

to the customer, then you win their loyalty. Then it moves from being a transaction to being more transformational, and that’s something technology doesn’t have; it doesn’t have a heartbeat.

Once you actually get customers in the door, how do you keep them there so you can build the transaction size? You’re dealing with two cylinders you have to fire on: one is more and one is less. More is what matters most to me – safety and security. The outside of your store looks inviting, I’m not afraid to walk in, the windows are clean, there’s a sense of pride in the store. When I walk into that store, it immediately looks organized, it looks alive, it doesn’t look like the product is dated, it doesn’t look like it’s the last days of the business. Now when I walk in and you’re interested in who I am and why I’m there, next thing you know I get to spend a little bit more time because we’re creating a human connection. Next thing, you have to create an adventure and give me things I can’t get anywhere else. You’re a little convenience store: be a petri dish to the world. “Have you tried this? Try a sample.” If you get me engaged and I’m ‘walking’ with you, then I will stay longer. Second part is the less, which is frictionless. Be less effort. I want to be able to pay immediately, I want to be able to find product immediately. I want to be able to feel like it’s easy to shop. If I’m going to the back of the store to get milk, along the way tie in what goes adjacent to milk. Start organizing your store like I organize my life.

So that’s how you balance customer service with speed. Customer service and speed used to be about having the best location. All of that has been taken away by the mobile phone because it’s right here and it’s going to get faster. Amazon will deliver things within 30 minutes or an hour. I’ve lost convenience in terms of that. So, how do I reframe it? It’s not just convenience CCentral.ca

How can c-stores stand out in a world where everyone is convenient? The great retailers know who they are and know who they’re not. You’re talking about people like Shoppers and Dollarama, that will increasingly become a selfserve store. They’ll continue to drive labour out and make the consumer do most of the labour, check themselves out, bag their own groceries, find their own products because they have to compete with the Amazons, which are even faster, better, and cheaper. They’re on this incredible race to zero.

WHAT AN INDEPENDENT HAS TO DO, OR EVEN A CHAIN CONVENIENCE STORE, IS FOCUS ON FULL SERVICE.

Sell into the consumers’ moments. Don’t just be a place for transactions. Shift from being transactional to transformational, from being a place to buy to a place to be, from just simply being faster, better, cheaper, to being personal, to giving more of what matters, to be more in touch with your neighbourhood and the consumer.

in terms of punching in buttons, it’s convenient for me to go there because I feel it’s got the things that matter most to me. And when I’m in there, it’s not a pain to get in and out because it’s easy, I can tap, I can shop easily, I can buy easily. If you get those two things connected, then you’re going to have a customer that’s very loyal to you because we’re social creatures, we want to be out and about, we want to be with people.

Are you seeing in your day-to-day life good examples of innovation and high-touch retailers? I love the Running Room. Anybody can sell running shoes; Running Room helps me run a 5k. Home Hardware – they’re helping me build a deck versus selling me a hammer. Sleep Country is about a better night’s sleep, not buying a mattress. They’re part of my adventure, they’re selling into my moment, they’re becoming part of my adventure in life. It’s that Yoda mentality that I think great retailers have, and you can see them when you go into a great convenience store and they know what you like, they know your name, they ask about you, they’re curious about you. I think that’s magical.

That’s a powerful message. “I’m not selling, I’m helping you.” Every customer that comes in my store is on a journey. The more I understand about the journey and the more I help them get to where they want to go, I’m not competing against a mobile phone that’s the world’s biggest vending machine. I’m making a human connection, and that’s something machines, automated intelligence and Amazon don’t have. They don’t have a heartbeat. You have a heartbeat and you have to show that is why you’re passionate about retail. ◗

Tony Chapman, motivational keynote speaker and marketing consultant, was the keynote speaker at Convenience U. This interview has been condensed and edited. May/June 2019

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