reaching new heights

Fresh off the acquisition of Cummings Oil, Andrea Jackson leads Jacksons Food Stores’ retail strategy.

By Shahla Hebets, Publisher

Keeping a low profile hasits advantages, but eventuallya chain’s success starts toattract the attention, and eventhe enmity, of the competitors around it.Jacksons Food Stores is one of the conveniencestore and petroleum industry’sbiggest success stories, yet it has primarilyflown under the radar. The Meridian,Idaho chain was founded in 1975 as a singleservice station. Jacksons has grown tooperate more than 100 stores operatingunder the Jacksons banner and retailingthe Chevron, Texaco, Shell and 76 fuelbrands and nearly a dozen quick-servicerestaurants (QSRs) in four western states.Plus, the company operates a wholesalefuel distribution business, Jackson Oil Inc.,which supplies more than 260 additionalShell, Texaco and Chevron dealers in eightwestern states.

What is impressive about the companyis its steady growth. There are not manyfamily-owned and operated companiesleft in the industry, yet Jacksons has theleadership and financial resources to continuepushing forward. Last year, Jacksonsacquired the distribution rights to the 100-store network operated by CummingsOil in an effort to serve a broader westerncommunity. Cummings, a 105-year oldcompany based in Albany, Ore., boastedannual sales of about $400 million.

Acquisitions have always been anasset for Jackson Food Stores, accordingto company President Andrea Jackson,for two reasons: to keep profits within thecompany rather than going to new constructionsand to eliminate competition.Because the company does its homework,Jacksons acquires confidently and has theability to act quickly when an opportunitypresents itself.

The company was founded by Andrea’sbrother, John Jackson, but she has playedan integral role in guiding the chain toits current level of success, and othersare noticing.

In 2006, Andrea Jackson was chosenby Idaho Business Review as one ofIdaho’s “Women of the Year.” She washonored because of her “professionalaccomplishments, willingness to servein volunteer organizations and to mentorother women.”

“My brother nominated me for thisaward and I was truly honored. Therewere some really impressive women thatwere in the group so it was really exciting,”Jackson said. “Because our system istruly fair, we have diversity at every level,including women at the highest levels inour company,” Jackson said. “If you focuson developing the people on your team, itis amazing the places they will take you.”

Jackson sat down with ConvenienceStore Decisions to discuss JacksonsFood Stores and the overall state ofindustry operations.

CSD: With all of the merger and acquisitionactivity since 1998, there are fewprivately held, family-owned companiesleft in the convenience store industry.Have you been approached about sellingthe business?

Jackson: Yes, but we have not consideredselling the business. Jacksons FoodsStores is a family operation and one thatwe expect to grow and flourish for yearsto come. My brother, John, is our CEO andhe is still a young guy. His children, Coryand Jeff Jackson, recently joined the businessas well. It’s great to now have thenext generation of Jacksons working inthe business, especially given that manycompanies don’t make it past a generationor two. This means that we’re doingsomething right. In our family, we believethat you have to work elsewhere priorto coming into the family business. Thisapproach provides experience in otherarenas and we can utilize these skills togrow our company.

In addition, we’ve diversified with anFBO (Fixed Base Operator) called JacksonJet Center that services the airport. We gotinvolved in this business because of thefuel component, but also because of mybrother and nephew’s interest in flying;they’re pilots. This venture has providednew opportunities and we hope to expandon this type of diversification movingforward.

CSD: Your organization is viewed asone of the innovators in the c-storechannel. What distinguishes youfrom the competition?

Jackson: Our passion! We have greatpeople here. The feedback we receive fromour customers very often is that we havethe nicest people. All of the store programsand products we offer are important, butthe employee component is what is fundamentalto our business. As a result, weare the most proud of our customer feedbackregarding our employees. It’s easy toforget how important consistently offeringcustomers a friendly encounter canhave to your bottom line, but we continueto focus and foster these special relationshipswithin our stores.

We work hard at being the most innovativewith marketing and promotions,and we do a good job of concentratingon what’s important to consumers. If youdon’t have what the customer wants, therest simply doesn’t matter.

CSD: What is your growth strategy forJacksons moving forward?

Jackson: Acquisitions have alwaysbeen a good thing for our company. Thereare a few reasons why acquisitions are ofinterest. First, the cost of new constructionis huge, and second, the opportunity toeliminate a competitor is often compelling.We really do our homework when lookingto acquire a business as well. We havetheir numbers and the company’s historyso that we can evaluate how well the businessis doing pretty quickly. Specifically,we look for ways that we can improve thebusiness based on our tactical approach. Ifthe company in question is doing a greatjob, then it will be hard to do much better.On the flip side, if we know we can see alift in the operation then that will improvethe economics.

At the same time, we are also willingto close under performing stores. If theyaren’t making it then we will walk away.We have stores that have been incrediblysuccessful for years, but then the roadchanges or, for whatever reason, it’s time to move on, and then we are perfectlywilling to do that. Sometimes the solutioncenters on leasing out the space foranother use or simply closing shop.

CSD: Jacksons has received numerousawards including Texaco’s Gold Star forBuilding Tomorrow Together as well asChevron’s Customer First Top Performerhonor and Shell’s Go Further distinction.Describe your business approachand why it is important for you to havestrong fuel partners?

Jackson: Originally, all of our sites werebranded Texaco, but we are very pleasedwith the brand recognition Chevron andShell bring to our stores. Each year, wehave won their awards for top performance.We’re very cooperative with ourpartners, and we’re not afraid to spendthe money that they ask of us to ensurethat our programs are successful. It’s notthat complicated. Meaning, we don’t gettoo caught up in the latest program ratherwe stay consistent to our fundamentals,which are being clean, offering an exceptionalshopping experience and havingwhat people want. If you offer these threethings consistently, you really stand out.

CSD: Hiring and retaining good employeesis a challenge for all businesses, butit seems to be particularly difficult in thec-store channel. What are you doing toattract and keep your top employees?

Jackson: The employee element isreally crucial to what we do as an organization.We pay better then our competitors,offer full benefits, tuition assistance andwe offer extensive training. Plus, weoffer some extra incentive programs. Forinstance, everyone in the organizationreceives a bonus based on meeting certaindefined criteria. It is very clear-cut andeveryone has a stake in the company’ssuccess. Every employee, including ourImage Associates, is rewarded if we obtainour stated goals. If you want to be in thegame as a recruiter of talented employees,you have to pay well
.

If we have anything to share, it’s thatyou have to treat your employees well.You have to offer employees an environmentwhere they want to work. If you treatyour employees as well as you would treatyour neighbor or a friend, you’ll see a greatdeal of loyalty from your team. It’s simple,but it matters to me that my employeesare happy.

CSD: Having strong employees is oneaspect of a successful market approach.Can you discuss the overall marketingstrategy for Jacksons Food Stores?

Jackson: We have a consistent marketingmessage in that we tend to replicate asimilar strategy in multiple stores that centerson good locations, great products andoutstanding service. We modify our merchandisingstrategy based on the locationof the store. For instance, we do have a fewstores that service strong Hispanic populations.We see the Hispanic customer as animportant growing demographic that weneed to do a better job of attracting to ourstores. As a result, we have more productsgeared toward this consumer group inthose areas, but we need to do a better jobof getting the Hispanic community to thinkof us as a place where they want to cometo shop. We advertise in Spanish and wereach out to the Hispanic community onmany levels.

Additionally, we also need to hiremore Hispanic employees to attract moreHispanics to our stores. I believe the greatestimpact we could make to reach thisconsumer base is if we had more employeesthat could speak the language andserve as a friendly face they could recognizeon a daily basis. Our goal is todo a better job of recruiting Hispanicsto work for our organization. We needthem. Unemployment in our marketsis extremely low, and we would love tohave more bilingual employees. Moreover,we’re a great employer. We pay for collegetuition and we have many benefits that Ithink would be of particular interest tothis demographic.

CSD: Are your demographics shifting?Are you seeing a shift in your consumerbase with respect to attracting morefemale shoppers?

Jackson: I don’t know if we get morethan our fair share of female shoppersbecause of our branded fuel offerings, butI have a feeling that we are skewed a bitmore heavily to female shoppers thanmost. Of course, our bread and butter consumeris the same consumer that the entireconvenience channel has penetrated themost successfully, but I think branded fueldoes generate more interest from femaleshoppers. In addition, we offer clean, welllitstores—appealing aspects to females.

We have stores with extremely different personalities and varying demographics,but I do believe that the consumerwho cares about her vehicle fills it withquality branded fuel—which I think is asmart thing to do—is a totally differentshopper than the person that fills up at anon-branded site. One is merely seekingcheap gas based on price, and we’re nottargeting that consumer.

CSD: What trends or product categoriesare growing in your markets?

Jackson: We’re looking at the samethings that other retailers are pursuing inthe channel such as energy drinks. Thathas been an exploding category right now.We want to invest more heavily, but wewant to make sure that we are properlymanaging that change. In the old days, itwas easier to manage the inventory. Today,there are so many suppliers to speak withand we need to determine what companythey utilize on the distribution front.

In addition, if you have multiple locationsto ship, it can be a challenge. Thatis one key benefit of having our own distribution.With that said, we have to getbetter about bringing new products tothe market faster because products havea shorter shelf life than they used to. It’s adelicate balance of having control of youroperation, being on the cutting edge, butalso walking away from products thataren’t moving. For instance, we’ve givenup some space in carbonated beverage,because their not pulling their weight anymore, in order to make space for energydrinks and vitamin waters.

CSD: Foodservice is another growing categoryin your stores.Can you describeyour foodservicestrategy?

Jackson: To besuccessful in thisbusiness you haveto add new profitcenters as other categoriesdecline. We’vehad a fair amountof suc c e s s wi t hbranded fast food,but you have to bevery selective aboutwhere you add thistype of offering. We are now more focusedon proprietary fast food, but we have notbeen as strong in this regard as I wouldlike. However, we continue to work onour offerings because we know that wehave to be able to provide quality fastfood to our customers.

Foodservice is an excellent opportunityfor the industry because it has greatmargins. We have good locations, and weneed to convince our customers that theycan come to us for their meals. We’re interestedin offering fresh foods and beingable to distribute high-quality products.

CSD: There has been a great deal of discussionin the channel regarding thehigh cost of credit card fees. How areyou dealing with this increase in operatingcosts?

Jackson: Part of our issue centersaround the fact that we offer branded fueland, as a result, our options are fairly limited.Dealing with credit card processingfees is one of the most pressing issues thatthis entire industry is facing today. Whenyou look at the fact that it’s the secondlargestexpense after labor, it just drivesme crazy and it’s absolutely ridiculous.One advantage to being with a majorbrand is their no-fee proprietary card. Wecontinue to capitalize on their enhancedofferings in this arena.

CSD: Looking back on your history, isthere any one decision that stands out inyour mind that has been particularly crucialto your company’s success?

Jackson: The most significant learningthat we had occurred years ago when wedecided to dramatically increase our storecount. We went from being a 32-storechain to purchasing 45 Circle K stores. Itwas a huge increase for us at the time, andwe had to learn how to operate at doubleour previous size. It was incredibly excitingand we worked extremely hard. Wepromoted people from within to meet thenew challenges.

The key learning we walked away withwas the knowledge that you can makedrastic changes to your organization andprevail. We were always the “little guy,”and then suddenly we were the No. 1retailer in our marketing area. This experiencemade future smaller acquisitionslook like a piece of cake, and we continueto view acquisitions favorably today.We’re not done yet.

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